Adaptation projects may be difficult to prioritize and finance, as the results of projects are difficult to quantifiably measure and compare across project types, and no singular “unit” for adaptation outcomes exists. The Higher Ground Foundation is developing the Vulnerability Reduction Credit (VRC™), which incorporates cost/benefit analysis and per capita vulnerability equalization tools to measure the outputs of climate adaptation projects. The VRC quantifies in a singular unit measures to reduce vulnerability to climate change.
This chapter* summarizes the structure and utility of VRCs and shows through a case study from Talle, Niger, how VRCs are created and integrated into Sahelian community adaptations to heterogeneous climate risks such as flooding and droughts. VRC analysis and crediting may serve as a monitoring and evaluation tool and as an instrument to help secure project finance while supporting sustained adaptation. The chapter further considers the potential benefits to governments, donors and economies. VRC financing has advantages over standard development assistance models, particularly for project risk management, project preparation, enhanced transparency of adaptation spend, and scaling of successful pilot projects throughout an economy.
*Download the full text pdf. This is a chapter form the book "Renewing Local Planning to Face Climate Change in the Tropics", edited by Maurizio Tiepolo, Alessandro Pezzoli and Vieri Tarchiani.