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Microloans, climate change adaptation, & stated investment behaviour in small island developing states: a Fiji case-study

Sharma-Khushal, Sindra (2014) Microloans, climate change adaptation, & stated investment behaviour in small island developing states: a Fiji case-study. PhD thesis, London School of Economics and Political Science.

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Anthropogenic climate change and environmental degradation impacts are no longer a worry for the distant future but a real concern for the present. Small Island Developing States (SIDS) and the poor, who often live by fragile ecosystems, are amongst the most vulnerable and exposed to the impacts of climate change. For these populations, climate related risks exacerbate other stressors and negatively impact livelihoods, security, and health. For low lying SIDS in particular, an additional fear is that climate change endangers their whole way of life, with their nationhood and culture being slowly engulfed by the approaching sea. Whilst the need to adapt is apparent, adaptation funding and motivating people to take up adaptive behaviours is a serious challenge. According to the ODI, financing climate change adaptation in the developing world can cost upwards of US$ 100-450 billion a year. Building adaptive capacity through cost effective solutions such as microloans for adaptive investments can be a promising strategy. By utilising the case study of Fiji, this Thesis attempts to unpack the cognitive drivers of climate change adaptive stated investment behaviour through a survey-based experiment (N=205). The prominent empirical method employed in this thesis was mediation analysis and specifically path analysis whereby the model specified is driven by theory. The choice of this method is justified through a comparison with multinomial logit. In the first instance, the antecedents of climate adaptive stated behaviour and the impact of information on subsequent stated behaviour were assessed through the framework of the Theory of Planned Behaviour. In addition perceptions to climate change in Fiji were explored through guided interviews (N=50). Overall positive attitudes, subjective norms and perceived behavioural control towards conservation and adaptation positively influenced intention to invest in adaptive strategies though intention only significantly influenced subsequent stated behaviour when information on climate change adaptation was provided. Next, the efficacy of incentives in engaging adaptive investments was assessed. The results indicated that the use of ‘green’ incentives (whereby loans are contingent on ecosystem impacts) was most conducive to the choice of adaptive investments over nonadaptive. In addition behavioural intention significantly mediated stated investment behaviour under the green incentive condition – which it is argued may show that such incentives crowd-in internal motives for engaging in environmentally protective behaviours. We also found that ethnicity was a strong positive moderator of behavioural antecedents and subsequent stated investment behaviour. Lastly the moderators of stated behaviour and its antecedents were examined by exploring resource dependence, perceived shocks, and perceived severity of environmental and other issues. Again, it was found that green incentives were successful in engaging people to take up adaptive investments more so then under a dynamic (whereby loans are contingent on repayement) and a no incentive condition. It was found that perceived shocks, and resource dependence could significantly impact cognitive antecedents of behaviour as specified by the Theory of Planned Behaviour and in particular perceptions of behavioural control. Shocks, resource dependence and perceived severity also moderated subsequent stated behaviour, with greater variability between between adaptive and non-adaptive investment choices under the no incentive and dynamic incentive conditions. The latter had a greater probablity of agents choosing non-adaptive over adaptive investments whilst in the former the opposite was true. Overall the results can be useful for adaptation policies, microloan best practice, and behavioural change interventions in SIDS in particular.

Item Type: Thesis (PhD)
Additional Information: © 2014 Sindra D Sharma-Khushal
Library of Congress subject classification: H Social Sciences > HC Economic History and Conditions
Sets: Departments > Geography and Environment
Supervisor: Di Falco, Salvatore

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