Editing IPCC:AR6/SRCCL/Chapter-5 (section)

==== 5.3.6.2 Financial resources ====

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Financial instruments such as micro-insurance, index-based insurance, provision of post-disaster finances for recovery and pre-disaster payment are fundamental means to reduce lower and medium level risks (Linnerooth-Bayer and Hochrainer-Stigler 2014 <sup>[[#fn:r675|675]]</sup> ). Fenton &amp; Paavola, 2015 <sup>[[#fn:r676|676]]</sup> ; Dowla, 2018 <sup>[[#fn:r677|677]]</sup> ). Hammill et al. (2010) <sup>[[#fn:r678|678]]</sup> found that microfinance services (MFS) are especially helpful for the poor. MFS can provide poor people with the means to diversify, accumulate and manage the assets needed to become less susceptible to shocks and stresses. As a result, MFS plays an important role in vulnerability reduction and climate change adaptation among some of the poor. The provision of small-scale financial products to low-income and otherwise disadvantaged groups by financial institutions can serve as adaptation to climate change. Access to finance in the context of climate change adaptation that focuses on poor households and women in particular is bringing encouraging results (Agrawala and Carraro 2010 <sup>[[#fn:r679|679]]</sup> ).

In summary, effective adaptation strategies can reduce the negative impacts of climate change. Food security under changing climate conditions depends on adaptation throughout the entire food system – production, supply chain, and consumption/demand, as well as reduction of food loss and waste. Adaptation can be autonomous, incremental, or transformative, and can reduce vulnerability and enhance resilience. Local food systems are embedded in culture, beliefs and values, and ILK can contribute to enhancing food system resilience to climate change (high confidence). Institutional and capacity-building measures are needed to scale up adaptation measures across local, national, regional, and global scales.

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