Mitigation and Adaptation Strategies for Global Change (2006) C  Springer 2006 A PROCESS-ORIENTED SUSTAINABLE LIVELIHOODS APPROACH–A TOOL FOR INCREASED UNDERSTANDING OF VULNERABILITY, ADAPTATION AND RESILIENCE PER KNUTSSON 1,∗ and MADELENE OSTWALD 2 1 Human Ecology Section, Department for regional studies on the human condition, G¨ oteborg University, P.O. Box 700, SE-405 30 G¨ oteborg, Sweden 2 Earth Sciences Centre, Physical Geography, P.O. Box 460, SE-405 30, G¨ oteborg University, Sweden ( ∗ Author for correspondence: Tel: +46-31-7734183 (Office); Fax: +46-31-7734933; E-mail: per.knutsson@he.gu.se) (Received 23 November 2004; accepted in final form 21 March 2005) Abstract. The Sustainable Livelihoods Approach (SLA) is often proposed to holistically capture vulnerability in assessments of livelihoods in aid and development programs. The full capacity of the approach has however only rarely been used in these assessments, lacking a clear account of processes of change and flexibility of assets, as well as the ability to quantify all capital assets of a livelihood system. The descriptions of livelihoods so far are in fact non-holistic. This paper attempts to use SLA in its full capacity through a quantification of the different capitals covered; natural, physical, economic, social and human. Further, the relationships between capitals are explored in a Chinese rural context of changing climate and land-use, and examples are given on how investments in one capital in reality can end up being accounted for in other capitals. The results indicate that through an analytical and process-oriented SLA, an effective tool for assessment of vulnerability can be developed. Such a tool would assist development organizations and policy-makers to target poverty traps and escape routes in the face of rapid and multiple changes. Keywords: adaptation, assessment tool, China, rural small-scale farmers, sustainable livelihoods approach, vulnerability 1. Introduction Due to growing evidence that impacts of climate change will increase already in the near future, and that the poor populations of the world will be more severely affected than others, the interlinked concepts of vulnerability, adaptation and resilience have simultaneously found their way into climate change and development discussions (c.f. Kelly and Adger 2000; Adger et al. 2003; the Task Force on Climate Change, Vulnerable Communities and Adaptation 2003; African Development Bank et al. 2004; Huq and Reid 2004; O’Brien et al. 2004). Until now, these concepts have been understood differently by various policy- and research communities, such as disaster and risk reduction (c.f. Wisner et al. 2004), climate and climate change (c.f. IPCC 2001), natural resource management (c.f. Ostrom 1999; Gunderson 2000;), and poverty reduction/development (c.f. Scoones 1997; African Development Bank et al. 2004). In order to develop tools for assessment of vulnerability in the face of the