Adaptation to climate variability and change.
The earth's climate is already changing because of human activities, primarily the combustion of fossil fuels and land management practices, and is projected to continue to change in the coming decades. Developing countries, and poor people within developing countries, are already suffering the greatest impact from climate-related disasters, which threaten to undermine their development. During the 1990s, an average of 200 million people per year from developing countries were affected by climate-related disasters, whereas only a million or so people from developed countries were affected.
Climate change has serious implications for the MDBs' poverty-reduction efforts. It will impact on areas of major economic and social importance for developing countries, such as water availability, agriculture, health, the durability of major infrastructure, and the sustainable use of natural resources. The MDBs whose member countries will be most impacted by climate change are making efforts to help these countries adapt to climate change variability through regional and country-specific programs. Institutions such as the World Bank and the AfDB are also in the process of upgrading their staff capacity in identifying and preparing adaptation activities. The majority of MDBs are now expanding their knowledge of climate risk management, implementing this knowledge in operational programs, and building more comprehensive screening tools and best-practice guidance to support their clients' long-term sustainable-development goals.
CLIMATE RISK AND ASSESSMENT
The majority of the MDBs are now "climate-proofing" projects that are climate sensitive and developing advisory assistance and capacity support mechanisms, as well as preparing systematic institutional and policy responses. This involves the development of screening tools in order to assess and mitigate climate risk in projects. This will not only protect their investments from possible future damage, but is essential for achieving poverty reduction.
In the area of climate risk management and assessment, the World Bank is developing robust and easy-to-use information and tools for assessing development projects and programs for potential sensitivities to climate change for Bank and client country staff. The ADB, AfDB, and IDB are also focusing on similar climate risk management initiatives in order to ensure that their operations are resilient to climate risk. The IDB is focusing on disaster risk mitigation and is making headway in mainstreaming disaster risk prevention in its operations. The ADB will assist its member countries in integrating climate change adaptation assessment and responses into broader development and natural resource management decision-making, whenever possible urging that adaptation concerns be combined with efforts to assess risk and reduce vulnerabilities to natural disasters. The ADB is incorporating these concerns into the country environment analyses as part of country strategy and program preparation. This ensures that adaptation issues, where relevant, are included in the ADB's programs of cooperation at the country level.
The AfDB will include systematic climate risk management analysis as part of due diligence in country planning and programming, and project preparation. In addition, a new African Development Bank Group Policy on Climate Risk Management and Climate Adaptation is under preparation. The new policy on adaptation is expected to be finalized and presented to the AfDB Board by end of 2008 with proposals for relevant changes in business processes, climate proofing methodologies, staff skills, resource requirements, and other institutional changes to strengthen internal capacities and enhance support to African countries' efforts in climate risk management and adaptation.
The IDB has done an initial assessment of the vulnerability of its portfolio to climate-change impacts. The results indicate that a significant number of the Bank's projects could be sensitive to climate change. This is driving the Bank to factor climate-risk concerns into sector policies, country strategies, and project design and implementation. As a first step, the IDB is focusing on integrating adaptation issues in disaster risk prevention in its operations and in country programming, as well as developing guidelines to climate-proof infrastructure investments.
The EBRD and EIB's region of operations is expected to be less affected by adaptation issues than other regions in the world where climate change may have very significant impacts on the ecology and economy of entire countries. In addition, the sectors of activity of these banks do not correspond to the main areas of adaptation requirements in the region which are mostly of an agricultural nature. Accordingly, the focus of the banks' work in their region of operations is on climate-change mitigation rather than adaptation.
8 IDB Support for Adaptation to Climate Change and Disaster Mitigation: Township Planning Strategies for Storm Surge in the Caribbean The general objective of the project is (a) to assist Caribbean countries to develop the adaptation strategies required to deal with the impact of natural disasters and severe weather events that are anticipated to occur in association with climate change; and (b) to strengthen their capacity for adaptation to this phenomenon. The specific objective of the project is to develop the capacity and methodology for incorporating risk analysis into the long-term development strategies of town planners and emergency managers. The project has three components: Risk Assessment of pilot sites: Storm surge risk assessments have been conducted in two pilot areas--St. Peter Township, Barbados, and Portmore, Jamaica--utilizing applications of the TAOS* storm surge risk assessment model. The risk assessments were prepared in close collaboration with the Caribbean Institute of Meteorology and Hydrology and in consultation with the regional emergency managers, town planners and communities. The study also included * The Arbiter of Storms. (a) an institutional analysis for the implementation of risk management, monitoring and forecasting; (b) proposals for raising awareness; and (c) recommendations for the promotion of improved preparedness through early warning systems, contingency planning and shelters, and potential mitigation investments and cost-effective use of economic incentives for their execution. Development of Toolkit: A toolkit targeting four types of users--town planners, emergency managers, community groups, and private sector providers of risk transfer services--will be developed. The toolkit will include criteria and guidelines for risk assessments, institutional issues, awareness raising and improved preparedness, and potential prevention and mitigation measures. Dissemination: The toolkit will be published and disseminated throughout the Caribbean.
Many of the MDBs are undertaking a series of country, regional, and sector studies to build a body of good-practice guidance on managing climate risk. The World Bank will conduct a wide variety of sector and country assessments that include the effects of different climatic conditions on the main sectors of the economy and a review of institutional capacity to manage the climate variability. They will build on existing in-country or Bank-led initiatives, and will be designed to identify specific, achievable, prioritized actions. Particular attention will be given to "low-hanging fruit" opportunities, as well as institutional and governance bottlenecks for the implementation of adaptation measures. The ADB is working with the World Bank on a similar initiative to assess the impacts of climate change in several large Asian coastal cities in terms of local and national economic growth, as well as regional and global economics. The World Bank will also review the role of insurance and other modes of risk transfer as a means of reducing vulnerability to climate change. The AfDB is undertaking a study on the impact of climate change on the Gambia River Basin. In addition, there is a proposal to extend such a study to cover all the river basins in Africa.
FINANCING CLIMATE RISK (ASSESSMENT AND ADAPTATION)
The majority of the MDBs will be focusing on mainstreaming climate-change adaptation into development planning, poverty reduction strategies, policy work, and project activities. This involves financing country-level assessments of climate change vulnerability and risk assessments at both the strategy/program and project levels.
The World Bank has programmed a number of projects to address known risks to climate change. The lessons learned from these investments, together with the results of a series of pilots directly linked to Bank operations, will provide guidance on how to approach climate risk in upstream analytical and planning processes, as well as in the project and program implementation phase. Much of the work focuses on agricultural and water issues and rural infrastructure, as these are fundamental to poverty reduction in most regions of the world. Not only are they very vulnerable to climate risk, but typically they have had less work done on them than the more spectacular climate threats such as sea-level rise, wind storms, etc. Adaptation-related activity by the World Bank has increased from only about 10 projects and technical assistance and advisory activities before the CEIF to about 40 projects (loan and grant) in 30 countries and 25 technical assistance advising activities.
The IFC is in the early stages of identifying appropriate methodologies for evaluating the risks of climate change to its investments and clients. In consultation with experts and other interested IFIs and private companies, the IFC plans to do a series of case studies by June 2008 to test available risk assessment tools, illustrate potential portfolio risks, and explore the feasibility of insurance and other response measures
The IDB will integrate climate change adaptation initiatives into its disaster risk prevention activities. This not only includes mainstreaming climate risk in country programming but also investments to reduce vulnerability to climate risk of urban and regional infrastructure. This involves identifying and protecting capital assets at risk to climate-change impacts, preparation of loans to finance risk-reduction investments, and the design and development of vulnerability components and activities in investment loans. The ADB will finance climate risk assessments at both the regional and national level through such programs as the Climate Change Adaptation Program for the Pacific (CLIMAP), which will review climate-change risks (e.g., sea level risk) while producing guidelines for development planners on how to climate-proof coastal infrastructure. The ADB also led the Central Asian Countries Initiative for Land Management, which brings together the five countries of that region to address land-degradation problems, some of which are attributable to climate change. In addition, the ADB is sponsoring climate change risk analysis on natural-resource productivity in the Greater Mekong subregion.
Africa is highly vulnerable to climate change, with the areas of particular concern being water resources, agriculture, health, ecosystems and biodiversity, forestry and coastal zones. The longer-term impacts will include changing rainfall patterns affecting agriculture and reducing food security, worsening water security and economic growth prospects, shifting temperature affecting vector diseases, and more challenging hurdles in reaching the MDGs. According to the IPCC the cost of adaptation in Africa could be as high as 5 to 10 percent of the continent's GDP. The AfDB, in addition to its policy-related work, is preparing a formal proposal on the establishment of a CEACAFA to galvanize its operations in this emerging area. By 2010, the bank expects to be able to provide financial support for 5 to 10 climate-adaptation activities per year in all the AfDB's regional member countries. Eligible activities will include the following:
* Increasing public awareness of vulnerability to country-specific climate change, including support to the Action plan for Africa on Climate Information for Development Needs (ClimDev Africa) jointly implemented by UNECA, the AfDB, and GCOS, under the leadership of the African Union
* Building or reinforcing private-sector and public institutional capacities at community, national, and subregional levels to manage increasing climate variability and extreme weather events--including emergency response logistical capabilities, strategic stockpiles (food, medicines, etc.), disaster insurance and re-insurance
* Mitigating the increasing threat of vector and water-borne diseases engendered by rising surface temperatures--by expanding the Bank Group's Rural Water Supply and Sanitation Initiative (RWSSI)), financing related activities also under the African Water Facility programs, and including support to fight malaria and other waterborne diseases
* Countering rising stress on ecosystems and natural resources, including biodiversity support to concerted efforts to preserve coastal mangrove forests and other wetland ecological systems, efforts to arrest deforestation of mountain slopes and soil erosion, etc.
* Protecting against the increasing threat of extreme weather events and the flooding of coastlands and small islands from the rising sea-level, with accompanying loss of infrastructure; supporting research into more ambient, resilient, safe, energy- and water-efficient housing design and building materials; reviewing possible defenses, for islands and coastal lands, against flooding and the rising sea level
* Climate risk management in Bank Group projects, programs, plans and strategies. This includes, on the one hand, due diligence in AfDB Group projects, and on the other hand, integration of climate risk management in Country Strategy Papers and sector strategies. For projects, systematic climate risk management should be included in the preparation, resulting in all Bank Group operations having sufficient resilience to current climate variability risks and projected climate-change threats and making effective use of opportunities. Over time, this should become systematic good practice in all operations, but in the short term, the CEACAFA will support building tools and best practices in selected projects, including:
* retroproofing previously approved operations still under implementation or post completion (where it is still practical and beneficial
* systematic climate risk management in new operations, leading, in high-risk cases, to modified investments, including climate risk management components additional to standard project design. The project-level climate risk management would be implemented through a two-step process: (a) initial--also simple and cheap--tool-based climate risk screening, possibly building on the World Bank's efforts in this area, and (b) in-depth risk assessment for projects or components at substantial risk (often using specialized consultants).
9 African Development Bank-Malawi Climate Adaptation for Rural Livelihoods and Agriculture (CARLA) Project The project objective is to "improve resilience to current climate variability and future climate change by developing and implementing cost effective adaptation strategies, policies, and measures that will improve agricultural production and rural livelihoods." The project is aimed at implementing the National Adaptation Programme of Action (NAPA) of Malawi and is eligible under the GEF LDCF, as it follows the principles and criteria outlined in the Programming Paper on the implementation of NAPAs under the LDCF. Malawi's 2005 NAPA, based on a multistakeholder consultative process, identifies two urgent and immediate priority actions that consist of (a) improving community resilience to climate change through the development of sustainable rural livelihoods, and (b) improving agricultural production under erratic rains and changing climatic conditions. The proposed LDCF project addresses these priority actions by implementing climate-change adaptation measures to improve resilience and adaptive capacity in vulnerable districts in Malawi. It builds on the baseline AfDB development project Smallholder Crop Production and Marketing, which has two main components: irrigation development and farmer support. The NAPA component, financed by the GEF LDCF grant, will address the impacts of climate change by supporting investments aimed at improving agricultural, land management and natural systems as well as rural livelihoods through targeted on the ground adaptation interventions, fostering adaptation of individuals, communities and the private sector climate risk management, including plans, policies, legislation and regulations, and resource allocation; institutional coordination; generation and tailoring of knowledge on climate risk management for specific user groups (particularly in the context of the investment component); and awareness raising. The project is targeted on strengthening the productive capacities of vulnerable communities, securing their livelihoods against the adverse impacts of climate change, and sustaining poverty reduction.
The proposed CEACAFA will operate along largely similar modalities as other AfDB multidonor trust funds, the main difference being that the financing for climate adaptation activities under the CEACAFA will most often be on grant terms. A large proportion of activities (at least 80 percent in terms of resource approvals) will be demand driven. Eligible clients will be central governments, sub-sovereign bodies such as municipal and local councils, private financial and business entities, research institutions, and civil society organizations and NGOs. The remainder will finance the Bank Group's own activities and initiatives, including economic and sector work, and knowledge dissemination.
10 ADB Support to Climate-Proofing Pacific Countries ADB recently completed a three-year project to assist selected Pacific developing member countries to adapt to climate change and variability. The project produced a climate change stocktaking and risk profiles for eight countries, together with a support kit and guidelines for mainstreaming adaptation, with several examples of project briefs. The analysis demonstrated the importance of mainstreaming adaptation in the Pacific, including strengthening the enabling environment to increase the likelihood of successful adaptation at project and community levels. The "National Guidelines for Mainstreaming Adaptation to Climate Change" were adopted by the governments of each country, and are now being used as the main references for adaptation mainstreaming at the national level. These are based on the approach presented in the widely disseminated main report from the study "Climate Proofing: A Risk-based Approach to Adaptation." Capacity building for responsible government agencies and related stakeholders also was provided. This project is being used by the ADB to expand its adaptation support not only to Pacific Island countries but also across Asia through its Climate Change Adaptation Program, supported by the Regional Technical Assistance Project Promoting Climate Change Adaptation in Asia and Pacific (2007-2011).
The EIB is managing the Climate Change Financing Facility (CCFF) that consists of a 1 billion [euro] window from the EIB's own resources for the financing of projects inside and outside the EU that result in a significant reduction in greenhouse gas emissions, generate carbon credits under the CDM and JI (joint implementation), and help countries or promoters adapt to climate change. Adaptation investment opportunities can be proposed in sectors such as water resources, agriculture, coastal zone management and marine resources, forestry and eco-system management.
The GEF is currently the world's largest funder of activities to address the adverse impacts of climate. Several MDBs, including the World Bank, ADB, and AfDB, are working closely with the GEF, which has funds available in the order of US$200 million at this point.
While a lot of analytic work is being undertaken, the current MDB financial commitment to adaptation activities remains modest. The MDBs as a group are reviewing ways in which their collective efforts on adaptation can be increased. For example, the ADB has recently initiated Promoting Climate Change Adaptation in Asia and the Pacific, a technical assistance project that is designed to mainstream adaptation into investment planning, and to broadly disseminate the results to member countries and donors so that a strengthened international community response for adaptation can occur.
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|Title Annotation:||THE MULTILATERAL DEVELOPMENT BANKS AND the Climate Change Agenda|
|Publication:||The Multilateral Development Banks and the Climate Change Agenda|
|Date:||Nov 1, 2007|
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