AnAn Adaptation Mosaic

A SAMPLE OF THE EMERGING WORLD BANK WORK IN CLIMATE CHANGE ADAPTATION

FINAL DRAFT

Ajay Mathur, Ian Burton, and Maarten van Aalst, eds.

February 2004

World Bank Global Climate Change Team

THE WORLD BANK An Adaptation Mosaic

A sample of the emerging World Bank work in climate change adaptation

Ajay Mathur, Ian Burton and Maarten van Aalst, eds.

2004

World Bank Global Climate Change Team MATHUR, BURTON AND VAN AALST, EDS. AN ADAPTATION MOSAIC

-ii- MATHUR, BURTON AND VAN AALST, EDS. AN ADAPTATION MOSAIC

Table of Contents

Acknowledgements

Introduction – an Adaptation Mosaic page 1 Ajay Mathur, Ian Burton, and Maarten van Aalst

1. The Socio-economic Costs of Disasters page 5 Margaret Arnold and Alcira Kreimer

2. Vulnerability and Adapation in Pacific Island Countries page 15 Maarten van Aalst and Sofia Bettencourt

3. Vulnerability and Adaptation in Bank work: Progess and Prospects page 41 Ian Burton and Maarten van Aalst

4. Climate Influence on World Bank Agriculture Portfolio in Brazil and India page 53 Rama Chandra Reddy, Ariel Dinar and Robert Mendelsohn

5. Climate Variability in Kenya: Impacts and Responses page 71 Hezron Mogaka, Sam Gichere, James Richard Davis and Rafik Hirji

6. Climate Change and Agriculture - Impacts and Adaptations page 83 Pradeep Kurukulasuriya

7. Weather Indexes for Developing Countries page 99 Panos Varangis, Jerry Skees, and Barry Barnett

8. Building Effective Catastrophe Insurance Programs at the Country Level: a Risk Management Perspective page 119 Eugene Gurenko

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Acknowledgements

The editors wish to thank all the participants of the climate change training course held during ESSD week on March 13/14, 2003; in particular the session chairs Bob Watson, Ajay Mathur, and Ariel Dinar, and presenters Alcira Kreimer, Bob Mendelsohn, Maarten van Aalst, Rama Chandra Reddy, Ian Burton, James Richard Davis, Pradeep Kurukulasuriya, Panos Varangis, and Eugene Gurenko.

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Introduction – an Adaptation Mosaic

Ajay Mathur1, Ian Burton2 and Maarten van Aalst3

1 Ajay Mathur ([email protected]) is team leader of the World Bank Global Climate Change Team 2 Ian Burton ([email protected]) is emeritus professor of the University of Toronto and independent scholar and consultant 3 Maarten van Aalst ([email protected]) is a climate change specialist at Utrecht University

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An Adaptation Mosaic

The papers in this collection were presented at a climate change training seminar held at the World Bank during ESSD week 2003. They were selected to provide a sample of current Bank work relating to adaptation to climate change, and to facilitate an exchange of ideas about the emerging agenda for Bank work in this area. What is presented here are fragments of an incomplete mosaic. The complete picture has yet to be drawn, but its pieces already provides an indications of the pattern of work that is now developing. The collection serves as a companion paper to Look Before You Leap, a strategic paper prepared for the Climate Change Team by Ian Burton and Maarten van Aalst, which proposes future directions for the Bank's work in this area.

In the past few years, adaptation to climate change has emerged onto the climate agenda to stand next to the reduction of greenhouse gas concentrations in the atmosphere as an essential part of the response to the risks of climate change. Poor countries, and poor people in all countries, are likely to be hit hardest by the negative consequences of climate change. Climate change thus directly affects the World Bank’s mission of reducing poverty4. The Bank’s clients clearly need assistance in developing their own approach to climate risks and their own adaptation priorities. At the same time, the Bank has to ensure that its own investments are not exposed to unacceptable risk. In some cases, new adaptation funding opportunities under the United Nations Framework Convention on Climate Change (UNFCCC) might be used for these tasks5.

It is widely accepted that the Bank's main efforts in climate change adaptation should be focused on the integration of climate risk management in policies and projects in client countries, where appropriate. While this process is urgent, it is not trivial how it should be shaped. The papers in this Mosaic collection exemplify the experiments and the valuable lessons from the "learning by doing" that characterises Bank experiences in this area so far.

While anthropogenic climate change is a new item on the global environment and development agenda, climate variability and extreme weather events have always been a concern. The main capability in the Bank for dealing with these issues rests with the Disaster Management Facility and it is in that direction that we can look for lessons from the experience of dealing with climate

4 See the recent interagency paper on Poverty and Climate Change at www.climatevarg.org 5 As discussed in Look Before You Leap (Burton and Van Aalst, 2003), the UNFCCC-related funding mechanisms do not necessarily match the World Bank mandate to mainstream adaptation in the context of poverty reduction and sustainble development. In contrast to greenhouse gas mitigation, adaptation has no clear quantitative measures of success like atmospheric concentrations or emission levels. Adaptation is a place-based phenomenon and the benefits fall largely where the adaptation policies and measures are adopted. In the absence of global yardsticks the adaptation process lacks coherence, and seems to be evolving on two different tracks. One track, in the context of the UNFCCC and its funding mechanisms, aims at strictly climate change related adaptation activities. The other track focuses on adaptation as part of mainstream economic and sustainable development, and sees climate change as just one element in a complex development process, which should not be isolated. The World Bank’s mission relates more to the latter. At the same time, there are good opportunities to combine adaptation measures and UNFCCC- related funding with the Bank's development work, both at the national level and in the project cycle. Such Bank activities would benefit from, and could also contribute to, a harmonization of the two tracks. MATHUR, BURTON AND VAN AALST, EDS. AN ADAPTATION MOSAIC impacts. The first paper in the set (by Margaret Arnold and Alcira Kreimer) therefore describes the impacts of disasters. The story is not reassuring. Despite considerable efforts the toll of disaster losses continues to rise in both developed and developing countries, although there has been considerable success in reducing the motality and morbidity associated with disasters. This experience shows that adapting to climate change variability and extremes is not a straightfoward task and easy and quick successes are not to be expected.

The subsequent papers in this set focus on the assessment of the additional risk that climate impacts place on development; emerging examples of how adaptation options to mitigate this risk can be integrated into the Bank’s operations; and innovative illustrations of how the „irreducible risk“ can be spread and shared .

The experience related to risk assessment comes from countries that are particularly vulnerable to climate change. Among them are many small island states, especially in the Pacific Ocean. Already vulnerable to tropical cyclones, droughts and floods, they now also face climate change and incremental sea level rise. The second paper (by Maarten van Aalst and Sofia Bettencourt) describes two World Bank activities in the Pacific Region: a study on the potential economic implications of climate change, and an ongoing project to mainstream adaptation into economic planning in Kiribati, a particularly vulnerable atoll country.

In addition to the Pacific islands study, the World Bank has been involved in similar activities to explore vulnerabilities to climate change and adaptation options in Bangladesh and the Caribbean islands - both also areas of high vulnerability and relatively low adaptation capacity. The third paper (by Ian Burton and Maarten van Aalst) draws lessons from these three studies, on the basis of recent project reviews.

Carrying out special studies on climate impacts, vulnerability and adaptation is one element of addressing the new risks, but in many ways it represents the easy part of the task. More difficult is the incorporation of adaptation and climate risk management into Bank operations. The Kiribati project (discussed in the second paper) aims to integrate climate risk management in the economic planning of a client country. Other steps towards the integration of climate risk management in operational work include an analysis of agriculture and irigation projects in Brazil and India (by Rama Chandra Reddy, Ariel Dinar, and Robert Mendelsohn), and of water resoures management and climate variability in Kenya (by Hezron Mogaka, Sam Gichere, James Richard Davis, and Rafik Hirji). Another sectoral approach is the review of impacts and adaptation options for agriculture (by Pradeep Kurukulasuriya).

The last two papers in the set deal not directly with adaptation measures and policies themselves, but with ways of risk sharing and spreading through insurance. Again the experience comes not from climate change work but from the field of natural disasters. Panos Varangis, Jerry Skees, and Barry Barnett describe the use of weather derivatives as an approach to dealing with catastrophic risk and Eugene Gurenko describes the Bank’s work in helping to establish a pool or a fund for earthquake insurance in Turkey.

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Special studies of climate risk, vulnerability and adaptation; lessons from natural disaster experience including new insurance initiatives; and the beginnings of the incorporation of climate risks into Bank operational work are three ways in which progress is being made in the development of a Bank approach to climate change adaptation. The next few years are likely to see a considerable expansion of all three kinds of work, leading to the day when assessment of climate risks will have become a routine part of Bank operations. As these papers show this is not a matter of devising new safeguards to be imposed upon Bank work at country and project levels. Rather it a matter of taking advantage of the opportunities for the Bank to assist its clients in the face of many risks, old and new - including a changing climate. This adaptation mosaic is the beginning of a long story, most of which has yet to be written. AN ADAPTATION MOSAIC CHAPTER 1

1 The Socio-economic Costs of Disasters1

Margaret Arnold and Alcira Kreimer2

1 Additional information relating to the topics raised in this paper can be found in a number of publications by the World Bank Disaster Management Facility, available at http://worldbank.org/dmf 2 Margaret Arnold and Alcira Kreimer ([email protected]) are the World Bank Disaster Management Facility

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The Intergovernmental Panel on Climate Change (IPCC) estimates an increase of 1.4 to 5.8 degrees centigrade in surface temperature over the current century, a rise that is without precedent in the last 10,000 years. Changes in this range will affect the intensity and frequency of extreme weather events, including floods, droughts, heat waves, and storms. Hence, disaster risk reduction and climate change adaptation are intimately linked. This chapter discusses the worrying trends in natural disasters, their impacts on development and poverty, and the role of the World Bank in disaster risk reduction.

1. Introduction

The mission of the World Bank is to fight poverty. An important part of this mission it to assist developing countries to prevent, prepare for and recover from natural disasters. Vulnerability to disaster impacts is an important and often overlooked dimension of poverty. Between 1990 and 1998, 94% of the world’s disasters and 97% of all natural-disaster-related deaths occurred in developing countries. Natural disasters comprise a key source of risk for the poor, including loss of life, shelter, livelihoods. The reduction of disaster risk is essential to achieving the Millennium Development Goals, in particular those of eradication extreme poverty and hunger; ensuring environmental sustainability; and developing a global partnership for development.

2. What’s to Come

In 2002, the cost of the world’s natural disasters reached US$55 billion. Over the last 50 years, there has been a 14-fold increase in the global cost of natural disasters, with weather-related natural disasters accounting for two-thirds of all losses. Annual economic losses due to natural disasters in the last decade reached an estimated US$54 billion per annum, with a high percentage of losses in infrastructure. In Asia alone, disasters caused losses to infrastructure investment amounting to US$10 billion per year in the 1990s. These direct losses from catastrophes significantly impact the poor and their livelihoods.

Developing countries are not only facing the potential of more frequent weather-related events. Rapid urbanization, the increased concentration of assets, environmental degradation, and other factors are also increasing the vulnerability of poor communities to disaster impacts. Since 1950, the urban population has been increasing at the rate of 4% per year compared with a 1.9% rate of increase for the world’s population. In the year 2020 it is expected that the total world population will reach approximately 8.5 billion, with a large percentage of these people located in urban areas with high exposure to natural hazards. Especially vulnerable to natural disasters are megacities like Jakarta, Istanbul, Buenos Aires, Athens, Sao Paulo, and Mexico City.

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3. Understanding the Developmental Impacts of Disasters

The impacts of disasters include direct, indirect and secondary losses. The direct effects of disasters comprise the physical losses such as loss of life, collapsed buildings, and destroyed infrastructure. Indirect costs refer to the loss of earnings and output due to interrupted activities after a disaster occurs. Examples of indirect costs include loss of earnings, unemployment, loss of productivity due to death, illness and injuries, and increased public finance expenditure. Secondary effects of disasters include macroeconomic impacts and longer-term impacts such as balance of payments, trade deficits and GDP growth. All of these impacts have significant adverse effects on the social and economic development of developing countries. For example, Honduras’ Poverty Reduction Strategy Paper, prepared by the Government, details the effects of Hurricane Mitch, stating that it caused an increase of an estimated 165,000 poor people nationwide. The strategy paper cites employment, housing, factors of production and income as areas affected by this disaster. Box 1. below provides some more details on the macroeconomic impacts that disasters can have.

Box 1. Modeling the macroeconomic impacts of disasters

Often perceived as “acts of God,” natural catastrophes have frequently been overlooked in policy planning. On an aggregate level, the consequence of this limited planning is a serious challenge to socioeconomic development as scarce funds are diverted from longer-term development objectives to short-term emergency relief and reconstruction needs. However, if disaster impacts are integrated as a component of macroeconomic projections, than more effective planning options at the country and international level can be explored. An exercise to model the macroeconomic impacts of disasters in Argentina, Honduras, and Nicaragua developed a framework to analyze the economic impacts of natural disasters in developing countries and facilitate the analysis of policies designed to reduce the economic impacts of natural catastrophes and minimize the impact of catastrophes on the poor. The country exercises first estimated annual expected losses due to natural catastrophes for each country. The results were an annual expected loss of $320 million a year for Argentina (representing 0.025% of capital stock), $64 million a year for Honduras (0.49% of capital stock), and $22 million a year for Nicaragua (0.43% of capital stock). The country exercises then estimated the macroeconomic impacts of these direct losses. In order for Argentina to achieve growth projections with annual expected losses of $320 million as a result of flooding, the country must be able to mobilize the funds necessary for emergency relief and reconstruction investment. These funds can come from either tapping into foreign savings by increasing imports and/or decreasing private consumption. By stochastically integrating catastrophe exposure into a macroeconomic model for Argentina, the exercise projects for one sample year that government consumption is expected to increase by $48 million, imports increase by $93 million, external debt increase by $160 million, and private consumption decrease by $410 million. These expected adjustments to existing forecasts derive solely from accounting for catastrophe losses, demonstrating that knowledge of the magnitude, probability and range of the impacts of catastrophes on macroeconomic projections is valuable for planning for disasters.

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Real GDP

8000 7500 7000 6500 6000

million USD 5500 5000 4500 4000 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 year

Original projection Projection incorporating catastrophic exposure Figure 1: Effect of incorporating catastrophe exposure on GDP projections in Honduras

The Honduras and Nicaragua examples considered cases in which access to post-disaster financing may be limited. Figure 1 demonstrates that if access to foreign savings is limited post- event, catastrophes could stagnate GDP for Honduras over the next 8 years. The first trajectory, marked with boxes, represents World Bank projections for expected annual growth rates of 5% to 6%. The second growth trajectory, marked with triangles, incorporates the effects of catastrophic exposure assuming Honduras can not obtain sufficient external funds to finance post-disaster losses. This new growth trajectory demonstrates that catastrophe exposure has the potential to impede future growth of the Honduran economy. The study on Nicaragua extended the Honduras' analysis to understand the impacts of catastrophes on the poor. Using a household level model, the macroeconomic estimates of decreased economic growth were translated into poverty impacts. Two scenarios on proportional and disproportional impacts showed that an inability to reconstruct or provide relief post- catastrophe can stall poverty eradication efforts.

Another threat to long-term development is the reallocation of expenditure that occurs following a disaster. Following the 1985 earthquake in Mexico, it is estimated that as much as 30% of funds earmarked for water sector projects were diverted to deal with emergency needs. Ad hoc reassignments of funds becomes frequent if not routine in disaster-prone countries, and even if funds are used well for disaster reconstruction, a sudden, unplanned reallocation can destabilize or sacrifice longer-term development objectives. Responding to disasters also undermines budgetary planning, investment confidence and interrupts ongoing projects and reduces the abilities of communities and governments to pursue long-term development goals. International organizations and local financing institutions also reallocate funding from ongoing projects to provide urgently needed support in emergency situations, which detracts from development goals set out by those activities.

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People in Poverty

2,400,000 Current policy 2,300,000 objective, to reduce the 2,200,000 number of poor

2,100,000 Catastrophe, number of poor 2,000,000 does not meet current policy 1,900,000 objective 1,800,000 1998 2000 2002 2004 2006 2008

Figure 2: Catastrophes can slow or stall the reduction of poverty

The dotted line in figure 2 shows the current policy objective for Nicaragua: to reduce the number of people in poverty. The dotted line indicates that, in the absence of a catastrophe, GDP growth alone reduces the number of people in poverty by 500,000 people by 2008. In the case of a catastrophe where a country does not obtain additional aid (shown by the solid line), the impact on poverty is substantial. For the decade following a 1998 catastrophe, the number of people living in poverty decreases only slightly. Towards the end of the projected period, the number of people in poverty begins to rise slightly. The country cases demonstrate that the ability to finance losses following a disaster is crucial to recovery. Including disaster risk management as a formal component of development planning for countries with high disaster exposure is essential if development efforts are to be truly sustainable.

Adapted from Freeman, Paul et al. Catastrophes and Development: Integrating Natural Catastrophes into Development Planning, Disaster Management Facility, World Bank, June 2002.

In every case, it is the poor that are disproportionately affected by disaster. Low-income families typically live in the informal sector, on marginal lands, and have few, if any, resources to mitigate and respond to disasters. When information is available on risk identification, people with resources can take measures to avoid the risk, while the poor are forced to accept a higher level of risk. Although they live in more vulnerable areas, the daily struggle to survive takes priority over investment in mitigating the impacts of potential disaster events.

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4. The Role of the World Bank in Reducing Disaster Impacts

The World Bank has a long tradition of supporting the disaster management efforts of its client countries. Since 1980, the Bank has approved approximately 500 operations related to natural disasters, amounting to more than $40 billion. This figure includes both post-disaster reconstruction operations as well as projects with components to mitigate losses before disaster strikes. The figure requires some explanation, as it does not include the amounts of funding that are reallocated from ongoing development projects in response to a disaster emergency, which are quite substantial. Following a disaster event, the World Bank in many cases reallocates funding from ongoing projects in a country’s lending portfolio in order to get urgently needed liquidity to the emergency situation. These funds however, remain under the original project name, and are difficult to capture in disaster lending figures. In addition, on the side of “mitigation projects,” the $40 million figure includes the entire loan amount of projects that may comprise a few components to risk reduction measures. An example may be a forestry development project that includes components to train firefighters and communities on fire prevention, build firebreaks, etc. In short, while the $40 million provides a ballpark figure regarding World Bank investment for disaster management, it is important to note that the proportion of funding aimed at post- disaster reconstruction is much more significant than that supporting “stand-alone” disaster risk reduction investments. A regional breakdown of the lending support for disasters is provided in Figure 3.

Figure 3. Lending Volume of Disaster-related Projects Approved since 1980

8,558

South Asia

Middle East and North Africa 2,383 9,016 Latin America and Caribbean

Europe and Central Asia 4,384 9,154

East Asia and Pacific

Africa 7,288

- 2,000 4,000 6,000 8,000 10,000

Funding ($m)

In terms of sectoral coverage, Bank-supported reconstruction projects are typically multi-sectoral, and implemented in both urban and rural areas. Affected countries generally give a high priority to housing reconstruction after a natural disaster, thus, many projects have housing reconstruction as a major component. Bank projects have focused even more on repairing infrastructure and damaged community facilities as well as economic recovery through emergency import support.

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Rebuilding in urban areas has often focused on health facilities, such as hospitals that are themselves important to the recovery process. Where full reconstruction was not necessary, projects have concentrated on rehabilitation.

Institutional strengthening measures—through information and early warning systems, for instance—have also featured prominently in reconstruction project design. Some reconstruction projects have successfully built up the capacity to respond to future emergencies through institutional development.

Projects aimed at disaster mitigation have addressed three likely weather-related events, namely floods, forest fires and droughts, all with long lead times against which mitigation can be most effective. Among the main components are forest fire prevention such as fire breaks and flood protection measures ranging from coastal defenses to terracing. Institutional development is extremely important for mitigation to promote disaster awareness, planning and early warning systems. As part of institutional development, the enforcement of land use and building codes to avoid settlement in hazardous areas or in vulnerable structures, has been widely pursued by these projects.

5. Stepping up Efforts to Reduce Disaster Impacts

Recognizing the increasing vulnerabilities to hazards, the World Bank has been stepping up its efforts to better integrate disaster risk reduction into its development efforts. In 1998, the Bank established a Disaster Management Facility (DMF) to serve as a central resource for technical support and cross-regional learning on disaster-related issues. The DMF serves the Bank and its clients by providing four main services: • technical support to Bank operations; • corporate strategy and policy analysis and development; • knowledge generation through work with Bank Group and external partners; and, • learning and training activities for Bank staff and clients.

The DMF’s objectives are to facilitate a more strategic response to disaster emergencies, and, more importantly, to enhance the Bank’s poverty alleviation efforts by integrating effective disaster risk reduction into development activities. To reduce the impacts of disasters and to facilitate the adaptive capacity of developing countries to the impacts of climate change, a comprehensive risk management strategy is necessary. This approach comprises three main components:

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• Risk identification: Identifying hazards, who and what is vulnerable to disaster impacts; and, developing a complete understanding of the economic, financial and social impacts of disasters. • Risk reduction: Developing strategies and tools to avoid hazards (e.g. land use and development planning) and resist disaster impacts (e.g. building codes, socio- organizational measures). • Risk sharing/transfer: Mechanisms to protect investments and better manage the financial impacts of disasters (e.g. insurance mechanisms, contingency financing arrangements, social safety nets).

The DMF has been working actively to develop tools and capacity for mainstreaming this comprehensive disaster risk management strategy into practice through World Bank strategies and operations. A great deal of documentation has been generated by the DMF, in partnership with other organizations to develop a better understanding of the economic and developmental impacts of disasters, thus justifying the benefits of disaster prevention investments (all DMF publications are accessible on the website (www.worldbank.org/dmf). Tools developed with partners to facilitate improved disaster risk management include standards and a methodology for assessing post-disaster damage and needs; construction guidelines for disaster resistant hospitals and health centers; and guidelines for microfinance institutions on how to best operate in disaster situations (to both protect the institution and support the recovery of the communities they serve).

Through awareness raising and training, Country Assistance Strategies (CASs) are increasingly addressing disaster risk management, and the governments of countries such as Vietnam, Malawi, Mozambique and Cambodia are incorporating disaster prevention and preparedness into their Poverty Reduction Strategy Papers (PRSPs).

Operations are also increasingly focusing on integrating disaster prevention into development planning. For example, reconstruction projects implemented following the Marmara earthquake in Turkey and the 2001 earthquake in Gujarat are going beyond mere rebuilding to focus on developing communities that are more resilient against future disaster events. In Honduras and Nicaragua, natural disaster vulnerability reduction projects focus exclusively on building emergency preparedness and response capacity at the national and municipal levels. Projects under preparation in Mexico and Colombia are supporting the development of ex ante measures to better manage the financial impacts of disasters. Further analyses are underway countries in Eastern Europe, South Asia and East Asia and the Pacific regions to explore how to strengthen capacity for disaster risk reduction.

Studies show that disaster prevention measures save lives and livelihoods and are a sound investment in future security. The US Federal Emergency Management Agency (FEMA) estimates that every dollar spent to mitigate disasters saves two dollars spent on response and recovery. A study in Argentina found that US$590 million invested in flood prevention avoided an estimated US$1.4 billion in damages from floods. Installing dams and improving drainage in the World Bank’s Rio Flood Reconstruction and Prevention project in Brazil reduced floodable

- 12 - AN ADAPTATION MOSAIC CHAPTER 1 areas by over 40% and achieved a 6.5 benefit -cost ratio for significant stretches of the Iguaçu and Sarapui rivers.

6. Conclusion

We are facing a dangerous trend of an increasing occurrence of disaster events and equally increasing vulnerability to disasters. We are surrounded by recent reminders that sustainable development cannot be attained without mitigating hazard risks. Cumulative experience with disasters points to an urgent need to move away from fatalism to prevention and from mobilizing resources after the fact to reducing risk before disasters occur. Developing countries and the agencies that assist them can not continue to formulate development plans and investment projects without due consideration to the risks posed by natural hazards.

Measures taken to reduce the impact of disasters provide an effective vehicle to make substantial advances in the fight against poverty. Solutions include implementing mechanisms to increase public awareness of natural hazards, promoting investment in disaster mitigation, and providing regulatory and financial incentives for safe construction and development. The fruits of such prevention efforts are considerable: less frequent and severe disasters, lives saved, property protected, and more resilient and prosperous communities.

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2 Vulnerability and Adaptation in Pacific Island Countries

• Vulnerability and Adaptation Analysis: Cities, Seas and Storms

• Operationalizing Adaptation: the Kiribati Adaptation Project

Maarten van Aalst1 and Sofia Bettencourt2

1 Maarten van Aalst ([email protected]) is a climate change specialist at Utrecht University. 2 Sofia Bettencourt ([email protected]) is a senior natural resources economist at the World Bank (and task team leader for the Kiribati Adaptation Project)

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2.1 Cities, Seas and Storms: Vulnerability and Adaptation Analysis3

Climate change is likely to have substantial and Table 1. Estimated Costs of Extreme Weather widespread impacts on Pacific Island countries, Events in the Pacific Island Region during the 1990s affecting sectors as varied as health, coastal (millions of US$) infrastructure, water resources, agriculture, Estimated forestry and fisheries. This summary examines Event Year Country losses the possible impacts of climate change on a high Cyclone Ofa 1990 Samoa 140 and a low island of the Pacific, and discusses Cyclone Val 1991 Samoa 300 key adaptation and financing strategies. Typhoon Omar 1992 Guam 300 Cyclone Nina 1993 Solomon Islands – Cyclone Prema 1993 Vanuatu – A. Key Challenges Cyclone Kina 1993 Fiji 140 Cyclone Martin 1997 Cook Island 7.5 Across the Pacific, atoll dwellers speak of Cyclone Hina 1997 Tonga 14.5 a having to move their houses away from the Drought 1997 Regional > 175 Cyclone Cora 1998 Tonga 56 ocean because of coastal erosion; of having to Cyclone Alan 1998 French Polynesia – change cropping patterns because of saltwater Cyclone Dani 1999 Fiji 3.5 intrusion; of changes in wind, rainfall, and ocean currents. While these events may simply reflect – Not available. a. Includes losses of US$160 million in Fiji (Stratus 2000). climate variability, they illustrate the types of Note: Minor events and disasters in Papua New Guinea not included. impacts likely to be felt under climate change. Costs are not adjusted for(inflation. Source: Campbell 1999. Rising Vulnerability to Weather Events Compounding Impacts of Climate Change Many policymakers dismiss climate change as a problem of the future. But impacts similar to Arriving on top of this increased vulnerability, those likely to result from climate change are climate change will likely exacerbate the current already being felt, as the Pacific Islands become impacts, whether or not climate variability increasingly vulnerable to extreme weather increases in the future—and there is some events and climate variability. Growing evidence that it may. In low islands, the most urbanization and squatter settlements, substantial damage would come from losses to degradation of coastal ecosystems, and rapidly coastal infrastructure as a result of inundation, developing infrastructure on coastal areas are storm surge, or shoreline erosion. But climate intensifying the islands’ exposure to extreme change could also cause more intense cyclones weather events. At the same time, traditional and droughts, the failure of subsistence crops practices promoting adaptation such as and coastal fisheries, losses in coral reefs, and multicrop agriculture are gradually weakening. the spread of malaria and dengue fever. These These factors are contributing to increasingly impacts could be felt soon: if climate change severe impacts from weather events. In the models are correct, the average sea level could rise 11–21 centimeters and average temperatures 1990s alone, the cost of extreme events in the 0 0 Pacific Island region exceeded US$1 billion could rise 0.5 –0.6 C by 2025 (table 1).

3 Summary of Cities, Sea, and Storms, Managing Change in Pacific Island Economies, Volume IV: Adapting to Climate Change (World Bank 2000).

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Table 2. Climate Change and Variability Scenarios in the Pacific Island Region

Impact 2025 2050 2100 Level of Certainty

Sea level rise (centimeters) 11–21 23–43 50–103 Moderate Air temperature increase (degrees Centigrade) 0.5–0.6 0.9–1.3 1.6–3.4 High Change in rainfall (percent) Fiji -3.7–+3.7 -8.2–+8.2 -20.3–+20.3 Low Kiribati -4.8–+3.2 -10.7–+7.1 -26.9–+17.7 Low Cyclones Frequency Models produce conflicting results Very low Intensity (percentage increase in wind speed) 0–20 Moderate El Niño Southern Oscillation (ENSO) A more El Niño –like mean state Moderate

Note: Ranges given reflect a best-guess scenario (lower value) and a worst-case scenario (higher value). For details, see World Bank (2000), annex A. B. Climate Change Scenarios How certain is climate change? The Intergovernmental Panel on Climate Change In 1999-2000, the World Bank helped sponsor a (IPCC) stated in 1995 that “the balance of study of potential impacts of climate change evidence suggests a discernible human influence scenarios and adaptation options in the Pacific on global climate change” (IPCC 1996). 4 Island region. Based on the best scientific Uncertainties remain, however, particularly at information available for the region, the resolutions with sufficient detail to encompass following scenarios were used (table 2): small island states. Rise in sea level. Sea level may rise 0.5 meters Some changes are more certain than others. (in a “best-guess” scenario) to 1 meter (in a There is emerging consensus that global average “worst-case” scenario) by 2100. temperatures and sea level will increase. Rainfall changes remain highly uncertain, Increase in surface air temperature. Air 0 0 however, as does the relationship between temperature could increase 1.6 –3.4 C by 2100. climate change and extreme events. Uncertainty Changes in rainfall. Rainfall could either rise or also increases with time: projections for 2100 fall—most models predict an increase—by about are less certain than projections for 2050. Global 20 percent in 2100, leading to more intense changes are more certain than regional or island- floods or droughts. specific changes. And impacts on coastal areas Increased frequency of El Niño-like conditions. and water resources are generally more certain The balance of evidence indicates that El Niño than impacts on agriculture and health. conditions may occur more frequently, leading Although there are uncertainties on the to higher average rainfall in the central Pacific magnitude and timing of the changes, most and northern Polynesia. studies consider the Pacific Islands to be at high risk from climate change and sea level rise Increased intensity of cyclones. Cyclones may (Kench and Cowell 1999). become more intense in the future, with wind Based on the results of the study, the physical speeds increasing by as much as 20 percent; it is and economic impacts of climate change in the unknown, however, whether cyclones will Pacific Island region are illustrated here by the become more frequent. example of a high island – Viti Levu in Fiji – and a group of low islands – Tarawa atoll in 4 The study was a collaboration with the International Kiribati. To give perspective to the analysis, the Global Change Institute, the Pacific Islands Climate economic damages were estimated for 2050 as if Change Assistance Programme teams in Fiji and the impacts had occurred under today’s socio- Kiribati, the South Pacific Regional Environmental economic conditions. Ranges represent a “best Programme, Stratus Consulting Inc., the Center for guess” scenario (lower bound) and a “worst International Climate and Environmental Research, and experts from numerous other national and case” scenario (upper bound). Costs reflect 1998 regional agencies (as listed in World Bank 2000). US dollars, and assume no adaptation.

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B. The Likely Impacts of Figure 1. Likely Impact of Climate Change on Climate Change Coastal Areas of Pacific Island Countries

Increased Increased Impact on Coastal Areas Sea Level Sea Tropical Rise Surface Cyclone Climate change is likely to affect coastal areas in Temperature Intensity three major ways: through a rise in sea level, leading to erosion and inundation; through more Impacts on Coral Reefs intense cyclones and storm surges; and through sssssssss higher sea surface temperatures, leading to a Processes decline in coral reefs (figure 1). Shoreward Increase wave Reduce Retreat of Energy sediment Mangrove production High islands may experience similar impacts as s Viti Levu, where coastal erosion may claim 2 to Increased Increased Increased River 4 percent of the land below 10 meters altitude by exposure coastal Flooding 2050, leading to average annual losses of to inundation erosion US$2.9–$5.8 million. By 2100, the proportion of land eroded could reach 5 to 10 percent. Due to the existing level of coastal protection and the topography, the impact of inundation is expected to be relatively minor. However, in years of strong storm surge, Viti Levu could experience losses in capital assets of US$75–$90 million by Figure 2: Scenarios of Inundation of Bikenibeu Island, mid-century. If the worst case scenarios of sea South Tarawa (Kiribati) level rise materialize by 2100, downtown Suva could experience serious flooding even during moderate cyclones.

The impact of sea level rise would be most severe in the low islands of the Pacific. In Tarawa, though the impact of coastal erosion is expected to be modest (3–4 percent of the land by 2100), inundation could lead to annual average damages of US$6.6 – US$12.4 million by 2050. Periodic storm surges could result in the inundation of up to 55–80 percent of land areas in North Tarawa, and 25–54 percent of areas in South Tarawa by 2050 (figure 2).

The net impact of sea level rise on mangroves is unclear, and could even be beneficial in some sites if the sea level rises gradually. Coral reefs, on the other hand, could be significantly affected by climate change. Many corals may not be able to adapt to warmer sea surface temperatures and to increased concentration of carbon dioxide in the atmosphere, both of which inhibit coral growth. Bleaching events and subsequent reef mortality are expected to become more frequent, A: Present status; B: Residual island under a worst case scenario, 2100; C: Residual island under worst case scenario and storm surge, 2100 leading potentially to a decline in reef fisheries Source: Background studies to Worldbank (2000) and a long-term reduction in coastal protection.

- 18 - AN ADAPTATION MOSAIC CHAPTER 2

Impact on Water Resources Figure 3. Likely Impact of Climate Change on the Water Resources of a Low Island (Tarawa, Kiribati) Climate change is likely to affect the water resources of Pacific Island countries through variations in rainfall, evapo-transpiration – Increased Drought Coastal Effects Frequency & of Mean Rainfall caused by rising temperatures – and a rise in Magnitude Climate Change sea level. It is also possible that islands such as Viti Levu would experience greater climate variability, with alternating floods Increase Decrease Loss of Increased Land Inundation and droughts brought on by more intense cyclones and fluctuations in El Niño/La Niña events. Decreased For Tarawa (and perhaps for many other low Improved Rain Reduced Reduced Water Water Quantity Quality islands in the Pacific) such trends would Resources Collection and impact the vital groundwater resources of the Storage atoll. If climate change scenarios prove Groundwater correct and rainfall changes by 7–10 percent, the sea level rises by 0.4 meters, and the Table 3. Estimated Average Annual Economic Impact of islands’ width is reduced through inundation, Climate Change on Water Resources of Tarawa and the thickness of Tarawa’s main groundwater Viti Levu, 2050 (millions of 1998 US$) supply could decline by 19–38 percent by 2050. The resulting economic losses could Category Annual damage average US$0.7–$2.7 million a year, and require the development of alternative groundwater sources, desalination, or rainfall Tarawa Atoll: Combined effect of sea level rise, changes in collection. rainfall and reduced island widtha 0.7_2.7 Total 0.7_2.7 In Viti Levu, rainfall variations could cause a 10 percent change in river flow by 2050 and a Viti Levu: 20 percent change by 2100. This could lead to Changes in average rainfall + substantial river flood damage if scenarios of Increased severity and/or frequency of El Niño–related drought + increased rainfall materialize. Provided that Increased cyclone intensity 0–11.1 the distribution system was kept fully Total >0-11.1 efficient, a scenario of reduced rainfall would not become a substantial threat for the water a – Assumes sea level rise of 0.4 meters, 7% increase to 10% decrease in rainfall, and reduced island width. supply of western Viti Levu until the second + Likely to have significant economic costs but impact could not be quantified. part of the century, but could then result in Note: The range given reflects a best guess and a worst case scenario. demand outstripping supply by as much as 38 Source: Background studies to Worldbank (2000). percent by 2100. Regional studies indicate that cyclone intensity may increase by 0–20 percent as a result of The combination of a warmer – and possibly climate change (Jones and others 1999; Holland drier – climate with potentially more prevalent 1997). A 20 percent increase in maximum wind El Niño conditions could lead to more intense speed could result in 44–100 percent higher droughts in Viti Levu. Droughts of the severity damages than experienced today,5 costing Viti of the 1997/98 event – which caused losses of Levu up to US$11 million a year by 2050 (table more than US$70 million, not counting impacts 3). on agriculture – could become the norm in the future. 5 Based on the costs of actual events recorded by the Fiji Meteorological Services, Clark (1997) and J. Terry (personal communication, May 2000).

- 19 – VAN AALST AND BETTENCOURT VULNERABILITY AND ADAPTATION IN PACIFIC ISLAND COUNTRIES

Impact on Agriculture Figure 4. Likely Impacts of Climate Change on Agriculture in Viti Levu, Fiji Climate change is most likely to affect agricultural production through changes in Increased Increased rainfall. Agricultural crops could also be Mean drought magnitude affected by rising temperatures, climate rainfall frequency of and tropical variability – such as more intense cyclones and magnitude cyclones El Niño/La Niña conditions – and sea level rise Increase Decrease (figure 4). If wetter conditions prevail in the future, water- sensitive crops such as coconut, breadfruit and Decreased Improved production production cassava would likely benefit. A rainfall decline, Sugar of most crops • Cane by contrast, would hurt most crops. In a low (but yam Taro production • island such as Tarawa, coconut production and • Cassava te babai (giant taro) would be particularly may decline) affected given their sensitivity to reductions in rainfall and groundwater. Figure 5. Effect of El Nino—induced Droughts on Taro Cultivation Area in Viti Levu, Fiji In Viti Levu, increases in rainfall during good years may offset the impacts of warmer temperatures. But a warmer – and possibly drier – climate could lead to more intense droughts during El Niño years. This could result in a 9 percent average drop in sugarcane production levels from current conditions, and in losses averaging US$13.7 million a year by 2050. In drought years, production of sugarcane could drop by half, with a shortfall of agricultural 1990 production approaching US$90 million. These periodic droughts could well prove to be the most disruptive to the Fijian economy once preferential trade agreements are phased out. The impacts of climate change on traditional crops, such as yam and taro, could also affect the subsistence economy of the Pacific Islands. In Viti Levu, a declining rainfall scenario and future El Niño/La Niña conditions could lead to a 11–15 percent shortfall in taro, yam, and Current El Nino cassava yields (figure 5). Even in scenarios of increasing rainfall, future climate variability could cost Viti Levu an average of US$68,0000 a year in lost food crops (though crops such as yam would likely benefit). In the low islands of Tarawa, sea level rise would affect agriculture crops through saltwater intrusion – affecting te babai (giant taro) production in particular – and through loss of 2050 El Nino coastal land to inundation, which may reduce production of copra, breadfruit and pandanus. Note: Shaded areas show land suitable for cultivation. Source: Background studies to Worldbank (2000). - 20 - AN ADAPTATION MOSAIC CHAPTER 2

Impact on Health virus. In Viti Levu, the number of cases could increase by 20–30 percent in 2050, and as much Climate change could have significant impacts as 100 percent by 2100 (under a worst case on public health due to the higher temperatures o scenario). In countries where the malaria vector (0.9–1.3 C by 2050), changes in water supply is found, the distribution and prevalence of the and extreme events, and a decline in agriculture disease is also likely to expand (WHO 1996). production. Likely impacts would include: Diarrhea disease is likely to become more • Direct impacts on public safety, such as common in a warmer world, particularly under a injuries, illness, and loss of lives due to scenario of decreasing rainfall. Sea level rise cyclones or droughts. could also increase the incidence of diarrhea by • Indirect effects, such as increased incidence disrupting sanitation and water supplies. of vector-borne diseases (dengue fever and Climate change could increase the incidence of malaria), waterborne diseases (diarrhea), and ciguatera poisoning in some areas. Kiribati toxic algae (ciguatera). already has one of the highest rates of ciguatera • Nutrition-related diseases, particularly poisoning in the Pacific (Lewis and Ruff, 1993). malnutrition and food shortages during The rise in temperatures is expected to increase extreme events. the incidence of ciguatera poisoning from 35–70 per thousand people to about 160–430 per These impacts are likely to be particularly severe thousand in 2050 (table 4). for the poor. Poor households – particularly in towns – will be more vulnerable to the impacts More intense cyclones and droughts are likely to of climate change because of their greater increase nutrition-related deficiencies, as propensity for infectious diseases, limited access experienced in Fiji during the 1997/98 drought, to medical services, substandard housing, and when US$18 million in food and water rations exposure to poor environmental conditions. had to be distributed (UNDAC 1998). Loss of Many of the urban poor may also lack access to agriculture and fisheries could result in the safety nets that assisted them traditionally in malnutrition and deterioration in standards of times of disaster. living. And the loss of land and infrastructure could lead to increased crowding conditions, Climate change could cause significant increases exacerbating problems of urban management. in the frequency, severity, and distribution of These diffuse effects could well prove to be dengue fever. The higher temperatures would among the most important impacts of climate increase the biting rate of mosquitoes and change on public health in the future. decrease the incubation period of the dengue

Table 4. Estimated Increases in Dengue Fever Epidemic Potential and Incidence of Ciguatera Poisoning in Kiribati as a Result of Climate Change, 2025–2100

Impact Baseline 2025 2050 2100 1990

Dengue fever Projected epidemic potentiala 0.18 0.20 0.22_0.24 0.25_0.36 Percentage change from 1990 — 11 22–33 39–100

Ciguatera poisoning incidence (per thousand population) 35_70 105_240 160_430 245_1,010

a – The epidemic potential index measures the efficiency of disease transmission. A value of 0.2 or above indicates a high epidemic potential. Note: Ranges indicate best-guess and worst-case scenarios. For assumptions, see World Bank (2000), annex A. Source: Background studies to this report.

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Impact on Regional Tuna Fisheries Box 1. Likely Future Climate

Climate change is likely to affect tuna fisheries Correspondence with of the Central and Western Pacific in two major Likely future climate present climate ways: by raising average ocean temperatures to levels currently experienced during medium- Mean state Moderate El Niño intensity El Niños and by increasing year-to- Moderate El Niño event Strong El Niño event year climate variability (Timmermann and Strong El Niño event Unknown, extremely others, 1999). The impacts are likely to be warm event pervasive, affecting the distribution, abundance, Moderate La Niña Current mean state and catchability of tuna fisheries: Strong La Niña Moderate La Niña • Decline in primary productivity. Primary productivity in the central and eastern Pacific could decline due to the increased stratification climate – could lead to a dramatic decline in between warmer surface waters and colder, productivity in the eastern Pacific (see box deeper water (and resulting reduction in 1). upwelling). Primary productivity in the western Pacific could conversely increase. • Higher impact on domestic fleets. While distant water fishing fleets can adapt to • Decline in tuna abundance. The decrease in stock fluctuations, domestic fleets would be upwelling would lead to a decline in the bigeye vulnerable to fluctuations of tuna fisheries in and adult yellowfin population (the species their exclusive economic zones. Countries in targeted by the longline fleet). By contrast, the central Pacific, such as Kiribati, would the abundance of purse-seine-caught skipjack likely be more adversely affected than those and juvenile yellowfin tuna is not expected to in the western Pacific. be affected. C. Economic Costs of Climate • Increased pressure on longline fishing. Given the continued high demand for sashimi Change in Japan, it is likely that longline fishing pressure on yellowfin tuna will increase to The aggregate economic costs of climate change compensate for the decline in adult bigeye impacts could be substantial. Estimates from tuna, leading to unsustainable exploitation. this study indicate that if climate change scenarios materialize, the island of Viti Levu in • Spatial redistribution of tuna resources. The Fiji could suffer economic damages averaging at warming of surface waters and the decline in least US$23-$52 million a year by 2050 (in primary productivity in the central and eastern 1998 dollar value), equivalent to 2–4 percent of Pacific could result in spatial redistribution of Fiji’s gross domestic product. Because these tuna resources to higher latitudes (such as losses are annual averages, they dampen the Japan) and towards the western equatorial actual costs of extreme weather events, which Pacific. could be considerably higher in a given year. A • Increase in climate variability. With the cyclone might cause damages of about US$40 likely rise in climate variability (Jones and million, while a severe drought could cost Viti others 1999), there may be an increase in the Levu some US$70 million in lost crops. annual fluctuations of the spatial distribution The Tarawa atoll in Kiribati could face average and abundance of tuna. It is possible that annual economic damages of US$8 million to more frequent cold events (such as strong La over US$16 million by 2050 (as compared with Niña episodes) may compensate for the a GDP of about US$47 million). In years of decrease in productivity under an El Niño strong storm surge, up to 54 percent of South mean state. However, a strong future El Tarawa could be inundated, with capital losses Niño – which has no parallel in the present of up to US$430 million (table 5).

- 22 - Table 5. Estimated Annual Economic ImpactAN ADAPTATION of Climate MOSAIC Change, 2050 (millions of 1998 US$) CHAPTER 2

Impact Average Annual damagea Likely Cost of an Extreme Extreme Eventb Event Viti Levu Tarawa Viti Levu Tarawa

Impact on coastal areas Loss of coastal land and infrastructure to erosion 3_6 0.1_0.3 – – – Loss of coastal land and infrastructure to inundation 0.3_0.5 7_12 75-90 210_430 Storm Surge and storm surge Loss of coral reefs and related services 5_14 0.2_0.5 – – – Loss of nonmonetized services from coral reefs, Mangroves and seagrasses + + – – –

Impact on water resources Increase in cyclone severity 0–11 – 40 – Cyclone Increase in ENSO–related droughts + + 50-70 – Drought Replacement of potable water supply due to change in + 1–3 – – – precipitation, sea level rise, and inundation Changes in annual rainfall + + – – – (other than impacts on agriculture)

Impact on agriculture Loss of sugarcane, yams, taro, and cassava due to temperature or rainfall changes and ENSO effects 14 + 70 – Drought Loss of other crops + + – – –

Impact on public health Increased incidence of dengue fever 1-6 + 30 – Large epidemic Increase in fatal dengue fever cases + + – – – Increased incidence of diarrhea 0 –1 + – – – Infant mortality due to diarrhea + + – – – Impact of cyclones and droughts on public safety + + – – –

Total estimated damages >23_52+ >8–16+ + Likely to have economic costs but impact not quantified. -- Not available a Reflects incremental average annual costs due to climate change. b Reflects the actual cost of an extreme event. Note: For assumptions, see World Bank (2000), Annex A. Ranges indicate a best guess (lower bound) and a worst case scenario (higher bound). Source: Background studies to this report.

D. Toward Adaptation: measures are best in the face of uncertain future Moderating the Impacts of impacts. Climate Change There is little Pacific Islands can do to prevent The estimated economic costs of climate change climate change. At the same time, Pacific Island assume no adaptation. In practice, Pacific Island governments cannot afford to ignore the governments and communities could help offset problem. Adapting to climate change may soon these costs by undertaking adaptation measures.6 become an economic and political imperative. The question is determining which adaptation The Need for Immediate Action

The development choices made by Pacific Island governments today will have a profound impact 6 Adaptation refers here to any measures that protects on the future vulnerability of the islands and on the Pacific Island countries against the impacts of climate change. Mitigation, by contrast, refers to the the magnitude of climate change impacts. reduction of greenhouse gas emissions.

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One of the most compelling arguments for of coastal areas and water supplies, control of acting now is the growing impact of extreme pollution, and investment in preventive health. weather events in the Pacific. Even those who argue that climate change may never happen As it will be shown, a 'no-regrets' adaptation cannot dispute the urgency of reducing the strategy need not involve large investments of islands’ vulnerability against severe climate public resources – but it will require strong events. The recent drought and the sequence of political will, as adaptation measures may face cyclones which affected many Pacific Islands strong competition from other development during the 1990s attest to an increasing exposure activities for scarce funds. Yet it is important to that will, sooner or later, put mounting public understand that the short-term economic gains of pressure on governments and politicians to act. a 'do nothing' strategy could be easily dissipated No less compelling is the fact that under an by the impact of future climate events. increasing globalized economy, those countries which invest early on adaptation – and, in the A development path that takes adaptation into process improve the quality of life and reduce account might sacrifice some potential short- investment risks – are likely to hold a term gains in favor of more diversification and a competitive advantage for foreign investment. reduction in vulnerability. But it would vastly As measures to reduce vulnerability are also decrease the downside costs, should climate among the most effective in adapting to climate change scenarios materialize. The challenge change, acting now to reduce current will be to find an acceptable level of risk – an vulnerability will also prepare the Pacific Islands intermediate solution between investing in high for the long-term effects of climate change. cost solutions and doing nothing – and start adapting long before the expected impacts occur. Another reason for acting now is that failure to do so may result in a loss of opportunities that Guidelines for Selecting Adaptation may not exist in the future. Coral reefs, for Measures example, may not be able to recover from bleaching events if they are weakened by Pacific Island countries have a vast array of pollution and mining. adaptation measures at their disposal. The following criteria could help guide their Finally, adaptation strategies may require selection: several decades to be discussed and implemented. Communities living in low-lying 1. No regrets. Give priority to 'no regrets' areas, for example, may need to relocate further measures, such as water resources inland to other communities’ customary land. management, which would be beneficial even This will require extensive public debates on in the absence of climate change. Structural how to place the common good of all above the measures such as sea walls and groynes – good of the clan or immediate family, a process which provide few benefits other than that cannot – and should not – be rushed. protection – require a high degree of certainty about the impact at a particular site. If climate Since it is difficult to predict far in advance how change impacts turn out to be different than climate change will affect a particular site, expected, investments in these measures could Pacific Island countries should avoid adaptation have been wasted. measures that could fail or have unanticipated social or economic consequences if climate 2. Level of implementation. Adopt general rather change impacts turn out to be different than than site-specific measures, at least until there anticipated (IPCC 1998). More appropriate will is more certainty about localized impacts. be 'no regrets' adaptation measures that would be 3. Bottom up or top-down. Use community- justified even in the absence of climate change. based (bottom-up) rather than top-down These include, for example, sound management interventions. Many traditional adaptation measures have been tested and adjusted over

- 24 - AN ADAPTATION MOSAIC CHAPTER 2

the years in response to extreme events. These observer, it may seem appropriate to reinforce measures are likely to be more effective than traditional Samoan houses to protect against top-down solutions. At the same time, cyclones. From the local communities’ point of communities will need external help to handle view, however, a 'do nothing' strategy may well threats – such as pollution – that are beyond be justified, because labor and materials could their control. A collaborative partnership be readily available from within the extended between the government and communities family and the houses might easily be rebuilt may well prove to be the most effective. following cyclones. The adaptation process thus needs to be highly participatory and allow for 4. Environmental impacts. Select adaptation adjustments as new knowledge about climate measures based on their impact on the overall change impacts is obtained. vulnerability of the islands, not only on their impact at a particular site (de Wet 1999). A Implementing Adaptation sea wall, for example, may solve the problems of a particular site but increase erosion The previous sections argued for Pacific Island downstream (figure 6). governments to promote 'no regrets' adaptation. But how should this strategy be implemented in 5. Cultural acceptability. Ensure that measures practice? are compatible with the socio-cultural traditions of local communities and do not Governments cannot do it alone. Adaptation cause social disruption. measures are and will continue to be 6. Timing. Time measures appropriately. Some implemented primarily by communities, the adaptation measures – such as expansion of private sector, and individuals. But the role of Pacific Island governments will be essential in rainwater collectors in Tarawa – may need to mainstreaming adaptation into policy and be implemented immediately. Others could development planning, in creating partnerships wait while appropriate responses are with communities and the private sector, and in developed. As a general rule, the most urgent dealing with problems only the government can measures are those needed to protect against handle (such as disaster management). current climate events and those on which it may no longer be possible to act in the future. Mainstreaming Adaptation 7. Cost-benefit. Chose measures where the Adaptation goals need to be identified as a clear potential benefits of adaptation clearly exceed priority in national policies and development its costs. plans. The objective would be to transform Table 6 shows a range of adaptation measures climate change from “something that may classified according to these criteria. happen in the future” to a priority feature of current development planning. Two key principles should be kept in mind when selecting adaptation options. First, adaptation is In the short to medium term, all major new not necessarily limited to interventions that development projects – such as coastal mining reduce climate change impacts. Measures that and dredging – should undergo adaptation increase the resilience of natural systems – by screening. This process should assess both the controlling pollution’s effects on coral reefs, for likely impact of climate change on the project, example – should also be considered, as should as well as the project’s impact on the islands’ policies that facilitate action on adaptation, such vulnerability and its contribution to adaptation as a legislation empowering communities to (de Wet 1999). Adaptation screening would not manage their own reef fisheries. require extensive new legislation but rather a revision of environmental impact assessments to Second, it is vital to consider the sociocultural take adaptation into account. The Coastal conditions of the Pacific Islands. To an external Hazard Mapping program in Samoa is a step in this direction.

- 25 – Table 6. SelectedV ExamplesAN AALST AND of B AdaptationETTENCOURT Measures VULNERABILITY AND ADAPTATION IN PACIFIC ISLAND COUNTRIES

Bottom up Negative Goal Adaptation measure No Level of implementation or top Environmental Culturally Timing Cost- regrets? down impacts? acceptable? benefit Moderate impacts on coastal areas Protection of critical ecosystems Increase Public awareness Generic Both No Yes Immediate Positive Prohibit extraction of reef and sand Yes Sector specific Both No May increase Immediate Positive building costs Prevent mangrove removal Yes Sector specific Both No Unknown Immediate Positive Control pollution Yes Generic Top down No Unknown Immediate Unknown Control overfishing Yes Sector specific Both No Loss of food Immediate Positive Protection of towns and property Engineered structures (such as seawalls) No Site specific Top down Probably Unknown Unknown Unknown Set back development from shoreline No Site specific Both Unknown Land tenure? Can wait Unknown Raise structures No Site specific Both Unknown Unknown Can wait Unknown Land use policies Coastal hazard mapping Yes Site specific Top down No Yes Immediate Unknown Control of erosion Mangrove replantation Yes Sector specific? Both No Yes Immediate Positive Engineering works in passages No Site specific Top down Probably Unknown Can wait Unknown Groynes No Site specific Top down Probably Unknown Immediate Positive(?) Moderate impacts on water resources Water resource management Leakage control Yes Sector specific Both No Yes Immediate Positive Pricing policies (fees, levies, surcharges) Yes (?) Sector specific Top down No Problematic Immediate Positive Conservation plumbing Yes Sector specific Both No Unknown Immediate Positive Stricter penalties to prevent waste Yes (?) Generic Top down No Resistance? Immediate Positive Catchment management Reforestation, soil conservation Yes Generic and site specific Both No Yes Immediate Positive Establishment of a Water Authority Yes Sector specific Top down No Unknown Immediate Positive Alternative water supply Expansion of rainwater collection Yes Sector and site specific Both Unknown Maybe Immediate Unknown Alternative groundwater use Yes Sector and site specific Top down Unknown Land tenure? Can wait Unknown Desalination No (?) Sector and site specific Top down Unknown High costs Can wait Unknown Importation No (?) Sector specific Top down No High costs Can wait Negative Flood control Diversion channels, weirs, etc. No Site specific Top down Probably Unknown Immediate Unknown Land use controls, flood proof housing No (?) Site specific Both No Land tenure? Immediate Unknown Moderate impacts on agriculture Community sustainability programs Traditional weather-resistant practices Yes Sector specific Bottom up No Yes Immediate Positive Sustainable production systems Agroforestry, water conservation Yes Sector specific Both No Unknown Immediate Positive Research Flexible farming systems Yes Sector specific Top down No Unknown Immediate Positive(?) Land use policies Mapping of suitable cropping areas Yes Generic Top down No Unknown Immediate Positive Avoid cultivation on marginal lands Yes Site specific Top down No Disruptive ? Positive Moderate impacts on public health Integrated adaptation strategies Poverty reduction programs Yes Generic and site specific Top down Unknown Yes Immediate Positive? and control of diarrheal disease Improved sanitation and water supply Yes Sector and site specific Both No Yes Immediate Positive Waste management Yes Sector and site specific Both No Unknown Immediate Positive Protection of groundwater Yes Sector and site specific Both No Unknown Immediate Positive Squatter settlement management Yes Site specific Both Unknown Yes ? Immediate Positive Control of dengue fever Community-based vector control Yes Sector and site specific Bottom up No Unknown Immediate Positive Improved preparedness (monitoring) Yes Sector specific Top down No Yes Immediate Positive Prevention of exposure Yes Sector specific Bottom up Unknown Difficult? Unknown Unknown Control of ciguatera poisoning Reduce destructive practices to Yes Sector specific Both No Food, income? Immediate Positive coral reefs Monitoring and public awareness Yes Sector specific Both No Yes Immediate Positive Moderate impacts on tuna fisheries Stronger regional collaboration Multilateral agreements Yes Sector specific Top down Unknown Distrust? Immediate Positive Research Better ENSO forecasting Yes Generic Top down No Yes Immediate Positive Improved tuna management Yes Sector specific Top down No Yes Immediate Positive Fleet management Diversification of domestic fleets No Sector and site specific Top down Unknown Problematic Can wait Positive

- 26 - AN ADAPTATION MOSAIC CHAPTER 2

Building Partnerships Funding Adaptation

In building partnerships with communities, Much of the costs and success of adaptation will individuals, and the private sector, the depend on the extent to which communities, government will need to play a pivotal role in individuals, and private sector own and the following areas: implement the strategies. This requires government support for community-based . Creating an enabling policy and legal efforts, and may require working through framework. This may include prioritizing traditional decision making processes to ensure adaptation in national planning, harmonizing “buy-in” at the local level. By asking new conflicting sectoral policies, and providing development projects to follow adaptation the necessary legal and technical support for standards, Pacific Island governments could also community based adaptation measures such shift part of the costs of adaptation to private as co-management of coastal areas. investors.

. Strengthening institutions. Links between 'No regrets' adaptation measures do not involve local communities and the government significant costs if started sufficiently early. should be strengthened so that communities Samoa’s environmental health program, for increasingly gain a voice in planning and example, operates with a budget of US$113,000 budgetary decisions. Local communities a year. The Coastal Zone Management Project should also be encouraged to work across in Majuro, financed by United Nations village boundaries to reach consensus on the Development Programme (UNDP), cost adaptive strategies that need to be applied to US$367,000 for four years of operation. By larger areas – particularly if relocation is contrast, sea walls surrounding the Tarawa atoll likely to be needed. would require capital investments of about US$1.5–$1.8 million (table 7). . Supporting collaborative programs. Community-based programs, such as vector In this context, it is recommended that Pacific control, water conservation, coastal Island countries adopt urgently a 'no regrets' management, or mangrove replantation, will policy aimed at decreasing their present need the support of government and vulnerability to extreme weather events (which nongovernmental organizations. At first, may exist independently of climate change). As external support should focus on galvanizing a first step, Pacific Island governments should community action. Later, it should shift to assess how public expenditures could be technical advice and assistance in areas adjusted to support this strategy, and how other communities cannot handle on their own. partners in the process – in particular communities and the private sector – may help . Mobilizing public action. Public awareness defray the costs. As a second step, Pacific and discussion forums involving community Island governments and donors should study representatives could help convey how to reallocate or attract new development aid information about the impacts of climate to fund 'no regrets' activities that cannot be change and gain consensus on the adaptation adequately funded by public expenditures. options. Many of these interventions – such as improved . Handling disaster mitigation and providing sanitation or coastal management – could be public services. Some adaptation measures justified as part of regular environmental will need to rely on government assistance. interventions. These include early warning systems and disaster mitigation programs, Even though 'no regrets' measures have the improvements in primary health care, and double benefit of reducing short-term exposure coastal protection in town areas. to climate variability as well as long-term vulnerability to climate change, it is important

- 27 – VAN AALST AND BETTENCOURT VULNERABILITY AND ADAPTATION IN PACIFIC ISLAND COUNTRIES that the two aspects be kept separate in international negotiations. Table 7. Indicative Adaptation Costs (US$) Adoption of an early 'no regrets' strategy by a country should not Measure Cost diminish its chances of accessing a climate change adaptation funds in Annual Operational Costs : the future. Land use planning 33,700 Waste management 181,900 Similarly, donors should not be led Biodiversity protection and natural parks 167,000 Environmental education and information 102,000 to believe that because 'no regrets' National disaster council 30,700 adaptation benefits the countries Reforestation 297,800 independently of climate change, Watershed projection and management 113,800 the justification for incremental Support to community-based fisheries management 81,400 financing of adaptation costs is Community disease control 205,800 Environmental health 112,600 weak. To do so would be to tip the Nutrition 83,400 scale in favor of structural solutions (such as seawalls), which are clearly Investment Costs: b incremental. Government officials Human waste management (composting toilets) 800,000 Elevating houses b 1,700,000-3,200,000 in the Pacific Islands have often Seawalls c 1,540,000-1,830,000 expressed the view that it is easier to obtain international aid for Coastal Zone Management Project for Majuro Atolld 367,300 structural measures than for 'no a Costs reflect Samoa public expenditures for 1999-00. GDP Samoa US$205 million. regrets' solutions. These b Covering North Tarawa (population 6,000, area 1,500 ha). GDP Kiribati US$47.9 million. disincentives need to be addressed c Covering Tarawa atoll (population 35,000, area 3,200 ha). The cost per linear meter is about US$155, excluding maintenance costs. in future international climate d Costs represent allocation for four years for Majuro (population 86,110). change discussions, in order to Sources: Legislative Assembly of Samoa 1999; Stratus 2000; UNDP 1996; background maintain 'no regrets' strategies at the studies to World Bank (2000). forefront of adaptation financing, and benefit, rather than penalize, the countries Pacific Island countries are understandably most willing to take early action. concerned about the slow pace of these negotiations. They view the stalling of Phase III Globally, the United Nations Framework as a way for emission-producing countries to Convention on Climate Change (UNFCCC) avoid recognizing their responsibilities toward provides the umbrella agreement for mitigation countries on the receiving end of climate of greenhouse gas emissions. The Convention change. also includes provisions to begin work on adaptation to climate change. To date, however, The findings of this report clearly show that the progress on adaptation has been slow. The Pacific Islands are likely to experience perception among many observers is that the significant incremental costs associated with high costs of adaptation have overruled global climate change in the future. The enthusiasm to assist those countries most in need responsibility is now on the international of support. As a consequence, funds from the community to move urgently with a financing Global Environmental Facility (GEF), the main mechanism to help the coastal states defray these financing mechanism for climate change, have costs. The urgency of this action for small states been available only for mitigation of greenhouse such as the Pacific Islands cannot be over- gas emissions and for studies and capacity emphasized. building. International negotiations under the At the same time, Pacific Island countries Conference of Parties of the UNFCCC have not should continue to speak with one voice at yet agreed to the financing of actual adaptation international climate change forums. Much has (Stage III) measures. been done already under the support of the Pacific Islands Climate Change Programme

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(PICCAP). A strengthened focus on optimal o By acting now to reduce their present-day adaptation strategies, and economic analysis – vulnerability to extreme weather events, particularly on costs and benefits of adaptation Pacific Island countries could go a long way measures – could strengthen their case in toward diminishing the effects of climate international negotiations, broaden the climate change in the future. change constituency, and mainstream climate change into the economic and development Based on these conclusions, a number of key planning of the Pacific Islands. recommendations can be derived. F. Summary of Key Findings Pacific Island Governments and Recommendations . Adopt a ‘No Regrets’ Adaptation Policy. The following conclusions can be derived from Pacific Island governments should put in the analysis: place an urgent policy of 'no regrets' adaptation, aimed at increasing the natural o The Pacific Islands are already experiencing resilience of the islands and reducing their severe impacts from climate events. This is vulnerability to present-day weather events. evidenced by cyclone damage of more than 'No regrets' measures could include, for US$1 billion during the 1990s and by the example, the management of critical coastal impact of recent droughts in Federated States ecosystems (such as coral reefs), control of of Micronesia, Fiji, Kiribati, Marshall urban pollution, water conservation, culture Islands, and Palau (SPREP 2000). of weather-resistant crops, and disease vector o The islands’ vulnerability to climate events is control. Under such a policy, Pacific Island growing, independently of climate change. governments would take adaptation goals Current trends point to a continuing rise in into account in future expenditure and vulnerability in the future which will be development planning. Insofar as adaptation exacerbated by climate change. measures helped reduce existing vulnerability (independently of climate change), Pacific o Climate change is likely to impose major Island governments would be justified in incremental social and economic costs on using reallocations of public expenditures Pacific Island countries. In disaster years the and development aid to fund the activities. impact could be particularly high, causing significant economic and social problems. . Develop a Broad Consultative Process for Implementation of Adaptation. Pacific Island o Climate change may affect all Pacific governments should start a process of Islanders, particularly the poor and most consultation with community representatives, vulnerable. Climate change may also the private sector, and other civil society exacerbate poverty by reducing coastal institutions (such as churches and NGOs), on settlement areas and affecting the crops and a national strategy for adaptation. The fisheries on which many communities strategies should build upon the National depend. Communications developed by the PICCAP country teams. The objective would be o Failure to adapt now could not only lead to mainstream adaptation into national policies major damages, but also result in a loss of and development plans, to gain consensus on opportunities to act in the future. Some coral priority adaptation measures, and to build reef areas, for example, may no longer be partnerships for their implementation. able to recover in the future if degradation continues at the present rates. . Require Adaptation Screening for Major Development Projects. To help defray future costs, Pacific Island governments should

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require all major infrastructure projects to with a lower allocation of global adaptation undergo adaptation screening as part of an funds, once these become available. expanded environmental impact assessment. Similarly, the justification for international financing of ‘no regrets’ adaptation needs to . Strengthen Socio-Economic Analysis of be recognized and promoted in its own right. Adaptation Options. Further work on the Failure to do so could promote a ‘wait and specific socio-economic impacts of climate see’ attitude, and favor the adoption of more change and adaptation – such as done under expensive (but clearly incremental) structural this report – could help strengthen the Pacific solutions such as seawalls. Island countries' position in international discussions on adaptation financing. A better Although many uncertainties remain, it now understanding of the physical and economic seems clear that climate change will affect many impacts would also help mainstream climate facets of Pacific Island people’s lives and change into broader development planning. economies in ways that are just now beginning to be understood. Climate change therefore Donors must be considered one of the most important challenges of the twenty-first century and a . Support 'No Regrets' Adaptation. Donors priority for immediate action. have an important role to play in discussing with Pacific Island countries how to best orient development assistance in support of national adaptation strategies. This could be F. References done either through stand alone interventions or as part of natural resources and Campbell, J. (1999). Vulnerability and Social environmental management programs. Impacts of Extreme Events. In International Global Change Institute (IGCI) and South . Support Adaptation Screening. To the extent Pacific Regional Environment Programme possible, donors should adopt adaptation (SPREP) (1999). PACCLIM Workshop screening as part of their policy requirements Modelling Climate and Sea-level Change Effects on environmental impact assessments. in Pacific Island Countries, August 23-27, 1999. International Global Change Institute. Hamilton, International Community New Zealand. . Operationalize Adaptation Financing. Given Clark, K. M. (1997). Current and Potential the importance of taking early action on Impact of Hurricane Variability on the adaptation, the international community Insurance Industry. In H. F. Diaz and R.S. needs to urgently agree on the mechanism Pulwarty (editors). Hurricanes, Climate and and size of adaptation financing – be it in the Socioeconomics. Springer. form of the Global Environmental Facility, a tax on the Clean Development Mechanism as De Wet, Neil (1999). A Conceptual Framework currently discussed, or others. The findings for Adaptation to Climate and Sea-Level Change from this study support the argument that in Pacific Island Countries. In International Pacific Island countries will likely experience Global Change Institute (IGCI) and South significant incremental costs from climate Pacific Regional Environment Programme change, and will need access to global (SPREP) (1999). PACCLIM Workshop adaptation funding. Modelling Climate and Sea-level Change Effects . Remove Incentives against Immediate Action in Pacific Island Countries, August 23-27, 1999. on ‘No Regrets’ Adaptation. Countries that International Global Change Institute. Hamilton, have taken early action on adaptation using New Zealand. their own public expenditures or development aid should not be penalized Holland, G. J. (1997). The Maximum Potential

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Intensity of Tropical Cyclones. Journal of Islandís Framework for Action on Climate Atmospheric Science, 54 : 2519-2541. Change, Climate Variability and Sea Level Rise. Apia, Samoa. Intergovernmental Panel on Climate Change (IPCC) (1996). Climate Change 1995: The Stratus Consulting (2000). Economic IPPC Second Assessment Report. Watson, Rt., Implications of Climate Change in Two Pacific M.C. Zinyowera and R.H. Moss (eds). Island Country Locations. Case Illustration of Cambridge University Press, Cambridge and Tarawa, Kiribati, and Viti Levu. Prepared under New York. sub-contract to CICERO (Oslo, Norway). Boulder, Colorado. Intergovernmental Panel on Climate Change (IPPC) (1998). Summary Report: IPCC Timmermann, A., Oberhuber, J., Bacher, A., Workshop on Adaptation to Climate Variability esch, M., Latif, M., Roeckner, E. (1999). and Change. March 29-April 1, 1998. San Jose, Increased El Niño Frequency in a Climate Costa Rica. Model Forced by Future Greenhouse Warming. Nature 398, 694-697. Jones, R.N., P.H. Whetton, K.J.E. Walsh, R. Suppiah and K.J. Hennessy (1999). Scenarios of United Nations Disaster Assessment and Climate Variability for the South Pacific. In Coordination (UNDAC) 1998. UNDAC Mission International Global Change Institute (IGCI) and Reports on Fiji Drought. South Pacific Regional Environment Programme http://www.reliefweb.int/w/rwb.nsf/S/A3238C8 (SPREP) (1999). PACCLIM Workshop D6E14D385C12566C9004C0D9C. Modelling Climate and Sea-level Change Effects Accessed September 1999. In Stratus Consulting in Pacific Island Countries, August 23-27, 1999. (2000). Economic Implications of Climate International Global Change Institute. Hamilton, Change in Two Pacific Island Country New Zealand. Locations. Case Illustration of Tarawa, Kiribati and Viti Levu. Prepared under sub-contract to Kench and Cowell (1999). Impacts of Sea Level CICERO (Oslo, Norway). Boulder, Colorado. Rise and Climate Change on Pacific Coasts. In International Global Change Institute (IGCI) and United Nations Development Programme South Pacific Regional Environment Programme (UNDP) (1996). Establishing a Coastal (SPREP) (1999). PACCLIM Workshop Management Program for Majuro Atoll. Modelling Climate and Sea-level Change Effects Proposal of the Government of the Marshall in Pacific Island Countries, August 23-27, 1999. Islands. United Nations Development International Global Change Institute. Hamilton, Programme, Suva, Fiji. New Zealand. World Bank (2000). Cities, Sea, and Storms, Managing Change in Pacific Island Economies, Legislative Assembly of Samoa (1999). Volume IV: Adapting to Climate Change. Papua Approved Estimates of Receipts and Payment of New Guinea and Pacific Island Country Unit, the Government for the Financial Year Ending the World Bank, Washington DC. 30th June 2000. Parliamentary Paper 1999, No. 9. Apia, Samoa. World Health Organization (WHO) (1996). Climate change and Human Health. Lewis, R. J. and T. A. Ruff (1993). Ciguatera: [McMichael, A.J., Haines, A., Sloof, R., and Ecological, Clinical, and Socio-Economic Kovats, S. (eds.)]. World Health Organization, Perspectives. Critical Reviews in Environmental Geneva. Science and Technology 23: 137-156.

South Pacific Regional Environmental Programme (SPREP), 2000. Draft Pacific

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2.2 Operationalizing adaptation: the Kiribati Adaptation Project7

Background A 2000 Climate Change Study supported by the World Bank indicated that under likely climate Kiribati is a low-laying atoll country with a change scenarios, up to 25-54 percent of areas of population of 93,000 spread over 33 islands South Tarawa, and 55-80 percent of areas in covering a landmass of only 730 sq km. It faces North Tarawa could be inundated by 2050. The extreme isolation, with the nearest large markets combined effect of sea level rise, changes in 4,000 km away (in Hawaii and Australia). The rainfall, and changes in evapotranspiration due arid climate and poor atoll soil offer little to higher temperatures could result in a 19-38 potential for agricultural development. At the percent decline in the thickness of the main same time, the immense area of ocean (an groundwater lens. Agriculture productivity – exclusive economic zone of 3.6 million sq km) particularly for taro and pandanus – could harbors some of the richest fishing grounds in decline due to storm-induced saltwater intrusion the world, and provides Kiribati with its most into groundwater lenses. Higher temperatures important source of revenue (about 27 percent of could also increase the epidemic potential for GNP in 1998). About one third of the population dengue fever by about 22-33 percent, increase lives in the capital, South Tarawa, a highly the incidence of ciguatera poisoning and dense area with a population growth of 3 percent degradation of coral reefs, and divert critical a year. At current rates, the population will tuna resources away from Kiribati waters. double in 20 years, placing even greater Finally, climate change could exacerbate challenges on the fragile atoll environment. overcrowding and poverty. In the absence of adaptation, these impacts are estimated to result Kiribati is one of the most vulnerable countries in economic damages averaging US$8–$16 in the world to the effects of climate change, million a year, equivalent to 17 to 34 percent of climate variability and sea level rise. Most of the the 1998 GDP. This reflects the potential high land in Tarawa lies less than 3 meters above sea costs of a 'do nothing' strategy. The above study level, with an average width of only 450 meters. supported the Vulnerability and Adaptation The islands are exposed to periodic storm surges component of Kiribati's First National and droughts, particularly during La Nina years. Communication to the United Nations Already, Kiribati is becoming increasingly Convention Framework on Climate Change vulnerable to climate events due to its high (UNFCCC). In the context of this work, it population concentration, accelerated coastal identified potential adaptation options in five development, shoreline erosion, and rising sectors: coastal infrastructure, water resources, environmental degradation. Problems with solid agriculture, health and fisheries. It also and human waste disposal in South Tarawa recommended that adaptation be mainstreamed remain acute. into national economic planning.

7 This description is based upon the Project Information Document, which can be downloaded from the World Bank website (www.wordbank.org).

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