The Economics of Adaptation to Climate Change
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EACC THE ECONOMICS OF ADAPTATION TO CLIMATE CHANGE A Synthesis Report FINAL CONSULTATION DRAFT August 2010 © 2010 The World Bank Group 1818 H Street, NW Washington, DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: [email protected] All rights reserved. This volume is a product of the World Bank Group. The World Bank Group does not guarantee the accuracy of the data included in this work. The boundaries, colors, denominations, and other information shown on any map in this work do not imply any judgment on the part of the World Bank Group concerning the legal status of any territory or the endorsement or acceptance of such boundaries. R I G H T S A N D P E R M I S S I O N S The material in this publication is copyrighted. Copying and/or transmitting portions or all of this work without permission may be a violation of applicable law. The World Bank Group encourages dissemination of its work and will normally grant permission to reproduce portions of the work promptly. For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone 978-750-8400; fax 978-750-4470; Internet: www.copyright.com. Cover images by: clockwise from top left: Shutterstock Images LLC, Sergio Margulis, Ana Bucher, the World Bank Photo Library. TABLE OF CONTENTS ABBREVIATIONS ii I. Overview ……………………….……………………..…………………………………. 1 1. Context ……………………………………………………………………………… 1 2. Objectives …………………………………………………………………………… 1 3. Approaches: the two parallel tracks ………………………………………………. 2 4. The Synthesis Report ………………………………………………………………. 2 5. Main findings ……………………………………………………………………….. 3 6. Recommendations for future work ……………………………………………….. 4 II. Concepts and methodology ..…………………………………………………………… 5 1. Concepts ………………………………………………………………….................. 5 2. A typology of adaptation measures ……………………………………………….. 6 3. Dealing with uncertainty ………………………………………………….............. 6 4. Methodology ……………………………………………………………….............. 8 III. Results from the global analyses .……………………………………………………... 10 1. Putting a price tag on adaptation …………………………………………………. 10 2. Putting the findings in context ……………………………………………............. 14 3. Lessons ……………………………………………………………………………… 15 IV. Results from the country analyses …………………………………………………… 18 1. Choice of countries …………………………………………………………………. 18 2. Methodology in African countries …………...……………………………………. 19 3. Mozambique ………………………………………………………………………... 20 4. Ethiopia …………………………………………………………………………….. 25 5. Ghana ………………………………………………………………………............. 31 6. Bangladesh …………………………………………………………………............. 38 7. Bolivia ……………………………………………………………………................. 46 8. Vietnam ……………………………………………………………………………... 53 9. Samoa ……………………………………………………………………….............. 59 V. Limitations ...…...……………………………………...………………………………... 65 1. Uncertainty …………………………………………………………………………. 65 2. Institutions ………………………………………………………………….............. 67 3. Modeling ……………………………………………………………………………. 68 VI. Lessons and future work .………………….………………….……………………….. 70 Acknowledgements ..…………………………………………………………………............... 77 i ABBREVIATIONS AR4 Fourth Assessment Report of the Intergovernmental Panel on Climate Control BAP Bali Action Plan CGE Computable General Equilibrium (Model) CLIRUN Climate and Runoff Model CMIP3 Coupled Model Intercomparison Project phase 3 CSIRO Commonwealth Scientific and Industrial Research Organization DALY Disability-adjusted life years DIVA Dynamic and Interactive Vulnerability Assessment EACC Economics of Adaptation to Climate Change EAP East Asia and Pacific (World Bank region) ECA Europe and Central Asia (World Bank region) ENSO El Niño Oscillation GCM General Circulation Model GDP Gross Domestic Product IMPACT International Model for Policy Analysis IPCC Intergovernmental Panel on Climate Change LAC Latin America and Caribbean (World Bank Region) MIP Mixed Integer Programming MIROC Model for Interdisciplinary Research on Climate MNA Middle East and North Africa (World Bank Region) NAPA National Adaptation Plans of Action NCAR National Centre for Atmospheric Research climate model NGO Nongovernmental organization ODA Official Development Assistance OECD Organization for economic Co-operation and Development PNC National Watershed Program (by its Spanish acronym) PPM Parts per million PSD Participatory Scenario Development RMSI Regional Maritime Security Initiative SAR South Asia (World Bank region) SRES Special Report on Emissions Scenarios of the IPCC SSA Sub-Saharan Africa (World Bank region) UN United Nations UNDP United Nation Development Programme UNFCCC United Nations Framework Convention on Climate Change WCRP World Climate Research Programme WHO World Health Organization ii I. OVERVIEW I.1 Context Under the Bali Action Plan adopted at the 2007 United Nations Climate Change Conference, developed countries agreed to allocate ―adequate, predictable, and sustainable financial resources and new and additional resources, including official and concessional funding for developing country parties‖ (UNFCCC 20081) to help them adapt to climate change. The plan views international cooperation as essential for building capacity to integrate adaptation measures into sectoral and national development plans. Yet studies on the costs of adaptation offer a wide range of estimates, from $4 billion to $109 billion a year. A recent critique of estimates suggests that these may be substantial underestimates (Parry and others 20092). Similarly, National Adaptation Programmes of Action, developed by the Least Developed Countries under Article 4.9 of the United Nations Framework Convention on Climate Change (UNFCCC), identify and cost only urgent and immediate adaptation measures. They do not incorporate the measures into long-term development plans. The Economics of Adaptation to Climate Change (EACC) study is intended to fill this knowledge gap. Soon after the Bali Conference of Parties, a partnership of the governments of Bangladesh, Plurinational State of Bolivia, Ethiopia, Ghana, Mozambique, Samoa, and Vietnam and the World Bank initiated the EACC study to estimate the cost of adapting to climate change. The study, funded by the governments of the Netherlands, Switzerland, and the United Kingdom, also aims to help countries develop plans that incorporate measures to adapt to climate change. I.2 Objectives The EACC study has two broad objectives: to develop a global estimate of adaptation costs for informing the international community‘s efforts in the climate negotiations, and to help decisionmakers in developing countries assess the risks posed by climate change and design national strategies for adapting to climate change. These two objectives complement each other. To some extent, however, they are also at odds with each other, and cannot be fully consistent: supporting developing country efforts to design adaptation strategies requires incorporating country-specific characteristics and socio-cultural and economic conditions into the analyses. Identifying the global costs of adaptation to climate change to support international negotiations requires analysis at a more aggregate level. Reconciling the two involves a tradeoff between the specifics of individual countries and a global picture. 1 UNFCCC (United Nations Framework Convention on Climate Change). 2007. Climate Change: Impacts, Vulnerabilities, and Adaptation in Developing Countries. Bonn, Germany: United Nations Framework Convention on Climate Change. 2 Parry, M., N. Arnell, P. Berry,D. Dodman,S. Fankhauser, C. Hope,S. Kovats, R. Nicholls, D. Satterthwaite, R. Tiffin, and T. Wheeler. 2009. Assessing the Costs of Adaptation to Climate Change: A review of the UNFCCC and Other Recent Estimates. London: Internaional Institute for Environment and Development and the Grantham Institute for Climate Change, Imperial College. 1 I.3 Approaches: the two parallel tracks To address the two objectives, the EACC was conducted on two parallel tracks: a global track, where national databases were used to generate aggregate estimates at a global scale, and a series of country level studies, where national data were disaggregated to more local and sector levels, helping to understand adaptation from the bottom-up perspective. The top-down and bottom-up approaches were compared and to the extent possible integrated. Some elements had to be analyzed separately, or solely, under each perspective. I.4 The Synthesis Report This Synthesis Report sits at the apex of a global study report and seven country case study reports. The global study consists of a number of sector studies, which were commissioned by the EACC project. Country case study reports present findings from sector analyses conducted at the national level, and include analysis of three to five sectors, depending on the country. The Diagram below depicts graphically the various EACC study components and their links. EACC Synthesis Report 7 Country Case Studies Global Study Mozambique Ethiopia Ghana Bangladesh Vietnam Samoa Bolivia Agriculture Water Sector Sector 2 Social Sector 3 Coastal SECTORS SECTORS Sector 4 Infrastructure …. others … others Given that climate change is a relatively new subject, the numerous reports produced as part of the EACC global and country tracks, including this Synthesis Report, cover many technical areas – from climate science to social and economic areas, as well as a number of sectors including agriculture, energy, water resources, infrastructure,