Annex II – Feasibility Study GREEN CLIMATE FUND FUNDING PROPOSAL I Feasibility Study i Annex II – Feasibility Study GREEN CLIMATE FUND FUNDING PROPOSAL I Technical Feasibility Report Strengthening the resilience of smallholder farmers in the Dry Zone to climate variability and extreme events through an integrated approach to water management ii Annex II – Feasibility Study GREEN CLIMATE FUND FUNDING PROPOSAL I Forward Sri Lanka is a country highly vulnerable to climate change. As with many countries around the world, the country has experienced the impact of rising temperatures and erratic rainfall patterns associated with prolonged droughts and floods, respectively. In response to this situation, Sri Lanka has played an active role in climate change adaptation activities, both locally and globally. The Framework Convention on Climate Change was ratified by Sri Lanka in 1993, and action was taken to ratify Kyoto Protocol and establish a Climate Change Secretariat. Other actions include formulation of national policies, strategic plans and strategies including a National Adaptation Plan (NAP) for Climate Change Impacts in 2015. Intended Nationally Determined Contributions (INDCs) of Sri Lanka were developed in 2015. Over the last few years, Sri Lanka has received a limited amount of adaptation finance from existing global vertical funds including the Special Climate Change Fund and Adaptation Fund. A large proportion of Sri Lankans are dependent on livelihoods connected to agriculture. Substantial investments in irrigation and agriculture, especially in the Dry Zone, have made the country self-sufficient in rice. However, the Dry Zone extending over 60% of the land, is heavily impacted by climate change. The loss of production from climate-related hazards affects mostly farmers with small land holdings, and undermines domestic food security as well as livelihood opportunities. At the national level, both food security of the nation and foreign income from export crops are adversely affected due to the impacts of climate change. Most smallholder farmers of the Dry Zone cultivate under “Village Irrigation Systems”, which consist of small reservoirs and water diversions, each irrigating less than 80 ha of land. These irrigation systems have provided water for domestic purposes, livestock, crops and inland fisheries of rural villages for several generations. They continue to be vital for the life, health and well- being of villagers. Climate change is compounding numerous other constraints affecting the agriculture sector. In particular, services provided by these irrigation systems are adversely affected, and have contributed to deteriorated water quality and quantity issues. With mounting concerns about the impact of climate change on the agriculture sector, the Government of Sri Lanka, under the leadership of the newly elected President, is paying the highest attention to this mounting and worsening crisis in the Dry Zone. Concerns are especially elevated due to the prevailing incidence of Chronic Kidney Disease, for which poor-quality water is cited as a contributing factor, and is increasing at an alarming rate in the Dry Zone. Recent experiences show that current climate forecasting and early warning systems have to be improved, in addition to structural and institutional solutions, to comprehensively address the impacts of the climate change on the agriculture sector. While several projects and programmes aimed at improving the resilience of the vulnerable communities to climate change were implemented in the recent times, many of them had often a sector specific focus which, in hindsight, has limited impacts. In the recent times, the increased realization of the inter-dependence of various issues and sectors such as drinking water, health and agriculture has become more prominent. Against this background, the Ministry of Mahaweli Development and Environment is pleased to present the findings of the feasibility study on iii Annex II – Feasibility Study GREEN CLIMATE FUND FUNDING PROPOSAL I ‘Strengthening the resilience of smallholder farmers in the Dry Zone to climate variability and extreme events’. The Ministry of Mahaweli Development and Environment prepared this assessment with inputs from the Ministries of Disaster Management, City Planning and Water Supply, Agriculture and Department of Agrarian Development, National Water Supply and Drainage Board, Department of National Community Water Supply, Department of Meteorology, Disaster Management Centre and several other national institutions. United Nations Development Programme provided the technical support to the Ministry to complete this assessment. The study examines the observed climate change and projections in Sri Lanka, impacts on agriculture and drinking water supply and their linkages, current state of irrigation, water supply, seasonal forecasting and early warning systems. It further outlines gaps in current approaches to address these critical issues for achieving key Sustainable Development Goals in Sri Lanka, the barriers to fill these gaps, and recommends solutions and measures to remove such barriers in three river basins and seven administrative districts which are found to be most vulnerable. The recommendations formulated by this study will be used to identify and inform concrete activities for implementation to strengthen the resilience and adaptive capacity of the most vulnerable communities in Sri Lanka, with a special focus on women. We look forward to working together with the concerned national and international institutions, UNDP and the Green Climate Fund to increase the resilience of vulnerable communities in the Dry Zone of Sri Lanka. It is expected that the experiences gained through implementation of these recommendations will result in policy impacts and strategic frameworks that can be replicated in other vulnerable river basins and districts. Udaya Seneviratne Secretary, Ministry of Mahaweli Development and Environment iv Annex II – Feasibility Study GREEN CLIMATE FUND FUNDING PROPOSAL I Contents: Forward ........................................................................................................................................................ iii Executive Summary ....................................................................................................................................... 1 Chapter 1 : Climate Risk Profile of Sri Lanka .............................................................................................. 5 1.1 Country Background: Development Context and Challenges .................................................5 1.1.1 Incomes and poverty ................................................................................................................ 6 1.1.2 Conflict and Poverty: the Dry Zone legacy ............................................................................... 8 1.1.3 Temperature, rainfall, seasons and agro-climate zones ........................................................ 10 1.1.4 Water resources, agriculture and rural livelihoods ................................................................ 11 1.2 Climate Change in Sri Lanka: Risks and Impacts .................................................................. 15 1.2.1 Sri Lanka in the global context: predictions for Asia and South Asia ..................................... 15 1.2.2 Climate change in Sri Lanka .................................................................................................... 17 1.2.3 Climatic hazards and extreme events .................................................................................... 21 1.3 Vulnerabilities and Exposure to Climate Change in the Dry Zone: Key Impacts to lives and livelihoods ................................................................................................................................... 25 1.3.1 Climate change impacts on water for agriculture and drinking ............................................. 25 1.3.2 Impacts on agriculture, life and livelihoods ........................................................................... 26 1.3.3 Increased crop losses and damages to livelihood assets ....................................................... 27 1.3.4 Drinking water and health: implications for climate resilience ............................................. 29 1.4 Vulnerability ranking and Mapping .................................................................................... 34 1.4.1 Vulnerability ranking based on socio-economic and meteorological parameters ................ 34 1.4.2 Potential to cope with climate change impacts and ranking based on hydrology and related physical parameters ............................................................................................................................ 35 1.5 Suggested geographies and sectors for intervention for climate change adaptation in the Dry Zone of Sri Lanka .......................................................................................................................... 35 Chapter 2 : Policy and Institutional Frameworks related to climate-resilient development .................. 37 2.1 National Development Policies and Strategies ................................................................... 37 2.1.1 National Climate Change Policy ............................................................................................. 37 2.1.2 National Climate Change Adaptation Plan ............................................................................