Annex II – Feasibility Study GREEN CLIMATE FUND FUNDING PROPOSAL I FEASIBILITY STUDY Addressing Climate Vulnerability In the Water Sector (ACWA) United Nations Development Programme UNDP On behalf of Government of the Republic of the Marshall Islands RMI March 2018 For Submission to the Green Climate Fund EXECUTIVE SUMMARY The Republic of the Marshall Islands (RMI) is a small island developing states (SIDS) consisting of 29 coral atolls and 5 single islands. The nation is a large-ocean state, with approximately 1,225 islands and islets with a total land area of only 182 km2, spread across over 2 million km2 of vast ocean space. Most of the 24 inhabited local government jurisdictions (atolls and islands) are remote and lie merely 2 meters above sea level on average, posing various challenges and risks to sustainable development in face of climate change. RMI’s population in 2017 is estimated as 55,5621, most of which is concentrated in urban atolls of Majuro and Kwajalein (Ebeye)2. Context Climate Change: It is predicted, that RMI will face increasing sea level rise, increasing rainfall variability with potential for extended drought periods and increasing storm surges with climate change3, further aggravating RMI’s vulnerability and more specifically sustainable water supply. These climate change impacts are likely to exacerbate the risks of water shortages in RMI, by further challenging the ability of the Marshallese people to have access to safe freshwater resources year-round. Droughts and storm waves are some of the key climate based events that impact RMI. Climate projections show that in the next twenty-five years, rainfall and drought scenarios in RMI will continue and may increase in the short term4. Combined with changing weather patterns, extreme events, and sea level rise5 due to climate change, the finite and fragile water resources in RMI are likely to be even more constrained in the future. Water: Communities and the households in RMI primarily rely on an inadequate water resource and supply system, which makes them vulnerable to risks of water shortages and drought. In urban communities of Majuro and Kwajalein (Ebeye), there are public water reticulated systems which will be improved through existing Master Plans that address their water needs for the future. For rural communities6, families rely on household or community rainwater harvesting (RWH) systems to supply their freshwater for drinking, cooking, and basic hygiene and RMI has not addressed their current adaptive needs in the face of climate change and are consequently the most vulnerable. Many of the rural communities in RMI also have access to groundwater wells however increased salinity of groundwater is experienced during drought conditions with the reduction of the freshwater lens due to increased reliance as an alternative water source. The potential of groundwater as an alternate water source is further compromised by pressure from sea level rise and also seawater inundation due to high tides which contaminating the freshwater which will be further exacerbated by climate change. The rural communities have the least adaptive capacity due to their social and economic conditions versus the urban communities and face the following challenges The dependence on rainwater harvesting for freshwater, without adequate safe water options, make Marshallese people extremely vulnerable to water shortages due to varied rainfall patterns, especially in face of climate change. People in RMI are often faced with severe water shortages, where they cannot access sufficient water required for basic drinking, cooking, and hygiene (minimum of 20 liter per capita day (Lpcd) annually – WHO/Sustainable Development Goal Standard7) under drought conditions. During the dry season between December to April8, people across RMI are often faced with very low quantities and quality of water, especially during ENSO years. 1 2016 population estimates were calculated based on 2011 RMI Census of Population and Housing and 2016 SPC Pacific Island Populations. Estimates and projections of demographic indicators for selected years. (PRISM) . Details are included in FS Annex 2. 2 urban population is approximately 74%. Government of the Republic of the Marshall Islands. 2011. Census. 3 Historic data shows a decreasing trend of rainfall quantities, with drought risk respectively increasing. Historic observation data indicate that the sea level has risen near Majuro by about 7mm (0.3 inches) per year since 1993. This is larger than the global average of 2.8–3.6 mm (0.11– 0.14 inches) per year. In the future, sea level is projected to continue to rise. 4 RMI Climate Projection Report – FS Annex 21 5 In terms of sea level, measurements at the Majuro project site indicate a sea-level rise of 4.0 mm/year since 1993 (SPSLCMP, 2010). This is an insufficient temporal sampling for some purposes but the data are consistent with regional rates of sea level rise (Figure 15, right) and reconstructed global data extending back to 1900, which indicate a sea-level rise of about 1.7 ± 0.2 mm/year (Figure 15, left). Satellite-based observations since 1993 closely mirror this upward trend (Church and White, 2011) . Source: SPREP, et. al. 2014. PACC Technical Report 5. Vulnerability and adaptation (V&A) assessment for the water sector in Majuro, Republic of the Marshall Islands. 6 Communities in Majuro, Kwajalein and other outer atolls and islands without access to public reticulated water will be termed rural communities throughout the FS 7 WHO and SDG minimum standard to provide water for drinking, cooking and basic hygiene 8 Dry season extends to May or June during El Niño–Southern Oscillation (ENSO) Page | 2 | FEASIBILITY STUDY | ACWA Protection of Groundwater . Protection of groundwater wells from inundation of seawater, which is under threat from sea level rise and increasing level of high tides and development of the understanding of its optimal to reduce dependency on RWH. Tackling issues of water security and resilience in face of climate change is a critical national priority for RMI, formalized by various national policies and institutional frameworks. RMI’s Strategic Development Plan “Vision 2018” sets out 15-year (2003 – 2018) long-term goals, objectives, and strategies, where climate change resilience and water sector improvements are part of 3 of its 10 goals. The following institutional and financial barriers hinder RMI from advancing efforts in tackling integrated water resilience in both their urban and rural communities. Barriers Institutional Barriers: The National Water and Sanitation Policy as well as the recently amended National Environmental Protection Act formalize the political accountability mechanisms for water governance. This can be utilized as the overarching framework to advance comprehensive and integrated implementation at all levels of governance in RMI. However, significant gaps remain in implementing national policies related to water security, in terms of effectiveness of stakeholders and institutions from environmental, social, political and economic levels. These include: Limited coordination, reporting and accountability mechanisms related to water at all levels Limited institutions and stakeholders with formalized roles and responsibilities at the subnational and community levels Limited information generated and shared for all types of water resources at all levels, limiting transparency and evidence-based participatory decision-making at all levels Limited accountability frameworks and public participation at all levels of governance Limited effectiveness of water governance especially in terms of functioning institutions at the subnational level and coordination mechanisms with other sectors. As a result, current water governance from economic, social, environmental and political dimensions is challenged in RMI. Financial barriers: The best practice in achieving financial sustainability for investments towards climate change adaptation in the water sector is to recover the full investment cost from rational tariff based revenue collected from the project beneficiaries. However, especially in the rural communities of RMI , this is difficult given their low income levels. The median income of rural household in RMI in 2011 was estimated at USD 1,936 per annum, with a number of residents in the outer atolls (rural communities) earning $1 to $2/day. The predominant economic activity in most of the rural communities includes copra production, fishing, and subsistence agriculture/ animal husbandry. Therefore, rural communities in RMI cannot afford to finance capital investments, nor support the annual O&M costs through their own resources (i..e water tariff). As a result, alternate sources of funding has to be identified and arranged by the national government in order to provide water security. Theory of Change Problem - Water Insecurity: People of the rural communities of RMI still do not have year-round access to safe freshwater supply for drinking and cooking despite many past initiatives. The Government of RMI has announced a State of Emergency due to the severe droughts most recently in 2017, 2015/2016 and 2013/2014, and has invested significant financial resources to deploy drought response efforts in urban and rural RMI with support from external parties. There is little confidence at the national, subnational and community levels that there is sufficient water infrastructure, human capacities, financial resources, and institutional capacity mechanisms