Module 5. Raising awareness. Training workshops on mainstreaming climate change. Global Climate Change Alliance Support Facility

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1 Global Climate Change Alliance Support Facility Module 5 Raising awareness and building partnerships Training workshops on mainstreaming climate change Training materials developed with the support of the European Commission

2 Tools supporting awareness raising and partnership building Assessing evidence Engaging key actors Vulnerability and adaptation assessments Macro and meso economic analysis Demonstration or pilot projects Communication & advocacy strategy Awareness raising & partnership building National consensus on and commitment to climateresilient and lowemission development Adapted from: UNDP-UNEP (2011) 2

3 Vulnerability and adaptation assessment A vulnerability and adaptation assessment would typically focus on 3 units of analysis: Places: land, water, ecosystems, natural capital and built infrastructure People: individuals, communities, human capital, livelihoods Institutions: sectors, organisations, how they relate to each other, social capital It should assess both current & future vulnerability to determine possible adaptation measures Source: Downing & Patwardhan (2004) 3

4 Steps in community vulnerability & adaptation assessment 4 Source: IPCC (2007c) 4 th Assessment Report, WG II - Fig. 16.3

5 Caribbean region: Vulnerability & capacity assessments (1) 5

6 Caribbean region: Vulnerability & capacity assessments (2) Implemented in most Caribbean countries (including some OCTs) Key features of methodology: Define scope of VCA Assess past, current and projected climate conditions Assess socio-economic trends and conditioning factors Assess social capitals and vulnerability Develop integrated vulnerability indicators Develop national and community-level risk profiles Identify entry points for mainstreaming in decision making Evaluate scenarios in the context of mainstreaming Source: Pulwarty & Hutchinson (2008) 6

7 Source: Economics of Climate Adaptation (2009) Test case on Samoa Focus on risks caused by sea level rise, Fig. 03, p Mapping physical vulnerability Exhibit 3 Highly granular geographic information has been used to segment assets according to their elevation above sea level Elevation map of central Apia Elevation Approach Starting point was a digital map of Samoa with contour lines (2m lines in coastal areas) In a second step, a more granular segmentation of coastal areas was obtained by using state-of-the-art GIS software Finally, geocoordinates of buildings and roads, were used to determine the asset exposure to coastal flooding risk 0 m 1 m 2 m >4 m Building Road SOURCE: Team analysis

8 Mapping social vulnerability Source: Government of Jamaica (2011), Figure 10, p. 16 8

9 Macro- and meso-economic analysis Economic analysis may be a powerful tool for motivating policy makers to take action Macro level: analysis of the impact climate change may have on the national economy Meso level: analysis at the level of key sectors or subsectors of the national economy The costs of inaction (climate-related losses) are compared with the net benefits of taking action (avoided losses minus costs) The analysis should also consider the distribution of losses and benefits (among social groups, regions...) 9

10 Economics of Climate Adaptation study for 8 Caribbean countries (1) Methodology: Establishment of a risk baseline (current losses) and future expected losses for 3 different CC scenarios Use of hazard, economic damage functions and value distribution models Assessment of adaptation measures (expected costs and benefits against the various scenarios) Risks assessed focus on the impact of CC on: Hurricane-induced wind damage Coastal flooding/storm surges Inland flooding Source: CCRIF (2010) 10

11 Economics of Climate Adaptation study for 8 Caribbean countries (2) Key regional findings: Current climate risks already high Annual expected losses 1-6% of GDP Hurricane-induced wind damage largest contributor CC could result in additional damage High change scenario: annual expected losses increased by 1-3% of GDP, reaching 2-9% of GDP by 2030 Cost-effective adaptation (risk mitigation) measures can help reduce the expected damage By up to 90%, much less in some countries however Risk transfer (e.g. insurance, catastrophe bonds) can help cover some of the residual risk relatively cheaply Source: CCRIF (2010) 11

12 Economics of Climate Adaptation study for 8 Caribbean countries (3) Source: CCRIF (2010), Figure 1, p. 4 12

13 Belize Expected CC impact on some crops 13 Source: CCRIF (2010) Figure 10, p. 22

14 Demonstration projects Test what works and does not work (relevance, effectiveness) Support lesson drawing for adaptive management Demonstration/ pilot projects Mobilise communities, local/regional authorities & other stakeholders Help foster interest and commitment of national authorities & other stakeholders Create motivation and knowledge for replication/ scaling-up Source: UNDP-UNEP (2011) 14

15 Raising awareness and building partnerships (1) 15 Assessing available evidence: using the findings of relevant studies and demonstration/pilot projects Engaging key actors: identifying and mobilising key organisations involved in development at the national and sector levels identifying and mobilising champions Who might be good champions? Are there already champions?

16 Raising awareness and building partnerships (2) Developing and implementing a communication and advocacy strategy in support of mainstreaming: Define the target audience to be informed or influenced Develop policy-relevant messages and materials based on evidence collected (e.g. policy briefs, radio programmes) Select and use appropriate communication channels for the various target groups (e.g. media, sector working groups) 16

17 Caribbean (regional): CC Handbook for Caribbean Journalists 17

18 Caribbean: My Island My Community initiative (1) Training and support programme focused on addressing CC through community mobilisation Active in 15 Caribbean countries Builds the capacities of local coalitions to raise public awareness and organise community mobilisation campaigns focused on behaviour change Based on the use of modern communication approaches (e.g. entertainment-education radio dramas, interactive national talk shows) and networking Source: 18

19 Caribbean: My Island My Community initiative (2) Tobago: Speyside Marine Area community-based management project (GEF-funded) Integrated coastal zone management project Initial steps included an awareness raising campaign supported by My Island My community Source: : Callaloo regional radio soap opera Illustrates actions communities can take to adapt to the rising sea levels, stronger storms and loss of biodiversity associated with climate change 208 episodes over 2 years! Source: releases/radio-drama-building- Resilience-to-Climate-Change-in- Caribbean/7585.html

20 Recap Key messages Awareness raising and partnership building help build national consensus and commitment to climateresilient, low-emission development The assessment of available evidence about climate change and its impacts is the starting point Evidence may be available, among others, from vulnerability and adaptation assessments, economic analysis and demonstration projects Evidence supports both the engagement of key actors and the development of a communication and advocacy strategy 20

21 Key references UNEP (2005) Communicating Sustainability: How to produce effective public campaigns. United Nations Environment Programme, Nairobi Adaptation Learning Mechanism knowledge-sharing platform: World Bank Economics of Adaptation to Climate Change web pages: 21

22 22 References (1) CCRIF (2010) Enhancing the climate risk and adaptation fact base in the Caribbean: An informational brochure highlighting the preliminary results of the ECA Study. CCRIF s Economics of Adaptation (ECA) Initiative. Caribbean Catastrophe Risk Insurance Facility, Grand Cayman, Cayman Islands. Available from: Downing T. & Patwardhan A. (2004) Assessing Vulnerability for Climate Adaptation. In: Lim B. & Spanger-Siegfried E. (eds.) (2004) Adaptation Policy Frameworks for Climate Change: Developing Strategies, Policies and Measures. United Nations Development Programme/Cambridge University Press, New York. Available from: Economics of Climate Adaptation Working Group (2009) Shaping climate-resilient development: a framework for decision-making. Climate Works Foundation, Global Environment Facility, European Commission, McKinsey & Company, The Rockfeller Foundation, Standard Chartered Bank & Swiss Re. Available from: edge_highlights/economics_of_climate_adaptation.aspx Government of Jamaica (2011) Jamaica Strategic Programme for Climate Resilience (SPCR). Prepared for the Pilot Programme for Climate Resilience (PPCR). Available from: Program%20-%20Endorsed.pdf

23 23 References (2) IPCC (2007c) Climate Change 2007: Impacts, Adaptation and Vulnerability. Contribution of Working Group II to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change [Parry M.L., Canziani O.F., Palutikof J.P., van der Linden P.J. & Hanson C.E. (eds.)]. Cambridge University Press, Cambridge, UK & New York, NY, USA. Available from: MACC Project (2005) Climate Change Handbook for Caribbean Journalists. Mainstreaming Adaptation to Climate Change (MACC) Project, Caribbean Community Climate Change Centre (CCCCC), Belmopan, Belize. Available from: Pulwarty R. & Hutchinson N. (2008) Vulnerability and Capacity Assessment Methodology: A guidance manual for the conduct and mainstreaming of climate change vulnerability and capacity assessments in the Caribbean Region. Caribbean Community Climate Change Centre, Belmopan, Belize. Available from: UNDP-UNEP (2011) Mainstreaming Adaptation to Climate Change into Development Planning: A Guide for Practitioners. UNDP-UNEP Poverty-Environment Initiative. Available from: UNEP (2005) Communicating Sustainability: How to produce effective public campaigns. United Nations Environment Programme, Nairobi. Available from:

24 Global Climate Change Alliance Support Facility Module 6 Mainstreaming climate change in national, sector and sub-national policies, strategies and programmes Training workshops on mainstreaming climate change Training materials developed with the support of the European Commission

25 2 Why mainstream climate change at the national, sector and sub-national levels?

26 Why mainstream climate change at strategic planning levels? 3 National level More: -integrated -effective -efficient -sustainable responses Sector coordination Allocation of resources across sectors Sector 1 Sector 2 Sector 3 Biophysical impacts Socioeconomic impacts

27 Why mainstream climate change at lower levels of governance? Best levels for observing / understanding development and climate change impacts Sub-national and local levels Vulnerability and adaptive capacity are context-specific Most adaptation options require local implementation Potential for piloting / pioneering initiatives Source: OECD (2009a) 4

28 Key stakeholders and cross-level interactions 5

29 6 Key stakeholders Ministries of Finance, Ministries with Planning, sector-specific Development competences Donor agencies Members of Parliament Sector management agencies Civil society organisations Sub-national / local governments Research organisations Private sector Local private sector Local citizens & organisations

30 Top-down and bottom-up approaches to adaptation 7 National policies & strategies National level incl. sectors Focused on physical impacts and biophysical vulnerability Freely adapted from Dessai & Hulme (2004) To op-down Adaptation Subnational levels (local in particular) Bo ottom-up Stakeholder approach Focused on prevailing socio-economic & environmental conditions and on social vulnerability Model- and scenario- driven Communitybased adaptation, pilot projects

31 8 Main entry points for mainstreaming climate change in strategic policy and planning processes

32 Main entry points in the national and sector policy cycles Recognise climate risks Policy cycle stage Policy formulation Allocate funding for climate-specific actions National level National long-term vision National policies and strategies Sector level Sector policies and strategies Planning Multi-year development plan Sectoral plans Resource allocation Programming & implementation National budget Climate-related fund(s) Sector-level development plans and budgets Sector budget envelopes Resources from fund(s) Sector programming Include climate considera -tions in project selection criteria Include climaterelated programmes/ projects (sectoral and cross-sectoral) Relocate funding to vulnerable or priority sectors/ regions Incorporate climate-related activities Adapted from: Olhoff & Schaer (2010) Fig. 1, p. 10 9

33 BVI: Key adaptation options - Examples at policy level (1) Beach and shoreline stability Avoid undermining natural beaches/shorelines or creating vulnerable man-made ones Protect beaches and vulnerable shorelines with natural defences where practical Allow for natural adjustments in beaches/shorelines as sea level rises (unless it would pose a danger or too significant a loss) Critical infrastructure Enhance the resilience of existing critical infrastructure Avoid building new infrastructure in areas or with materials vulnerable to climate hazards Source: Burnett Penn (2010) 10

34 BVI: Key adaptation options - Examples at policy level (2) Energy security Enhance the resilience of the electricity generation and distribution system Implement policies to reduce energy use and encourage greater energy independence Food security Agriculture Expand and increase the resilience of local agricultural production (with policies to encourage water efficiency, environmental sensitivity, technology and local capacity building) Source: Burnett Penn (2010) 11

35 BVI: Key adaptation options - Examples at policy level (3) Food security Fisheries Place greater emphasis on protection of fisheries habitat and sustainable fisheries practices Human health Emphasise preventative vs treatment approach for impacted health issues Increase the resilience of the population to health impacts Enhance the capacity of the healthcare sector Source: Burnett Penn (2010) 12

36 BVI: Key adaptation options - Examples at policy level (4) Insurance and banking Depend less on global insurance companies and look towards more regional solutions Minimise vulnerability of insured and mortgaged properties to climate change impacts Tourism: Take strong no regrets measures to preserve the quality of natural and historical attractions Enhance the resilience of tourism infrastructure and facilities to climate impacts Create a more environmentally responsible tourism industry Source: Burnett Penn (2010) 13

37 Barbados: Adaptation strategy for the tourism sector Measures to be implemented include: Develop best-practice guide to CC adaptation for the tourist industry, highlighting cost-effective opportunities to reduce vulnerability Provide guidance to industry stakeholders on adaptation options, e.g. with regard to zoning, setbacks, coastal habitat conservation/restoration, water quality, EIAs Mainstream climate change into the Coastal Zone Management Plan Coordinate industry-specific adaptation plans with the regional Comprehensive Disaster Management strategy Source: University of West Indies (2009) 14

38 Barbados: Mitigation strategy for the tourism sector Measures to be implemented include: Conduct tourism sector greenhouse gas inventory and establish baseline for the monitoring and evaluation of progress Develop best practice guides to emissions management for use by hotels, attractions, tour operators, taxi drivers, etc. Develop and distribute fact sheets on energy efficiency, standards, regulations, tools and resources for measuring and managing emissions Develop and distribute fact sheets on voluntary carbon offsets Source: University of West Indies (2009) 15

39 16 Tools for mainstreaming climate change in strategic policy and planning processes

40 Tools supporting awareness raising... Vulnerability and adaptation assessments Macro and meso economic analysis Demonstration projects... are also useful for influencing policies and informing planning processes Awareness raising Influence on policies Adapted from: UNDP-UNEP (2011) 17

41 EuropeAid s climate change sector scripts 18 Agriculture and rural development Ecosystems and biodiversity management Education Energy supply Health Infrastructure Solid waste management Trade and investment Water supply and sanitation

42 19 Hazard and risk Probability of occurrence Hazard Risk Severity of consequences

43 20 Climate risk screening Identifies potential risks for a programme or project by assessing, in its specific context: Exposure to the effects of CC Sensitivity to such effects Response & adaptation capacity Maladaptation risk OPTIONAL: Impacts on climate (GHG emissions/ emission removals) A standard screening questionnaire can be developed to support this exercise

44 Climate risk screening: key factors to consider Location Sector Relationship of the planned intervention to livelihoods Socio-economic conditions (current projected) Adaptive capacity of various stakeholder groups Including current coping mechanisms / autonomous adaptation measures Lifetime of the considered investments/activities 21

45 Outcomes of climate risk screening None or low No specific action, or limited measures Vulnerability to the effects of CC Medium High Further investigation, adaptation measures Further investigation, redesign for reduced vulnerability/enhanced adaptive capacity, or even abandonment Risk of maladaptation No Yes No specific action Further investigation, redesign for reduced maladaptation risk, or even abandonment GHG emissions or emission removals Insignificant Significant (*) No specific action, or limited measures Further investigation and enhancement of mitigation potential (*) In proportion to the size/scope of the intervention 22

46 Climate risk assessment Climate risk assessment (CRA) is a dedicated study aimed at: assessing in further detail the risks identified during climate risk screening identifying possible risk prevention, risk mitigation and other adaptation measures assessing these options formulating concrete recommendations with regard to the design of the programme or project The assessment of future climate risks should be anchored to an assessment of current risks 23

47 Strategic environmental assessment (SEA) 24 A study: aimed at analysing the environmental consequences of proposed policies/plans/programmes, as well as the main environmental opportunities, risks and constraints to be taken into account for the purpose of promoting more sustainable development Ensures that environmental considerations are taken into account EARLY in the policy & planning process

48 Role of SEA in supporting climate change mainstreaming With adequate ToR, SEA can: identify elements of the considered policy or programme that are sensitive to or at risk from climate change identify elements that may result in increased vulnerability to the effects of climate change assess direct and indirect GHG emissions identify options for risk management, adaptation and mitigation and make recommendations on alternatives, on institutional aspects, capacity building, etc. For a model of ToR, see handout or EC Guidelines on the Integration of Environment & Climate Change (2009), Annex 5 25

49 Fiji: Climate-sensitive SEA (1) Fiji: SEA of Tourism Development Plan (WWF, 2003) Climate change may contribute to the generation of synergistic impacts e.g. Coral reefs threatened by the combined effects of increased nutrient loading (from sewerage and seepage from landfills), higher water temperatures, more boat movements and more contact with divers Sustainability objectives (against which the impacts of the Plan are assessed) include minimising climate change impacts by minimising greenhouse gas emissions per tourist day/tourist dollar Source: Levett & McNally (2003) 26

50 Fiji: Climate-sensitive SEA (2) The potential effects of climate change on Fiji and their consequences for tourism are summarised in the environmental baseline Spoiling of coastal environments (coral bleaching, coastal erosion, sedimentation of shoreline and coral reefs) Increased vulnerability of tourism facilities to flooding and storm damage More frequent disruption to tourist travel and restrictions on enjoyment due to extreme weather events Increased health risks to tourists Greater competition and conflict over access to natural resources as non-tourism demands increase while climate change erodes the resource base (freshwater, land,...) 27

51 Fiji: Climate-sensitive SEA (3) The socio-economic baseline mentions the targeting of international air travel for GHG emission reductions as a long-term development that might threaten tourism development Without mitigation measures, the objective of minimising climate change impacts cannot be reached Reducing the climate change intensity of tourism will require: reducing air travel impacts in proportion to tourism benefits (e.g. longer stays, closer origin) implementing energy efficiency measures in new developments (e.g. low-energy accommodation, use of renewable energy) 28

52 Climate change integration in EIAs 29

53 Is the assessment linked to: A specific policy, strategy, programme or project? Yes A specific policy or strategy? No A specific programme? No A specific project? No Yes ( ) Yes ( ) Yes ( ) Vulnerability and adaptation assessment Strategic environmental assessment (*) Climate risk assessment Environmental impact assessment (*) ( ) Climate risk screening can be applied before (*) With ToRs adapted to include undertaking a more detailed assessment climate-related considerations 30

54 Recap Key messages Mainstreaming climate change at strategic planning levels supports more integrated, effective, efficient and sustainable responses But top-down and bottom-up approaches to adaptation are complementary and mainstreaming is also justified at local level Multiple tools are available to support climate change mainstreaming in policies, strategies, programmes and projects Both ad hoc studies and assessments, and integration of climate-related considerations in feasibility / formulation studies, support this mainstreaming process 31

55 32 Key references EC (2009a) EC Cooperation: Responding to Climate Change Sector scripts series. European Commission, Brussels EC (2009b) Guidelines on the Integration of Environment and Climate Change in Development Cooperation. European Commission, Brussels UNDP-UNEP (2011) Mainstreaming Adaptation to Climate Change into Development Planning: A Guide for Practitioners. UNDP-UNEP Poverty-Environment Initiative

56 33 References (1) Burnett Penn A. (2010) The Virgin Islands Climate Change Green Paper. Prepared by the Conservation and Fisheries Department, Ministry of Natural Resources and Labour. Caribbean Community Climate Change Centre, Belmopan, Belize, and Government of the Virgin Islands. Available from: CARICOM & SPREP (2004) Adapting to a Changing Climate in the Caribbean and South Pacific Regions: Guide to the Integration of Climate Change Adaptation into the Environmental Impact Assessment (EIA) process. Caribbean Community Secretariat/Adapting to Climate Change in the Caribbean (ACCC) Project & South Pacific Regional Environment Programme (SPREP), with assistance from the Global Environment Facility (GEF), the World Bank and the Canadian International Development Agency (CIDA). Available from: Dessai S. & Hulme M. (2004) Does climate adaptation policy need probabilities? Climate Policy, vol. 4 (2) Available from: EC (2009a) EC Cooperation: Responding to Climate Change Sector scripts series. A series of information notes comprising an introduction and sector-specific notes. European Commission, Brussels

57 34 References (2) EC (2009b) Guidelines on the Integration of Environment and Climate Change in Development Cooperation. European Commission, Brussels. Available from: Levett R. & McNally R. (2003) A Strategic Environmental Assessment of Fiji s Tourism Development Plan. World Wildlife Fund (WWF). Available from: OECD (2009a) Integrating Climate Change Adaptation into Development Co-operation: Policy guidance. OECD Publishing, Paris. [Read-only, browse-it edition] Available from: Olhoff A. & Schaer C. (2010) Screening tools and guidelines to support the mainstreaming of climate change adaptation into development assistance: A stocktaking report. Environment & Energy Group, United Nations Development Programme, New York. Available from: UNDP-UNEP (2011) Mainstreaming Adaptation to Climate Change into Development Planning: A Guide for Practitioners. UNDP-UNEP Poverty-Environment Initiative. Available from: University of West Indies (2009) National adaptation strategy to address climate change in the tourism sector in Barbados: Strategy and action plan. Technical report 5C/MACC Caribbean Community Climate Change Centre, Belmopan, Belize. Available from:

58 Global Climate Change Alliance Support Facility Module 7 Costing, assessing and selecting adaptation and mitigation options and measures Training workshops on mainstreaming climate change Training materials developed with the support of the European Commission

59 Linking policy, costing and budgeting 2 Mainstreaming of climate change in policies, strategies & programmes Identification of adaption and mitigation options Costing, assessment and selection of adaptation and mitigation options Resource allocation: Integration of adaptation and mitigation measures in budgets

60 3 Tools for costing and assessing adaptation and mitigation options

61 Cost-benefit analysis: identifying costs and benefits 4 Adaptation Costs: extra costs incurred compared with the business-asusual scenario Benefits: avoided damage and losses, extra developmental benefits compared with business-as-usual scenario Mitigation Costs: extra costs incurred compared with business-asusual scenario, reduced economic growth opportunities Can you think of some examples? Benefits: cost savings, sales of carbon credits, positive environmental and related health/livelihoods outcomes (+ difficult to value: strategic and competitive advantages)

62 Cost-benefit analysis (1) Cost-benefit analysis (CBA): Quantifies all the costs and benefits (*) of an intervention (with benefits including both positive benefits and avoided losses) over the entire lifetime of the intervention A discount rate is applied to all costs and benefits to represent preference for the present or simply the opportunity cost of capital -> calculation of present value The higher the discount rate, the smaller the present value The further away in the future, the smaller the present value Significant controversies over the right discount rate for assessing long-term options (*) Actually the incremental costs and benefits, i.e. the difference in costs/benefits between a with intervention and a no intervention scenario 5

63 6 Cost-benefit analysis (2) Outputs of cost-benefit analysis: Cost-benefit ratio (CBR) Ratio of costs to benefits calculated at their present value (the smaller, the better should be <1) Net present value (NPV) Benefits minus costs calculated at their present value (the larger, the better) Internal rate of return (IRR) The discount rate at which NPV = 0 A measure of the benefit-generating power of the option or intervention (the larger, the better)

64 Anguilla: CBR of protection measures against coastal floods Cost-benefit ratio and loss avoidance potential for adaptation measures USD millions, 2009 Cost/benefit ratio for measures : High change Measures with net positive benefits Measures with net negative benefits Averted losses Source: CCRIF (2010) Appendix 2, p. 13 7

65 Georgetown, Guyana case study CBA of various adaptation options Source: Economics of Climate Adaptation (2009) Test case on Georgetown, Guyana Focus on risks from flash floods, Fig. 05, p

66 Cost-effectiveness analysis (1) Cost-effectiveness analysis (CEA): Costs are valued in monetary terms, and benefits (*) quantified in physical units, over the entire lifetime of the intervention; a discount rate is applied to both This allows calculating unit costs, as the ratio of total discounted costs to total discounted benefits obtained The obtained unit costs support : the comparison of several options comparison with benchmark costs for similar interventions, where available (*) As in cost-benefit analysis, incremental rather than absolute costs and benefits should be taken into account 9

67 Cost-effectiveness analysis (2) Compared with CBA, CEA: is suitable where it is difficult to assign a monetary value to benefits but requires identifying a single, all-encompassing measure of benefits which may be both difficult and reductive 10

68 Illustration of CEA: Global GHG abatement cost curve 11 Source: McKinsey (2009), Exhibit 8, p. 17

69 Example: land-based mitigation options Significant mitigation potential for developing countries Atmosphere CO CO 2 2 CH 4 N 2 O Typically costeffective and requiring low upfront investment Forests Net sink (tree biomass + soil organic matter) Peatlands Largest & most efficient terrestrial store of carbon biomass Improved ecosystem management also supports adaptation Grasslands Net carbon sink if not degraded Cultivated systems Both a sink and a source of GHGs, net balance depends on cultivation methods 12

70 13 Financial and economic analysis Both CBA and CEA support: Basis for private sector decision making financial analysis: considers the monetary costs and benefits (or equivalent) accruing to parties directly concerned by a project or programme, at their face value economic analysis: broadens the analysis to more accurately reflect costs and benefits to society Basis for public sector decision making

71 Complementary tools For the assessment of robustness and the integration of uncertainty, CBA/CEA can be combined with: the use of multiple scenarios (e.g. no change scenario and various climate change and development scenarios) sensitivity analysis (i.e. testing of the effect of changes in scenario assumptions on the CBR, NPV, IRR or unit costs) risk analysis (-> risk probability analysis includes the probability of occurrence of various cost and benefit outcomes in calculations... assuming probabilities are known) 14

72 15 Tools for prioritising and selecting adaptation and mitigation measures

73 Supporting decision making CBA/CEA support the financial and economic assessment of adaptation/mitigation options They help identify measures that offer the best value for money a key aspect in situations of budgetary constraints Other types of assessment and other criteria (e.g. technical, social, environmental) are required to fully inform decision makers Multi-criteria analysis (MCA) helps integrate various criteria 16

74 Multi-criteria analysis (1) An approach to decision support that uses more than one criterion to assess performance and rank various options or interventions The term actually covers a wide range of methods Typically: various options or interventions are assessed against a pre-determined set of criteria qualitative ratings or quantitative scores are given rules are then applied to rank options/interventions Numerical scores can be added up to calculate a total score (with the possibility of applying different weights to different criteria) 17

75 Multi-criteria analysis (2) MCA is a useful complement to CBA/CEA Allows combining financial/economic criteria with technical, environmental and social ones It can be used on its own, or in combination with CBA/CEA: MCA before CBA/CEA Allows reducing the number of options to which CBA/CEA is applied MCA after CBA/CEA CBA/CEA helps eliminate financially or economically unviable options, then MCA allows for final selection based on extra criteria 18

76 19 Example of MCA grid Option Effectiveness Cost or CBR (*) Technical feasibility Social & cultural acceptability Env l impacts Total score Option 1 Option 2 Option 3 Option 4 Scores: from 1 (poorest performance) to 4 (highest performance). As far as cost is concerned, a scale should be established, with scores corresponding to a given cost range or cost/unit range. (*) CBR = cost-benefit ratio Adapted from USAID (2007), Exhibit 12, p. 18

77 Recap Key messages Cost-benefit analysis and cost-effectiveness analysis support the identification of financially and economically viable adaptation and mitigation options/measures Help prioritise actions based on financial/economic criteria Multi-criteria analysis, used alone or in combination with CBA or CEA, supports the assessment and prioritisation of adaptation and mitigation options based on multiple criteria Technical, environmental and social criteria can be considered alongside financial/economic ones 20

78 21 Key references Economics of Climate Adaptation Working Group (2009) Shaping climate-resilient development: a framework for decision-making. Climate Works Foundation, Global Environment Facility, European Commission, McKinsey & Company, The Rockfeller Foundation, Standard Chartered Bank & Swiss Re World Bank Economics of Adaptation to Climate Change web pages:

79 22 References CCRIF (2010) Enhancing the climate risk and adaptation fact base in the Caribbean: An informational brochure highlighting the preliminary results of the ECA Study. CCRIF s Economics of Adaptation (ECA) Initiative. Caribbean Catastrophe Risk Insurance Facility, Grand Cayman, Cayman Islands. Available from: Economics of Climate Adaptation Working Group (2009) Shaping climate-resilient development: a framework for decision-making. Climate Works Foundation, Global Environment Facility, European Commission, McKinsey & Company, The Rockfeller Foundation, Standard Chartered Bank & Swiss Re. Available from: wledge_highlights/economics_of_climate_adaptation.aspx McKinsey & Company (2009) Pathways to a Low-Carbon Economy: Version 2 of the Global Greenhouse Gas Abatement Cost Curve. Available from: USAID (2007) Adapting to Climate Variability and Change: A guidance manual for development planning. United States Agency for International Development, Washington, DC. Available from:

80 Global Climate Change Alliance Support Facility Module 8 Mainstreaming climate change in the budgetary process Training workshops on mainstreaming climate change Training materials developed with the support of the European Commission

81 Implications of climate-related policies and measures for public revenue and expenditure 2

82 Implications of climate change integration on the revenue side + - Taxes on economic activities related to climate adaptation R & mitigation E measures Reduced taxes on activities that shrink or fail to develop as a result of adaptation or mitigation policies V E N U E S Foreign grants & other financial transfers related to adaptation & mitigation Carbon tax / Taxes on highemission activities Growth effects from increased competitive- ness Revenues 3

83 Implications of climate change integration on the expenditure side + - Subsidies for adaptation & mitigationrelated activities Reduced subsidies for fuel consumption and other highemission activities Current expenditures in relation to adaptation & mitigation activities R & specific infrastructure E maintenance V E Reduced spending N on healthu care, infrastructure E replacement S etc. as a result of successful adaptation measures Public investment (capital expenditure) in adaptation and/or mitigation-related infrastructure Expenditures 4

84 Linking the budget to policy objectives and expected results 5

85 Linking spending to policy and results, with a medium-term outlook National objectives and strategies Medium-term sector plans Medium-term budget perspective or expenditure framework Annual budget Implementation & service delivery Performance monitoring 6

86 The medium-term expenditure framework (MTEF) A forward-looking budgetary planning tool covering a 3 to 5-year period systematically links strategic objectives (national/sectoral) and related outputs/outcomes with actions required to achieve them, corresponding expenditures and resources supports the prioritisation of expenditures and the predictability of resources facilitates performance monitoring Can be established at the national level (inter-sectoral allocations) as well as the sectoral level (intra-sectoral allocations) 7

87 In practice MTEFs are rather sophisticated tools, and few countries have full-fledged MTEFs The preparation of medium-term projections of national and/or sector expenditures is a good starting point The uncertainties associated with projections and forecasts should be recognised What is the practice in your respective countries? 8

88 Entry points for climate change mainstreaming 9

89 Climate change at the resource allocation stage The mainstreaming of climate change requires: reallocating funding to more vulnerable and/or priority sectors and regions providing funding for adaptation- and/or mitigation-specific plans or activities adding climate change considerations to the criteria for screening and selecting projects and investments making room for cross-sectoral activities (e.g. DRR) This process typically involves a mix of top-down and bottom-up processes Source: OECD (2009a) 10

90 Key stages in budget preparation and related entry points (1) Key stages 1. Determination of macroeconomic outlook 2. Multi-year strategic planning: medium-term fiscal strategy, medium-term expenditure framework 3. Determination of next year s: -expected revenues -acceptable level of deficit -global level of expenditures 4. Pre-allocation of expenditures among line ministries, according to policy priorities Impacts of CC on economic activity & growth Key actors Min. of Finance/Planning, adaptation/mitigation statistical on office, central bank Cabinet, Min. of Finance Impacts of CC economic activity & growth Extra costs of adaptation / mitigation measures Extra resources required / pledged Min. of Finance (Budget Dept, Macroeconomic Extra revenues Dept), / cost Cabinet savings resulting from adaptation/mitigation Cabinet, Re-allocation Min. of of Finance funds (Budget Dept) support of adaptation/ mitigation objectives 11

91 Key stages in budget preparation and related entry points (2) Key stages 5. Preparation/Circulation of budget circular & expenditure ceilings 6. Costing of sectoral policies, submission of bids 7. Review of sectoral bids, testing of cost estimates, finalisation of budget estimates 8. Negotiations, followed by endorsement of budget 9. Preparation of appropriation bill and budgetary documents 10. Submission of budget to Parliament Discussion & adoption Key actors Instructions on costing adaptation/mitigation policies & measures Min. of Finance (Budget Dept) All ministries Costing && integration government of agencies adaptation/mitigation policies & measures Min. of Finance (Budget Dept), Use of climate risk Cabinet screening procedures Min. of Finance, other Ministries/agencies, policies & measures Cabinet Prioritisation of adaptation/mitigation Min. of Finance (Budget Dept) Min. of Finance, Parliament Discussion of adaptation/mitigation policies & measures 12

92 Global Climate Change Alliance Support Facility Module 9 Mainstreaming climate change in monitoring systems Training workshops on mainstreaming climate change Training materials developed with the support of the European Commission

93 2 Performance measurement and monitoring: Key concepts

94 Objectives and related indicators/milestones O u t c o m e s Hierarchy of objectives Overall objective(s) Specific objective(s) Progress measurement Impact indicators Outcome indicators P r o c e s s Intermediate results Inputs Output indicators Milestones Input indicators Milestones Adapted from: EC (2004), OECD (2002) 3

95 SMART indicators and targets Indicators and targets should be: Specific to the related objectives Measurable Available at a reasonable cost Relevant to the information needs of decision makers Time-bound Source: EC (2004) 4

96 Mainstreaming climate change in monitoring systems 5

97 What should be monitored, and why? 6 Aspect to monitor Climate variability and change, impacts and vulnerabilities Policy and institutional change Policy/Strategy implementation and outcomes Rationale for monitoring Make decisions as well informed as possible Support adaptive management Promote the institutionalisation of climate change mainstreaming Enhance the transparency and accountability of the mainstreaming process Strengthen commitment to the objectives set in policies and strategies Stimulate the achievement of tangible outcomes

98 Climate change in the national development monitoring system Climate monitoring should be integrated into wider national and specific development monitoring systems => Strengthen and adapt existing monitoring systems (incl. statistical systems) to integrate climate change Build on existing institutions and sources of information but adapt statistical systems and data sources 7

99 Levels at which to measure climate-related performance 8 Indicators and milestones related to climate change and the associated response can be included in the PAFs (*) of climate change strategies and actions plans, but also those of: national and sectoral development strategies and programmes sub-national (e.g. regional, local) development plans individual projects (logical framework) (*) Performance assessment frameworks Ultimate objective of mainstreaming!

100 9 Monitoring climate change Meteorology, climate variability Climate change Data collection, management and dissemination Strengthening of meteorological information & systems Mainstreaming Is the mainstreaming process based on reliable information? New patterns Emerging trends Projections, scenarios Tools for assessing impacts, vulnerabilities & risks

101 Monitoring policy and institutional change Policy change Institutional change Integration of adaptation/mitigation considerations in national & sector policies/strategies Development of adaptation- & mitigation-oriented policies & plans (e.g. DRR, REDD strategy) Mainstreaming Is mainstreaming getting institutionalised at all levels? Political leadership Inst l commitment Coordination & participatory mechanisms Procedures Systems Tools Capacity building programmes 10

102 Monitoring policy implementation and outcomes 11 Implementation (inputs, outputs) Outcomes, impacts Increased allocation of resources (Inclusion of) adaptation/mitigation (measures in) programmes/projects Implementation & enforcement of adaptation/mitigation measures & regulations Mainstreaming Does the mainstreaming process produce results and impacts? Increased resilience of vulnerable groups (women, children, farmers, coastal communities,...) Increased resilience of key sectors Green growth, green jobs Climate-resilient, low-emission development

103 12 Performance assessment frameworks and budget support

104 Role of PAFs in relation to budget support Progress measured against the PAF s criteria and targets provides opportunities for policy dialogue in the context of budget support Increasingly, the PAF associated with development and poverty reduction strategies is likely to include indicators and targets associated with climate change adaptation, disaster risk reduction, energy efficiency, etc. In the case of EC budget support, performance against a chosen sub-set of criteria and targets also determines the final amount of disbursements 13

105 Illustration: Seychelles Climate Change Support Programme (1) Overall objective: Enhance the sustainability of Seychelles development and economic reforms through mitigation policies and building resilience for adaptation to climate change impacts Expected results: effective mainstreaming of climate change in national development policies and in key sector strategies and action plans a solid institutional and legal framework in the energy sector integrating the Clean Development Mechanism EU support provided under GCCA framework in addition to existing GBS 14

106 Illustration: Seychelles Climate Change Support Programme (2) 15 Performance monitoring and criteria for disbursement: Tranche Criteria 2010 Approval by Cabinet of the National Climate Change Strategy. Approval by Cabinet of the Energy Policy Climate change mainstreamed in at least 3 key sectors of EMPS. Approval by Cabinet of Energy Bill allowing for CDM projects Climate change mainstreamed into all sectors of EMPS. Amendments to the Town and Country Planning Act and Environment Protection Act coherent with the SNCCS, approved by Cabinet. Enactment of the Energy act. EMPS = Seychelles Environment Management Plan SNCCS = Seychelles National Climate Change Strategy

107 16 Recap Key messages Climate monitoring, as well as the monitoring of responses to climate change, should be integrated into existing development monitoring systems This is a key aspect of the mainstreaming process Multiple aspects can be subject to monitoring Climate variability and change and their impacts Changes in policies and institutions The implementation and outcomes of adaptation and mitigation measures

108 17 Key reference World Bank (n.d.) Mainstreaming Adaptation to Climate Change in Agriculture and Natural Resources Management Projects. World Bank, Washington, DC. Guidance Note #8 Monitoring and Evaluation of Adaptation Activities

109 18 References EC (2004) Project Cycle Management Guidelines. Aid Delivery Methods series, Volume 1. European Commission, Brussels. Available from: nes_2004_en.pdf OECD (2002) Glossary of Key Terms in Evaluation and Results Based Management. OECD Publishing, Paris. Available from: World Bank (n.d.) Mainstreaming Adaptation to Climate Change in Agriculture and Natural Resources Management Projects. World Bank, Washington, DC. Guidance Note #8 Monitoring and Evaluation of Adaptation Activities. [Online] Available from:

110 Global Climate Change Alliance Support Facility Module 10 Synthesis, conclusions and way forward Training workshops on mainstreaming climate change Training materials developed with the support of the European Commission

111 Recap of the framework and tools 2

112 Finding the entry points and making the case Mainstreaming CC into policy and planning processes Meeting the implementation challenge Mod1 Mod2 Mod4 Mod5 Preliminary assessments Understanding the science Understanding CC development linkages Understanding climaterelated uncertainties Raising awareness and building partnerships National consensus and commitment to climateresilient, low-emission development Collecting country-specific evidence and influencing Mod6 policy processes Mainstreaming CC in (sub)national and sector policies, strategies, programmes Costing, assessing and selecting adaptation and mitigation options and Mod7 measures Budgeting and financing Mainstreaming CC in the Mod8 budgetary process Mainstreaming CC in monitoring systems Performance assessment Mod9 frameworks Supporting policy measures National, sector and subnational levels Mod3 Strengthening institutions and capacities Needs assessment Working mechanisms Strengthening institutions and capacities Mod3 Learning by doing Strengthening institutions and capacities Mainstreaming Mod3 as standard practice Engaging stakeholders and coordinating within the development community Adapted from: UNDP-UNEP (2009) Figure 3.1, p. 15 3

113 Understanding CC development linkages 4 Mod2 Preliminary assessments Understanding CC development linkages Millennium Ecosystem Assessment framework Millennium Development Goals

114 5 Strengthening institutions and capacities Mod3 National capacity selfassessments Strengthening institutions / capacities Needs assessment Working mechanisms Learning by doing Inst l & management arrangements for mainstreaming Actions supporting learning-bydoing Mainstreaming as standard practice Formal training Exchange visits On-the-job learning (interdisciplinary teams, twinning, technical assistance, demonstration projects) Lesson learning & dissemination Stakeholder analysis