UNFCCC Expert Meeting on Loss and Damage from Climate Change Asia Regional Workshop Bangkok, Thailand 27 29 August 2012 Session 4 Approaches to Address Loss and Damage at National Level Charles Rodgers Asian Development Bank
Contents 1. Economics of Climate Change Regional Studies 2. Disaster Risk Financing 3. Climate Proofing Critical Infrastructure 4. Pilot Program for Climate Resilience
1. Regional Economics of Climate Change How much would climate change cost us? Is it worth taking action? To what extent and when? What and where first? What are the levels of investment and financing needed? What policies will help ensure consistency across adaptation and low carbon agendas?
Key Outputs Cost of climate change %GDP loss economy wide; sector specific Cost benefit or cost effectiveness of options Marginal Adaptation/Abatement Cost curve Investment requirements Climate and policy impact on welfare, income distribution, employment, trade, competitiveness, etc. Under different scenarios, sets of assumptions; range/probabilistic Interactive and user friendly platform or a suite of planning tools for policy makers
Regional Studies SE Asia (completed) Phase II: Strengthening Planning Capacity for Low Carbon Growth in Developing Asia (started in Q1 2011) South Asia Part I Cleaner Technologies and Options (tbc Q2 2012) Part II Adaptation and Impact Assessment (tbc Q1 2013) Pacific (tbc Q2 2012) impact and adaptation NE Asia (tbc Q3 2012) adaptation and LCG Central and West Asia (to start in Q2 2012)
Framework: IAM linkages with others Development, demographic, and emissions scenarios Adaptation Local climate Impact in sectors Adaptation costs Integrated Assessment Models Mitigation Country level energy and emissions MAC curves Country reports and databases Bring detailed/bottom up studies together in a coherent manner Adaptation mitigation linkages Simulation under long term scenarios; probabilistic/sensitivity analysis
PAGE09: Bangladesh temp rise (A1FI) o C 4.8 o C rise by 2100 from pre industrial level; 4.6 o C rise globally Breaks 2 o C rise (considered safe) by 2045 Large uncertainty about future climate (and what we know about it)
PAGE09: global sea level rise (A1FI) meters On average, 0.70 m SLR by 2100, ranging from 0.42 1.12 m Reflects thermal expansion and melting of West Antarctic and Greenland ice sheets
Keep an eye on catastrophic risks Global sea level is projected to rise by 0.7 m on average by 2100 But 5% chance could go up to 1.1 m, with maximum of 2 m increase How to adapt?
PAGE09: climate cost in BAN (A1FI) %GDP Total cost equivalent to 9.4% GDP by 2100 Worst comes to worst sees 27% GDP loss equivalent by 2100
FUND3.6: climate cost in BAN (A2)
2. Disaster Risk Financing ADB Objective: to develop DRF solutions for cities within an integrated disaster risk management (IDRM) framework by Focusing on urban risk to address rising risks from the compounding of urbanization, continuing poverty, and increasing climate vulnerability Complementing work being supported by World Bank and private sector to establish national level DRF solutions (e.g. CAT DDO) Supporting the establishment of a DRM Framework with an urban DRF component
Integrated Disaster Risk Management Increased Resilience through Integrated Disaster Risk Management Disaster Risk Reduction Climate Change Adaptation Disaster Risk Financing Country level IDRM model Management of retained risks Elimination of preventable risks Transfer of disaster risks (amortization) Strengthened risk governance & capacity development Risk Assessment National & local development systems Stakeholder engagement Policy Frameworks Development Planning Development Investment Input streams Knowledge Inputs Guidance Best practices Lessons Learned Technical Assistance Expert consulting Regional cooperation Financing Loans Grants Guarantees
Integrated Disaster Risk Management High frequency Low frequency High severity International Donor Assistance Catastrophe bonds & other Insurance Linked Securities Insurance / Reinsurance Risk transfer Contingent credit Low severity Once in 3 5 years Once in 10 15 years Once in 15 20 years Once in 25 50 years Once in 75 100 years Reserves / Calamity Funds (potentially insurance backed) Risk retention Expected return period
Integrated Disaster Risk Management 3 yr project to be implemented in the Philippines and Indonesia Selection of consultants has commenced On the ground activities to start in 2012 Overall project amount is US $2 million (covering both countries) similar project to be implemented in Viet Nam support for projects comes from the Japan Fund for Poverty Reduction (JFPR)
Phase 1 Phase 2 Risk profiling Development of city selection criteria City selection Identification of key DRF focus area in each city (e.g., public liquidity coverage, public asset protection, social protection, ) Development of options for DRF focus area in each city Preliminary risk modeling Feasibility studies and financial modeling for the options (eg parametric insurance, catastrophe bond, microinsurance, ) Phase 3 Phase 4 Review of options with cities and government agencies Selection of most feasible option for each city Support to city in developing requirements (detailed requirements description for drf options) DRF solution implemented in each city (eg. Parametric insurance for public liquidity coverage) Cities and DMCs take DMF solutions for each city to market Selected firm provides risk carrying service
3. Climate Proofing Infrastructure Climate proofing is a shorthand term for identifying risks to a development project as a consequence of climate variability and change, and ensuring that those risks are reduced to acceptable levels through long lasting and environmentally sound, economically viable, and socially acceptable changes implemented at one or more of the following stages in the project cycle: planning, design, construction, operation, and decommissioning.
Case Study: Ho Chi Minh City Approach: GIS based impact, vulnerability assessment and evaluation of adaptation options One time horizon for assessing climate extent and impact: 2050 Two IPCC scenarios: 1.A2: High emission Minimal innovation to current practice (SLR 26cm) 2.B2: Medium emission Mitigation measures applied (SLR 24cm) Regular and extreme climate situations flood, drought and saline intrusion With and without planned comprehensive dyke system designed for current climate (USD 750 million)
Viet Nam: Climate Change Impact and Adaptation in Asian Coastal Cities By 2050, 30 70% of new transport systems are at risk of flooding. roads with dyke 19 railways, ports, metro with dyke
Bangladesh: Strengthening the Resilience of the Khulna Water Sector to Climate Change Khulna: 3rd largest 1.4 million Shortage of water supply (currently relying on shallow groundwater) Increased urban flooding Drainage congestion ADB in partnership with Institute for Water Modeling (Bangladesh) conducted study supporting: City Region Development Project (2010): drainage, salinity control Khulna Water Supply Project (2011) others to follow
Approach: Climate Readiness Acquire land for reservoir here; develop when needed
4. Pilot Program for Climate Resilience PPCR: Adaptation window of the Strategic Climate Fund (SCF) of the Climate Investment Funds (CIF) Approach: integrating climate resilience considerations into national development planning and implementation consistent with poverty reduction and sustainable development goals Objective: to provide incentives for scaled up action; initiate transformational change Funding: $127.5 m finance for approved projects ($78 m grant; $49 m near zero interest credits); $693 m in pipeline these will leverage a comparable amount of co financing
PPCR PPCR are country led, build on National Adaptation Programs of Action (NAPA) or equivalent; and strategically aligned with other donor funded activities Investments supported by PPCR include (i) technical assistance to integrate climate resilience into national and sectoral development plans; (ii) public and private sector investments addressing climate resilience Seven pilot programs in Asia and the Pacific: Bangladesh Cambodia Nepal Tajikistan Samoa Tonga Papua New Guinea (submitted; pending endorsement)
Example: PPCR in Nepal
Nepal Strategic Program for Climate Resilience
Available at: http://www.adb.org