anand patwardhan adaptation cse briefing 280809 final
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Adaptation: status and prospectsTRANSCRIPT
Anand PatwardhanIndian Institute of Technology-
BombayEmail: [email protected]
Adaptation: status and prospects
Why adaptation? Asymmetry in distribution of impacts
Disproportionately larger impacts may be experienced in developing countries
Mitigation is not enoughRegardless of mitigation, we are faced with a finite, and
significant degree of anthropogenic climate changeThis is true even if we think a 2 C target is possible, and
even more important if we don’t reach it (quite likely)Managing climate risk is important for sustainable
developmentWe are not well adapted to current climate risksA greater focus on adaptation (filling the “adaptation
deficit”) may actually help in advancing the development agenda
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Evolution as reflected in the IPCC assessmentsGradual evolution in emphasis from biophysical
changes to impacts to vulnerability and now to adaptation from the first to the fourth IPCC assessment reports
Gradual evolution in focus from making the case (‘why’) to guiding the response (‘what’ and ‘how’)
Gradual evolution of thinking from a largely mechanistic and sequential view of impacts, vulnerability & adaptation to a more complex, process-oriented understanding of the response processBaselines and socio-economic development scenariosPath dependency and the possibility of mal-adaptation
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Some relevant findings from the AR4 Adaptation is necessary in the short and longer term to address
impacts resulting from the warming that would occur even for the lowest stabilization scenarios assessed (WG2 SPM, p.19).
More specific information is now available across a wide range of systems and sectors concerning the nature of future impacts, including for some fields not covered in previous assessments. Key impacts would be in water, food, ecosystems, coasts and health sectors (WG2 SPM, p.11).
Though adaptation measures are seldom undertaken in response to climate change alone (WG2, Ch. 17, p.719), in several sectors, climate response options can be implemented to realize synergies and avoid conflicts with other dimensions of sustainable development (AR4 Synthesis Report, p.18).
A wide array of adaptation options is available, but more extensive adaptation than is currently occurring is required to reduce vulnerability to future climate change (WG2 SPM, p.19).
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Some relevant findings from the AR4 – contd…. More specific information is now available across the regions of the
world concerning the nature of future impacts, including for some places not covered in previous assessments. In addition to LDCs and SIDS (which are already acknowledged as vulnerable regions under the Convention) other regions have been identified (WG2 SPM, p.13), for example (examples extracted from WG2, Ch. 19, Sec. 19.3.3, p. 791-792): Africa is likely to be the continent most vulnerable to climate change
especially with respect to food security and agricultural productivity, particularly regarding subsistence agriculture, increased water stress, potential for increased exposure to disease and other health risks, increased risks to human health Approximately 1 billion people in South, South-East, and East Asia would face increased risks from reduced water supplies decreased agricultural productivity and increased risks of floods droughts and cholera.
Tens of millions to over a hundred million people in Latin America would face increased risk of water stress.
Low-lying, densely populated coastal areas are very likely to face risks from sea-level rise and more intense extreme events.
Human settlements in polar regions are already being adversely affected by reduction in ice cover and coastal erosion.
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Adaptation in the UNFCCC and KP
According to Article 4.1 of the UNFCCC, Parties are committed to: Formulate, implement, publish and regularly update national and, where appropriate, regional programmes
containing measures… to facilitate adequate adaptation to climate change (Art. 4.1. (b)); and Cooperate in preparing for adaptation to the impacts of climate change; develop and elaborate appropriate and
integrated plans for coastal zone management, water resources and agriculture, and for the protection and rehabilitation of areas, particularly in Africa, affected by drought and desertification, as well as floods (Art. 4.1 (e)).
Article 4.4 states that: The developed country Parties and other developed Parties included in Annex II shall also assist the developing
country Parties that are particularly vulnerable to the adverse effects of climate change in meeting the costs of adaptation to those adverse effects.
Articles 4.8 and 4.9 of the Convention make specific reference to developing country Parties, in particular least developed and most vulnerable countries. These articles explicitly mention funding and transfer of technology “to meet the specific needs and concerns of developing country Parties arising from the adverse effects of climate change” (UNFCCC 1992).
The Adaptation Fund created as a part of the Marrakech Accords was finally operationalized at CMP3 in Bali. The process involved decisions regarding the basic elements of the fund (28/CMP.1), principles underlying operation and management (5/CMP.2) and giving specific form to these arrangements (1/CMP.3) under which the Adaptation Fund Board is serviced by a Secretariat and a Trustee.
The Special Climate Change Fund and LDC Fund also created as part of the Marrakech accords.
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Adaptation is addressed under different agenda itemsSBI
Financial mechanism of the Convention (guidance to the GEF regarding SCCF and LDCF)
1/CP.10 (Buenos Aires programme of work) and Art 4.8 SBI (CMP)
Adaptation FundSBSTA
Nairobi Work ProgrammeAWGLCA
One of the pillars of the BAPAWGKP
Extending share of proceeds
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Multilateral response on adaptationBased on the two pillars of
National and local adaptation responses
Technology Financing
Generation Delivery
• Criteria for project selection and cost-sharing•Methodologies
‘How’ to support
‘What’ to support
• Adequacy and predictability of source of funds• Scale of funds
• Research: utilize S&T cooperation• Development: approaches for joint technology development • Deployment: and appropriate financing models
Should support and enable
•Institutional structure• Financial instruments
Mechanisms for development &
transfer
What technolog
y• Technology in the broadest sense• Traditional knowledge capture
Effective financing and resource delivery is key
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Resource generation Adequacy and predictability of resources Scale of resources required: chronic vs. acute change
Resource delivery What to support?
Making the space of potential projects tractable: criteria and parameters for additional cost, baselines and project outcomes / benefits
Need standardized, simplified methodologies How to deliver?
Institutional structure for delivery, including governance of mechanism
Appropriate financial instruments for delivery Recognize that in the case of adaptation (unlike mitigation),
for most sectors, the actions being supported will be those of public entities
Difficulty with directly applying ideas from mitigation (baselines, additionality, incremental cost, global / local benefits)
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ElementsDemand
What are the needs and their characteristics and resource requirements?
SupplyHow do we generate the resources for
meeting these needs?Delivery
How do we deliver the resources effectively? What are the appropriate institutional arrangements and modalities?
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SupplyCharacteristics
AdequacyPredictabilityAutomaticityNew & additionalMeeting demand characteristics
OptionsContributionsLevy on transactionsOthers….
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Rationale for enhanced financial flows
Sector Areas / Adaptation measures considered
Global(billion USD)
Developing countries (%)
Agriculture, forestry and fisheries
Production and processing
Research and development
Extension activities
14 50 %
Water supply Water supply infrastructure 11 80 %
Human Health Treating increased cases of diarrhoeal disease, malnutrition and malaria
5 100 %
Coastal zone Beach nourishment and dykes 11 40 %
Infrastructure New infrastructure 8130 25 %
UNFCCC, 2007: Additional investment and financial flows in 2030 for adaptation amount to tens of billions of USD, estimates depend on underlying scenarios
Adaptation costs depend on level of mitigation activities
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Rationale for enhanced financial flows – cont.
UNDP HDR 2007/2008: adaptation investment needs will be USD 86 billion by 2015
Evolution from adaptation costs studies at the global level towards studies that will likely develop more information on adaptation needs at regional and national levels UNDP project to estimate adaptation costs for agriculture, water
resources, human health, forestry, and tourism in 10 countries
Regional Economics of Climate Change Studies, e.g. by ECLAC and ADB
However there are big questions about the adaptation cost numbers, including Assumptions (e.g.,10-20% of investments for climate-proofing)Limited sectors and adaptation ‘Nebulous nature’ of adaptation or what are we exactly
estimating costs of?
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Generation of financial resources - options
Fundingsource
Current
Proposed
Public funding Private funding
Voluntary Contributions Defined Contributions
Contributions though levies on market
instruments/commoditiesMultilateral Bilateral International National
• Convention Funds under the GEF (SPA, SCCF and LDCF)
• PPCR
ODA, including
• GCCA• Japanese
Cool Earth Partnership
• Spanish MDG Fund
Fixed % of GNP or based on criteria such as GDP, GHG and population
• CDM levy for AF
• EU ETS • Investments• Financial risk
management instruments, including insurance
Market finance, including•venture capital,•commercial loans•revolving credits
• Share from global carbon tax
• Expansion of CDM levy to 3-5%
• SOP from JI and ET
• Auctioning allowances
• Levies on international air travel and bunker fuels
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Current available and pledged funding in USD million
Source Estimated level of funding
Period Nominal annual level of funding
Funding under the Convention SPA
LDCF SCCF
50
172 91
As of Oct 21, 2008 As of Oct 21, 2008
n.a. n.a.
Adaptation Fund 400-1 500 2008-12 80-300 Multilateral
PPCR 640 2009-12 160 Bilateral
Japanese Cool Earth Partnership 1 000 2008-12 200 German International Climate Initiative 385 2008-12 77
GCCA of the European Commission 84 2008-10 28
Spanish MDG Fund 143 2008-11 36
Call for resources to be:
Adequate and sustainable to address identified needs
Predictable to enable proper planning or sequencing of adaptation actions
New and additional to not divert funds from ODA
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Potential of proposed options in USD billion
Proposed by Source Nominal annual level of funding
G77 and China
0.25 to 0.5 % of GDP from Annex I Parties 100.5–201
Switzerland 2 USD/t CO2 18.4 Norway 2% levy on auctioning AAUs 15–25 Mexico contributions based on GDP, GHG and
population and markets 0.2
EU 2% levy on SOP from CDM 0.25–2.5 Pakistan 3-5% levy on SOP from CDM 0.375–6.25 LDCs 2% levy on SOP from JI and ET 0.03–2.25 LDCs Levy on international air travel (IATAL) 4–10 LDCs Levy on bunker fuels (IMERS) 4–15
Private sector will likely play a critical role in funding adaptation investments
and will at some stage undertake adaptation out of self-interest
Need to identify levers to further encourage the private sector to optimise and shift its investments towards more climate-resilient activities, for example
Public-Private-Partnerships for infrastructure projects or financial risk management, including insurance, where public takes over risks and ensures a certain economic rate of return
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Demand: what to support? The adaptation = development conceptualization has led to an unfortunate
paradox:Because adaptation = development, “normal” development actions ought to take
care of the problem, as long as agents (and decisions) are “fully informed” If adaptation = development, donor countries fear that “normal” development cam
get put under adaptation projects, thus “opening the floodgates” in terms of demand on resources
To move forward we will need to recognize that adaptation to climate change:Poses a distinct, additional burdenThe costs of responding to this additional burden would need to be met
through (grant financing) under the financial mechanism of the ConventionThat while mainstreaming or integration is an approach for putting
adaptation into practice, and not a means for removing the needs for funding
Given that the estimation of these additional costs in practice may be rather difficult we may need (a) better characterization of adaptation demand, (b) a process for determination and (c) negotiated levels of co-financing
Our response will need to address chronic and acute hazards (reinsurance)
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Characterization of adaptation
Adaptation may be examined and characterized along two dimensions: Nature of additionality, and Nature of the intervention
Nature of additionality and primary drivers1. Integrating climate risk into socio-economic
activities to ‘climate-proof’ a current or future socio-economic activity to harness development benefits, e.g. airport in coastal zone
2. Expanding adaptive capacity to deal with future and not only current risks to harness development and adaptation benefits, e.g. crop insurance
3. Directly addressing observed impacts from climate change to harness adaptation benefits, e.g. changing Malaria zones
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Characterization of adaptation – cont.
Nature of the intervention in line with the Bali Action Plan
Context of intervention at national and sectoral level Policies
Programmes and plans
Projects
Type of intervention Capacity-building
Research and assessments
Disaster risk reduction and risk management, including insurance
Technology
Specific adaptation action (e.g., infrastructure, cultivating drought-resistant crops)
Economic diversificationAugust 28, 2009Anand Patwardhan, IIT-Bombay
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Examples of adaptation interventions (from NAPA’s)
Intervention
Additionality
Type of intervention Context of intervention
Research and assessments
Disaster risk reduction
Programmes Projects
Integrating climate risk into socio-economic activities
Research on micro hydro-power production (Burundi)
Introduce drought tolerant crop varieties (Comoros)
Incorporate adaptations from NAPAs in Ministry Operational Plans (Kiribati)
Increase water supplies to combat increasing drought (Comoros)
Expanding adaptive capacity to deal with future and not only current risks
Research on drought, flood and saline tolerant crop varieties (Bangladesh)
Strengthen early warning systems (Zambia)
Integrated protection and management of coastal zones (Cape Verde)
Plant vegetation to reduce risks from storms (Cambodia)
Directly addressing impacts from climate change
Improve understanding of groundwater resources in light of persistent drought (Mauritania)
River flood warning system (Bhutan)
Mainstreaming adaptation into sectoral programmes (Bangladesh)
Lowering of water levels in the Thorthormi Lake to reduce risk of a future GLOF (Bhutan)
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Delivery arrangementsInstitutional arrangements
GovernanceHow much to fund?
Matching demand and supplyMethodologies for additional cost
determinationHow to disburse?
Access to resources
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Current institutional arrangements
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Proposed institutional arrangements
Call for adaptation funding being structured and governed under an umbrella financial mechanism of the Convention
Policy choice:Using and improving existing institutions, e.g. GEF
Establishing new ones, e.g. Adaptation Fund under the Convention overseen by a board appointed by the COP with equitable and balanced representation of all Parties
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Current access
For whom?All developing country Parties to the Convention
SPA under the GEF Trust Fund (for global environmental and adaptation benefits)
SCCF (for adaptation benefits)Only LDCs that are Parties to the Convention
LDCF (for preparation and implementation of NAPAs)Developing country Parties to the Kyoto Protocol that
are particularly vulnerable Adaptation Fund (concrete adaptation projects and
programmes )How?So far only indirect access through implementing
agencies, direct access to Adaptation Fund being operationalized
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Proposed access
For whom?All developing country Parties to the Convention with a
possibility of prioritization regarding vulnerability BAP: LDCs, SIDS and countries in Africa affected by
drought, desertification and floodsProposals:
“Poorest and most vulnerable” Vulnerability index or indicators reflecting a country’s:
o Circumstanceso Respective capabilitieso Level of associated risk o Physical impacts
How?Direct and easy access with streamlined and transparent
procedures
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Disbursement considerations
Current disbursementUnder the SPA
2 increments: one for GEB and one for adaptation, developed for each project
Under the SCCF and the LDCF1 increment for adaptation, determined through a sliding co-
financing scale based on the size of the project
Proposed disbursement Adaptation funding to be provided based on the
nature of additionality and the nature of interventionMay need negotiated levels of co-financing and
possibly a process by which this may be accomplished (example: Methodologies Panel to the AF)
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Examples of disbursement for adaptation
Intervention
Additionality
Type of intervention Context of intervention
Research and assessments
Disaster risk reduction
Programmes Projects
Integrating climate risk into socio-economic activities
Full cost Negotiated co-financing depending on sector and project/ Full costs of marginal adjustments
Negotiated co-financing depending on sector and project/ Full costs of marginal adjustments
Negotiated co-financing depending on sector and project/ Full cost of marginal adjustments
Expanding adaptive capacity to deal with future and not only current risks
Negotiated co-financing
Negotiated co-financing depending on sector and project
Negotiated co-financing depending on sector and project
Negotiated co-financing depending on sector and project
Directly addressing impacts from climate change
Full cost Full cost Full cost Full cost
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Disbursement – cont.
Way of disbursementProject support, as currently practised
Appropriate for piloting adaptation actions in countries and sectors
Less suitable in delivering up-scaled financial resources Programmatic support as envisaged by the
Adaptation Fund and several PartiesAllow for implementation at scaleSupport for national adaptation plans
Budget support as piloted in development assistanceAllows for integration of national budgets, climate funds
and other development funds
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Beyond financingExpert support for adaptation
Adaptation Committee of ExpertsRegional centers and global and regional
networksResearch and capacity-building
Tools, methodologies and metrics for assessing implementation and outcomes
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Contact information
Anand Patwardhan
Shailesh J Mehta School of Management
Indian Institute of Technology
Powai, Mumbai 400076, India
Phone: 91.22.25767788
Fax: 91.22.25722872
Email: [email protected]
August 28, 2009