Inception WorkshopSESSION IPeter Mackay

For RDTA 8119: Economics of Climate Change in Central & West AsiaBishkek 25th June 2015

Workshop objectives Review current circumstances in

Kyrgyzstan that potentially impact on project activities and implementation of the study;

Review and finalize the work plans; Confirm organizational arrangements

for project management; and To present to government and key

stakeholders the draft Inception Report for comments, feedback and support.

Session I: Introduction to the ProjectContext, aims & objectives, expected outcomes.Findings from the Inception MissionProject Design & Implementation ArrangementsSession II: Study Approach & MethodologyEconomic AnalysisClimate Change/Impact AnalysisSession III: Stakeholder Involvement Stakeholder Mapping Project Selection Investment Proposals Questions & Answers

Presentation outline

The RDTA 8119: Economics of Climate Change in Central and West Asia (TA) seeks to address the lack of robust evidence on the options and costs to reduce greenhouse gas emissions (mitigation) and reduce the negative effects of climate change (adaptation) in Afghanistan, Kyrgyzstan and Tajikistan.The TA will identify priority investments for climate resilience and low-carbon development.The TA will support the countries’ readiness for leveraging public and private sector finance to address prioritized adaptation and mitigation investment needs.

Background & purpose

Component 1 Adaptation to Climate Change: - which will assess the costs and benefits of implementing adaptation measures to reduce the adverse effects of climate change on energy and water resources in the Afghanistan, the Kyrgyz Republic, and Tajikistan; and(Component 2 Mitigation of Climate Change: - to assess the costs and benefits of GHG emission reduction measures and formulate low-carbon development investment proposals for energy and transport in Azerbaijan, Kazakhstan, and Uzbekistan.)

Components

Output 1: will estimate the cost of climate change adaptation for Afghanistan, the Kyrgyz Republic, and Tajikistan; and

Output 2: will estimate the costs and benefits of climate change adaptation policies and technologies in energy and water resources sectors, by evaluating the benefits of adaptation (avoided losses) and the cost incurred - and will develop investment proposals in water resources and energy sectors (a minimum of 10 per country).

Outputs Component 1

Proj

ect D

esig

n

Climate impact analysis

Economic analysis

The main deliverable will be the economic study, including financial flows analysis and linked project investment proposals that are ‘investment ready’.

Secondary deliverables include capacity building, training and the development of a ‘knowledge product’.

Deliverables

Project inception phase

Data collection & climate modeling

Economic & Impact assessment

Adaptation & capacity

Team

Name Position

Peter Mackay Team/ Leader/Climate Adaptation Specialist

Alexander Mueller Economic Specialist

Philip Buckle Climate Change Specialist

Joanta Green Energy Specialist

Tim Hannan Water Resource Specialist

Mars Amanaliyev Deputy TL Kyrgyzstan/Climate Change

Rysbek Satylkanov Energy Specialist

Larisa Bazhanovaha Water Resource Specialist

2015 input schedule1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40

Apr 30-3 Apr 6-10

Apr 13-17

Apr 20-24

May 27-1

May 4-8

May 11-15

May 18-22

May 25-29 Jun 1-5

Jun 8-12

Jun 15-19

Jun 22-26

Jul 29-3 Jul 6-10 Jul 13-17

Jul 20-24

Jul 27-31 Aug 3-7

Aug 10-14

Aug 17-21

Aug 24-28 Sep 31-4 Sep 7-11

Sep 14-18

Sep 21-25

Oct 28-2 Oct 5-9 Oct 12-16

Oct 19-23

Oct 26-30 Nov 2-6

Nov 9-13

Nov 16-20

Nov 23-27

Dec 30-4

Dec 7-11

Dec 14-18

Dec 21-25 Dec 28-1

Peter MackayTeam Leader/Climate Adaptation Specialist

8.32 3.68 12.00

Alexander Mueller Economist 6.01 2.99 9.00

Joanta GreenClimate Impact Assessment and Energy

2.62 1.38 4.00

Phillip BuckleClimate Change Scenarion Specialist 4.16 1.84 6.00

Timothy HannanClimate Impact Assessment & Water Specialist 2.62 1.38 4.00

A Kayumov Climate Change Specialist (TAJ)14.16 1.84 16.00

A Rasooli Energy Specialist (AFG) 6.00 0.00 6.00

Larisa Bazhanova Hydrologist (KJZ) 6.00 0.00 6.00

Ghulam Nasere Climate Change Specialist (AFG)14.16 1.84 16.00

Mars Amanaliyev Climate Change Specialist (KGZ)14.16 1.84 16.00

Rysbek Satylkanov Energy Specialist (KGZ) 6.00 0.00 6.00

Sediq Reshteen Hydrologist (AFG) 6.00 0.00 6.00

2015

National Experts

Name Position Home Field Total

Months Input Nov DecInternational Consultants

Apr May Jun Aug Sep OctJul

2016 input schedule41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61 62 63 64 65 66 67 68 69

Jan 4-8Jan 11-

15Jan 18-

22Jan 25-

29 Feb 1-5Feb 8-

12Feb 15-

19Feb 22-

26Mar 29-

4 Mar 7-11Mar 14-

18Mar 21-

25Mar 28-

1 Apr 4-8Apr 11-

15Apr 18-

22Apr 25-

29May 2-

6May 9-

13May 16-

20May 23-

27June 30 -

3June 6 -

10June 13 -

17June 20 -

24 June 27 - 1 July 4 - 8 July 11 - 15July 18 -

22

Peter MackayTeam Leader/Climate Adaptation Specialist

8.32 3.68 12.00

Alexander Mueller Economist 6.01 2.99 9.00

Joanta GreenClimate Impact Assessment and Energy Specialist

2.62 1.38 4.00

Phillip BuckleClimate Change Scenarion Specialist 4.16 1.84 6.00

Timothy HannanClimate Impact Assessment & Water Specialist 2.62 1.38 4.00

Abdulhamid Kayumov Climate Change Specialist (TAJ) 14.16 1.84 16.00

Abdullelah Rasooli Energy Specialist (AFG) 6.00 0.00 6.00

Larisa Bazhanova Hydrologist (KJZ) 6.00 0.00 6.00

Ghulam Nasere Climate Change Specialist (AFG) 14.16 1.84 16.00

Mars Amanaliyev Climate Change Specialist (KGZ) 14.16 1.84 16.00

Rysbek Satylkanov Energy Specialist (KGZ) 6.00 0.00 6.00

Sediq Reshteen Hydrologist (AFG) 6.00 0.00 6.00

July2016

National Experts

Apr May June

Name Position Home Field Total

Months Input Jan Feb MarInternational Consultants

Whilst the study objective is clear, it was necessary to focus more clearly on the economic analysis components and clarify the approach and methodologies.

The original study design needed to be revised in terms of the work flows and outputs to facilitate detailed work planning and scheduling.

The study timeline will need to be extended (by 1-2 months) to take account of the delays in commencing the study and mobilizing the team.

The costs of coordinating activities across the 3 countries is proving to be higher than previously expected, and is likely to require additional funding resources.

Key findings Inception Phase

Counterpart agencies and arrangements are in place and working well for the most part – however, organizational arrangements could be improved in Tajikistan.

Data collection has commenced and is progressing slowly, due to difficult access to official information.

Concern exists over the availability, quality and access to data, which could potentially compromise impact assessment efforts.

The level of policy development relating to adaptation planning varies substantially between the countries, and this will have to be taken into account when the adaptation planning options and investment proposals are identified and elaborated for the water and energy sectors.

Continued …

Coordination between and across the study area is problematic, especially with regard to Afghanistan. The inability of the international team to travel to Afghanistan has the potential to degrade the effectiveness of the on-ground delivery in that country and inhibit stakeholder participation and buy-in.

Opportunities exist to leverage information and technology exchange through national climate change networks.

Opportunities exist to maintain contacts with ongoing projects and studies, which are linked with the current study either spatially or thematically, or both need to explore opportunities to optimize collaboration and avoid duplication of efforts.

Continued …

Data availability: Provision should be made by the GoK to facilitate provision of/and access to relevant data and information wherever possible.

Data quality: Hydro-meteorological data quality is not consistent across all three countries and often incomplete; this will necessitate developing a synthetic approach to climate change scenarios.

Capacity for economic modeling: Additional funding will be required to be able to use the Integrated Assessment Model PAGE and adapt it to the study area. To use this model for this study, some adaptation is required to be able to scale down to the country level, and expert guidance will be needed on data collection.

Recommendations

Adequacy of project resources: Project administration in Tajikistan requires enhancement and supplementation of technical and management skills, which may be achieved in part by reassigning existing resources and funding additional resources.

Office space: It is suggested that for Tajikistan it would be beneficial if office space could be made available in the Ministry for Economic Development & Trade, as this would give the project a higher profile and presence within government.

Coordination across countries: Additional budget is required to cover the larger than expected costs associated with establishing suitable arrangements that allow the Afghan team to fully participate in the study.

Continued …

Inception WorkshopSESSION IIAlexander MuellerPhilip Buckle

For RDTA 8119: Economics of Climate Change in Central & West AsiaBishkek 25th June 2015

Our approachFor the purpose of this study, we propose to take a top-down & bottom-up approach that:

Combines the use of an Integrated Assessment Model (IAM) to analyze the costs of climate change at the regional and country levels; with

Cost Benefit Analysis (CBA) for assessing the costs and benefits of potential adaptation measures in the water and energy sectors at the country and local levels.

Econ

omic

anal

ysis

Climate scenarios Climate change scenarios for temperature,

precipitation (rain and snow), climate-induced extreme events, and other climatic parameters will be reviewed for Tajikistan, Afghanistan and the Kyrgyz Republic for different time periods up to 2100 under different GHG emission scenarios to identify the likelihood of exceeding manageable thresholds.

Time and resource constraints as well as variable data quality will require a synthetic approach to developing scenarios, rather than downscaling. This will be achieved by a critical and informed review of existing scenarios at regional and country levels and will use input from scenarios, reports, national communications, key experts and other credible data sources.

Sector analysisThe sector analysis for water and energy sectors will: identify principal sector constraints; evaluate the lessons learned from other

climate change programs; compile reliable data on each sector; and assess policy requirements, institutional

needs, capacity building; and Identify future investments in the water

and energy sector.

Impact analysis

We will take a standard Vulnerability & Risk Assessment approach to assessing the potential impacts and costs of climate change on water resources and the energy sectors at the regional, national and sub-national levels. This analysis is of impacts (e.g. floods), not climate change in itself.

Macro-economic modeling

PAGE09 will be used to estimate the cost of climate change at macro-level for Afghanistan, Kyrgyzstan and Tajikistan up to 2100 under different GHG emission scenarios.

This is the same model that was used in the ADB Economics of Climate Change studies for the Pacific and for South Asia.

Cost benefit analysis CBA will be used to assess the costs and benefits

of potential adaption options and measures for the water and energy sectors at two levels. 1. At the ‘local or project specific level’: where

information on the costs and benefits of adaptation can facilitate the design and prioritization of adaptation strategies, programs and projects, and provide an input into project selection; and

2. At the ‘national levels’: where the information on costs and benefits at the project specific level is used to assess the national adaptation financing needs and for allocations of adaptation to allow efficient, effective and equitable response strategies.

Estimating costs Step 1: Establish a baseline scenarios consisting of

projections of land use, water, energy, population growth, urbanization, and other variables without climate change. This provides the reference scenario against which the impacts of climate change without and with adaptation will be measured.

Step 2: Consider the relevant climate variables for the sector and identify changes projected to 2100 for each of the climate scenarios.

Step 3: Identify the impact of changes in climate on productivity, water and energy, social and health impacts and land use.

Step 4: Combine the information collected in Steps 2 and 3 to estimate the overall impact of climate change on energy use, water availability and use and production by comparing estimates of yields and production under no climate change, and with climate change but no adaptation.

Continued …. Step 5: Identify opportunities for autonomous

adaptation undertaken by local communities and the private sector in responses to changes in climate and other conditions, and planned adaptation, which is likely to be initiated and at least partly funded by the government.

Step 6: Estimate the benefits and costs of adaptation in the water and energy sectors under the future climate conditions after the adaptation measures have been implemented (i.e. the difference between the baseline scenario and the scenario of climate change with adaptation), and the impact of adaptation itself (the difference between the scenarios of climate change without and with adaptation).

Step 7: Incorporate the results from Step 6 into the BCA model to assess the benefits of adaptation.

Investment & financial flows analysis Following on from the CBA it is important that the

study also identifies options for financing and investment, and where possible to elaborate project designs specifically targeting international financing avenues and opportunities.

This will involve an examination of the Investment and Financial Flows (IFF) for adaptation to climate change at a country level for the two sectors (water and energy).

Investment & financial flowsWe will undertake a review of IFFs including: The total costs estimated for adaptation in the water

and energy sector calculated for 2030; Current and pledged funding for adaptation in the

water and energy sectors for each country as at 2015; Future planned investments for adaptation in the

water and energy sectors (and the relevant shortfall); Sources of international financial support for

adaptation; Institutional arrangements for adaptation financing; and How to effectively access and promote increased

funding and investment for adaptation.

Inception WorkshopSESSION IIIAlexander MuellerMars Amanaliyev

For RDTA 8119: Economics of Climate Change in Central & West AsiaBishkek 25th June 2015

Stakeholder contributions Provision of data, information and

support. Formation of working groups for

project concept elaboration (water, energy and multi-benefit investments & proposals).

Stakeholder mapping

Primary stakeholders

Secondary stakeholders

Project elaborationIt is essential that key stakeholders are involved from the beginning of this process. Stakeholders will be asked to: Identify suitable ‘concept project’ options (i.e. a

long list of project concepts to be considered) which can be either single sector projects or multiple benefit project concepts;

Select, validate and weight criteria based on national development priorities, climate adaptation strategies and policies;

Evaluate and select potential investment projects for further elaboration and CBA.

MCA criteria Effectiveness in adaptation to climate change; Compatibility with Government policy and/or with other

development goals; Institutional viability and socio-cultural

acceptability; Technical and financial sustainability after project

implementation; No regret option and low regret options; Level of project development (concept, pre-feasibility,

feasibility, detained design); Potential to generate multiple-benefits such as such

as poverty alleviation, gender, emissions reduction and carbon sequestration potentials etc.; and

Risk (new concept, already piloted, tried & tested elsewhere).

Questions, comments & suggestionsPeter Mackay (Team Leader)petermackay99@hotmail.com

Mars Amanalyiev (Deputy Team Leader)Mars.Amanaliev@unicon-international.com

Thank YouPeter, Alexander, Philip, Joanta, Tim, Mars, Larisa & Rysbeck