Abel Mejia WB Financing Adaptation Measures in the Water ... · Seminar on Financing Adaptation ... Grants for projects related to six focal areas: biodiversity, climate change, international

Abel MejiaW ld B kWorld Bank

World Water Week 2009, Stockholm Seminar on Financing Adaptation

Structure of the presentationStructure of the presentation

1) How big is the challenge?1) How big is the challenge?

2) H h ( dditi l)2) How much (additional) funding is available?funding is available?

3) Wh t i th W ld B k3) What is the World Bank doing?doing?

Estimates of Global Infrastructure Cost for AdaptationEstimates of Global Infrastructure Cost for Adaptation are in the 10 to 70 billion USD per year range

World Bank (2006): $9‐41 billion per year

Adaptation  = Baseline x % Exposed  to x % Increase in costs to 

• Stern (2006): $4‐37 billion / yr

pCosts

= BaselineInvestments

x pClimate Risk

xclimate‐proof

Stern (2006): $4 37 billion / yr

• UNDP (2007): $5‐67 billion / yr by 2015

UNDP (2007) 47 109 billi / b 2015 i l d i l t ti di tUNDP (2007): 47‐109 billion / yr by 2015 includes social protection + disaster response 

Oxfam (2007): NGO adaptation projects at least $50 billion / yrOxfam (2007): NGO adaptation projects ‐ at least $50 billion / yr

UNFCCC (2007): First sector‐based estimates $28‐69 billion / yr by 2030 – of which 8 billion is for water supply in developing countrieswhich 8 billion is for water supply in developing countries

Sector based cost of adaptationSector based cost of adaptation estimate prepared for UNFCCCp p

Sector Global Need (billion USD)

Share of developingcountries

Agriculture, forestry & fisheries

14 50%

Water supply 11 80%Water supply 11 80%

Human health 5 100%

Coastal zone 11 40%

Other infrastructure 80‐130 25%

Source:  Stratus Consulting  presentation to  Dialogue on Long‐Term Cooperative Action, Vienna –August 28, 2007

But when specified in NAPAs the adaptation costs p plook very small (current estimates from NAPAs)

USD million

• Estimates for 40 out of 49 LDCs

Bangladesh Mozambique Ethiopia Samoa Total

Coastal Zones 23 2 NA NA 166

• Stakeholder consultations

Disaster Preparedness

NA 3 10 5 58

Health NA NA 6 1 33

• Urgent, short-term adaptation pri riti

Infrastructure 2 NA 2 1 77

Ecosystems NA NA 8 0.4 112

T i NA NA NA 0 3 2 priorities

• Total costs, not l

Tourism NA NA NA 0.3 2

Water Resources

2 2 30 1 170

annual costs

• Limited sectoral i

Agriculture, Forestry,Fisheries

27 NA 2 0.3 160

economic analyses

Definition of Adaptation is a major challenge to have measures identified and financed

Vehicles for Climate Finance

Fund

GEF Global EnvironmentFacility

10 implementing agencies: UNDP, UNEP, WB, FAO, IADB, UNIDO, ADB, AfDB, EBRD and IFADGrants for projects related to six focal areas: biodiversity, climate change, international waters, land degradation, the ozone layer, and persistent organic pollutants

b f ld k b h h ) h lFCPF Forest Carbon Partnership Facility

Part of World Bank Carbon Finance Mechanism.  Two mechanisms: 1) Technical assistance 4 REDD reference scenario and strategy 2) Purchases certified emission reductions  from selected countries

Adaptation F d

Adaptation Fund t d  d  

World Bank is trustee. GEF provides Secretariat. Adaptation fund is funded by a tax of 2% of tifi d  i i   d ti  (CER )   i t   d  f  CDM   Ad t ti  F d Fund created under 

UNFCCCcertified emission reductions (CERs) on investors proceeds from CDMs.  Adaptation Fund monetizes CERs and spends the proceeds on climate change adaptation projects.  Sales in May and June approx. 12 million USD

EU GCCA EU Global Climate Change Alliance

The Global Climate Change Alliance (GCCA) aims at supporting the poorest and most vulnerable countries with respect to their capacity to adapt to the effects of climate change  It Change Alliance vulnerable countries with respect to their capacity to adapt to the effects of climate change. It will provide a platform for dialogue and financial and technical support for adaptation measures and the integration of climate change into development strategies.  (Committed: 250 million EUR for 2008‐2010 plus funds for CC under European Development Fund)

GFDRR Global Facility for  The GFDRR is managed by the World Bank on behalf of the participating donor partners and GFDRR Global Facility for Disaster Reductionand Recovery

The GFDRR is managed by the World Bank on behalf of the participating donor partners and other partnering stakeholders. The GFDRR provides technical and financial assistance to high risk low‐ and middle‐income countries to mainstream disaster reduction in national development strategies and plans to achieve the Millennium Development Goals (MDGs).  Donors pledged 82 million USD over 4 years (2007 – 2010). Contribution so far 79 million USD.

WBG RR&EE program

Seems to be several under the Climate Investment Funds, notably the Scaling up Renewable Energy in Low Income Countries and the Energy Efficiency component under the Clean Technology Fund.  The  volume of 3.4 billion may reflect WBG lending to renewable energy and energy efficiency

Vehicles for climate change finance: Large Commitments, but so far small amounts mobilized for adaptation

Mitigation(Total Needs est.$220bn+ / year)

GEF

$ 0.25 bn WBG RE & 

Carbon Market: 

CDM&JI

~ $ 8 bn

Both 

M&AFCPF

$0.2 bn

REDD

for FY09 EE Progam(IBRD/IDA/IFC/MIGA)

$3.4 bn

~ $ 8 bn

for FY09 M&A

Resources

GEF $ 0.25 bn

Adaptation 

funding

$3 4for FY09 Climate 

Investment 

Funds (MDBs)Resourcesto address

Climate Change Adaptation 

FundO h  MDB

$6.1 bn

UNDP

$ 0.09‐ 0.12 bn

for adaptation

$ 0.3‐0.5 bn Other MDBs$3 bn

for FY09Private

Adaptation(Total Needs est

p

GFDRR $ 0.07 bn

EUGlobal ClimateChange Alliance

€ 0. 3 bn

Bilateral Donors

$ ?

Donors$ ?

FY09 estimates are projections

(Total Needs est. $30bn / year)

Funds ~$1.2 BiSource: World Bank (2009)

Climate Investment Funds~6 billion committed

Clean Technology Fund Strategic Climate Fund

Targeted programs with dedicated

Finance scaled-up demonstration, deployment and transfer of low carbon technologies

g p gfunding to pilot new approaches

with potential for scaling up

Forest Investment Program

Scaling Up Renewable Energy

in Low Income

Country Investment Plans Pilot Program for Climate Resilience

Reduce emissions from deforestation

and forest

ow co eCountries

Begin transformational change by use of

• Support countries’ development strategies

• Leverage financial products ofInternational Financial Institutions

• Stimulate private sector

Mainstream climate resilience

into core and forest degradation

change by use of renewable energy

• Stimulate private sector engagement

into core development

planning

±$1 billion

under design just approved

±$5 billion

Contribute to strengthening the knowledge baseContribute to strengthening the knowledge base

WDR 2010 on Development and Climate ChangeDevelopment and Climate Change (climate-smart development policies)

Economics of AdaptationEconomics of Adaptation (global adaptation costs with case studies in seven countries)

Sector & Region specific studies: Agriculture, Water; Transport, Forests, Biodiversity, Social Agriculture, Water; Transport, Forests, Biodiversity, Social

Low Carbon High Growth report in LCR, Adaptation study in Low Carbon High Growth report in LCR, Adaptation study in ECA; Economics of CC series in Africa etcECA; Economics of CC series in Africa etcECA; Economics of CC series in Africa, etc.ECA; Economics of CC series in Africa, etc.

LowLow--carbon growth country studies: Bcarbon growth country studies: Brazil; China, India, Indonesia; Mexico, Poland, South AfricaIndonesia; Mexico, Poland, South Africa

State and Trends of the Carbon MarketState and Trends of the Carbon Market

ib l d d li h iContribute new tools and delivery mechanisms

Climate Change for Development Professionals (CCDP) learningClimate Change for Development Professionals (CCDP) learning programGlobal Expert Team (GET) on Climate Change AdaptationGuidance Notes on climate proofing and adaptationGreening Infrastructure guidance note (to support INFRA Platform) Guidance on the use and leverage of various climate financeGuidance on the use and leverage of various climate finance instrumentsESMAP Energy Efficiency initiative Climate Change Data Portal New Climate Change website – WB pilot of new web governanceGHG A ti (E T t F t l t t IFC)GHG Accounting (Energy, Transport, Forests, real sector at IFC)Global City Indicators ProgramTracking of CC-related investments in WBG portfolioTracking of CC related investments in WBG portfolio

Different types of projects are exposed to yp p j pclimate change in different ways

Climate change model (22 GCMs)

Alternative Scenarios  (A2, A1B 

Projections of 5 hydrologic 

model (22 GCMs)and B1) indicators

H d l i i di t W t t   ff t dHydrologic indicator Water system affected

Change in annual net irrigation deficit Irrigation and drainage

Change in run‐off reliability (drought) Urban water supply & sanitationg y ( g ) pp y

Change in minimum base flow Rural water supply and sanitation

Change in run‐off reliability (flood) Flood control

Change in basin yields River  basin management and multi‐purpose infrastructure

E i 2030 iddl GCM i A1BExposure in year 2030 – middle GCM, scenario A1B

Irrigation and Drainage Systems Rural Water Supply & Sanitation

Change in net irrigation deficit

Urban Water Supply & Sanitation

Change in minimum base flow

Flood control Urban Water Supply & SanitationFlood control

Change in run‐off reliability (drought)Change in run‐off reliability (flood)

Indicators have been evaluated for 7,000 basins in the Bank’s regions, for all GCMs and for three scenarios

This will allow Bank Staff to bring fairly detailed climate data to bear on their project preparation – the aim is eventually to make this material publicly available  

Evaluation of consequences for Bank portfolio2030

60%

70%

80%

90%

100%

tmen

ts

2030

A significant share of the World Bank’s Water Portfolio is at risk from exposure to 

10%

20%

30%

40%

50%

of

wat

er in

vest is at risk from exposure to 

climate change

0%AFR MNA LCR ECA EAP SAR Bankwide

%

2050

50%

60%

70%

80%

90%

100%

stm

entsA screening tool is being 

developed to identify at risk 

0%

10%

20%

30%

40%

50%

% o

f w

ater

inve

sp yprojects at design stage

0%AFR MNA LCR ECA EAP SAR Bankwide

%

Low Med High

Next stepsMake the large database available

Initially to Bank Staff ‐ later publiclyy p y

Integrate this type of information in planning at river basin or national / regional level

A pilot on best practice has been initiatedA pilot on best practice has been initiated

Integrate this type of information in project designA methodology has been prepared that may be used for gy p p ymulti‐purpose infrastructure

Evaluate robustness of treaties and institutional arrangements for transboundary basinsarrangements for transboundary basins

Work is underway

Develop a screening tool for at risk projectsll f h d l f h kInitially for hydropower – later for other at risk sectors

Reprogramming Water Supply Project in QuitoSupply Project in Quito

•Glacier reductionD i   l d   d •Drying moorlands and high lagoons•Change in flow patternChange in flow pattern•35% reduction on base flow from glaciers•Population Growth•Advance Rios Orientales project (Antisana)project (Antisana)

Take away messagesTake away messages

1) How big is the challenge?

Large in absolute amounts 

Should be manageable when compared to total flows1) How big is the challenge?key challenge seems to be identification 

of good projects

2) How much (additional) funding is available?

Large pledges

Additionality is a difficult issue

So far limited money paid in 

3) What is the World Bank

y p

Strengthening the knowledge base

New tools and delivery mechanisms3) What is the World Bank doing?

New tools and delivery mechanisms

Climate Change as part of assistance     strategies

Climate adaptation in projectsClimate adaptation in projects