Addressing Water Impacts of Climate Change EC-EIB Water and Sanitation Seminar Brussels – 7 July 2010 Jochen Harnisch, Coordinator Climate Change Policy.

Addressing Water Impacts of Climate Change

EC-EIB Water and Sanitation Seminar

Brussels – 7 July 2010

Jochen Harnisch, Coordinator Climate Change Policy

KfW Development Bank

Presentation Outline

1. Water mediated impacts of climate change

2. Adaptation response options

3. International climate policy and adaptation

4. Selected activities by EU development institutions and KFW

5. Outlook

Presentation Outline

1. Water mediated impacts of climate change

2. Adaptation response options

3. International climate policy and adaptation

4. Selected activities by EU development institutions and KFW

5. Outlook

Model Results Seasonal Changes of River Run-off in Europe(2071-2100/1961-90; SRES A2)

Source: EEA, 2008

Change of Water Runoff for 2090 relative to 1990 (IPCC SRES A1B)

Source: IPCC AR4 WG I, 2007

Dotted areas: good model agreement

Uncertainties of Climate Change Projections

● Different model families involved in model inter/comparisons for Intergovernmental Panel on Climate Change (IPCC) and similar fora

● Uncertainties of model projections vary regionally

● Certainty of model projections:

temperature > precipitation > run-off > climate variability > frequency and severity of

extreme events

Main Effects of Climate Change on Water

● Rainfall, runoff, stream flow, groundwater recharge, water availability from changes in annual averages;

● Variability and extremes, floods and droughts, more intense and more frequent storms;

● Temperature – resulting in aridity, increasing evaporation and irrigation water demand, glacier and snow melt, loss of storage, change in water quality;

● Sea level changes – resulting in impacts on estuaries, deltas, and seawater intrusion into groundwater aquifers; and

● Plant water use efficiency from changes in atmospheric carbon dioxide (CO2) concentration.

Source: CCCD, 2009

Evolution of Number of Great Natural Catastrophes

Source: MunichRe, 2010

Evolution of Global Losses From Natural Catastrophes (USD bln p.yr)

Source: MunichRe, 2010

Equador: Increase of Flooding Desasters (<50 casualties / <500 houses)

Source: UNISDR,

2009

Section Summary

● Damages due to climate change are already taking place, costs are largely incurred by households, private and public sector in developing countries

● Impact signal from climate change as recorded by insurance signals is robust but influenced by economic growth, growing population and improved communications

● The poorest are most vulnerable (poor houses, dependence on agriculture, no financial resources for response measures) but their losses bear little significance to insurance and economic statistics

Presentation Outline

1. Water mediated impacts of climate change

2. Adaptation response options

3. International climate policy and adaptation

4. Selected activities by EU development institutions and KFW

5. Outlook

Adaptation Focus: Vulnerability vs. Impacts

Source: Klein & Persson, 2008

Local Options in Water Resources Management

● Development of rainfed agricultural systems that are easy to operate and maintain locally;

● Improved management of soil moisture in rainfed areas;● Increased investment in water harvesting, small storage,and supplementary

irrigation schemes;● Small community-based irrigation schemes;● Development of water supply to meet the needs of multiple and diverse water

users;● Improved water access for livestock in arid and semiarid areas; and● Other actions such as demand management, conjunctive surface and

groundwater management, payments for environmental services, and so on.

Source: Hedger and Cacouris, 2008

National Options in Water Resources Management

● Integrate climate variability and climate change in water policy frameworks;● Encourage an integrated approach in water management planning that cuts

across land, agriculture, and mining sectors, taking into account water productivities as a basis for reallocations;

● Diversify economies and incomes;● Support the decentralization of water resources management (or focus on

catchments and river basins);● Ensure that climate risk information is available and used to inform water

planning strategies; and● Empower communities to engage with local and national governments to help

meet their water needs.

Source: Hedger and Cacouris, 2008

McKinsey on Adaptation to Climate Change (August 2009) – Case Study Maharastra (India)

http://www.mckinsey.com/App_Media/Images/Page_Images/Offices/SocialSector/PDF/ECA_Shaping_Climate%20Resilent_Development.pdf

Source: ECA/ McKinsey, 2009

Estimated Annual Adaptation Needs – Public Sector (USD bln p.yr)

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Sector UNFCCC, 2007 for 2030

World Bank, 2009 2010-50

Infrastructure 2-41 14-30

Coastal zones 4 30

Fresh water provision and flood protection

9 14-19

Agriculture, forestry and fisheries

7 7-8

Health 5 2

Extreme events n.a. 7

Total 27-66 78-90

Annual DC Adaptation Needs (USD bln 2010-50): All Infrastructure Except Coastal Protection

18Source: World Bank – 2009

Developing Country Adaptation Needs (2010-50):Costal Protection (USD bln p.yr)

19Source: World Bank – 2009

2020

Annual Financing Needs of Developing Countries

Adaptation [billion EUR

p.a.]

Mitigation[billion EUR

p.a.]

Thereof Forests [billion EUR p.a.]

Annual global R & D [billion EUR

p.a.]

5 – 87 55 – 80 15 – 25 5 – 30

low share of private sector

high private sector: 38 (EU)

low share of private sector

medium to high share of private

sector

2005 constant Euros, average for 2013-2020, expressed as grant equivalents

Source: EU COM, McKinsey, World Bank, UNFCCC

Section Summary

● UNFCCC (2007), World Bank (2009), Parry et al. (2009), ECA (2009) and other studies are milestones to understand adaptation needs

● Key uncertainties: development deficit, definition of long-term baseline, scope, climate impacts, adaptation definition & implementation

● UNFCCC(2007) and World Bank (2009) suggest that adaptation is mainly a public sector task – which is linked to their perspective

● Not all sub-sectors quantified in detail: e.g. ecosystem-stabilisation, private households, commercial buildings & industrial infrastructure

● While overall numbers are high they are probably underestimates: based on schematic approaches and incomplete coverage

● Beyond immeadiate capacity building, adaptation and development agendas cannot be disaggregated

Presentation Outline

1. Water mediated impacts of climate change

2. Adaptation response options

3. International climate policy and adaptation

4. Selected activities by EU development institutions and KFW

5. Outlook

Visual Impressions From Copenhagen

Key Elements: The Copenhagen Accord

● Agreed informally between 25 governments on the last day of Copenhagen● Final plenary only „takes note“ of Copenhagen Accord

● 2°C target agreed for 21st century● Submission of supported and unsupported NAMAs until 31 January 2010● Support of adaptation activities by means of predictable and sustainable

funding, technology and capacity development● New and additional financing of 30 billion USD over period 2010 to 2012 (“Fast-

Start Funding“)● Annually 100 billion USD of climate financing from public and private sources

via bilateral and multilateral channels● Creation of “High-Level Advisory Group“ on climate financing ● Framework for a “Copenhagen Green Climate Fund“ ● Review of the Accord by 2015 (after publication of IPCC AR5)

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Public Climate Financing to Developing Countries: New Commitments of Grants and Loans in 2008

Globally >18 billion USD of new commitments: grants and loans

KFW with 2.4 $ billion of climate financing, thereof 600 million adaptation

Source: SEI, GEF & German Parliament

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Today: Parallel Implementing Channels

Industrialised Country Budgets & International Sources of Finance

Developing Countries: Budgets, Programmes, Projects, Companies, Civil Society

Bilateral Financing Institutions

Channel 1 Channel 2 Channel 3

World Bank CIFs

CTF SCF

Multilateral Deve-lopment Banks

UNFCCC Climate Funds

Multilateral Deve-lopment Banks & UN Agencies

Good Reasons for the Multi-Channel System

Good Reasons:● Full use of existing implementation capacity for +25% p.yr. growth ● Competition and choice innovation and efficiency● Various interfaces for involvement of different private sector actors● Attracts money from different types of sources● Robustness – cannot be blocked by a single country or country group● In line with Article 11 of the UNFCCC

Challenges: ● Transparency and coordination:

High level forum, UN registry or OECD-DAC

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Presentation Outline

1. Water mediated impacts of climate change

2. Adaptation response options

3. International climate policy and adaptation

4. Selected activities by EU development institutions and KFW

5. Outlook

EU Financing Institutions WG on Adpatation to Climate Change: History and Objectives

EU Financing Institutions Working Group on Adpatation to Climate Change● Incepted in February 2010 in Luxembourg● Current members: AFD, CEB, EBRD, EIB, KFW● Adaptation related new commitments in 2008: >700 million Euros

Priority actions● Develop a common set of definitions on adaptation;● Agree a concept note on the technical and financial principles for adaptation financing;● Compile a resource base of tools and other initiatives (complete or under preparation)

for mainstreaming climate risk management;● Develop a joint toolkit for climate change risk management to be used by partners ● Select best-practice projects for testing the above principles and practices

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KFW Water Management in JordanP

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Eff

ects

• Severely limited water resources• Population growth and climate change

increase water stress• Water loss of 30% due to pipe leaks

• Investments in rehabilitation measures in the water supply network

• Repairing and replacement of old house connections

• KfW provides financing & technical advice

• Reduction of water losses• Improvement of water security• Increase of supply of drinking water• Adaptation to climate related water stress

31

KFW Cyclone Protection in IndiaP

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Ap

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ach

Eff

ects

• Flood waves and heavy rainfalls are often companions of cyclones that frequently occur in the state of Orissa

• Cooperation with the German Red Cross• Construction of protective buildings that can

also be used for communal meetings• Preventive actions: establishment of a local

emergency management, emergency training and an early warning system

• Creation of fund to cover maintenance costs

• Improved protection against cyclones• Support of communal institutions • Adaptation to climate related extreme events

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KFW Adaptation Program in North-East IndiaP

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Ap

pro

ach

Eff

ects

• Significant climate changes already notable: less rain, higher temperature, more floods

• High vulnerability and low adaptive capacity

• Program-based approach, selection of sub-projects according to pre-identified criteria (e.g. expected benefits, feasibility, no-regret)

• Funding adaptation measures across different sectors: protection of housing areas against floods, up-dating irrigation systems, adjustment of forest/agricultural/fisheries management etc.

• Convergence with national schemes

• Inter-linkage of adaptation and development planning – increased awareness

• Full-scale analysis of vulnerability and adaptive capacity by national researchers

• Funding of pilot adaptation measures

Adaptation Portfolio of KFW in 2008

Adaptation Portfolio KfW Development Bank 2008

Sub-Sahara Africa

Asia

Europe, Caucasus

Latin America

Mena

0 50 100 150 200 250

mil

lio

n E

UR

Total 0.4 billion EUR

Presentation Outline

1. Water mediated impacts of climate change

2. Adaptation response options

3. International climate policy and adaptation

4. Selected activities by EU development institutions and KFW

5. Outlook

Outlook

● Climate change and adaptation are taking place already – majority of costs incurred by private sector

● Substantial new and additional funding for adaptation needed to avoid risks to growth and ODA diversion in developing countries

● European development institutions are global players in adaptation financing and cooperate closely to implement adaptation in partner countries

● Adaptation and development are integrated challenges

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Further Information

Dr. Jochen Harnisch Coordinator Climate Change Policy Vice President Environment & Climate

KfW Development BankPalmengartenstr. 5-9 D-60325 Frankfurt

phone: +49 69 7431-9695e-Mail: [email protected]