PROJECT INFORMATION DOCUMENT (PID) APPRAISAL STAGE Report No.:78831 Project Name Increasing Climate Resilience and Enhancing Sustainable Land Management in the Southwest of the Buenos Aires Province Project Region Latin America and the Caribbean Country Argentina Sector Agricultural extension and research (25%), Crops (25%), Irrigation and drainage (25%), Animal production (25%) Lending Instrument Investment Project Financing Project ID P125804 Recipient(s) The Argentine Republic Implementing Agency Secretariat of Environment and Sustainable Development Environmental Screening { }A { X }B { }C { }FI Category Date PID Prepared June 17, 2013 Estimated Date of Appraisal June 17, 2013 Completion Estimated Date of Board N/A Approval Decision Authorized to proceed to negotiations upon receipt of a satisfactory Operational Manual for the project. I. Country Context 1. Climate scenarios devised for 2080/2090 in Argentina project increases in mean and extreme temperatures and changing precipitation patterns. These effects will have diverse impacts on regions, communities and economic sectors, but there are considerable underlying scientific uncertainties related with their magnitude and timing. Today, the scope and objectives of the Argentine Governmental Committee on Climate Change (GCCC) and its work on a National Climate Change Strategy (NCCS) provide an enabling environment to identify multi-benefit programs and measures that ideally combine synergies of climate mitigation and adaptation and start to apply tools developed for robust decision making under uncertainty. 2. Argentina’s economy relies heavily on natural resources mainly in agriculture, energy, and transportation. In 2008, these activities represented 31% of the GDP. As almost anywhere in the world, going forward implies critical decisions regarding the development path to be followed. To pursue sustainable development in today’s climate-constrained world, more green growth and climate resiliency considerations ought to be introduced into the key sector strategies and development plans on agriculture, industry (e.g. mining and power production) and services (e.g. tourism and transport). 3. According to the climate scenarios developed with the regional MM5-CIMA high resolution model for the 21st century1, a considerable temperature increase is expected for the whole Argentine territory. The (IPCC) A2 scenario2, projects more than 4°C temperature increase in the north of the country, and up to 2°C warming in Patagonia by the second half of the century. These increases, added to the warming already experienced during the 20th Century of approximately 1°C, are expected to have negative effects on several natural systems such as the generalized retreat of glaciers and higher evapo-transpiration in most areas. These effects would in turn impact water availability and consequently increase the risk of water deficits for agricultural production. For the North and central parts of the country, the SNC's forecasts indicate that increases are expected also in terms of maximum temperatures accompanied by a concentration of the rainfall regime. However, the mean rainfall levels are expected to stay approximately at their current levels. All this is expected to result in increased aridity and an intensification of the desertification processes affecting agriculture. Furthermore, since increased droughts are forecast for the winter season, it is expected that cattle ranching would be especially impacted. Project Background and Context section of the Adaptation Fund Project document describes the specific climate conditions for the Project’s target area. 4. In this context, climate adaptation together with mitigation is a key development challenge for Argentina. A favorable climate is one of the most important physical assets on which the main Argentinean socio-productive activities depend. The climate-induced events with the greatest impacts on the national territory and human activities are: (i) up to 20 per cent reduction of the water level in the La Plata basin (shared between 5 countries) within the next 50 years; (ii) increased water stress in northern and parts of western Argentina; (iii) potential water crisis in Mendoza, San Juan and Comahue; (iv) intense precipitation and floods in already affected zones such as the City of Buenos Aires; (v) further glacier retreat with implications for hydro-power generation and agriculture; and (vi) increased vulnerability of coastal areas to sea level rise.3 5. Gender matters. Recent case studies4 in Argentina have identified women being particularly vulnerable to climate impacts and found them already facing a number of direct impacts. Women have initiated adaptation strategies in terms of both ongoing and projected changes. Accordingly, specific gender approaches are needed in formulating related policies and measures (P&M). II. Sectoral and Institutional Context 7. According to the National Action Program to Combat Desertification (NAP) of the Secretariat of Environment and Sustainable Development (Secretaría de Ambiente y Desarrollo 1 This model was based on the Hadley Centre HadCM3 model, and using different IPCC scenarios served the Second National Communication (SNC, 2007) of the Republic of Argentina to the United Nations Framework Convention on Climate Change (UNFCCC). 2 http://www.ipcc.ch/ipccreports/tar/wg1/029.htm: The A2 storyline and scenario family describes a very heterogeneous world based on self-reliance and preservation of local identities. Fertility patterns across regions converge very slowly, which results in continuously increasing population. Economic development is primarily regionally oriented and per capita economic growth and technological change more fragmented and slower than other storylines. 3 The Second National Communication (SNC) of the Republic of Argentina to the UNFCCC (2007) 4 Bendini, M., García, M.I., Palomares, M. y Steimbreger, N: Impacto social del cambio climático. Percepciones y respuestas adaptativas (2010) World Bank, Social Development Unit, Latin American and Caribbean Region Sustentable, SAyDS), the country uses over 80% of its land for agricultural, livestock and forestry activities. 8. Climate change (CC) adaptation and mitigation, and conservation of natural resources are important pillars of the current program of the Government of Argentina (GoA), which aims at mainstreaming them into the key economic sectors. The Project has a direct link with a number of national strategies and plans, most notably with the NCCS and the NAP of the SAyDS. CC impacts are already being experienced in Argentina, and future CC projections indicate new vulnerabilities and aggravation of current ones, and the country has started to implement some specific adaptation actions. Coping strategies has mostly taken place in an autonomous, unplanned manner particularly in the agricultural sector, and besides short term economic benefits, it has caused environmental damage in terms of land degradation. 9. The SAyDS Directorate for Climate Change is the GoA focal point of the UNFCCC. Since 2009, the GCCC serves as a platform to coordinate, disseminate and validate climate change- related sectoral processes. It is currently developing the NCCS, and will coordinate the Third National Communication (TNC) activities aimed at designing CC P&M that can be integrated into sectoral development strategies. The TNC will provide science-based tools for decision- making across areas and administrative levels, including a comprehensive analysis of the challenges posed by the evolution of climate conditions on the agriculture sector. The Fourth Appraisal Report (AR4) of the IPCC anticipated substantial dilemmas faced by agriculture, but did not include an evaluation of particular regional challenges. It is on this point that the TNC aims to inform the UNFCCC and highlight the national, sub-national and local issues faced by Argentina: the whole of its productive belt will be affected by increases in soil temperatures and changes in rainfall patterns, including the occurrence of extreme weather events. The Project- level background and context description in the Adaptation Fund Project document provides a more detailed description of the agriculture sector and related issues in political economy. 10. The SAyDS Directorate of Soil Conservation and Fight against Desertification, the GoA focal point of the United Nations Convention to Combat Desertification (UNCCD), is in charge of the NAP, within which the following related projects would complement the proposed Project: 1) National Observatory of Land Degradation and Desertification (SAyDS-CONICET), fruit of the Land Degradation Assessment in Dry Lands (LADA-FAO) project; 2) an evaluation of economic impacts of CC in dry lands in Argentina to produce CC vulnerability zoning of the Argentine regional economies; 3) Global Environment Facility (GEF) project “Sustainable Forest Management in the Transboundary Gran Chaco American Ecosystem�; 4) GEF project on Sustainable Management of Arid and Semi-arid Ecosystems to Control Desertification in Patagonia, where the interventions operate on a similar ecosystem; and 5) Construction of Strategic Financial Partnerships for the Consolidation of Argentina’s NAP, a project that reviews the regulations of land use planning and soil conservation and implements the MERCOSUR Strategy to Combat Desertification. 11. Within the framework of the National Strategic Food Plan the Ministry of Agriculture, Livestock and Fishing (MAGyP) encourages development of sustainable production systems in degraded areas through forestry practices and infrastructure improvements for agricultural services to increase competitiveness, exports and employment. In the Project area (see maps in Annex 1 of the Adaptation Fund Project document5), it implements revolving funds in support of productive activities and no-interest credit lines in support of small- and medium-scale farmers and implements the Farming Emergency Law. Further, the Project is expected to exchange lessons learnt and promote synergies with the WB-IDB executed Provincial Agricultural Services Program (PROSAP), a potential follow-up project of which could also provide important replication and scale-up options. 12. The Provincial Sustainable Development Agency (OPDS) for Buenos Aires Province operates various related activities like the Agrosolidarity Environmental Program that promotes long term improvements of quality of life and limits misuse of resources. The provincial law 13,647 includes the Development Plan of the Southwest Buenos Aires Province that assigns resources to farmers to improve sustainable land management, and the Regional Council for the Development of the Southwest of the Province to promote sustainable development among a broad range of provincial and technical institutes, universities and trade associations. Important synergy has been achieved with the National Institute for Agricultural Technology (INTA) that develops a variety of potential adaptation options for local agriculture practices and will be directly involved in Project implementation (EEA Hilario Ascasubi). III. Project Development Objectives 13. The Project objective is to contribute to reducing climate and man-made vulnerability of the agroecosystems in the Southwest of the Buenos Aires Province by increasing adaptive capacity of key local institutions and actors and piloting and disseminating climate resilient and sustainable land management practices. 14. Participatory planning processes will be used to identify and pilot concrete adaptation measures focusing on water, crops and livestock management to promote climate resilience. IV. Project Description 15. The Project aims at promoting an enabling environment for climate adaptation as a continued, inter-sectoral and inter-institutional learning process, and to implement production- based adaptation measures in dry land agroecosystems, by introducing techniques for climate resilient and sustainable management of natural resources, supported by cross-institutional work aimed at (1) creating an adequate political, social, and economic framework to ensure adoption, sustainability, continuity, and further development of the adaptation efforts; and (2) bolstering and fine-tuning adaptation measures identified and chosen through institutional and community- level capacity building. 16. The Project consists of the following components: Component 1: Reducing Institutional and Community-level Vulnerability 1. Improvement of response and planning capacity of local institutions and communities by promoting people’s engagement in data collection and analysis from inter-institutional to household level. 5 https://www.adaptation- fund.org/sites/default/files/Proposal%20for%20Argentina%20(The%20World%20Bank).pdf 2. Collection of data and transformation of such data into information through the establishment of an Information and Early-Warning System on Climate Change and Desertification (IEWS). 3. Creation of a Regional Consultative Observatory of Public Policies on Climate Change and Desertification (Observatory) through institutional and sector-specific networking among related stakeholders to utilize the created information in the relevant decision-making processes. 4. Development of innovative and participatory capacity building and governance tools through specific programs targeting institutions, agricultural producers and their families. Component 2: Implementing Adaptation Measures in Productive Agroecosystems 1. Selection and appraisal, through a participatory process, of the main interventions to be implemented on each Specific Intervention Site covering small-scale pilot interventions selected from a menu of options related to adaptive management of livestock, crops and water. 2. Development and field application of the Sustainable Land Management (SLM) practices selected for the Project’s area of influence, including management practices on water, livestock and crops. Other activities could include programs to improve access to markets and options to promote productive alternatives. Component 3: Applying Participatory Approach to Knowledge Management and Local Capacity Development for Adaptation to Climate Change 1. Engagement of directly targeted farmers and partner organizations in Project monitoring, adaptive management and dissemination of lessons learned. 2. Provision of training and tools for the participation in the development of local and farm/household-specific adaptation strategies. 3. Capacity building with a focus on the development of knowledge systems that promote continuous improvement and adaptive management. 4. Development of a specific methodology to address the following topics: (i) climate change and implications for agriculture and identification of potential response options; (ii) prioritization of response options; and (iii) development of action plans. 5. Promotion of training for local groups for carrying out KM tasks, and mutual knowledge sharing between and beyond the key counties of Puán, Villarino and Patagones. 6. Preparation of a specific communication and KM strategy to identify specific means to involve different stakeholder groups and find effective ways for knowledge sharing. 7. Organization of joint demonstrative field visits to promote hands-on dialogue. 8. Dissemination of good practices and lessons learnt at different administrative levels, including relevant international forums. Component 4: Developing a Sustainability Strategy 1. Generation of institutional and community level agreements for the measures to be sustained beyond the Project’s closure. 2. Search for continued financing for successful initiatives, through institutional arrangements that enable linking measures with the Development Plan of the Southwest of Buenos Aires Province (PDSO). 3. Promotion of linkages with other national-level plans, e.g. the Provincial Agricultural Services Program. 4. Continuation of the IEWS and its adoption by the Observatory. 5. Promotion of institutional arrangements targeting sustainability of the Observatory. 6. Facilitation of the development of arrangements for local accountability and supervision by the federal and provincial executing counterparts for an additional 5-year period after the Project’s closing date. 7. Compilation and review of potential sources of financing, and development of a fundraising strategy involving private and public sectors. 8. Development of a participatory program to disseminate good practices, to trigger multiplication processes through time. V. Financing Source: Amount (in USD Million) Recipient and counterparts 1.859 Others (Adaptation Fund) 3.960 Total 5.819 17. This Project will be funded by the Adaptation Fund for a grant amount of US$ 3,960,200. VI. Implementation 18. The Project’s executing agency will be the National Secretariat of Environment and Sustainable Development (SAyDS). At the provincial level, the Project counterpart is the Provincial Sustainable Development Agency (OPDS), which is the provincial institution with responsibility, mission and powers on environment and sustainable development in the Province of Buenos Aires. The SAyDS and OPDS have signed an institutional cooperation agreement which contemplates the Project. 19. The Project will be supported by a Steering Committee (SC) comprised of the SAyDS highest level as well as the Government of the Province of Buenos Aires through OPDS, with the objective and necessary mandate to advice on the central intervention lines. 20. The main function of the SC would be to provide strategic and political leadership to the Project and secure effective coordination among involved senior environmental authorities at national and provincial level. The SC will ensure alignment of the Project with the Government strategies and programs underway especially with respect to consistency of the interventions at both jurisdictional levels. Furthermore, the SC will guarantee transparency throughout Project interventions. 21. The Project Implementing Unit (PIU) will be comprised of the two SAyDS Directorates, Soil Conservation and Fight against Desertification and Climate Change, and OPDS. The PIU will be in charge of coordinating the Project activities, leading rigorous and participative monitoring and control process, developing and analyzing reports, as well as managing disbursements and controlling their proper application. The PIU will host a General Executive Coordinator who will coordinate activities with a Territorial Executive Manager. The latter will be located in an OPDS office in the intervention zone and be mainly in charge of the local institutional relations and the direct supervision of field activities. 22. The Project has identified key partners for the execution of the proposed activities. The Annex 3 of the full-fledged Project document (see footnote 5) describes the scope of work for each activity for each partner institution. SAyDS will enter into implementation agreement with each participating entity. Procurement and FM responsibilities will be retained by SAyDS. 23. The SAyDS has experience in the implementation of projects with the Bank and GEF finance. As of today, the SAyDS has executed the Coastal Contamination Prevention and Marine Biodiversity GEF project (P049012), the Native Forest and Protected Areas project (P040808), the Biodiversity Conservation GEF project (P039787), the National Solid Waste Management IBRD project (P08996), the Second National Communication GEF project (P048173), and the Natural Resources Sustainable Management project (P100806). This background provides it with a robust basis to lead the Project in both technical and fiduciary terms. 24. Financial management, disbursements, and procurement will be managed by the Program of Projects with External Financing of the SAyDS, which will be part of the PIU structure. The capacity of this proposed unit has been assessed by Bank staff as part of the Third National Communication (P116974) re-structuring. The institutional arrangements and capacity in place have been found acceptable to the Bank. VII. Safeguard Policies (including public consultation) Safeguard Policies Triggered by the Project Yes No Environmental Assessment (OP/BP 4.01) X Natural Habitats (OP/BP 4.04) X Pest Management (OP 4.09) X Physical Cultural Resources (OP/BP 4.11) X Involuntary Resettlement (OP/BP 4.12) X Indigenous Peoples (OP/BP 4.10) X Forests (OP/BP 4.36) X Safety of Dams (OP/BP 4.37) X Projects in Disputed Areas (OP/BP 7.60)* X Projects on International Waterways (OP/BP 7.50) X VIII. Contact point at World Bank and Recipient World Bank Contact: Marcelo Hector Acerbi Title: Senior Environmental Specialist Tel: 5260+3614 / 54-11-4316-0614 Email: macerbi@worldbank.org Implementing Agency Contact: José Cueva Title: Director de Conservación de Suelos y Lucha contra la Desertificación Tel: 54-11-4348-8573 Email: desersuelo@ambiente.gob.ar IX. For more information contact: The InfoShop The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 458-4500 Fax: (202) 522-1500 Web: http://www.worldbank.org/infoshop * By supporting the proposed project, the Bank does not intend to prejudice the final determination of the parties' claims on the disputed areas