47653 Muthukumara Mani Anil Markandya viju ipe climate change p o l i C y A n d i n s t i t U t i o n A l r e f o r M s t o s U p p o r t AdAptAtion And MitigAtion in developMent progrAMs A p r A C t i C A l g U i d e Environment Department Sustainable Development Network The World Bank Muthukumara Mani Anil Markandya viju ipe climate change p o l i C y A n d i n s t i t U t i o n A l r e f o r M s t o s U p p o r t AdAptAtion And MitigAtion in developMent progrAMs A p r A C t i C A l g U i d e Environment Department Sustainable Development Network The World Bank i © 2008 The International Bank for Reconstruction and Development / The World Bank 1818 H Street, NW Washington, DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: feedback@worldbank.org All rights reserved. This volume is a product of the staff of the International Bank for Reconstruction and Development / The World Bank. 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For permission to photocopy or reprint any part of this work, please send a request with complete information to the Copyright Clearance Center Inc., 222 Rosewood Drive, Danvers, MA 01923, USA; telephone 978-750-8400; fax 978-750-4470; Internet: www.copyright.com. ii Contents LiST of ACroNymS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv LiST of TABLES & BoxES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iv PrEfACE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .v ACkNoWLEDgmENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii iNTroDuCTioN Objective and Audience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .x Key Policies and Programs Addressed . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .x Structure of the Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . xi moDuLE i Impacts of Climate Change in Developing Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 Adaptation Measures to the Impacts of Climate Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Mitigation Measures to the Impacts of Climate Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 moDuLE 2 Transmission Channels . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Climate Institutional Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Macroeconomic, Fiscal, and Public Sector Reforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Sectoral Reforms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 moDuLE 3 Policies and Measures for Adaptation to Climate Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47 Policy Options for Mitigation of Climate Change . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55 BiBLiogrAPhy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80 ANNEx 1 The Delhi Ministerial Declaration on Climate Change and Sustainable Development . . . . . . . . . . . . . . . . . . . . . . . 81 iii List of Acronyms List of Tables & Boxes CDG Carbon delivery guarantee List of Tables CDM Clean Development Mechanism CEA Country Environmental Analysis 1.1 Adaptation initiatives in selected developing countries . . . . . . . . . . . . . . 5 1.2 Global studies of adaptation costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 CEIF Clean Energy for Development Investment Framework CER Certified emission reduction 2.1 Climate institutional assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17 CFL Compact fluorescent lamp 2.2 Transmission channels for policies designed . . . . . . . . . . . . . . . . . . . . . 27-28 CFU Carbon finance unit to ensure macroeconomic stability 2.3 Transmission channels for policies designed . . . . . . . . . . . . . . . . . . . . . 29-30 CPF Carbon Partnership Facility to improve the investment climate CPIA Country Policy and Institutional Assessment 2.4 Transmission channels for policies designed . . . . . . . . . . . . . . . . . . . . . . . . . . .31 EIA Environmental impact assessment to improve public financial management EPI Environment Performance Index 2.5 Transmission channels for policies designed . . . . . . . . . . . . . . . . . . . . . 32-33 ERC to improve governance Emission reduction credits 2.6 Transmission channels for policies designed . . . . . . . . . . . . . . . . . . . . . . . . . . .34 GHG Greenhouse gases to target policies for the poor FCPF Forest Carbon Partnership Facility 2.7 Transmission channels for policies designed . . . . . . . . . . . . . . . . . . . . . . . . . . .35 GDP Gross domestic product to promote decentralization IFC International Finance Corporation 2.8 Transmission channels for policies designed . . . . . . . . . . . . . . . . . . . . . . . . . . .35 to increase competition and entrench property rights IPCC Intergovernmental Panel on Climate Change 2.9 Transmission channels for policies designed . . . . . . . . . . . . . . . . . . . . . 36-37 MDG Millennium Development Goals to increase production and competitiveness in agriculture NAFTA North American Free Trade Agreement 2.10 Transmission channels for policies designed . . . . . . . . . . . . . . . . . . . . . 38-39 NAPA National adaptation programs of action to develop the forest sector 2.11 Transmission channels for policies designed . . . . . . . . . . . . . . . . . . . . . . . . . . .40 PRSC Poverty reduction strategy credit to develop the mining sector RAF Resource allocation framework 2.12 Transmission channels for policies designed . . . . . . . . . . . . . . . . . . . . . . . . . . .41 REDFD Reducing emissions from deforestation to develop the fisheries sector and forest degradation 2.13 Transmission channels for policies designed . . . . . . . . . . . . . . . . . . . . . . . . . . .42 SEA Strategic environmental analysis to promote better healthcare 2.14 Transmission channels for policies designed . . . . . . . . . . . . . . . . . . . . . 43-44 SFCCD Strategic Framework for Climate Change to improve infrastructure and Development 2.15 Transmission channels for policies designed . . . . . . . . . . . . . . . . . . . . . . . . . . .45 TTL Task team leader to promote better energy use UNFCCC United Nations Framework Convention on Climate Change WBG World Bank Group 3.1 Agricultural sector policies for adaptation . . . . . . . . . . . . . . . . . . . . . . . . . 48-49 to climate change 3.2 Policies for adaptation in the water sector . . . . . . . . . . . . . . . . . . . . . . . . . 51-54 Notes: 3.3 Policies for adaptation in coastal areas . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56-58 3.4 Policies for adaptation in the forest sector . . . . . . . . . . . . . . . . . . . . . . . . . . 59-60 1. Unless otherwise noted, all dollars = U.S. dollars. 3.5 Adaptation policies for preservation of . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61 biodiversity and ecosystems 3.6 Policies for adaptation in the health sector . . . . . . . . . . . . . . . . . . . . . . . . . 62-64 3.7 Energy sector policies for mitigation/adaptation . . . . . . . . . . . . . . . . 67-71 to climate change 3.8 Policies for mitigation/adaptation to climate . . . . . . . . . . . . . . . . . . . . . . . 72-73 change in commercial and residential buildings 3.9 Policies for mitigation/adaptation to climate . . . . . . . . . . . . . . . . . . . . . . . . . . . . .74 change in the transport and infrastructure sector 3.10 Policies for mitigation in the forest sector . . . . . . . . . . . . . . . . . . . . 75-76 3.11 Policies for mitigation in the agriculture sector . . . . . . . . . . . . . . . . . . . . . . . . .77 3.12 Mitigation policies in the waste management sector . . . . . . . . . . . . . . .78 List of Boxes 1.1 The Kyoto Protocol . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .10 1.2 Strategic Framework on Climate Change and Development . . . . . .12 iv Preface The need to "mainstream" climate policy into development goals is well-recognized within the World Bank, as well as at the national level and among other donor agencies. Individually and collectively, international multilateral and bilateral organizations have responded to the increasing challenge of climate change with an agenda for action to integrate climate concerns into the mainstream of developmental policy making and poverty-reduction initiatives. All have defined major new initiatives designed to help their clients mitigate the impact of past and future development programs on climate change. In addition, they have intensified joint efforts on both climate change mitigation and adaptation. Actions needed to adapt to climate change and to limit GHGs cover many sectors of the economy (agriculture, water, coastal areas, forests, biodiversity and ecosystems, health, transport and infrastructure investment). Since all of these are affected by most development programs, one can expect the choice of policies for development to have implications for adaptation policy. More widely, macroeconomic and sectoral policies also have potential impacts on emissions of GHGs and on the nature of development in a country, which in turn has implications on the costs of adaptation. It is important for donors and their country partners to be aware of these linkages. The purpose of this study is to draw on all available material in order to provide targeted guidance on the linkages between the design of development programs and the objectives of adapting to climate change and limiting emissions of greenhouse gases (GHGs). The report should be useful to practitioners in development organizations (multilateral and bilateral institutions) and countries for a better understanding of the implications of development programs and policies on climate change, as well as the implications of climate policies on budgetary and related operations. v vi Acknowledgments The study was prepared by a team comprising of Muthukumara Mani (Task Team Leader), Anil Markandya, and Viju Ipe. The authors would like to acknowledge comments and inputs received from Aziz Bouzaher, Kirk Hamilton, Sushenjit Bandyopadhyay, Juan C. Belausteguigoitia, Dan Biller, Richard Damania, and a number of participants of a seminar on the topic held on July 30, 2008, at the World Bank in Washington, DC.1 This study is a product of the Policy and Economics Team in the Environment Department led by Kirk Hamilton. Editorial support was provided by Alexandra Sears, James Cantrell and Robert Livernash. The work was conducted under the overall supervision of Sector Managers Laura Tlaiye and Michele De Nevers. The authors are solely responsible for the views expressed here, which do not necessarily represent the opinion of the World Bank, its Executive Directors, or the countries they represent. The generous support received from the Bank Netherlands Partnership Program (BNPP) is gratefully acknowledged. 1 Muthukumara Mani is a Senior Environmental Economist at the Social, Environment and Water Resource Management Unit of the South Asia Region. Anil Markandya (Professor, University of Bath) and Viju Ipe are consultants to the Environment Department of the World Bank. vii viii introduction In 2007 the World Bank undertook a review of how climate change impacts poor developing countries. The review highlighted the strong links between poverty and climate vulnerability and emphasized the need for increased resources to assist countries (a) with the higher costs of climate risk management and There is now a strong consensus that climate change asset rehabilitation due to more frequent and severe presents an urgent challenge to the well-being of all natural disasters, and (b) to adapt within their core countries, particularly the poorest countries and the development strategies.1 poorest people in them. Even if efforts to reduce greenhouse gas emissions (GHGs) are successful, it is Lessons from Bank experience also demonstrate that no longer possible to avoid some degree of global mitigation of and adaptation to climate change can warming and climate change. The primary direct effects have significant synergies with local development of climate change are an increase in droughts and priorities and development of new business floods, more seasonal peaks in river flow, and a higher opportunities. In an address at the United Nations probability of stronger tropical storms. The poorest Conference in Bali in December 2007, World Bank countries and communities are likely to suffer the most President Robert Zoellick noted that climate change is because of their geographical location, low incomes, a "development, economic and investment challenge. and low institutional capacity, as well as their greater It offers an opportunity for social and economic reliance on climate-sensitive sectors like agriculture. transformation that can lead to an inclusive sustainable globalization. That is why climate change Climate action regarding adaptation is therefore is a critical pillar of the development agenda."2 increasingly important in most developing countries. Adaptation is understood to include efforts to adjust to In 2008 the Bank issued the Strategic Framework for ongoing and potential effects of climate change. Climate Change and Development. The framework seeks Building up resilience to increasing climate variability to integrate climate change and development challenges is the most significant climate challenge facing these without compromising growth and poverty reduction countries. Although poor developing countries efforts through its country operations, including policy contribute the least to GHG emissions, some dialogue, lending, and analytical work in client countries, development programs--such as expanding access to and through its regional and global operations. clean energy (including through regional projects), as well as financing improved land management and forest The purpose of this report is to draw on all available management programs--can offer true win-win material in order to provide targeted guidance on the opportunities in terms of both supporting good linkages between the design of development programs development and reducing global GHG emissions. and the objectives of adapting to climate change and limiting emissions of greenhouse gases (GHGs). Given the inherent costs involved, adaptation should be pursued not as an end in itself, but as a means to Donor-supported poverty reduction strategy credits meet the development objectives of countries. (PRSCs) are already playing an increasing role in Countries will need to factor climate risks into their development planning and consider the range of 1 World Bank. 2007. IDA and Climate Change: Making Climate interventions that will increase their resilience to Action Work For Development. Other important contributions that have come out recently include the IPCC Fourth Assessment climate change. In low-income countries, a primary report (2007), the UNFCCC report on investment flows (2007), the focus on growth and poverty reduction can increase International Energy Agency's (IEA) World Energy Outlook 2007, and the forthcoming Organisation for Economic Co-operation and climate resilience by helping these countries Development's (OECD) Environmental Outlook 2008. diversify their economies. 2 Robert Zoellick, United Nations Climate Change Conference in Bali, Indonesia, December 2007. ix supporting prioritized policy actions in implementing Provide examples of policy making at the the agenda of social and structural policy and national level that successfully mainstreams institutional reform in a number of countries. climate considerations. Mainstreaming of the climate agenda is still in the early stages and is mainly driven by the UNFCCC through The report should be useful to practitioners in preparation of National Adaptation Programs of Action development organizations (multilateral and bilateral (NAPA) and associated prioritization of adaptation institutions) and countries for a better understanding of projects.3 The countries are also increasingly the implications of development programs and policies integrating climate change adaptation strategies into on climate change, as well as the implications of the development and implementation of PRSCs. climate policies on budgetary and related operations. The financial implications of actions to address climate key Policies and Programs Addressed change in developing countries remain highly uncertain. The estimated total cost of adaptation range from $4 to $109 Development programs are associated with a whole billion a year, with a significant portion coming from public array of policies such as macroeconomic policy funds. Such high levels of expenditure cannot be made reforms, fiscal policies, and specific policies in key outside a macroeconomic framework that recognizes their sectors such as agriculture, energy, transport, health, importance, evaluates them appropriately, and includes and education. In some cases, the operation may deal them in the medium-term expenditure framework. directly with reforms in certain climate sensitive sectors such as energy, transport, water and objective and Audience sanitation, agriculture, and forestry. In such cases, there is an obvious need for a careful analysis of The report provides practical guidance to development impacts of these policies on emissions of GHGs, as practitioners on systematically analyzing the direct and well as on the effectiveness of measures taken to indirect effects of development policy reforms on adapt to climate change. In other cases, such as climate change, as well as how climate change affects public sector reform and governance, the potential for the choice of instruments used to promote sustainable likely significant impacts on the environment and development. The specific objectives are to: natural resources is much less, but even here there may be a need to include a climate "overlay" on the Offer guidance on general measures that need to reforms being proposed. be taken in each country to ensure that climate change considerations are mainstreamed into From an analytical standpoint, more difficult cases development policies and programs. are those where the effect is indirect. Trade, public expenditure management, and privatization reforms Offer guidance on how macroeconomic and could have a significant bearing on GHG emissions sectoral development policies impact on the on natural resources, with implications for the climate objectives of mitigating GHGs and on adapting impacts of these changes on individuals. For to climate change. example, reducing export tariffs on agriculture products may increase exports of certain crops with Provide examples of important pathways by a high demand for water and low drought tolerance. which climate change can impact on the As climate impacts start to bite, farmers who have effectiveness of development policy lending adopted these crops will be negatively affected. and what these pathways imply for the design Switching to other crops, which is what the climate of such policy. adaptation policy is promoting, will become more costly. These examples underscore the need for the 3 For further details see http://unfccc.int/national_reports/napa/ two programs to work in harmony. items/2719.php. Accessed 9th November 2008. x Structure of the report governance, social protection, and competition; and (2) sectoral reforms, including agriculture, forestry, The report organizes the different tools available for and mining. The analysis identifies two classes analysis of the effects of each policy, identifies the of possible actions to respond to these linkages: environmental priorities, and then provides guidance (1) actions that need to be taken to minimize any on selection and use of the tools given the time and negative impact of the development programs; and resource constraints. The report is designed to be (2) actions that can be taken to enhance the impact concise and user-friendly. It consists of three of the program. The first is based on the principle of specific modules. doing as little harm as possible to climate adaptation and mitigation,5 and the second on the principle The first module looks at the main climate impacts of being pro-active and using the development that can be expected in developing countries. It briefly program framework to make mitigation and describes the measures being taken to adapt to the adaptation polices more effective. expected impacts and provides some estimates of the costs of these measures. The data and information are The third module describes the measures being drawn from the latest IPCC report, as well as from introduced to reduce GHGs and to adapt to climate reports and publications of national governments.4 change in developing countries. They should be borne in mind when deciding what new policies or measures The second module identifies relevant transmission should be introduced or what existing polices channels through which development programs could strengthened to ensure that climate policy and have an effect on GHG emissions and on the impacts development policies are reinforcing. The aim is to of impending climate change on individuals. The inform those preparing the programs of what is going development programs are divided into two groups: on in the climate arena, how it may affect the (1) macroeconomic reforms, including measures they wish to implement and specific macroeconomic stability, the investment climate, policies that may be implemented. 4 IPCC. 2007. Climate Change 2007: Impacts, Adaptation and Vulnerability: Working Group II Contribution to the Intergovernmental Panel on Climate Change". Bonn: Intergovernmental Panel on Climate Change. 5 In the climate literature the term mitigation is used to refer to measures to reduce the emissions of GHGs. xi xii module i Over the course of the century, water supplies stored in glaciers and snow cover are projected to decline, reducing water availability in regions supplied by meltwater from major mountain ranges, where more than one-sixth of the world's people currently live. This module provides some background information on the likely impacts of climate Ecosystems change in developing countries and on possible The resilience of many ecosystems is likely to be measures that need to be taken to address the exceeded in this century by an unprecedented ongoing and forthcoming changes. combination of climate change, associated disturbances (such as flooding, drought, wildfire, As the 4th IPCC report notes, insects, and ocean acidification), and other global change drivers (such as land use change, "Observational evidence from all continents pollution, and overexploitation of resources). and most oceans shows that many natural systems are being affected by Due to increases in global average temperature regional climate changes, particularly exceeding 1.5 to 2.5° C and concomitant temperature increases." atmospheric carbon dioxide concentrations, there are projected to be major changes in ecosystem The main impacts of climate change are summarized structure and function, species' ecological in this report. This module provides a brief description interactions, and species' geographic ranges, of these impacts and of the measures that can be with predominantly negative consequences for taken to adapt to them. It also reviews measures by biodiversity and ecosystem goods and services which developing countries can reduce their GHG such as water and food supply. emissions in a cost-effective way. Food, fiber, and forest products impacts of Climate Change in Crop productivity is projected to increase slightly Developing Countries at mid- to high latitudes for local mean temperature increases of up to 1­3° C depending The IPCC report identifies a large number of areas of on the crop, and then decrease beyond that in impact. Summarized below are those where there are some regions. At lower latitudes, especially likely to be significant consequences for the seasonally dry and tropical regions, crop development of a country: productivity is projected to decrease for even small local temperature increases (1­2° C), Freshwater resources which would increase the risk of hunger. Average river runoff and water availability are projected to increase by 10­40 percent at high Globally, the potential for food production is latitudes and in some wet tropical areas, but projected to increase with increases in local decrease by 10­30 percent over some dry areas average temperature over a range of 1­3° C, but at mid-latitudes and in the dry tropics. above this it is projected to decrease. Drought-affected areas will likely increase in Increases in the frequency of droughts and extent. At the same time, heavy precipitation floods are projected to affect local crop events, which are very likely to increase in production negatively, especially in subsistence frequency, will augment flood risk. sectors at low latitudes. However, at all latitudes 1 adaptations such as altered cultivars and Industry, settlements, and society planting times allow cereal yields to be The most vulnerable industries, settlements, maintained at or above baseline yields for and societies are generally those in coastal and modest warming. river flood plains, those whose economies are closely linked with climate-sensitive resources, Globally, commercial timber productivity rises and those in areas prone to extreme weather modestly with climate change in the events, especially where rapid urbanization short- to-medium term, with large regional is occurring. variability around the global trend. Where extreme weather events become more Regional changes in the distribution and intense and/or more frequent, the economic production of particular fish species are and social costs of those events will increase. expected due to continued warming, These increases will be substantial in the areas with adverse effects projected for most directly affected. Climate change impacts aquaculture and fisheries. spread from directly impacted areas and sectors to other areas and sectors through Coastal systems and low-lying areas extensive and complex linkages. Coasts are projected to be exposed to increasing risks, including coastal erosion, due to climate Health change and sea-level rise. The effect will be Projected climate-change-related exposures are exacerbated by increasing human-induced likely to affect the health status of millions of pressures on coastal areas. people, particularly those with low adaptive capacity, through: Corals are vulnerable to thermal stress and have low adaptive capacity. Increases in sea surface Increases in malnutrition and consequent temperature of about 1­3° C are projected to disorders, with implications for child growth result in more frequent coral bleaching events and development and widespread mortality, unless there is thermal adaptation or acclimatization by corals. Increased deaths, disease, and injury due to heat waves, floods, storms, fires, and Coastal wetlands, including salt marshes and droughts mangroves, are projected to be negatively affected by sea-level rise, especially where they An increased burden of diarrheal disease are constrained on their landward side or starved of sediment. Increased frequency of cardio-respiratory diseases due to higher concentrations By the 2080s, many millions more people are of ground-level ozone related to projected to be flooded every year due to climate change sea-level rise. Those densely populated and low-lying areas where adaptive capacity is Altered spatial distribution of some relatively low, and which already face other infectious disease vectors. challenges such as tropical storms or local coastal subsidence, are especially at risk. The Climate change is expected to have some numbers affected will be largest in the mixed effects, such as a decrease or increase mega-deltas of Asia and Africa. Small islands in the range and transmission potential of are especially vulnerable. malaria in Africa. 2 Studies in temperate areas have shown that The report estimates that between 75 and 250 million climate change is projected to bring some people are projected to be exposed to an increase of benefits, such as fewer deaths from cold water stress due to climate change by 2020. Coupled exposure. Overall, it is expected that these with increased demand, this will adversely affect benefits will be outweighed by the negative livelihoods and exacerbate water-related problems. health effects of rising temperatures worldwide, Agricultural production, including access to food in especially in developing countries. many African countries and regions, is projected to be severely compromised by climate variability and change. The area suitable for agriculture, the length of There are four observations about these impacts. growing seasons, and yield potential--particularly along the margins of semi-arid and arid areas--are expected The first is that the impacts in the low latitudes, where to decrease. This would further adversely affect food most of the developing countries are located, are security and exacerbate malnutrition in the continent. In largely negative. some countries, yields from rainfed agriculture could be reduced by up to 50 percent by 2020. Second, while the balance of positive and negative health impacts will vary from one location to another and will Local food supplies are also projected to be negatively alter over time as temperatures continue to rise, poor affected by decreasing fisheries resources in large communities will be especially vulnerable, particularly lakes due to rising water temperatures, which may be those concentrated in high-risk areas. They tend to have exacerbated by continued overfishing. Toward the end more limited adaptive capacities and are more dependent of the 21st century, projected sea-level rise will affect on climate-sensitive resources such as local water and low-lying coastal areas with large populations. The cost food supplies. It follows from this that a reduction in of adaptation could amount to at least 5 to10 percent poverty will reduce the vulnerability to climate change. of gross domestic product (GDP). Mangroves and coral Thus development and adaptation go hand in hand. reefs are projected to be further degraded, with additional consequences for fisheries and tourism. Third, the observations clearly note an increase in negative impacts as GHG concentrations increase and Adaptation measures to the impacts as global mean temperatures rise. Whereas for small of Climate Change increases in temperatures of around 1 to 2° C there are even some positive effects, these disappear once The IPCC refers to adaptation practices as actual temperature increases reach 4 to 5° C and above. adjustments, or changes in decision environments, which might ultimately enhance resilience or reduce Fourth, there remains a great deal of uncertainty about vulnerability to observed or expected changes in these impacts, especially at the local level. The IPCC climate. Investment in coastal protection infrastructure report is at pains to reflect this by stating varying to reduce vulnerability to storm surges and anticipated degrees of confidence in its statements. From a policy sea-level rise is an example of actual adjustments. The perspective, this uncertainty translates into the need development of climate risk-screening guidelines, to avoid extreme events through the adoption of which might make downstream development projects measures that reflect an aversion to risk. more resilient to climate risks, is an example of changes in the policy environment. Africa and South Asia are the most vulnerable continents to climate variability and change because Another important classification of measures is with of multiple stresses and low adaptive capacity. Some respect to the time dimension. Adaptation to climate adaptation to current climate variability is already risks can be viewed at three levels: (1) responses to taking place; however, this may be insufficient for current variability (which also reflect learning from past future changes in climate. adaptations to historical climates); (2) observed 3 medium and long-term trends in climate; and (3) measures being taken to adapt infrastructure investment anticipatory planning in response to model-based to account for future climate change. This is particularly scenarios of long-term climate change. the case for long-lived infrastructure that may be exposed to climate change impacts over its lifespan, In the context of development programs, the cases of or where business-as-usual activities would irreversibly greatest interest are when there is a conflict between constrain future adaptation to the impacts of climate policies that promote development and those that change. Examples are mostly from developed countries protect individuals against the impacts of climate and include investments in roads, railway lines (to change. For example, activities such as shrimp account for subsidence from climate change), bridges farming and conversion of coastal mangroves may (to account for sea-level rise), and the like. More of this promote rural livelihoods, but they could also should be done, however, in developing countries. exacerbate vulnerability to sea-level rise. An example from the developing world, the Qinghai-Tibet Adaptation measures can be further classified into Railway, is an exception. The railway crosses the Tibetan proactive and reactive or ex-post. Examples of proactive Plateau, including about 1,000 kilometers that is at least measures include crop and livelihood diversification, 13,000 feet (4,000 meters) above sea level. Five-hundred seasonal climate forecasting, community-based disaster kilometers of the railway rests on permafrost, with risk reduction, famine early warning systems, insurance, roughly half of it "high-temperature permafrost," which water storage, supplementary irrigation and so on. is only 1 to 2° C below freezing. The railway line would Examples of reactive or ex-post measures include affect the permafrost layer, which will thaw as a result of emergency response, disaster recovery, and migration. rising temperatures, in turn affecting the stability of the Recent reviews indicate that a "wait-and see" or reactive line. To reduce these risks, design engineers have approach is often inefficient and could be particularly put in place a combination of insulation and cooling unsuccessful in addressing irreversible damages--such systems to minimize the amount of heat absorbed as species extinction or unrecoverable ecosystem by the permafrost. damages--that may result from climate change. In addition to specific infrastructure projects, there are Table 1.1 provides examples of some adaptation now also examples where climate change scenarios measures implemented by a range of actors, including are being considered in more comprehensive risk individuals, communities, governments, and the management policies and plans. Efforts are under way private sector. Such measures involve a mix of to integrate adaptation to current and future climate institutional and behavioral responses, the use of within the environmental impact assessment (EIA) technologies, and the design of climate-resilient procedures of several countries in the Caribbean. infrastructure. They are typically undertaken in Within OECD countries, a number of other policy response to multiple risks, and often as part of existing initiatives have also been put in place that account for processes or programs, such as livelihood future climate change, particularly sea-level rise. In the enhancement, water resource management, and Netherlands, for example, the Technical Advisory drought relief. Public expenditures are an important Committee on Water Defence recommended the part of the adaptation strategy, although they are by design of new engineering works with a long lifetime, no means the only part of the strategy. While climate such as storm surge barriers and dams, to take a change has generated a great deal of discussion, 50-cm sea-level rise into account. Such examples relatively few adaptation measure have been from developing countries are rare, although there are implemented to date. exceptions (see the case of Bangladesh in Table 1.1). In addition to the examples in Table 1.1, which are There are also examples of consideration of climate largely though not entirely reactive, there are now change as part of comprehensive risk-management 4 strategies at the city, regional, and national levels. In deciding on which adaptation policies to introduce, France, Finland, and the United Kingdom have policy makers need to look at their costs and benefits. developed national strategies and frameworks to This is difficult, given the major uncertainties referred adapt to climate change. At the city level, meanwhile, to above, and implies the need to adopt the climate change scenarios are being considered in a precautionary principle of taking action to prevent number of developed countries. Again, there are fewer serious negative effects from climate change. examples from the developing world of this kind of risk Most work has been done on sea-level rise, where the management strategy. estimates are relatively straightforward. Studies Table 1.1 Adaptation initiatives in selected developing countries Region/ Country Climate Stress Adaptation Practices Africa Egypt Sea-level rise Adoption of National Climate Change Action Plan integrating climate change concerns into national policies; adoption of law 4/94 requiring EIA for project approval and regulating setback distances for coastal infrastructure; installation of hard structures in areas vulnerable to coastal erosion Sudan Drought Expanded use of traditional rainwater harvesting and water conserving techniques; building of shelter belts and wind breaks to improve resilience of rangelands; monitoring of the number of grazing animals and trees cut; set-up of revolving credit funds Botswana Drought National government programs to re-create employment options after drought; capacity building of local authorities; assistance to small subsistence farmers to increase crop production Asia Bangladesh Sea-level Consideration of climate change in the National Water Management Plan; building of flow regulators in rise, saltwater coastal embankments; use of alternative crops and low-tech water filters intrusion Philippines Drought, floods Adjustment of silvicultural treatment schedules to suit climate variations; shift to drought-resistant crops; use of shallow tubewells; rotation method of irrigation during water shortages; construction of water impounding basins; construction of fire lines and controlled burning; adoption of soil and water conservation measures for upland farming Nepal Glacial lake The Tsho Rolpa risk reduction project in Nepal is an example of adaptation measures being implemented expansion to address the creeping threat of glacial lake outburst flooding as a result of rising temperatures, potentially causing serious damage to a dam and to livelihoods downstream. Small Islands Sea-level rise Capacity building for shoreline defense system design; introduction of participatory risk assessment; (Somoa, Tonga, provision of grants to strengthen coastal resilience and rehabilitation of infrastructures; construction of Cook Islands) cyclone-resistant housing units; retrofit of buildings to improved hazard standards; review of building codes; reforestation of mangroves Drought, Rainwater harvesting; leakage reduction; hydroponic farming; bank loans allowing for purchase of saltwater rainwater storage tanks intrusion Source: from IPCC WGII Fourth Assessment Report ­ Final Draft for Government Review Chapter 17: Assessment of Adaptation Practices, Options, Constraints and Capacity. 5 indicate that, based on such a benefit-cost For many countries located in tropical regions, assessment, almost all the cities in the OECD the potential benefits of low-cost adaptation countries and about 50 to 80 percent of beaches and measures such as changes in planting dates, open coasts should be protected. In the case of crop mixes, and cultivars do not turn out to be developing countries, an analysis for some selected sufficient to offset the significant climate change Asian states shows the costs of coastal protection damages (Rosenzweig and Parry, 1994; Butt and as a percentage of GDP. In general the figures are low, others 2005). amounting to 1 to 2 percent of GDP, depending on which climate scenario considered. In the case of a These analyses need to be interpreted with some couple of island states, however, the percentage caution. First, there is a high level of uncertainty about rises to more than 13 (IPCC WGII, 2007).7 the "business-as-usual" scenario. In particular, not These cost-benefit calculations are sensitive to taking action could result in high "socially contingent" the assumed values of the land and structures costs, such as when populations migrate and social that would be affected. changes lead to conflict. By and large, these have not been accounted for. Including them would turn the There are a few studies of the costs and benefits of calculations more in favor of some adaptation action, agricultural adaptation for developing countries.8 The although that action may not best take the form of available results indicate that there are large inter and maintaining agriculture in the affected regions. intra-regional variations. Here are some examples: Second, where there are risks, the benefits should In the case of Gambia, Njie and others (2006) include a premium associated with any actions that found that yields of millet would increase and reduce this risk. In general, such a premium has not inter-annual variability decrease through been added. adaptation measures such as improving cultivars, irrigation, and improved crop Third, most of the benefits of adaptation go to fertilization. The net benefits of these measures, poor households, while the costs are incurred to however (that is, the benefits less the costs), individuals with a higher average income. This were not always positive. In general, the net transfer, although not generally accounted for, benefits were higher for crop fertilization than for should also be considered. the other measures. The authors note the high level of uncertainty, especially as one goes In addition to the national-level studies, there are further out in time. overall estimates of the costs of adaptation to climate change at the global level. Table 1.2 summarizes the In Mali, Butt and others (2005) estimate that main studies, which range from $4 billion to $109 adaptation through trade, through changes in billion a year for developing countries and $44 billion crop mix, and through the development of to $166 billion for all countries. The breakdown heat-resistant cultivars could offset 90 to 107 between public and private sectors is not provided. percent of the welfare losses arising from climate Notwithstanding the uncertainty over costs, it is clear change. Thus the benefits can exceed the costs these costs could be a significant share of the budget or come close to it. of developing countries in the years to come and hence deserve to be taken seriously. Overall, IPCC AR4 summarized the situation by noting 7 The countries covered in the study were Micronesia, Palau, Tuvalu, Marshall Islands, Mozambique, French Polynesia, that the literature on adaptation costs and benefits Guinea-Bissau, Nauru, Guyana, New Caledonia, Papua New remains "quite limited and fragmented" (Adger and Guinea, Kiribati, Maldives, Vietnam, and Cambodia. 8 There is virtually nothing on the costs of adapting energy systems others 2007, in IPCC WGII 2007). It reported that there at the country level. 6 is only a small methodological literature on the greater access to technology and resources to invest adaptation cost-benefit assessment, much of this at a in adaptation, high per-capita income is considered macro-scale associated with global assessment, and neither a necessary nor a sufficient indicator of the there remains very limited real practical application. capacity to adapt to climate change. Some elements of adaptive capacity actually are not substitutable: an Other aspects of adaptation that are relevant economy will be as vulnerable as the "weakest link" in from the broader perspective of development its resources and adaptive capacity (for example, with policy are the following: respect to natural disasters). Within both developed and developing countries, some regions, localities, or Adaptive capacity and development social groups have a lower adaptive capacity. Although development does in general make it easier to adapt, new studies show that adaptive capacity is Determinants of adaptive capacity influenced not only by economic development and The specific determinants of adaptive capacity at the technology, but also by social factors such as human national level represent an area of contested capital and governance structures. Furthermore, knowledge. Some studies relate adaptive capacity to recent analysis argues that adaptive capacity is not a levels of national development, including political concern unique to regions with low levels of economic stability, economic well-being, human and social activity. Although economic development may provide capital, and institutions. National-level adaptive Table 1.2 global studies of adaptation costs Study Cost of Adaptation Regional coverage Time frame Sectors Comments World Bank $9 billion to $41 Developing countries Present Unspecified Based on OECD and WB analysis (2006) billion/year of flow exposed to CC. Costs of reducing climate risks (climate proofing) Stern Review $4 billion to $37 Developing countries Present Unspecified Update with modification of WB (2006) billion/year study Oxfam (2007) At least $50 billion/ Developing countries Present Unspecified WB study plus extrapolation from year NAPA's and NGO estimates UNDP (2007) $86 billion to $109 Developing countries 2015 Unspecified WB study, plus costing of targets billion/year for adapting poverty reduction programs and strengthening of disaster response UNFCCC (2007) $28 billion to $67 Developing countries 2030 Agriculture, Analysis of specific adaptations billion/year forestry, fisheries, water supply, health, coastal zones, infrastructure UNFCCC (2007) $44 billion to $166 Global 2030 Agriculture, billion/year forestry, fisheries, water supply, health, coastal zones, infrastructure Source: Agrawala and others. 2008. Presented at the OECD workshop on Economic Aspects of Adaptation. 7 capacity has also been represented by proxy indicators The process of providing international finance to such as economic capacity, human and civic resources, developing countries to support these measures is and environmental capacity. From the Bank's through a National Adaptation Program of Action perspective, a country-level assessment of adaptive (NAPA). In completing a NAPA, a country identifies capacity should include an assessment of the priority activities that must be implemented in the institutional capacity in the government structures that immediate future in order to address urgent national deal with adaptation measures, as well as an assessment climate change adaptation needs. Although only six countries had completed their national NAPA reports of the capacity of the private sector and civil society to as of mid-2006, a number of specific projects make behavioral changes in the light of new pressures were identified in these reports for priority action. from climate-related events. In all this, vulnerability For instance, lessons from the Bangladesh NAPA assessments of key affected groups should also play a suggest that the country should (a) adopt a livelihood part, but they are not the whole story. In addition, there rather than a sectoral approach, (b) focus on near- and could be major differences between regions of the medium-term impacts of climate variability as well country and between different communities and groups, as long-term impacts, (c) ensure integration of which also need to be recognized. indigenous and traditional knowledge, and (d) ensure procedural fairness through interactive participation Finally, the capacity to adapt is influenced by and self-mobilization. economic policies. For instance, measures that improve non-farm employment opportunities and NAPA as an instrument needs to recognize the reduce peoples' dependence on the land make rural importance of mainstreaming adaptation into macro households less vulnerable to changes in yields. policies as well as policies across all sectors affecting Likewise, a policy that allows prices of primary water management, disaster preparedness, land use products to become volatile makes it more difficult for planning, and energy planning. By ensuring the farmers to survive if low prices coincide with periods mainstreaming of adaptation measures, we ensure of drought in the region. Trade measures can also that this area of policy will become part of and affect adaptation. In the case of India, many farmers consistent with other well-established programs. no longer plant traditional, drought-tolerant oilseed crops because there are no markets due to an influx of Like the World Bank, other agencies are also seeking cheap imports from abroad (O'Brien and others 2004). to integrate climate change adaptation into their It is also argued that the globalization of fisheries has grant and loan activities. They want to screen out decreased the resilience of marine ecosystems those loans or grants that make adaptation more (Berkes and others 2006) and made them less able to difficult or less effective and that create new adapt to climate change. vulnerabilities. So far, however, they have not fully examined how their activities affect vulnerability to Measures to enhance adaptation capacity climate change and have not encompassed a set of Measures that have been identified as important in measures to reduce vulnerability. enhancing adaptation capacity include: Adaptation is constrained by ecological, technical, Reducing vulnerability of people and economic, and financial factors. In some cases it may infrastructure be impossible from an ecological viewpoint to adapt, at least locally, to the changes. In such cases more Providing information on risks for private and major action may be needed, such as complete public investments and decision making relocation of populations and abandonment of ongoing activities. Then there are technological limits Protecting public goods such as habitats, regarding how much one can restore the situation species, and culturally important resources. ex ante. These go together with economic factors, 8 which determine how much one can justify, in terms 2000; (3) a principle of "common but differentiated of costs and benefits, to adapt to a given set of responsibilities," suggesting that developing countries impacts. Finally, even if an action is ecologically and should not be expected to undertake the same technically feasible, and it is justified on cost-benefit obligations as developed countries; and (4) grounds, it may not be undertaken if the agents opportunities for realizing more cost-effective involved cannot afford to make the necessary reductions in GHG emissions through joint outlays. Without external support, many of the implementation. The Kyoto Protocol, which came into justifiable actions will not be implemented. force in 2005, committed most industrial countries and some transition economies (Annex B countries) to mitigation measures to the impacts specific GHG emission targets (see Box 1.1). Beyond of Climate Change Kyoto, international agreements to deal with climate change will be more efficient if they provide incentives Mitigating climate change is central to the to reduce GHG emissions and institutions to collect development and poverty reduction agenda. Early and verify information on emissions so that progress mitigation of greenhouse gas emissions will toward mitigation can be monitored. Such incentives significantly reduce the need for future adaptation, could be through a carbon tax, permit market, or some especially the burden on the poor. Few major combination of the two. studies--such as IPCC Fourth Assessment report (2007), the UNFCC report on investment flows (2007), The UNFCCC has been implementing the Clean the International Energy Agency's (IEA) World Energy Development Mechanism (CDM) as one of its sources Outlook 2007, and the upcoming Organisation for of carbon finance. Under the CDM, parties to the Economic Co-operation and Development's (OECD) Kyoto Protocol could meet their obligations to reduce Environmental Outlook 2008--have improved the GHG emissions by purchasing emission reduction understanding of the feasibility and costs of curbing credits (ERCs) from projects in developing countries. GHG emissions. Stabilization of GHG concentrations An ERC is generated if a project reduces its carbon within the levels that keep the impacts of climate emissions below what would have occurred without change manageable would require limiting GHG the CDM. The credits need to be certified by the emissions through multilateral action involving policy UNFCCC before they can be used to meet obligations incentives and the deployment on a global scale of a under the Kyoto Protocol. The CDM market is growing; portfolio of currently available and future low-carbon as of January 2008, the UNFCCC had registered 901 technologies in a range of sectors, including energy projects with ERCs totaling 1.15 billion tons of CO2 supply, transport, buildings, industry, agriculture, equivalent.9 Land-use projects eligible under the CDM forestry, and waste management. are limited to afforestation and reforestation under the Marrakesh Accords. A new carbon credit program that Since GHG mitigation is a global public good, is being negotiated with in the UNFCCC is Reducing measures for abatement require international Emissions in Deforestation and Forest Degradation cooperation if they are to provide effective incentives. (REDD). This program would compensate countries International coordination to deal with climate change with carbon credits for their efforts in reducing CO2 has been organized under the UN Framework emissions through forest conservation and by Convention on Climate Change (UNFCCC), which was controlling forest degradation. signed in Rio de Janeiro in 1992 and ratified in 1994 by 190 countries. The climate policy framework of the UNFCCC has four critical elements: (1) a long-term 9 Most of these projects have originated in Asia or Latin America, goal of stabilizing GHG concentrations in the with fewer than 3 percent originating in Africa. China was the atmosphere; (2) a short-term goal for the developed largest seller of ERCs between January 2005 and September 2006; most transactions involved energy and manufacturing countries to stabilize their emissions at 1990 levels by projects. 9 Box 1.1 The kyoto Protocol The Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNFCCC) entered into force on February 16, 2005, following ratification by Russia.As of May 11, 2007, 172 countries and the regional economic integration organization (EEC) have ratified, accepted, approved, or acceded to the Kyoto Protocol.The UNFCCC includes the principle of "common but differentiated responsibilities." Under the principle, as stipulated in Article 3, Paragraph 1 of the UNFCCC, the Parties agreed that (1) the largest share of historical and current global emissions of greenhouse gases has originated in developed countries; (2) per capita emissions in developing countries are still relatively low; and (3) the share of global emissions originating in developing countries will grow to meet their social and development needs. Under the Kyoto Protocol, industrialized countries (called Annex I countries) have to reduce their combined emissions to 5 percent below 1990 levels in the first commitment period of 2008­12.Annex I countries include the industrialized countries that were members of the Organisation for Economic Co-operation and Development (OECD) in 1992, plus countries with economies in transition (the EIT Parties), including the Russian Federation, the Baltic states, and several Central and Eastern European states. Countries that have accepted greenhouse gas emissions reduction obligations must submit an annual greenhouse gas inventory. Non-Annex I countries (developing countries) that have ratified the protocol do not have to commit to specific targets as they face potential technical and economic constraints. Nevertheless, they have to report their emissions levels and develop national climate change mitigation programs. While the average emissions reduction is 5 percent, each country agreed to its own specific target.Within the Annex I countries, differentiated national targets range from 8 percent reductions for the European Union (EU) to a 10 percent allowable increase in emissions for Iceland. Further, while Annex I countries must put in place domestic policies and measures to achieve their targets, the Protocol does not oblige governments to implement any particular policy, allowing countries to seek optimal ways to achieve greenhouse gas emission reduction and to adjust their climate change strategies to the circumstances of their economies.The Protocol defines three flexibility mechanisms--known as joint implementation (JI), the Clean Development Mechanism (CDM), and emissions trading--to help Annex I Parties lower the overall costs of achieving emissions targets by allowing them to reduce emissions, or increase greenhouse gas removals more cheaply in other countries than at home. Source: 1. European Environment Agency. 2006. "Greenhouse Gas Emission Trends and Projections in Europe 2006." 2. United Nations Framework Convention on Climate Change. "Good Practices in Policies and Measures Under the Kyoto Protocol." 10 Although there is a broad agreement that GHGs must recently through the Clean Energy for Development be reduced over the coming decades, there are Investment Framework (CEIF) together with the action differences of opinion on the stabilization targets and plan in 2006­07. The Bank has recently issued a draft the means of achieving them. Estimates of GHG comprehensive Strategic Framework on Climate emissions in 2000 by sector show that about 65 Change and Development (SFCCD) (Box 1.2). percent of the total emissions are from energy consumption and industrial processes, 18 percent The Bank has been a pioneer in the carbon market, from land use change (primarily deforestation), and the and a facilitator of energy sector reforms that provide rest (17 percent) from agriculture and waste. In 2004, incentives for efficiency, energy savings, and better the average per capita emissions were 13.3 tons of environmental practices. The CEIF focuses on three CO2 per person in high-income countries, 4.0 in areas: (a) energy for growth, with particular emphasis middle-income countries, and only 0.9 ton in on access to energy in sub-Saharan Africa; (b) the low-income countries. Carbon emissions from both transition to a low-carbon development trajectory; and high-income (Annex 1 countries that agreed to limit (c) adaptation to the effects of climate change. The GHG emissions under UNFCC) and developing World Bank engagement in low-carbon growth countries (non-Annex 1 countries) have continued to technologies has now expanded beyond energy to increase. They are predicted to increase by over 60 other sectors such as urban, transport, industry percent by 2035 (from 2004 levels) under the IPCC (primarily by the IFC), agriculture, and forestry. The AIFI10 scenario. CEIF further envisages enhancement of cooperation and harmonization with other development partners Although historically the annual CO2 emissions from and catalyzing substantial additional resources from developing countries remained below those from the both the public and private sources. developed countries, they will soon be equal and emissions from developing countries are projected to The Bank Group is optimizing the use of available surpass the developed-country emissions under the non-lending sources such as GEF and carbon AIFI scenario (Wheeler and Ummel 2007). Similarly, finance for mitigation. The Bank has committed following the AIFI trajectory, the cumulative emissions about 22 percent of its notional GEF allocation to from developing countries will equal those of mitigation during the GEF 2006­10 replenishment high-income countries by 2035. However, this does period. In addition, the Bank's carbon finance (CF) not imply that emissions from developing countries emission reduction purchase agreements totaled should immediately be reduced, thus compromising $195 million in fiscal 2007, of which $144 million is their growth prospects, but does indicate that the for energy. The CF purchase agreements are magnitude of emissions need to be considered as expected to reach $300 million in fiscal 2008. MIGA well. The non-Annex 1 countries have not yet made is also exploring opportunities to expand guarantee any commitments and or responsibilities to reduce operations in the form of carbon credits for carbon their emissions. finance projects. A carbon delivery guarantee (CDG) is IFC's flagship program. It aims to further support The World Bank and climate change climate-friendly products in emerging markets. The The World Bank Group has accumulated substantial CDG is the only product in the market that (a) experience in addressing climate change in the improves market access for sellers of project-based context of development and poverty reduction, most carbon credits in developing countries, (b) provides sellers with enhanced counterparty quality, and (c) helps maximize the value of future credits by providing a triple-A credit enhancement and a 10 For an explanation of AIFI scenario, refer to IPCC Special Report transparent link to prices in secondary compliance on Emissions Scenarios, IPCC http://www.grida.no/climate/ipcc/ emission/index.htm markets like Europe. 11 Box 1.2 Strategic framework on Climate Change and Development The World Bank's Strategic Framework on Climate Change and Development (SFCCD) is a means to articulate the WBG's vision on how to integrate climate change and development challenges, without compromising growth and poverty reduction efforts through its country operations, including policy dialogue, lending, and analytical work in client countries, and through its regional and global operations. Scaling up WBG action on climate change rests on (a) a continued priority for economic growth, poverty reduction, and achieving MDGs in developing countries; (b) an understanding that access to energy services and increased energy use by developing countries are fundamental to these goals; and (c) a recognition that adaptation to climate variability and change is critical to sustaining and furthering development gains in the majority of developing countries. Reflecting the multisectoral and multidimensional nature of the challenge, the SFCCD will encompass activities in many sectors, covering energy, transport, urban development, water, agriculture, forestry, industry, economic policy, and social and human development.The SFCCD also acknowledges and will address multiple dimensions through which changing climate affects development: economic, financial, social, gender, and environmental, including impacts on other global environmental goods such as biodiversity. Given that knowledge about climate change, particularly the economic and social aspects, is continuously evolving and uncertainties remain, the design of the SFCCD will be flexible so as to incorporate new knowledge and support actions, whose benefits are robust under any future scenarios of climate change negotiations and impacts. The development of the SFCCD is also guided by the principles of (a) supporting the UNFCCC process; (b) being neutral to any negotiating party position; (c) helping developing countries manage the challenges of climate change and realize opportunities of climate action; (d) considering climate change as an overarching development and economic issue--not only an environmental issue--that requires involvement and leadership by the ministries of development and finance, in addition to environment ministries; (e) recognizing the importance of partnerships, given the many actors on the international arena with different mandates on the issue; and (f) building the SFCCD as an integral part of the Bank's strategy on inclusive and sustainable globalization. Source: World Bank. 2008. Toward A Strategic Framework on Climate Change and Development for the World Bank Group: Concept and Issues Paper. Washington, DC: World Bank. 12 Although CEIF has focused mainly on the power degradation (REDD). It aims to build country sector, work has extended to other sectors such as capacity, including a national accounting transport, where there are opportunities to tackle framework for REDD in interested countries. development and mitigation together. Two new carbon FCPF's Carbon Fund will offer positive incentives facilities, the Carbon Partnership Facility (CPF) and for reducing emissions from tropical forests, which Forest Carbon Partnership Facility (FCPF), were can improve the livelihoods of poor people who approved by the Bank Board in September 2007 to depend on natural resources, while protecting expand the scale and scope of carbon finance. The natural assets. These natural assets typically CPF is designed to (1) scale up carbon finance promote the maintenance of local environmental through programmatic and sector-based approaches, benefits such as protection of watersheds, the and (2) support long-term low-carbon investments by clearing and degradation of which represents purchasing emission reductions beyond 2012. Its aim about 30 percent of GHG emissions from is to use carbon markets to promote GHG mitigation developing countries. FCPF has been developed enhancing the value of carbon finance to leverage in response to numerous requests from both investment for clean energy and the use of developing and industrialized countries, including lower-carbon technology. The CPF will provide interest from 34 IBRD and IDA member countries, continuity and sustain capacity in the carbon market, with a target capitalization of $300 million. The both in developing and developed countries. Bank group is also developing strategies to overcome the barriers to accelerated development FCPF is designed to test and pilot activities for and deployment of clean energy technologies in reducing emissions from deforestation and forest developing countries. 13 14 module 2 important but it is not enough. In addition, an assessment should be made of the country's institutional capacity to address climate issues and the extent to which these have been mainstreamed into the government policy-making framework. Transmission Channels Since the capacity of the country to integrate development and climate policy are crucial to the In this module, the different transmission channels effective design of development policy, we would are evaluated with respect to their possible links to recommend that all countries have such an climate change. assessment carried out and any gaps in the present arrangement noted. The aim should then be to help The purpose of this module is to identify the main the countries to fill these gaps as part of present and channels through which development programs could future development policy lending programs. In the affect the capacity of a country to adapt to climate meantime, where capacity is weak, special measures change and to reduce its GHGs in a cost-effective way. may need to be taken to ensure that the development programs do not have any significant negative effects The pathways by which macroeconomic and sectoral on the climate side. In the analysis of the transmission reforms can influence climate policy are complex and channels, we have attempted to indicate what these depend on the existing institutional framework. With measures might be. appropriate institutions, one can ensure a high degree of consistency between development policy and For each policy we divide the linkages into those climate policy, whereas in the absence of such related to adaptation and those related to mitigation. institutional support there can be considerable For each of the two we identify actions that should be dissonance. From a broad environmental viewpoint, a taken to reduce any negative impacts, as well as country's environmental management capacity can be actions that could be taken to enhance the positive assessed through the CIESIN's Environment impacts. Thus each development policy has four sets Performance Index (EPI),11 the World Bank's CPIA of linkages to climate policy. Of course, not all are index,12 or the GEF Resource Allocation Framework equally important. To give an idea of their relative (RAF).13 For climate policy, that assessment is importance, we have used a color coding. A red color indicates that action is very important and should be given priority. Yellow is used to indicate that action is 11 An Initiative of the Yale Center for Environmental Law and Policy (YCELP) and the Center for International Earth Science of moderate importance and green to indicate that Information Network (CIESIN) of Columbia University, EPI there are no significant linkages and could indeed be measures country-scale performance on a core set of environmental policy goals for which every government can be positive effects on climate adaptation and mitigation. made accountable. 12 The Country Policy and Institutional Assessment (CPIA) rates countries against a set of 16 criteria grouped in four clusters: (a) The policies are divided as follows: Items 1-8 are economic management; (b) structural policies; (c) policies for social inclusion and equity; and (d) public sector management macroeconomic or economy-wide reforms and 9-19 and institutions. The environmental criterion assesses the are sectoral reforms: extent to which environmental policies foster the protection and sustainable use of natural resources and the management of pollution. Assessment of environmental sustainability requires 1. Ensuring macroeconomic stability multidimensional criteria (i.e. for air, water, waste, conservation management, coastal zones management, and natural resources 2. Improving the investment climate management). To ensure balanced assessments, World Bank staff 3. Improving public financial management members assess country policies and institutions by filling out a specific questionnaire. 4. Governance reforms 13 Under the RAF, GEF resources are being allocated to countries based on their potential to generate global environmental 5. Social protection benefits and their capacity, policies, and practices to successfully 6. Decentralization implement GEF projects. 15 7. Increasing competition and entrenching impacts are given in Table 2.2. The following property rights comments should be noted: 8. Modernizing the rural economy 9. Agricultural sector reforms a. Positive impacts on the environment are possible 10. Forestry sector reforms with a number of policies. In terms of mitigation, 11. Mining sector reforms the countries should look at measures that 12. Fisheries sector reforms promote energy efficiency and provide adequate 13. Environmental management reforms resources for adaptation programs. Although 14. Education sector reforms much of the funding for such programs will come 15. Health sector reforms from donors, counterpart funds are crucial. A list 16. Infrastructure reforms covering water, of such measures is given in module 3. In transport, and urban sectors defining priority spending, the relatively weak 17. Energy sector reforms state of benefit-cost analysis for adaptation 18. Financial sector reforms programs should not imply that they get 19. Tourism sector reforms summarily rejected. Rather, an effort should be made to strengthen capacity to estimate the Climate institutional Assessment benefits of such programs in a credible way. Generally, since environmental budgets (and a As noted above, each country should have made an part of adaptation budgets probably come under assessment of the effectiveness of current this category) are often at risk, it is important to arrangements to formulate and implement climate make a fair valuation of the expenditures in this policy in an integrated way. Since the Bank has not yet area. Ministries of Finance often see the carried out such an assessment, a rapid appraisal may expenditures on the environment as a luxury, be necessary. The key questions that need to be which they are not. But the capacity of the addressed in such a survey are given below (Table environment ministries to quantify the benefits 2.1). These are divided into two groups: (1) the Key and make the case can be weak. Ideally these questions, and (2) a supplementary list provided for adaptation programs should be integrated into additional guidance. traditional sectoral programs, where their benefits to the economy are properly quantified macroeconomic, fiscal, and Public and accounted for. Sector reforms b. In the area of fiscal reform, countries should be Policies designed to ensure macroeconomic stability, encouraged to explore the potential for energy improve the investment climate, improve public taxes that provide incentives for low-carbon financial management, improve governance, social options. Examples of such taxes are given in protection decentralization, increase competition and module 3. entrench property rights and modernization of the rural economy are included in the general class of c. With fiscal devolution, there is a risk that support macroeconomic, fiscal, and public sector reforms. for mitigation and adaptation programs will fall, especially where the benefits of such programs Ensuring macroeconomic stability are at the national level rather than regional. The broad objectives here are to improve fiscal Measures should be included to prevent this. performance and fiscal sustainability, reduce government debt and improve debt management, and d. The most risky area is with respect to trade expand and deepen international trade. The specific reforms. Cases where deforestation has resulted policies to ensure macroeconomic stability and their from trade liberalization have been documented. 16 Table 2.1 Climate institutional Assessment Key Questions How strong is the country's environmental capacity as measured by its EPI/CPIA/RAF Score for the environment? How well does the national focal point for climate function? Are all communications with the UNFCCC and other bodies on time and are other reporting obligations fulfilled? Has the country prepared a NAPA and how well is this rated in terms of completeness, analytical rigor, etc.? How complete are the assumptions and methodology used in the GHG inventories reported in the NAPA? Are the inventories of GHGs reported in NAPA internally consistent in all its elements, with inventories of other years? Has the country prepared a climate mitigation strategy and how well is this rated in terms of completeness, analytical rigor, etc.? Additional Issues to be addressed Are the estimates of emissions and removals reported in the national reports comparable across parties? Is the inventory complete in that it covers all sources and sinks as well as all gases as in the IPCC guidelines for national GHG inventories? Does the country have a vulnerability assessment of the impact of climate change and how well is the assessment done in terms of completeness and rigor? Does the country possess infrastructure and institutional systems for meteorological, oceanographic and atmospheric/space based systems for proper reporting of climate variables? In which ministries other than environment is there a person with some responsibility for integrating climate policy? Has the country an active program for mitigation of GHGs that is being monitored and how many tons of GHGs have been reduced as a result of CDM and other projects and programs? Has the plan for disaster and emergency preparedness been modified to incorporate climate change related events? Does the country have a national program for systematic development and implementation of a climate change action program? Are the responsibilities of the key stakeholders in developing and implementing climate change policies well defined? Do the key stakeholders, the participating ministries and committees, have well-defined institutional linkages and coordination mechanisms to fulfill the climate agenda? Do the public and industry have sufficient awareness of climate change issues? Are there enough mechanisms to better inform the public and industry about the climate change challenges and opportunities? Does the climate change policy team have enough human resources to implement the action agenda? Are the institutions supported by enough public resources? Do the institutions have enough technical resources such as data access and management systems, information networks and means of communication? How well the activities are coordinated at the national and regional levels? Does the central agency command enough political power to develop and implement sound policies and programs? Are there options available in the country for insurance against risk from climate change and natural disasters? (See Box 2). 17 This acts to reduce carbon sequestration compliant. There can be an incentive for national capacity. On the adaptation side, some authorities to accept lower performance export incentives can increase vulnerability to standards or turn a blind eye to adaptation climate change. An analysis of the potential for measures not complied with if it means getting a such exports should be carried out and major job creation investment. appropriate measures to prevent such exploitation should be introduced. c. Privatization can be beneficial to energy efficiency, as often it is the state industries that are the least e. Regional trade agreements can have negative compliant with environmental standards. The new, environmental consequences. Major agreements more private-sector-oriented industrial structure will, such as NAFTA have been subject to SEAs, however, need a larger and a different regulatory which have identified the potentially damaging capacity with regard to the GHG and energy impacts of such agreements. It would be efficiency targets. The macroeconomic reform desirable to have some upstream work that has program should therefore be complemented with an identified the problem areas. environmental capacity enhancing program, as has been the case in a number of countries. Improving the investment climate The broad objectives here are to improve investment d. Policies to strengthen small businesses should procedures, promote privatization reform and include measures to help them to be more energy liquidation of state-owned enterprises, promote private efficient and better able to comply with the sector development generally, and facilitate trade. The requirements imposed by any adaptation plan. specific policies and their impacts are given in Table 2.3. The following comments should be noted: e. Improving access to capital markets and raising funds through international bonds can help a. There have been problems with the speeding up increase energy efficiency, as these markets now of business start-up times and licensing include standards of good practice in this area. procedures. Where the primary investment They are also becoming more aware of the need sectors and/or operations are likely to have to respect adaptation guidelines. major impacts in terms of energy use and adaptation measures, it is not appropriate to f. Reforms to land markets should recognize the require these to be done hastily. This applies need to restrict development in certain areas as especially to areas such as mining and forestry a measure to address climate change and areas where change in land use is an integral part of the program. Proper procedures in these Improving public financial management sectors will take time (as they do in industrialized The broad objectives here are to strengthen budgeting countries); countries should not follow shorter and financial management, improve procurement, and processing times in such cases. initiate civil service reform. The specific policies and their impacts are given in Table 2.4. The following b. The promotion of FDI should also not be at the comments should be noted: expense of energy efficiency standards and should be screened with respect to national a. It is important that costs of adaptation measures adaptation plans. In general, foreign investors be prepared as soon as possible and fed into the are only too willing to ensure compliance but medium-term expenditure framework. they need to be well-informed about the requirements in these areas. Furthermore, it is b. In improving control of government revenues the not always the case that FDI seeks to be Bank and the Fund look to establish a 18 consolidated set of budgetary accounts. This more effectively. Such programs have been important includes revenues from taxes that are earmarked. drivers of a range of environmental reforms in many Sometimes the two institutions also ask for the industrialized countries and economies in transition, as taxes not to be earmarked. In the case of well as some developing ones. mitigation and adaptation measures, however, some earmarked taxes can be justified (e.g. a It is also important to ensure society's participation in carbon tax that is allocated for an energy the adaptation programs that are being drawn up. efficiency program or a land development fee that is used to finance expenditures on Finally, when introducing measures to increase equity adaptation). Where this is the case, they should in decentralized resource allocation, it is important to be allowed to remain as such, although the ensure that differences in adaptation costs of different consolidation can still go ahead. zones are taken into account. c. A number of countries also operate with Social protection environmental funds. Some of these have played The broad objectives here are to target policies for the an important role in financing environmental poor, implement pension reforms, and bring in policies investments. Where the Bank engages in to encourage growth and development of small and strengthening non-bank financial institutions, it medium enterprises. The specific policies and their should look to ensure that these are also impacts are given in Table 2.6. operating under "good practice" rules (for example, the "St. Petersburg Principles" In general, measures that directly act to reduce developed by the OECD14). poverty should benefit the environment. There are some cases, however, where the measures may need d. Government can provide strong incentives for to be looked at carefully--for example, removal of energy efficiency through giving positive points some subsidies to the poor, where these subsidies in procurement evaluations for energy-efficient provide an incentive to use energy more efficiently. suppliers. Most countries have some such measures, and a list is provided in module 3. Furthermore, some subsidies Governance reforms may be needed to promote adaptation (for example, The broad objectives here are to improve public cultivation of drought-resistant crops, or increased use administration, raise fiduciary standards, and implement of renewable energy). These should be evaluated judiciary and civil service reforms. The specific policies carefully; if targeted payments are effective, they and their impacts are given in Table 2.5. should be retained. In general, policies that reduce corruption and Decentralization of poverty reduction programs should make the judiciary and civil service more take account of the differential access of individuals to accountable and transparent should help ensure noncommercial resources, including energy. that the goals of mitigation and adaptation are implemented more effectively. Credit supply to small and medium enterprises should be used to promote energy efficiency and to One can draw attention in the awareness programs to implement critical adaptation measures that have been the importance of carbon footprints of different lifestyles identified in works carried out by the government. and of the measures needed to adapt to climate change Decentralization The broad objectives here are to promote fiscal 14 OECD. 1995. "The St. Petersburgh Guidelines on Environmental Funds in the Transition to a Market Economy." OECD/GD(95) 108. decentralization and to strengthen the capacity of local Paris: OECD. 19 communities to deliver public services. The specific some encouragement and monitoring to ensure that policies and their impacts are given in Table 2.7. the full potential of the reforms is realized. It is frequently the experience that local authorities are Sectoral reforms less well-equipped and less well-qualified in managing environmental resources than central governments. Sectoral reforms generally accompany investment Any program of decentralization must therefore take programs in the relevant sectors. The policies account of the need to build capacity at that level. In supporting the investments, however, need to be the case of climate change, this applies to programs mindful of possible climate impacts. The following are to promote energy efficiency and renewable energy the key transmission channels: use, as well as to programs to implement adaptation measures. It may be better to have some of these a. In agriculture, there is a serious risk of programs managed at the national level, or at least deforestation and cultivation of land that is better with strong central government support. Without not cultivated as a result of policies that increase adequate capacity, a serious risk exists of damage the profitability of some crops. This has impacts being done to the environment. on carbon sequestration that need to be addressed. On the other hand, measures that It is also important to ensure that enough resources promote agriculture now need to take account of are made available for adaptation programs once how the changed outputs from that sector will decentralization has been introduced. stand up to climate change. Some of them may make it more difficult to adapt to the new Increasing competition and patterns of drought, flood, and temperature. entrenching property rights These impacts should be allowed for when The broad objectives here are to liberalize the provision appraising agricultural polices. If necessary, of key services, entrench property rights and secured additional instruments may be needed to ensure transactions, and reform state-owned utilities. The adequate and effective adaptation. specific policies and their impacts are given in Table 2.8. b. Many sectoral reforms offer a real opportunity to Privatization of the railway and civil aviation industries promote GHG mitigation and adaptation. For should be supported by guidance on how future example, with the prospect of credits for avoided investments and operations will be affected by deforestation, governments and donor agencies climate. Guidelines on taking account of climate should look to support programs that develop impacts should be provided to the private sector. baselines, measure forest growth, and market carbon credits (see Bank support for this in It is important in drawing up privatization plans for module 3). These will indicate a reduction in the energy-intensive industries to prepare at the same more conventional activities that affects forests time a plan to meet certain carbon reduction or energy such as logging and land clearance. efficiency targets. Where appropriate, plans to adapt to climate impacts should also be prepared by the c. Investments in several sectors will be affected by private enterprises. This will require the private sector climate change. These include agriculture, to work with the government to ensure the targets are mining, energy, irrigation, transport, tourism, and credible and in keeping with government indicative urban development. Future investment plans improvements in carbon efficiency. should reflect climate impacts as much as possible. In some places, development should In general, the involvement of the private sector be restricted. In other cases, it should be should improve energy efficiency, but it will need undertaken in the light of altered land and water 20 stresses. A tool to ensure that the environmental accompanied by measures to ensure that issues are taken into account at the strategic environmental standards and requirements for good level is the strategic environmental assessment, practices are respected. In the absence of such or SEA. While promoting investment options in complementary policies, even the best designed the infrastructure, energy, tourism, and other reforms can have negative consequences for carbon environmentally sensitive sectors, such options sequestration and emissions of GHGs. This is should encompass the possible climate impacts. important because--in the context of climate change--deforestation and expansion of agriculture d. Promoting privatization and responding to reduces sequestration and releases GHGs. climate change are not mutually exclusive; indeed, private sector development can help The second concern is with respect to agricultural improve energy efficiency. But it does mean a production and adaptation. Some crop expansion can different system of regulation and the greater use make adaptation more difficult, as we noted in module of indirect methods of control, often using 2. If the changes in trade regime result in a shift to market-based incentives. These should be crops that are less climate-resilient, it will make developed in parallel with the sectoral reforms. adaptation more difficult. This does not mean that such trade should not be promoted, but it does mean e. Development practitioners should be mindful of that care should be taken to ensure that adaptation the need to ensure that the reforms do not cause strategies are modified to take account of the effects hardship to the poor sectors of society. This is of the trade. In some cases it may even make sense also important from a climate point of view. If not to encourage certain kinds of crops. This can be people are unable to have access to resources done through other instruments that complement the they were previously using in a relatively benign trade liberalization. way, they may turn to further damage forest and other resources that capture carbon. Social The third area is with respect to investment and protection programs need to be aware of these maintenance of infrastructure, such as irrigation possibilities and be designed to avoid them. schemes or roads. These should be designed to withstand the climate changes that are foreseen. Agriculture The government, with the aid of the donor The broad objectives are to increase production and community, can provide guidance in this regard. productivity, and increase competitiveness in specific Development programs should ensure that such commodities. There are also policies designed to guidance is taken into account in infrastructure stimulate farm incomes through extension services planning and management. and research and development. The specific policies and their impacts are given in Table 2.9. Finally, there is the possibility of improving tillage practices, use of fertilizers, etc. in a way that increases Because of its close links to adaptation, agriculture is sequestration and reduces emissions of GHGs. Where a particularly vulnerable area where policy reforms with agricultural reforms are being implemented, it could be sound macroeconomic intentions can spill over into desirable to include support for such measures where impacts that need to be addressed. Commentators the costs and benefits justify it. have noted the pressures that some reforms may place on expansion of agriculture to areas that were All areas of agricultural activity need research and previously forestland or marginal land unsuitable for extension support to facilitate adaptation and cultivation. How much of this happens depends on the mitigation. The main themes that could be promoted institutional arrangements for the protection of such are (a) techniques relating to carbon sequestration are lands. In other cases, too, reforms need to be promoted where appropriate, and (b) crop varieties 21 that are able to adapt to climate are researched operations that are being supported, and that EIAs of thoroughly. Although such research should be part of mining operations, which last over several decades, the climate program, these aspects should be given take account of the impending climate impacts. These some prominence where the Bank is supporting could affect the stability of mining areas, the development in agriculture and rural economy. availability of water, etc. Forestry The risks of regional authorities turning a blind eye to The broad objectives are to (a) shift to the sustainable such concerns so as to attract private investors have management of forest resources, (b) improve to be addressed. Similar concerns apply for different management of production forests and (c) increase reasons in the case of artisanal mines. conservation of biodiversity. The specific policies and their impacts are given in Table 2.10. Fisheries The broad objective is sustainable development of the As in the case of agriculture, forest sector reforms are fisheries sector. The specific policies and their impacts closely tied to the environment. On the mitigation side, are given in Table 2.12. the aim should be to manage logging so as to reduce carbon loss. It is also now becoming possible to The high level of awareness of the risks of overfishing certify carbon credits from avoided deforestation. In means that policies designed to promote this sector drawing up forest sector plans, it is very important are sensitive to this factor. The danger of promoting therefore to include this option, which may generate industrial fisheries is the impact it can have on greater income than logging or clearing land for small-scale fishers, who in turn can damage their agriculture. The mechanisms for getting financial environment as they seek alternative sources of support for this are discussed in module 3. livelihood. On the adaptation side, it is clear that forests will As far as climate considerations are concerned, they change in their composition with climate change. A will play a major role in the way fish stocks evolve and careful assessment of these changes should inform where and how sustainable fishing can be practiced. policy on forest management, as well as plans for Any reviews of future prospects must include these biodiversity protection, protection of wildlife, and factors. Fishery policy must be made in conjunction conservation areas. with climate adaptation policy. Measures to mainstream climate concerns into forest Environmental Management management are thus of crucial importance. The Bank Policies covered in development programs that relate should play a leading role in ensuring that this to environmental management include: happens. Ensuring adequate financing for building Mining capacity and investments for environmental The broad objective is to develop the mining sector as management a source of growth. The specific policies and their impacts are given in Table 2.11. Adopting environmental impact mitigation plans The mining sector has major environmental impacts, Passing laws and decrees on environmental which need to be considered in any programs that regulation and monitoring expand the sector. As far as climate change is concerned, development programs should ensure that Streamlining environmental and forest impact energy efficiency is given prominence in any assessments 22 Decentralizing environmental management Improving transparency in procurement instruments and plans procedures and practices Promoting transparency and public participation Improving efficiency of education in environmental management expenditure Developing fiscal instruments to promote Improving sector governance environmental management and allocating more funds to promote sustainability Enhancing monitoring of school performance by communities Promoting decentralization and the role of communities in environmental management. Strengthening monitoring and evaluation Such policies are generally supportive of climate Improving teacher management change adaptation. In fact, climate change is one of the key areas that these reforms will address. As Revitalizing Parent-Teacher Associations already noted, it is critical to ensure that management systems for the environment are strong enough to Developing an education management address the additional challenges posed by climate information system adaptation and mitigation. In Table 2.1 we have provided a guide to the questions that should be Promoting community oversight of asked of such systems. Where there are weaknesses, educational programs development programs should include a component to overcome these shortcomings, or identify other Promoting equitable access to education components of Bank support to the country that will and improving quality do the same. For the review in module 1, we saw that most countries are still weak in their capacity to Reducing dropout rates, especially address these new challenges. It is therefore important at lower levels to give high priority to building up capacity in this area while supporting the government through Ensuring equitable access to education development policy lending. at all levels Education Encouraging participation of the private Policies covered in development programs that relate sector to education sector include: Promoting equal access to boys and girls Promoting a fiscal framework and increased sector financing Targeting poor and marginalized areas with the weakest education indicators Facilitating the transfer of resources to districts to meet the needs of education service delivery Reducing regional disparities Increasing the transparency of financial Improving the quality of education management processes and strengthening provincial and district capacity for Improving teaching practices, with a focus monitoring flows on schools and student outcomes 23 Reducing repetition rates and increasing In some countries, changes in diet and exercise can completion rates also have not only health benefits but also benefits in terms of reduced emissions of GHGs. Such impacts, Reinforcing the capacity of existing academic however, apply to those with relatively high incomes structures and administration and are therefore less likely to apply across the board in poor countries. Raising awareness of parents Infrastructure Increasing accountability of schools to both The broad objectives are to implement general transport government and community sector reforms, urban sector reforms, development of ports, water sector reforms, and liberalization of the Improving teacher quality via emphasis on telecommunications sector. The specific policies and teacher recruiting and training their impacts are given in Table 2.14. Reducing corruption and misuse of public Most infrastructure investments will have some resources implications in terms of future use of energy and therefore of GHG emissions. They will also often be From a climate perspective, increasing awareness of affected by climate change, given the long life of such climate impacts is probably the main link to investments. Development programs for infrastructure educational reforms. Actions at the household, farm, development should therefore make sure that all and enterprise level to use energy more efficiently can investment plans incorporate a climate-impacts provide highly cost-effective reductions in GHGs. perspective. Furthermore, when designing policies for Likewise, these can be implemented through publicity the provision of infrastructure, they should also take programs for the public, school curriculum additions, account of the implications climate change will have and demonstration packages. By including such on the impacts of these policies. The most obvious measures in any educational sector program, the one is clearance of land for urban development. This development programs will help mainstream climate has to be done in the light of future water variability, change objectives into that sector's policies. sea-level rise, and so on. Less obvious are the impacts of transport systems for private vehicles, and Health distances that people have to travel to work. Options The main objectives of sectoral health policies are to for urban development need to go through a climate improve financing and the fiduciary environment, and assessment in terms of the relative energy demands better target healthcare to the poor. Specific policies they imply. and their impacts are given in Table 2.13. Where options that are more attractive from a climate The main links to climate change arise through perspective turn out not to be the lowest cost ones, alterations in the priorities for health spending and the the additional costs can often be justified in terms of links between the health and infrastructure budgets. the climate benefits. Moreover, funds are available to As climate­related health burdens increase, more finance this gap, or at least part of it. Some of these attention will need to be paid (in some places) to sources were discussed in module 1. Module 3 vector-borne diseases, such as malaria and provides further details of Bank and other initiatives cerebrospinal meningitis. Addressing these would in this area. involve both reactive as well as preventive measures. Some of the latter entail increases in infrastructure Energy investment, for example in water management, making The broad objectives of energy sector loans are to expenditures in the two areas related. implement tariff structure reforms, privatization, 24 improvements in operational efficiency and fiscal Financial sector sustainability of utilities, promotion of renewable The broad objectives of development programs in energy, increased competition in the energy market, this sector are to increase resilience and soundness competition in the petroleum market, and of the financial system, implement reforms in the rural improvements in social and environmental finance sector and reform the insurance sector. The sustainability of energy reforms. The specific main items included are the following: policies and their impacts are given in Table 2.15. increase resilience and soundness The energy reforms in development programs of the financial system focus mainly on financial issues of cost recovery, institutional issues of privatization, and operational Restructuring and privatization of state banks issues of efficiency improvement and financial Reducing the stock of non-performing loans sustainability. In addition, there has been some Reforming financial institutions attention given in recent years to promoting nontraditional renewable energy. Improving internal control and audit in banks Modernizing the payment system, legislation to prevent money As far as climate change is concerned, the last of laundering, and improving quality of financial information these has a clear benefit in terms of mitigation of Strengthening the fiduciary framework for public financial GHGs. There are several financial mechanisms to management and corporate financial reporting support the additional costs of adopting renewable Increasing access to finance energy, which are listed in module 1. It is crucial that the TTL be fully aware of all such possibilities and Reforming the rural finance sector that any program of support for renewable energy be Establishing a rural finance agency an integral part of the program of climate change Reforming the insurance sector mitigation. The additional link that development programs have to establish is that of providing the Improving the legal, regulatory and supervisory framework for the banking sector and capital markets right incentives to the agents responsible for supply and using renewable energy, so that projects that are rendered financially viable through support While these reforms do not directly impinge on mechanisms such as CDM do in fact deliver the climate mitigation and adaptation, there is potential reductions in GHGs that are promised. for including a climate overlay in the operations of banks so that they are aware of the need to The other areas of energy sector reform also undertake proper climate assessments when they offer some possible benefits for climate change if make loans for infrastructure investments. designed appropriately. In terms of tariff reforms, Likewise, a rural finance agency should promote there is scope for green tariffs, as well as the use and support programs that involve adaptation and of feed-in tariffs to promote renewable energy. In mitigation; if it is to do that, it must have adequate terms of operational efficiency, one may be able to knowledge in that area. Finally, provision of add to the financial benefits of reduced losses the insurance is an important part of the adaptation to benefits of reduced GHGs (converted into money climate change. Reforms in the insurance sector flows). Finally, as far as subsidies are concerned, should include coverage of climate risks with we may need to take a more nuanced approach, support from the government to make the market especially where removal of subsidies could work (excessive risks will not be covered by the result in increased deforestation, or where the private sector and its ability to provide coverage subsidies directly support the adoption of clean can depend on government policies for flood renewable energy. protection, etc.). 25 Tourism sector Tourism strategies and investment have necessarily to The broad objective is to promote tourism and look at the medium to long term. In this context, tourism revenue. Specific policies that have been adaptation to climate change is essential. Much work supported include: has been done to estimate changes in flows of tourists as a result of climate impacts. Any country Increasing the number of tourist destinations undertaking a development program in tourism should draw on the prior work on the impacts. It should Establishing and implementing a set of undertake an SEA to configure the most effective benchmarks for good environmental practice in tourist developments and the infrastructure support tourist facilities needed to implement the program. Promoting sustainable tourism Promoting environmental conditions, especially in regard to wastewater and solid waste at tourist sites. 26 Table 2.2 Transmission channels for policies designed to ensure macroeconomic stability Policy Mitigation Adaptation Reactive Proactive Reactive Proactive Improve fiscal performance and fiscal sustainability Strengthen tax administration Maintain sound expenditure composition across sectors Ensure proper Ensure proper support and improve management of public expenditure support for energy for adaptation programs efficiency Reduce primary spending Improve transparency of fiscal accounts and budget execution Reform tax policy to increase revenue base Possible introduction of a carbon or energy tax Adhere to fiscal discipline, meeting target and ensure priority spending Make tax system more equitable, transparent and stable Reduce tax based expenditure Risk of reducing Risk of reducing support for energy support for efficiency adaptation programs Budget management and fiscal rules to ensure budget envelope and ensure allocations to line ministries are in accord with preset ceilings Set a fiscal framework, identifying priority spending Develop capability to show benefits of programs Encourage increased and more predictable revenues through improved compliance, broader tax base and reduction in tax rates to improve investment Create an operational fiscal policy office with capability and access to information sufficient to provide analysis of proposed tax, tariff and financial market policies Strengthen fiscal devolution Risk of reduced Risk of reduced support support for mitigation for adaptation measures measures Strengthen budget reporting and planning Increase equity in intergovernmental transfers Improve efficiency and impact of public spending on national, sub-national and sectoral levels Improve budget execution and financial reporting Improve treasury operation Simplify expenditure management and make it transparent 27 Table 2.2 Transmission channels for policies designed to ensure macroeconomic stability (continued) Policy Mitigation Adaptation Reactive Proactive Reactive Proactive Improve fiscal performance and fiscal sustainability Strengthen public expenditure management Strengthen legislative oversight on public finances Phase out direct and indirect subsidies to state owned enterprises Implement a Medium-Term Expenditure Risk that programs (MTEF) to have greater visibility of policies and on adaptation cannot place budgetary allocations in a medium term justify themselves on framework cost benefit grounds Reallocate inefficient spending Reduction of government debt/ improve debt management Reduction of public debt Assessment of civil service pension liabilities and possibilities for reform Develop and implement a debt management strategy Improve debt management Reduce subsidies to the non-poor These could help reduce energy consumption Make tax revenue administration more efficient Expand and deepen international trade Trade policy reforms; liberalization of trade regime, Check impacts of Can be a source Ensure that changes tariff and non-tariff regulations reforms on GHGs and of technology that in output do not on carbon loss via reduces GHGs if so increase vulnerability Expand market access for domestic exports deforestation designed to CC Implement complementary measures to facilitate trade and customs clearance Implementation of regional trade agreements SEA of policies should Should not promote Use regional cover climate changes trade that makes agreements to ensure impacts of such adaptation more common approach to agreements difficult adaptation. Ensure compliance with international conventions and property rights Reform to promote foreign direct investment Good practice Can be a source Ensure that FDI runs through a climate screen should cover energy of technology that efficiency reduces GHGs if so designed 28 Table 2.3 Transmission channels for policies designed to improve the investment climate Policy Mitigation Adaptation Reactive Proactive Reactive Proactive Improve investment procedures Reduce uncertainty for investors by implementing Ensure that the supporting regulations include Investment guidelines should provide some the investment law and its supporting regulations incentives to adopt energy efficient technologies advice on likely climate changes and adaptation and new operating procedures. where possible measures that the government intends to implement Reduction in business start-up time by Ensure that this is not at the expense of This should not be done at the expense of due simplifying and/or eliminating unnecessary considering GHG implications of the investments diligence on its consequences for ongoing and business licenses, procedures and multiple proposed adaptation measures (e.g. location of registration requirements. plants in areas to be affected by sea level rise) Facilitate doing business by streamlining registration procedures Establish one-stop center for business registration Ease entry of foreign professionals and skilled Could help develop workers efficient technologies Strengthen arrangements for public-private Should not be an Can help bring in new Should not be an partnerships excuse for lower technology excuse for lower standards standards Strengthen banking system Strengthen non-bank financial sector regulation and supervision to minimize chances of crisis Speed up licensing of complex operations such as Can result in Can result in ignoring forest concession, power plants, pulp mills, etc. overlooking of GHG implications for impacts. adaptation policy Improve access to international capital markets Can help increase Can help awareness carbon efficiency of CC risks Establish a national investment program Issuance of international bonds Can help increase Can help awareness carbon efficiency of CC risks Privatization, reform, and liquidation of state-owned enterprises Sell or cancel state's minority shares in State enterprises are enterprises often least efficient, thus it can help increase efficiency Sell or liquidate companies with majority state ownership Sell state shares in shipyards Sell or liquidate agro-kombinants Reduce state subsidies to enterprises Ensure that efficiency standards are not Contain enterprise arrears compromised 29 Table 2.3 Transmission channels for policies designed to improve the investment climate (continued) Policy Mitigation Adaptation Reactive Proactive Reactive Proactive Privatization, restructuring and bankruptcy of state Can provide an enterprises impetus for increased energy efficiency Reforms for private sector development Reducing cost of factors like electricity, telephone, Costs of these services should include at least Cost of water water, transportation an element for the cost of carbon generated resources should take account of costs of CC adaptation Facilitating transit of import goods Design of routes should allow for CC Lowering administrative barriers for private Ensure that this is Ensure that this is not investors not done at expense done at expense of of meeting efficiency ignoring need to adapt Liberalize permitting and licensing rules standards to CC Improve the rule of law for private sector Can help ensure Can help ensure compliance with adaptation by private energy goals by sector private sector Liberalization of labor laws-less intervention by the state Improve functioning of land markets Ensure markets reflect costs of adaptation Increase private sector access to finance Finance should not Finance should support bad practices not support mal- adaptation Improve functioning of labor markets Enforcement of standards for goods exported, especially WTO standards for food products Strengthen small business Should help improve efficiency Promote export of handicrafts by revising laws and taxes (export tax) schemes Trade Facilitation Improve governance procedures and promotion of e-government Ensure compliance with international conventions Rights should be and property rights limited by obligations to adapt Simplification of customs regulations, computerization of customs procedures Enhance team tariff through improved governance procedure, better IT, and research capability 30 Table 2.4 Transmission channels for policies designed to improve public financial management Policy Mitigation Adaptation Reactive Proactive Reactive Proactive Strengthen budgeting and financial management Improve budgeting through future expenditure Estimates should framework with a system of clear forward include costs of estimates adaptation Improve controls and efficiency in treasury But earmarked taxes management by consolidating revenue and may promote energy expenditure accounts efficiency /low carbon operations Increase accountability and transparency in government financial management Improve the stability of the financial sector by Banks should also Banks need to be implementing good corporate governance and adopt good practice informed on good risk management standards, particularly in standards w.r.t. energy practice w.r.t. state-owned banks. efficiency adaptation. Commercialization and transparency of commercial banks Strengthen non-bank financial institutions to Special funds for Special funds for develop a diversified financial sector. energy efficiency may adaptation may be be desirable desirable Improve Procurement Implement transparent procurement processes and better procurement outcomes Enhance efficiency of procurement, e-procurement Legal, regulatory, and institutional framework Procurement rules in public procurement that complies with could include international standards efficiency standards Public procurement reforms to increase transparency Initiate Civil Service Reform Pension reforms Establish independent salary commission that can propose new pay designs for higher level state officials Civil service reform to include a framework for training, payroll verification, pay and grading policy Setting up functional human resource management office Capacity of civil service to ensure skills base and address issues of retention and sustainability Efficient, transparent, and fair policies regarding personnel 31 Table 2.5 Transmission channels for policies designed to improve governance Policy Mitigation Adaptation Reactive Proactive Reactive Proactive Improve Public Administration Institution building at the public administration Important to include sector to affect financial management, personnel capacity building w.r.t. management and economic decision making adaptation Raise awareness of citizens about rights, rule of Important to raise Important to raise law, corruption awareness on carbon awareness on footprints adaptation Improve performance through introduction of internal auditing, evaluation, and performance review Improve performance of civil service through incentives Better fiduciary standards and public expenditure management Transparency and accountability in treasury cash management Regulations to prevent money laundering activities Strengthen Accountant General's department Set up public accounts committee and records management Strengthen internal and external audit Transparency and equity in decentralized resource Equity in allocation should take account of allocation adaptation requirements of different zones Improve accountability and transparency of government financing Judiciary reforms Improve transparency and efficiency of judiciary Improve financial situation of the judiciary sector and sustain the allocation Strengthen institutional capacity, promote broader Important to include civil society in drawing up civil society participation, and provide judicial adaptation strategies services in courts that are more transparent, fair, equitable and accessible Prepare and implement action plans to fight corruption and money laundering Strengthen institutional capacity of the Ministry of Should help implement adaptation measures Justice and ensure compliance Set up anticorruption commissions/committees Regulatory and institutional mechanisms to fight corruption 32 Table 2.5 Transmission channels for policies designed to improve governance (continued) Policy Mitigation Adaptation Reactive Proactive Reactive Proactive Civil Service Reforms Rationalize employment in the public sector Reduce deficits in the pension system and move the system toward fiscal sustainability Create a lean, effective and efficient civil service free of corruption Develop a human resource management system Promote gender equality in civil service Improve human resource management in the public sector Promote early retirement options, redeployment of staff, stabilization of civil service staff 33 Table 2.6 Transmission channels for policies designed to target policies for the poor Policy Action Mitigation Adaptation Reactive Proactive Reactive Proactive Target policies for the poor Replace consumer subsidies with targeted Some subsidies are useful in reducing carbon Removing subsidies may increase behavior that programs for poor, cash transfers, etc. emissions and energy use; they should be makes adaptation more difficult if they increase carefully evaluated vulnerability of those dependent on natural resources; however, some targeted subsidies could actually reduce the vulnerability of the poor Improve monitoring and analysis of information on Include in this the Include if possible poverty and social well-being effects on energy use changes that impact on adaptation Encourage participation of stakeholders in poverty reduction programs Decentralization of poverty reduction programs Take account of dependence on non-commercial energy Social security and universal health insurance reform Improve poverty orientation of public spending Pension Reforms Increase pensions, pay pensions on time, and improve administration Reform of pension scheme to reduce the state expenditure Policies to encourage growth and development of small and medium enterprises Provide access to credit, technical assistance, Make this a function Make credit available and capacity building to these enterprises of their energy to implement efficiency adaptation measures Promote the handicrafts industry, reduce the skill tax 34 Table 2.7 Transmission channels for policies designed to promote decentralization Policy Action Mitigation Adaptation Reactive Proactive Reactive Proactive Promote Fiscal Decentralization Improve resource allocation to the local levels It is important to take account of capacity in the It is important to ensure that capacity for and strengthen intergovernmental fiscal relations regions and communities to promote energy adaptation planning and implementation is efficiency and to develop projects for the carbon adequate at the regional level before giving the market, which is an international market regions the responsibility to manage programs in this area Strengthen capacity of communities to deliver public services Improve decentralization by issuing ministerial decrees for blue-book and on-granting procedures and improve the framework for sub-national government bond issuance and work-out procedures. Provide leadership, policy and regulatory frameworks Adequate and timely resources for local This is critical for institutions, and capacity building adaptation planning Table 2.8 Transmission channels for policies designed to increase competition and entrench property rights Policy Action Mitigation Adaptation Reactive Proactive Reactive Proactive Liberalization of Key Services Liberalization of railway services Include a plan for improvements in energy Ensure that plans for investment are screened for efficiency in the private sector programs climate impacts Liberalization of civil aviation services Liberalization of telecommunication services Strengthen capacity of communities to deliver public services Strengthen creditor rights Strengthen civil procedures for debt recovery Simplify procedure for property transactions Reform of State-Owned Utilities Should include plans Privatization of state-owned utilities to adapt to climate Should improve impacts energy efficiency Encourage private sector participation 35 Table 2.9 Transmission channels for policies designed to increase production and competitiveness in agriculture Policy Mitigation Adaptation Reactive Proactive Reactive Proactive Increase production and productivity Improve access to markets (trade liberalization) Ensure that measures If trade increases exports that make adaptation do not lead to more difficult, adaptation policy should be deforestation adjusted and perhaps some exports discouraged Promote agronomic research Should include research on resilience to climate change Support for infrastructure and equipment Equipment and infrastructure should be designed to withstand CC Strengthen performance and productivity of the Design of irrigation schemes should take account irrigation sector of climate effects Increase access to micro finance Design schemes so as not to encourage mal adaptation Reform of land tenure laws and land acts Laws should enforce the right to limit development where CC will pose a risk Improve rural roads Design of roads should allow for future climate impacts Product price and input price reforms Ensure that measures Evaluate impacts on crops w.r.t. climate impacts do not lead to deforestation Maintenance and expansion of irrigation Design of irrigation schemes should take account of climate effects 36 Table 2.9 Transmission channels for policies designed to increase production and competitiveness in agriculture (continued) Policy Action Mitigation Adaptation Reactive Proactive Reactive Proactive Increase competitiveness in specific commodities (Coffee, tea, cotton, etc.) Provide better incentives and institutional arrangements to farmers to increase returns Improve marketing arrangements for improved Promote adoption of seeds that are more seeds and fertilizers resilient to climate change Improve processing facilities Reform sector boards Ensure that this does not lead to expended Improve trade and marketing of production that will make future adaptation agro-processed products more difficult Implement producer price-setting mechanism Privatize processing facilities (e.g., cotton ginning, coffee processing) Policies to modernize the rural economy Strengthen agricultural research and development Ensure that part of the research program look Crucial that the research include a component on at ways to reduce carbon loss through reduce how to adapt to changing climate by developing Strengthen agricultural extension services tillage and other management practices drought resistant crops, etc. Provide private extension advisory services Provide stimulus to agricultural research 37 Table 2.10 Transmission channels for policies designed to develop the forest sector Policy Mitigation Adaptation Reactive Proactive Reactive Proactive Sustainable management of forest resources Implementation and compliance with forestry Code should include adoption of measures to limit code carbon loss Encourage domestic processing of logs Logging should be low impact w.r.t. carbon Community engagement in forestry sector Communities should be encouraged to adopt low- carbon-loss methods Implement forest sector monitoring Streamline Environmental and Forest Impact Cover aspects related Assessment to sequestration Transparency in allocation of forest permits Sustainable forest management plans and timely delivery of services to the private sector Seek, if possible, to Effective enforcement of forest fiscal regime like develop market for effective collection of forest taxes carbon credits Recruitment of internationally reputed observer to monitor logging activities Decentralization, allocating a share of forest revenues to the local governments Setting up national forest observatory with GIS If a market for carbon Changes in forest growth and forest capabilities to track timber flows and payment credits is to work it products should be incorporated into of related fees will need effective forestry exploitation plans GIS capability Capacity building for forest institutions Reform forestry fund with private sector and local government participation 38 Table 2.10 Transmission channels for policies designed to develop the forest sector (continued) Policy Mitigation Adaptation Reactive Proactive Reactive Proactive Biodiversity Conservation Strengthen institutions for management Management should and administration of parks, protected areas, take account of and wildlife climate impacts Promote local community participation in administration of protected and sensitive areas Systematic application of environmental impact assessment Implementation of socio-economic mitigation plans and resettlement of indigenous people Measures to exempt nationally protected areas from logging, industrial mining, fishing, or any activity that threatens biodiversity Management of production forests Complete forest estate zoning plan Implement forest management policies Include if possible and plans for production forests carbon credits as an alternative to logging Promote efficiency and value-added in timber and land clearance product processing and reduce wastage Ensure control of forest production field applications and enforcement and application of penalties Valorize non-timber forest products Especially carbon credits Continue the plantation development program Encourage competitive bidding of logging permits for natural and planted timber Develop a framework for effective log tracking system Enactment of sustainable forestry law Improve livelihood of natural resource owners through appropriate valuation of forest resources 39 Table 2.11 Transmission channels for policies designed to develop the mining sector Policy Mitigation Adaptation Reactive Proactive Reactive Proactive Develop the mining Sector as a Source of Growth Reform the legal, regulatory and institutional settings in the mining sector Improve governance and transparency Improve private sector investment Ensure mining in the mining sector practices are as energy efficient as possible Expand administration of all mining licenses through cadastral system Improve the level and quality of Cover energy mining extension services efficiency Improve competition in the mining sector Update regulatory and legislative framework to bring governance and institutional standards to international levels Design mechanism to share mining revenues with local communities Build capacity in the mining sector Set up environmental management policies and EIA should include effects of climate change on guidelines for social and environmental impact stability of mining areas, availability of water assessment Introduce better practices for improved work and living conditions in artisanal mine sites Provide advice and support for energy efficiency in these operations Improve economic efficiency and transparency of the sector Restructure mining right titling system Strengthen Environmental and Forest Impact EIA should include effects of climate change Assessment of mining on stability of mining areas, availability of water 40 Table 2.12 Transmission channels for policies designed to develop the fisheries sector Policy Mitigation Adaptation Reactive Proactive Reactive Proactive Develop the mining Sector as a Source of Growth Establishing rules of a geo-positioning system This is crucial to effective management of to monitor industrial fishing stocks under changing climatic conditions Implement transparency in industry fishing activities Comprehensive socioeconomic and environmental Such a review should include the impacts of review of the industrial fishing sector changing fish stocks resulting from climate effects (and others) on communities dependent on fishing; changes in permissible fishery should follow Design and enforce conservation measures to Conservation and protection measures should protect and or restore fish populations in over- be influenced by expected climate impacts; exploited or fragile marine areas thus adaptation policy and fishery policy have to be made in conjunction with each other 41 Table 2.13 Transmission channels for policies designed to promote better healthcare Policy Mitigation Adaptation Reactive Proactive Reactive Proactive Improve financing and fiduciary environment for health Increase and sustain government spending to Increased spending Immunization healthcare to address increases programs in incidence of Investment in vector-borne diseases infrastructure to respond to disease outbreak Increase allocative and technical efficiency of Increased incidence of malaria, cerebro-spinal healthcare spending meningitis, and cholera in some places should imply a modification of priorities in health spending Decentralization of delivery and public oversight Improve monitoring and evaluation Targeting healthcare to the poor Increase access to affordable healthcare Improve quality and equity Access to improved water and food will reduce susceptibility/ exposure to vector- borne diseases and weather extremes Decentralize health services, primary and secondary level services Planning, budgeting at the central, state, regional, district and peripheral levels Strengthen partnership with private and NGO Lower meat diets Health education can sectors benefit health and reduce risk of climate- reduce emissions related infectious from agriculture; diseases similar double benefits from reduced motor transport 42 Table 2.14 Transmission channels for policies designed to improve infrastructure Policy Mitigation Adaptation Reactive Proactive Reactive Proactive Implement general transport sector reforms Rehabilitation of rural tracks and roads in Design should take production centers account of climate impacts Development and maintenance of road network Design should take account of need to reduce energy use Modernize and streamline trade and transport logistics practices Increase private sector participation in rail and Incentives for low- road services carbon programs should be included Sustained development of a safe, secure, and System should Design should take efficient national highway system discourage long account of climate work journeys effects Catalyze institutional reforms in order to develop a sustainable toll highway system Reduce costs for port users and enhance management accountability Secure, safe, economical, and efficient civil aviation system Develop air transport Consider internalizing carbon costs Increase resource generation and attract private capital Implement urban transport sector reforms Lanes fully dedicated to public transport Benefits are even greater if we take account of reduced GHG emissions Congestion pricing Reduction of fleet and taxi services Rationalization of public transport supply Take account of GHG impacts Measures for financial sustainability of urban transport sector Promote citizen's participation in government- sponsored infrastructure projects Establish air pollution reduction targets Reduced air pollution also provide reduced GHGs Coordinate management of land use and land use Land use has planning for urban transport long- term impacts on GHGs 43 Table 2.14 Transmission channels for policies designed to improve infrastructure (continued) Policy Mitigation Adaptation Reactive Proactive Reactive Proactive Development of ports Privatization of core services Private sector participation in port development Water sector reforms Improve access to improved water and sanitation These have important health benefits that services increase with CC Increase waste water treatment capacity This can reduce adverse health impacts from open sewers, etc. Improve water use productivity in irrigated lands This should be done taking account of changes in rainfall due to CC Foster integrated water resource management reform for sustainable water use Improve financial sustainability of water services Improve monitoring and evaluation Promote hand washing Measures for water pollution control Promote cost recovery in water utilities Promote private sector participation in water utilities Remove subsidies in water sector This can have benefits when CC impacts are Benefits will arise from reduced demand that taken into account via reduced energy demand can be part of adaptive response to CC Develop spatial water availability data Develop a water rights registry and The price of water should reflect increasing implementation of water rights market scarcity and higher costs of management of variable flow Enforce water rights and permits for establishment of more efficient water markets Liberalize Telecom Market Encourage private sector participation Reduce demand for travel Urban Sector Reforms Repeal urban land ceiling regulation Rationalize stamp duty in land transactions Reform rent control laws to stimulate private investment in rental housing and development Introduce of computerized land registration process Reform property taxes so they become a major source of revenue for urban and local bodies Reform user charges by urban local bodies 44 Table 2.15 Transmission channels for policies designed to promote better energy use Policy Mitigation Adaptation Reactive Proactive Reactive Proactive Tariff Structure Reforms Reform of tariff structure to reflect costs, cover Promote green tariffs costs of generation Privatization Develop rules and procedures for entry Promote feed-in tariffs, Allow for fact that of private sector incentives for clean water availability in energy future will impact energy production Government programs to deal with the debt of electric utilities as they are being privatized Improve operational efficiency and fiscal sustainability of utilities Reduce transmission and system losses Take advantage of carbon benefits Increase tariff rates to cover operating costs Improve operational efficiency of electric utilities Reduce corruption in power sector Increase collection rate Remove subsidies to utilities in the power sector Subsidies for production of green electricity may be justified Improve fuel quality with respect to sulfur content, Possible CC lead content impacts should be accounted for Promote use of renewable energy Reform legal environment to promote use of renewable energy Communication to increase public awareness Inform public on benefits of clean energy Develop institutional arrangements for operation of Take advantage of renewable energy projects carbon benefits 45 46 northern and southern Africa are estimated at 0.4 to Module III 1.3 percent of GDP (Mendelsohn and others 2000). Drought conditions, flooding, and pest outbreaks are some of the stress factors due to climate change that may affect agriculture and food production systems. This module presents the specific policy measures being We present below a menu of policies to adapt to the introduced to reduce GHGs and to adapt to climate above stress factors in the agriculture and food change in developing countries. The aim is to inform the production sector. The following are the general development practitioners of what new policies or approaches for adaptation in the agricultural sector: measures should or could be introduced, or what existing polices could be strengthened, to ensure that climate 1. Development of new crop types and enhanced policy and development programs are reinforcing. operation of seed banks 2. Policies to encourage adoption of farming Policies and measures for Adaptation practices at the farm level for better adaptation to to Climate Change climate change 3. Policies to discourage monoculture and Although climate change has been occurring for some encourage farmers to plant a variety of heat and years and more change will occur even under drought-resistant crops mitigation measures, adaptation to the impacts of 4. Policies to improve efficiency of irrigation and such changes has not received equal importance as water use in agriculture the mitigation agenda in either the negotiations or in 5. Policies to improve soil conservation and prevent development planning. Though the Delhi declaration land degradation sought to raise the need for adaptation, the activity 6. Policies to promote better/improved agricultural remained limited to capacity building, assessment, drought management. and a few pilot projects (see Annex 1 for details of the Delhi Ministerial Declaration). The specific policies for adaptation are presented in Table 3.1 In developing CEIF, the Bank emphasized that adaptation should be one of the three pillars in tackling Policies for adaptation in the water sector the issues of energy access and climate change in Climate change impacts on water are important for all development. CEIF further seeks to consider climate sectors. Changes in precipitation and temperature change, current and future, as an essential part of patterns lead to changes in runoff and water development planning through a climate risk availability. Runoff is predicted to increase at higher management approach that seeks to deal with current latitudes and in some wet tropical areas, including climate risks and opportunities while considering populous areas in east and southeast Asia. It is projected climate trends. We present below specific expected to decrease in the mid-latitude regions and policy measures that may be considered in development dry tropics due to a decrease in rainfall and higher policy lending operations to adapt to climate change. rates of evapotranspiration. Many semi-arid and arid areas will likely suffer a decrease in water resources Policies for adaptation in the agricultural sector due to climate change. Endemic morbidity and Results from various assessments of impacts of mortality due to diarrheal diseases associated with climate change show that Sub-Saharan Africa is one floods and droughts are expected to rise due to of the regions likely to emerge as the most vulnerable, changes in the hydrological cycle. with likely losses between 2 and 7 percent of GDP. Western and Central Africa are also vulnerable, with In Africa, climate change has the potential to impose impacts ranging from 2 to 4 percent of GDP. Losses in additional pressures on water availability, accessibility, 47 Table 3.1 Agricultural sector policies for adaptation to climate change 1. Development of new crop types and enhanced operation of seed banks Climate outcome Specific policies Indicators of progress Seed banks and crop Schemes to promote seed banks to maintain different varieties Capacity of public sector organizations like types/varieties provide an of the crop so as to help farmers diversify crops and crop Department of Agriculture to maintain and opportunity for farmers to varieties distribute new crops and crop varieties diversify, allowing them to counter the threat of climate Schemes for research and development of new crop types Capacity and operation of seed companies in change. Development of and crop varieties that are more resistant to heat and drought the private sector, developing and distributing heat and drought-resistant conditions new crops and crop varieties crops/varieties will enable agricultural production in Schemes to strengthen capacity of the Department of Agricultural research and development marginal and areas with Agriculture to provide seeds of a diverse mixture of crops and activities for the development of new varieties less rainfall crop varieties that better tolerate climate risks and crops, mostly in public universities Programs to encourage international cooperation in the Capacity of public and private institutions to development of varieties and crops that will better adapt to maintain germplasm banks adverse conditions Strengthen the capacity of organizations that maintain plant genetic resources, like national bureaus of plant genetic resources 2. Policies to encourage adoption of farming practices at the farm level for better adaptation to climate change Climate outcome Specific policies Indicators of progress Such farming practices will Agricultural extension schemes to encourage adjustments in Percentage of farmers who adjust planting help individual farmers to planting and harvesting dates and harvesting dates to cope with adverse adjust to uncertain climate climatic events conditions at the farm level Schemes to encourage conservation practices such as Percentage of farmers who adopt conservation tillage, zero tillage, furrow diking conservation tillage practices Programs to encourage terracing and contour planting when Area covered by terracing and contour the land has an undulating topography planting schemes Schemes to develop windbreaks along borders Area covered by windbreaks 3. Policies to discourage monoculture and encourage farmers to plant a variety of heat and drought-resistant crops Climate outcome Specific policies Indicators of progress Monoculture, growing a Schemes to provide economic incentives that will encourage Percentage of farmers who adopt single crop, increases the farmers to switch and rotate crops and grow a mixture of crops diversification of crops and crop varieties vulnerability of farming to rather than monoculture climatic variability Schemes to provide incentives to encourage farmers to plant Proportion of agricultural land suitable for the full acreage normally planted cultivation but not cultivated Tax and price policies that reflect disincentives to monoculture Indicators of relative output price/profitability that induces farmers to adopt monoculture Tax and other incentive policies to increase diversification of crops and crop varieties 48 Table 3.1 Agricultural sector policies for adaptation to climate change (continued) 4. Policies to improve efficiency of irrigation and water use in agriculture Climate outcome Specific policies Indicators of progress Improvements allow Schemes to reduce distribution losses of irrigation water by Measures of irrigation water lost in canals and greater flexibility maintaining canals and better monitoring other distribution losses by reducing water consumption and Improved pricing schemes for irrigation water to encourage Prices charged for irrigation water to reflect the dependence on natural use efficiency true economic value, scarcity rents factors such as rainfall Schemes to encourage improved irrigation methods Area irrigated through improved, more efficient and runoff without like drip and sprinkler irrigation irrigation methods like drip and sprinkler irrigation reducing crop yields. This will help in adapting Research on development of crop varieties that need Indicators of water use efficiency in agriculture to the new scenario less water such as water requirement ratio (WRR) proposed of availability of water by FAO resources Extension schemes to promote the best timing and dose Prices charged for irrigation water to reflect the of irrigation true economic value, scarcity rents Tariff reforms on electricity used for agricultural production, Price of electricity used in agricultural sector removal of subsidies for electricity used for pumping irrigation water 5. Policies to improve soil conservation and prevent land degradation Climate outcome Specific policies Indicators of progress Measures for land Reforms in tenure practices and land tenure laws Security of tenure conservation will prevent soil erosion and land Schemes to promote changes in farming practices, such as Area under minimum/zero tillage practices degradation, thus making minimum/zero tillage land more productive Programs to encourage cover cropping with leguminous Area covered by cover crops and other and reduce water cover crops to preserve soil moisture, increase soil organic conservation practices consumption without matter, and reduce soil erosion reducing crop yields. Conservation measures Schemes to encourage contour planting when the Proportion of area covered by contour planting will increase greater topography is undulating under undulating topographic conditions resiliency in adapting to future climate changes Schemes to promote use of farm equipment, including Proportion of area under mechanized farming tractors, harvesters, and other equipment Number of tractors, harvesters, and other farm equipment available 6. Policies to promote better/improved agricultural drought management Climate outcome Specific policies Indicators of progress Reduced impact of Schemes to strengthen the meteorological department, Number of meteorological stations and staff with drought, which is meteorological stations and improve data collection, data the meteorological department expected to increase in management, and forecasting capacity frequency Schemes to establish weather/meteorological stations Data on geographical coverage of the meteorological stations and skills level of the staff Incentive policies to encourage better drought- management programs Research programs to develop high-temperature/drought- Availability and coverage of drought-resistant crop resistant varieties varieties Policies to alter cropping patterns to suit drought conditions Shifts in cropping pattern 49 and demand. Even in the absence of climate adaptation is presented in Table 3.4 under the change, based on the present trends in population following categories: and water use African countries are expected to exceed the limits of economically sustainable 1. Enhance forest seed banks aimed at conservation land-based water resources before 2025 (Ashton 2. Forest conservation through watershed 2002). In Asia, while freshwater availability in the development and conservation central, south, east and southeast regions are 3. Encourage diverse forest management practices projected to decrease, coastal areas could be at for rehabilitation greater risk due to increased flooding from the 4. Policies that establish flexible criteria for sea and rivers. intervention 5. Policies to reduce habitat fragmentation and Table 3.2 presents water sector adaptation policies. promote development of migration corridors 6. Policies for development of forest plantations Policies for adaptation in coastal areas In order to reduce the vulnerability of coastal areas to Adaptation policies for preservation of the effects of climate change, three basic strategies biodiversity and ecosystems coined: (1) protect, (2) retreat, and (3) accommodate Biodiversity increases the resilience of the physical have been proposed. Protection strategies attempt to and biological systems to changing environmental reduce the risk of the event by decreasing its conditions and changes in climatic variables as probability of occurrence. Protection strategies include genetically rich populations and species-rich hard structural options, soft structural options, and ecosystems have greater potential for adaptation. indigenous options. Retreat strategies reduce the The specific policies to preserve biodiversity and risk by limiting its potential effects by discouraging ecosystems are presented in Table 3.5 under the development in sensitive coastal areas and planning following general categories: urban growth. Strategies for accommodation increase the ability of the society to cope with the effects of the 1. Integrated ecosystem planning and management event. The specific policy options for coastal areas 2. Policies to protect and enhance migration to adapt to climate change scenarios are presented corridors or buffer zones in Table 3.3. 3. Enhance methods to protect biodiversity off-site Policies for adaptation in the forest sector Adaptation policies in the health sector Forests cover about 30 percent of the land area. Forest Climate change is expected to affect the health area in the 10 most forest-rich countries account for status of millions of people: for example, through about two-thirds of total forest area, but forests account increases in malnutrition, mortality, diseases, and for less than 10 percent of the land area in 57 countries. injuries due to adverse weather events. Adverse Projected long-term impacts of climate change on weather events could increase incidence of forests range from pronounced increases in productivity infectious diseases like malaria, cerebrospinal in some northern countries to die-back of tropical meningitis, cholera, and waterborne diseases in forests. In forests that are managed at low levels or not developing countries. Policies for better adaptation managed at all, as is the case for tropical forests in Asia in the health sector are presented in Table 3.6 and Africa, fewer options for adaptation exist and there under the following categories: is more uncertainty from climate change. To the extent possible, adaptive responses to climate change include 1. Improving public health infrastructure reducing deforestation and enhancing species richness, 2. Improving access to adequate food and water maintaining continuity of forest ecosystems, and 3. Health education resilience. The menu of policy options for forest sector 4. Policies to combat incidence of malaria 50 Table 3.2 Policies for adaptation in the water sector 1. Policies targeting household water use Climate outcome Specific policies Indicators of progress Water conservation at Schemes to encourage adoption of water conservation Proportion of household water use in relation the householdv level and practices at home such as water saving taps, flushing and to total water consumption thus reduction in demand showering appliances will benefit under current and under climate change Reforms in pricing of household water used so as to reflect the Charges and price for household water scenarios true economic value services to reflect the true value Schemes to construct cisterns and install rainwater barrels to store rainwater 2. Policies targeting industrial, commercial firms and businesses using water Climate outcome Specific policies Indicators of progress Conservation of water by Schemes to increase on-site storage capacities Water storage capacity of industries and industries and businesses businesses will reduce the overall demand for the supply Programs to recycle water used in cooling and processing Amount/percentage of recycled water used under current and climate for industrial purposes change scenarios Schemes to promote alternative water supplies such as use of Quantity of water used from alternative seawater and brackish water through desalination sources like sea water and from desalination Investment programs to upgrade wastewater treatment to Capacity of wastewater treatment facilities improve efficiency and quantity of wastewater treated 3. Policies targeting water bureaus/supply utilities Climate outcome Specific policies Indicators of progress Policies by water bureaus/ Schemes to seek alternative water sources like water transfer Infrastructure for water transfer authorities and or water from other rivers supply utilities to increase water supply, reduce Schemes to promote water conservation initiatives directed to Budget allocations for water conservation water demand, and make residential and other water users provisions for storage could Investment programs for construction of additional reservoir storage Capacity of reservoirs improve performance of the water sector under current Incentives to discourage growth of water-intensive industries Industrial water use per value-added conditions and adapt under and encourage structural change in industry to less-water- industrial GDP changing climate scenarios intensive industries Investment in water distribution systems to reduce leakage Investment in maintenance of water and system inefficiency and reduce non-revenue water distribution systems (unaccounted for water) Schemes to subsidize municipal water infrastructure Non-revenue water or percentage improvement unaccounted-for water Schemes to enhance water saving in public facilities Investment to upgrade wastewater treatment facilities to Measures of water quality improve effluent quality 51 Table 3.2 Policies for adaptation in the water sector (continued) 4. Policies for river basin planning and coordination Climate outcome Specific policies Indicators of progress Comprehensive planning Programs to create institutions for comprehensive planning Existence of institutions/capacity for across river basins will provide across river basins to help solve problems of water quality comprehensive planning solutions to problems of water and quantity quality and quantity Development of conflict resolution mechanisms and Institutions for conflict resolution institutional capacity in water allocation scheme Schemes to enhance river basin management by Capacity of local institutions/degree of coordinating different interest groups among upstream and decentralization downstream users Create institutions to regulate water supply and wastewater Budget allocations for river basin planning discharge within the basin by establishing legal priorities to and watershed development regulate withdrawal during times of shortage Schemes to promote water conservation in the river basin Programs to provide subsidies to losses due to water shortage Schemes to subsidize long distance water transfer 5.Adopt contingency planning for drought Climate outcome Specific policies Indicators of progress Measures to adapt to water Develop plans for short-term measures to adapt to water Measures of drought preparedness shortages could help reduce shortages and thus mitigate droughts losses due to drought conditions 6. Policies to make marginal changes in construction of infrastructure Climate outcome Specific policies Indicators of progress Increased variability in runoff Schemes to incorporate marginal changes in the planned Capacity of water resources infrastructure and higher storage capacity construction of water resources infrastructure such as to accommodate short-term surges in storm may be required in the case of reservoirs, dams, canals, pipelines, pumping plants, storm water adverse effects due to climate drainages and flood control works to adapt to increased change variability in runoff or to a need for greater storage capacity 7. Policies for interbasin transfer of available water Climate outcome Specific policies Indicators of progress Transfers of water between Programs to create institutions for interbasin transfers to Existence of institutions/capacity for basins may result in more promote more efficient use of water and for responding to comprehensive planning efficient water use both in regional droughts or other problems of water supply current and changed climate conditions. Transfers are easier to implement than fully operating markets for water allocation. 52 Table 3.2 Policies for adaptation in the water sector (continued) 8. Maintain options to develop new dam sites Climate outcome Specific policies Indicators of progress Developing potential dam Programs to reserve areas keep options open to develop dam Availability of reserve areas for development sites allows for options for sites to increase ability to adjust to water shocks of dams and other water storage areas storage of water in case of extreme events 9. Policies to conserve water by reducing demand for water Climate outcome Specific policies Indicators of progress Water conservation and Programs to encourage efficient water use including education Public extension/education programs to reduction in demand will encourage water conservation benefit under current and under climate change Educational activities to promote voluntary compliance and scenarios water conservation Pricing of water resources to encourage conservation policies Prices/charges for water Schemes to enforce quota restrictions on water use Rationing water or imposition of water conservation standards and technologies 10. Policies to allocate water supplies using market-based systems Climate outcome Specific policies Indicators of progress Market-based allocations Policies that respond more rapidly to changing conditions of facilitate efficient allocation supply to lower demand under both the current and expected climate change scenarios 11. Policies to control pollution Climate outcome Specific policies Indicators of progress Water pollution reduces the Policies to reduce point and nonpoint sources of water pollution Measures of water quality supply of clean water 53 Table 3.2 Policies for adaptation in the water sector (continued) 12. Policies targeting water use in agricultural sector Climate outcome Specific policies Indicators of progress Agricultural sector uses Schemes to construct farm ponds to store water Budget allocations for schemes in the most of the water in agricultural sector to conserve water developing countries. Adaptation policies in Programs to promote water harvesting techniques Watershed development projects the agricultural sector Incentives to adjust crop structure, switching to less water Cropping pattern and crop mix to increase the supply, demanding/intensive crops increase the efficiency of water used, and reduce Schemes to improve irrigation efficiency by reducing wastage demand will benefit water sector in the current Schemes to switch from low to high efficiency irrigation Coverage of efficient irrigation techniques conditions and facilitate techniques adaptation under climate Investment programs to upgrade canals and storage Government spending change scenarios infrastructure to increase capacity and to reduce losses in transport and storage Programs to increase use of brackish water Share of brackish water used Schemes to encourage groundwater recharge and thus Depth of water table replenish the water table Programs to promote use of sprinkle and drip irrigation Area covered by drip/sprinkler irrigation techniques when appropriate Schemes to strengthen the maintenance of mechanical wells and anti-seepage of channels Programs for adjustment operation and optimization of district water control and water distribution systems Schemes to promote research in good quality seeds, advanced Availability of seeds/varieties of crops that technologies and practices that conserve water use in use less water agriculture Programs to establish crop insurance covering losses due to drought and flooding Provide farmers with subsidies for losses due to drought, flooding, and other natural hazards 13. Policies to encourage rainwater harvesting Climate outcome Specific policies Indicators of progress The policy is diverting, Schemes to construct different structures for storage of Public investment in structures for water collecting, storing, utilizing, on-farm water and prevent runoff-- structures include tanks, harvesting and managing runoff for reservoirs, dams, water pans, etc. productive use. Runoff is collected from rooftops, ground catchments, as well as ephemeral streams (flood water harvesting) and road/footpath drainage 54 5. Policies to prevent as well as cure cerebro-spinal Unlike other World Bank development products, the CFU meningitis (CSM) disease does not lend or grant resources to projects, but rather 6. Policies for management of cholera contracts to purchase emission reductions similar to a 7. Policies to prevent/control infectious diseases commercial transaction, paying for them annually or 8. Policies to prevent waterborne diseases periodically once they have been verified by a third-party 9. Policies to combat heat stress auditor. The selling of emission reductions--or carbon finance--has been shown to increase the bankability of Policy options for mitigation projects by adding an additional revenue stream in hard of Climate Change currency, which reduces the risks of commercial lending or grant finance. Thus, carbon finance provides a means There is substantial economic potential for mitigation of of leveraging new private and public investment into GHG emissions in the coming decades that could offset projects that reduce greenhouse gas emissions, thereby the projected growth of emissions or reduce emissions mitigating climate change while contributing to below the current levels. The potential in the industrial sustainable development. sector is especially high in the energy-intensive industries where the full potential has not been utilized, The Bank's carbon finance operations have both in the developing and developed countries. demonstrated numerous opportunities for collaborating Agricultural practices can make a significant across sectors, and have served as a catalyst in contribution to low-cost mitigation by increasing soil bringing climate issues to bear in projects relating to carbon sinks and by contributing biomass feedstocks rural electrification, renewable energy, energy efficiency, for energy use. Similarly, forest-related mitigation urban infrastructure, waste management, pollution actions can considerably reduce emissions from abatement, forestry, and water resource management. sources and increase CO2 removals by sinks at low A vital element of this is ensuring that developing cost. The waste sector, although a low contributor of countries and economies in transition are key players in emissions, can also positively contribute to GHG the emerging carbon market for greenhouse gas mitigation. Geoengineering options such as ocean emission reductions. The role of the Bank's Carbon fertilization and blocking sunlight by bringing material Finance Unit is to catalyze a global carbon market that into the upper atmosphere are also being discussed, reduces transaction costs, supports sustainable although their side effects are not fully known. The development, and reaches and benefits the poorer World Bank Group's initiatives on mitigation were communities of the developing world. discussed briefly in section 2.3. Sectoral policies for mitigation Carbon finance at the World Bank A wide variety of policies and instruments/technologies The World Bank's carbon finance initiatives are an are available at the national level for mitigation of GHG integral part of the Bank's mission to reduce poverty emissions. The potential for mitigation in the industrial through its environment and energy strategies. The sector is predominantly in the energy-intensive World Bank Carbon Finance Unit (CFU) uses money industries through increasing energy efficiency and contributed by governments and companies in OECD promoting greater use of renewable energy. In addition countries to purchase project-based greenhouse gas to the energy sector, there are opportunities for emission reductions in developing countries and mitigation in the agricultural sector, building and countries with economies in transition. The emission transportation, the forestry sector, and in waste reductions are purchased through one of the CFU's management. Such sectoral policies may be integrated carbon funds on behalf of the contributor, and within with the carbon finance opportunities and may be the framework of the Kyoto Protocol's Clean become eligible for certified emission reduction (CER) Development Mechanism (CDM) or Joint credits. The specific mitigation opportunities in the Implementation (JI). above sectors are presented below. 55 Table 3.3 Policies for adaptation in coastal areas 1. Policies to retreat from (manage) coastal areas susceptible to effects of global warming to discourage development in sensitive coastal areas and plan for urban growth Climate outcome Specific policies Indicators of progress Planning for growth away Schemes to increase or establish setbacks and buffer zones Investment/ funds allocated for construction from sensitive lands toward between the shore and new coastal developments to avoid the of setbacks and buffer zones less vulnerable areas will destructive effects of sea-level rise reduce the risks associated with sea-level rise and Schemes to relocate threatened buildings also reduce vulnerability to Programs to create upland buffers Funds for creating upland buffers severe coastal storms that may occur under current Schemes for managed realignment of coastal areas/ Funds for realignment of costal development and under changing climate development scenarios. The setbacks for coastal development Schemes to develop rolling easements for presumed mobility Funds/investment in rolling easements will buy some time to avoid Programs to phase out or prevent development in susceptible Legislation to phase out or prevent the destructive effects of areas development in susceptible areas sea-level rise. Similarly, buffer zones enable the sea Limit government subsidies or tax incentives to develop coastal level to rise up to a point land sensitive to sea-level rise such as barrier lands, coastal without threatening coastal wetlands, estuarine shore lands, and critical wildlife habitat development Programs to discourage permanent shoreline stabilization and allow a gradual retreat from a sea-level rise thus facilitating the development market to decide if a property is worth developing Policies to site large capital facilities away from coasts that would pose significant flooding hazards 56 Table 3.3 Policies for adaptation in coastal areas (continued) 2. Policies to protect coastal areas: these include hard structural options, soft structural options and indigenous options Climate outcome Specific policies Indicators of progress Coastal areas are valuable Hard structural options Funds/budget allocation for construction of natural areas that are hard structural operations difficult to re-create and hence there is a need to Schemes to construct dikes, levees, floodwalls Funds allocated for investment in dikes, protect their irreversible levees, floodwalls; indicator of the dikes, loss. Protecting coastal levees, and floodwalls constructed areas and wetlands would Construction of seawalls, revetments, bulkheads Seawalls, revetments, bulkheads constructed; also improve water quality, budget allocations for such investments flood control, and fish and wildlife habitat under Investment in development of groynes Extent of groynes developed current climate conditions. Schemes to develop detached breakwaters Coverage of detached breakwater Investment programs to develop floodgates and tidal barriers Coverage of floodgates and tidal barriers Soft structural options Coverage of soft structural options; budget allocations Programs to develop barriers to salt water intrusion Coverage of barriers to salt water intrusion Schemes for periodic beach nourishment Coverage of periodic beach nourishment activities Schemes for restoration and creation of dunes Dunes restored/recreated Indigenous options Schemes for restoration and creation of wetlands Afforestation programs Area brought under afforestation program Schemes to create coconut leaf walls or coconut fiber stone Area covered by leaf walls or fiber stone units units Schemes to erect wooden and stone walls Area covered by wooden/stone walls 57 Table 3.3 Policies for adaptation in coastal areas (continued) 3. Policies to accommodate climate change in development and management of coastal areas Climate outcome Specific policies Indicators of progress Polices for accommodation Schemes to develop early warning systems Indicator of early warning systems in place of emerging climate scenarios in development Emergency planning for evacuation systems Capacity for action under emergency, and management of capacity of evacuation systems coastal areas will improve Hazard insurance programs to cover risks from adverse events Investments covered by hazard insurance; the ability of the society to and floods on investments in coastal areas availability of options for hazard insurance cope with the effects of the event. Policy initiatives to encourage private sector insurance Private sector participation in hazard companies to offer insurance to reflect the true risks of insurance programs developing or living in coastal areas Modification of land use and agricultural practices Programs to modify building styles and codes Suitability of building styles and codes to suit adverse impacts Strict regulation of hazard zones Programs to improve drainage by increasing diameter of pipes Programs to improve drainage by increasing pump capacity Measure of capacity of drainage systems to accommodate storm surges Scheme to increase capacity and or construction of desalination plants Programs to incorporate marginal increase in the height of the coastal infrastructure such as bridges or sea walls to provide cushion to offset sea-level rise 58 Table 3.4 Policies for adaptation in the forest sector 1. Enhance forest seed banks aimed at conservation Climate outcome Specific policies Indicators of progress Maintaining access to a variety of seeds to Schemes to increase forest seed banks Investment in forest seed banks allow conservation of original genetic diversity of forests to be rebred provides an assurance that benefits provided by forests are not lost for ever. Seed collections should represent the variety of genotypes that exist for each species 2. Forest conservation through watershed development and conservation Climate outcome Specific policies Indicators of progress Preservation and conservation of watersheds Schemes to conserve watersheds Investment in watershed conservation; will prevent land degradation and number of watersheds conserved desertification 3. Encourage diverse forest management practices for rehabilitation Climate outcome Specific policies Indicators of progress A diverse mix of forest management practices, Policies to include a mix of planting practices Extent of species mix in forests strategies, and species will provide a buffer against uncertainties of climate change Schemes to plant a greater variety of species Extent of species mix in forests Schemes to plant tree species drawn from Extent of species mix with those that grow on warmer climate zones warmer climates Forestry schemes with high planting densities Planting of trees that have greater resistance to heat and drought on the southern range of managed forest boundaries if trees can survive in the current climate Schemes to plant tree species and adjust management practices considering future climate scenarios Schemes for forest rehabilitation through Coverage of agroforestry schemes agroforestry A mix of different timber harvesting strategies to promote forest diversity 59 Table 3.4 Policies for adaptation in the forest sector (continued) 4. Policies that establish flexible criteria for intervention Climate outcome Specific policies Indicators of progress Flexible policies let interventions be Flexible policies for salvage harvests so as to allow implemented to adjust to the changes in the adjustments as climatic conditions change structure of the forest because of climate change Flexibility regarding silivicultural management Flexible policies for insect and fire control, and restoration activities 5. Policies to reduce habitat fragmentation and promote development of migration corridors Climate outcome Specific policies Indicators of progress Geographic fragmentation threatens the Incentive policies and programs for multiple-use Extent of geographic fragmentation of ability of forests and forest species to migrate management that balances preservation and use forests or adapt to climate change. Currently the with in a single parcel health of many forests is stressed by existing fragmentation and is most likely to increase Negotiation of conservation easements that under climate change. There is a likelihood protect geographically important land parcels that climate change will cause forests to from development migrate in a poleward or vertical direction 6. Policies for development of forest plantations Climate outcome Specific policies Indicators of progress Establishment of forest plantations will Schemes to establish fuelwood orchards Coverage of fuelwood orchards reduce impacts on forest ecosystems due to increased fuelwood demand 60 Table 3.5 Adaptation policies for preservation of biodiversity and ecosystems 1. Integrated ecosystem planning and management Climate outcome Specific policies Indicators of progress Integrated planning and management Develop institutions for coordination Capacity of institutions in planning and along watershed and ecosystem lines will in planning and management along management along watersheds and reduce institutional fragmentation in the watersheds and ecosystems ecosystems management of natural areas, ecosystems, and a variety of plant and animal species. Programs to foster regional, national, and Institutional capacity to foster coordination Institutional coordination will help address international coordination in preservation many of the threats to diversity of species of a variety of species and ecosystems 2. Policies to protect and enhance migration corridors or buffer zones Climate outcome Specific policies Indicators of progress Such policies help maintain ecosystems Schemes to increase buffer zones Coverage of buffer zones by improving the likelihood of successful around current reserve areas that include adaptation by plant and animal species different altitudes and ecosystems Schemes to implement a graded system of management where the innermost areas receive greatest protection and more users are allowed in the outer buffer zones or corridors Schemes to increase diversity of natural Measure of diversity of natural lands and lands and land parcels to improve parcels possibility of species adaptation to climate variability Programs to develop corridors around Presence/coverage of corridors reserve areas so as to allow animals to migrate as climate changes 3. Enhance methods to protect biodiversity off-site Climate outcome Specific policies Indicators of progress Offsite protection is important in preventing Investment programs to create gene and Availability of gene/seed banks, libraries, irreversible loss of biodiversity. Methods for seed banks, libraries, gardens, and zoos and gardens offsite protection must be in place before climate changes to avoid irreversible loss of species extinction 61 Table 3.6 Policies for adaptation in the health sector 1. Policies to improve public health infrastructure Climate outcome Specific policies Indicators of progress Public health infrastructure would Investments in public health training reduce the vulnerability of the population programs to health impacts of climate change Investment in disease surveillance Infrastructure and funding for disease surveillance mechanisms Investment in sanitation systems Coverage of public sanitation system Programs for vector control Area covered by the vector control program Immunization programs Percentage of the population covered Investment in infrastructure to respond to Number and coverage of health centers and rapid disease outbreak, diagnosis, and treatment response teams 2. Improving access to adequate food and water Climate outcome Specific policies Indicators of progress Access to improved water and food Investment programs to increase access to Population with access to improved water will reduce susceptibility/ exposure to improved water sources vector-borne diseases and weather extremes Policies for improving access to food and Infrastructure for emergency management nutrition under extreme conditions 3. Improving health education programs Climate outcome Specific policies Indicators of progress Health education can make people Programs for public education on infectious Expenditure on public education programs to better prepared under possible health diseases combat infectious diseases impacts due to climate change Program to educate public on control/ Expenditure on public education programs prevention of waterborne diseases 4. Policies to combat incidence of Malaria Climate outcome Specific policies Indicators of progress Malaria is a climate-sensitive tropical Programs to develop vaccines and herbal disease; a warming trend is associated preparations with increases in malaria incidence in some locations Schemes to control mosquitoes Public spending on mosquito control Programs to introduce predators to control Public spending on vector control vector population Schemes to distribute insecticide- Number of nets distributed impregnated nets Health education programs Government expenditure on health education Programs for improved treatment of malaria Coverage of health clinics and hospitals patients 62 Table 3.6 Policies for adaptation in the health sector (continued) 5. Policies to prevent as well as cure cerebro-spinal meningitis (CSM) disease Climate outcome Specific policies Indicators of progress Studies have shown an increase in Schemes to improve architectural design of incidence of CSM disease in West Africa, houses which is suspected to be associated with changing weather patterns. Programs for vaccination against the disease Percentage of population vaccinated, public Changing climate patterns may trigger spending on vaccination an increase in incidence Schemes for health education Government expenditure on health education Investment in mobile clinics to treat disease Number of mobile clinics cases Programs for improved treatment of CSM patients 6. Policies for management of cholera Climate outcome Specific policies Indicators of progress Changing climate patterns could Programs for vaccination against the disease Percentage of population vaccinated, public trigger emergence of cholera and other spending on vaccination infectious diseases Schemes for health education Government expenditure on health education Investment in mobile clinics to treat disease Number of mobile clinics and number of patients cases treated Programs for improved treatment of cholera Coverage of health clinics and hospitals patients Schemes to use bore-hole drills for capturing water Program to use activated charcoal in Public/private spending on activated charcoal domestic water filter systems 7. Policies to prevent/control infectious diseases Climate outcome Specific policies Indicators of progress Changes in infectious disease Programs to develop a computer information Coverage of health information database transmission patterns are a likely major system on disease incidence consequence of climate change Public education scheme on health care, Public spending on health care disease prevention and treatment Schemes to control vectors transmitting Public expenditure on vector control diseases Schemes for primary healthcare, including Coverage of primary healthcare facilities, coverage vaccinations and medicines of vaccinations 63 Table 3.6 Policies for adaptation in the health sector (continued) 8. Policies to prevent waterborne diseases Climate outcome Specific policies Indicators of progress Increased precipitation caused by Schemes to improve water supply systems Percentage of population with access to improved global warming may increase flooding water in some areas, which could lead to drinking water contamination and in turn Improve water purification systems incidence of waterborne diseases Programs to develop a computer information system on disease incidence, surveillance and control Schemes for improved sanitations Schemes to improve primary health care, Coverage of primary healthcare facilities, including vaccinations and medicines coverage of vaccinations 9. Policies to combat heat stress Climate outcome Specific policies Indicators of progress Increase in temperatures as a result of Schemes to provide cost-effective Percentage of population with such systems warming result in heat stress technologies and cooling management systems Schemes for adjustments in building designs such as insulation, blinds, better ventilation Programs to encourage planting trees in Urban tree coverage urban areas 64 Energy sector policies for mitigation for mitigation in the transport sector are presented under Energy sector offers the greatest opportunity for two categories: (1) policies to promote energy efficiency mitigation. The policies that could be followed in the and GHG emission reduction in the transportation sector, energy sector are grouped into the following four and (2) policies to reduce congestion on roads, general groups. The specific policies are then outlined highways, and urban centers (see Table 3.9). under each group in Table 3.7 Policies for mitigation in the forest sector 1. Policies to promote renewable energy generation Forests have a very significant role in the global carbon and use of renewable sources to include wind, cycle. Though forests play a key role in mitigation, solar, hydro, sea water currents, geothermal energy, forests are also affected by climate change, and their soil energy, air energy, biomass energy, landfill gas contribution to climate change may be affected by energy, sewage gas energy, and biogas energy stresses resulting from it. Mitigation options in the forest 2. Policies to promote energy efficiency sector include reducing emissions from deforestation 3. Policies to encourage fuel switching for power and forest degradation, enhancing sequestration rates generation in existing and new forests, providing wood fuels as a 4. Policies to encourage carbon capture substitute for fossil fuels, and providing wood products for more energy-intensive materials. As noted in module Mitigation options/policies in the building sector 1, the Bank is active in promoting finance for avoided Substantial reduction in GHG emissions from deforestation. If these reductions in GHGs are accepted commercial and residential buildings could be by the UNFCCC as part of the next climate agreement, achieved through improving energy efficiency and use there will be a major impetus to forestation. For of renewable energy using technologies that are purposes of this discussion, we present below forestry available and have been proved successful. Estimates sector mitigation polices under the following five by the IPCC show there is a potential to reduce 29 general categories: percent of the projected baseline emissions cost-effectively by 2020 in the residential and 1. Policies to increase or maintain the forest area by commercial sectors (highest among all sectors preventing deforestation assessed). The policies and programs for GHG 2. Policies to increase forest area by encouraging mitigation from buildings are presented under the aforestation and reforestation following six groups in Table 3.8: 3. Policies to improve forest management to increase carbon density at plot and landscape level 1. Policies to promote energy efficiency of 4. Policies to encourage substitution of appliances and electric and electronic equipment energy-intensive materials with less 2. Policies on building energy codes energy-intensive ones 3. Building certification and labeling systems 5. Promotion of bio-energy 4. Education, training, and energy audit programs 5. Standards and labeling of appliances, lighting, The specific policy instruments include economic and office/consumer plug loads instruments, regulatory instruments, voluntary 6. Voluntary agreements agreements, and research and development and dissemination programs (see Table 3.10). Policies for mitigation in the transportation sector In 2004, the transport sector accounted for 23 percent Policies for mitigation in agriculture sector of the world's energy-related GHG emissions, with In 2006, agriculture accounted for about 10 to 12 about three-quarters coming from road vehicles. percent of the global anthropogenic emissions of Improving energy efficiency in the transport sector thus GHGs, 60 percent of N2O emissions, and 50 percent offers a significant opportunity for mitigation. Policies of CH4 (IPCC 2007). There are number of options for 65 mitigation of GHGs from agriculture, including GHGs, the largest source is landfill methane, followed improved crop and grazing land management, by wastewater methane and nitrous oxide. In addition, restoration of organic lands that are drained for crop minor emissions of CO2 result from incineration of production, and restoration of degraded lands. Land wastes containing carbon. A variety of technologies are management practices include improved agronomic available for mitigation of GHGs from wastes. Landfilling practices, nutrient use, tillage, and residue with landfill gas recovery, post consumer recycling, management. There are also opportunities for composting of selected waste fractions and processes mitigation through improved water and rice-land that reduce GHG generation compared to landfilling are management, set-asides, land use and agroforestry; some such technologies currently available. For and improved grazing and livestock and manure purposes of this discussion, we present below in Table management. Table 3.11 presents a menu of 3.12 specific policies for mitigation polices under the policy options for mitigation under the following following four general categories: two categories: 1. Policies to reduce landfill methane emissions 1. Policies for improved cropland management 2. Programs to promote incineration and other 2. Policies for improved livestock management waste-to-energy 3. Policies to promote waste minimization, re-use Mitigation policies in waste management and recovery Wastes are a small contributor of GHGs, accounting for 4. Policies and measures to reduce emission of less than 5 percent of total GHG emissions. Among the fluorinated gases 66 Table 3.7 Energy sector policies for mitigation/adaptation to climate change 1.Policies to promote renewable energy generation and use of renewable sources to include wind,solar,hydro,sea water currents, geothermal energy,soil energy,air energy,biomass energy,landfill gas energy,sewage gas energy,and biogas energy Climate outcome Specific policy instruments Development and use of renewable energy Economic policy instruments reduces the demand for and generation of Proposals to provide capital investment grants to promote renewable energy generation energy from coal-fired power plants and thus reduces GHG emissions Schemes to provide feed-in tariffs for energy produced from all renewable sources Programs to enforce mandatory renewable energy targets (quota obligations) to raise the contribution of renewable energy sources in the total electricity supply mix Development of tradable renewable energy certificates (RECs) to demonstrate compliance with the objective of mandatory renewable energy targets GHG taxes on power plants, CO2 taxes-green tax program Implementation of tradable emission permits Schemes to provide supply tariffs to renewable generation units such as hydro plants and other ecofriendly generation units Investment subsidy and an exemption from real estate taxes to companies that invest in use of sustainable sources of energy (hydroelectric energy, wind energy, solar energy, geothermal energy, biogas, organic products and waste from agriculture and forestry arboriculture, biodegradable organic part of waste), cogeneration and energy savings during the manufacturing process Capital cost allowance to renewable energy equipments used to generate electricity or to produce thermal energy for direct use in an industrial process Fiscal incentives for development of renewable energy, photovoltaic rebate program Subsidies for development, demonstration, and commercialization of new products and processes for energy efficiency Schemes to reconstruct and improve efficiency of hydroelectric plants, e.g. Russia Regulatory instruments Schemes to enforce targets like mandatory share of energy from renewable sources in the total energy supplied Liberalization of energy market providing access to grids for energy generated from renewable sources Schemes to commercialize generation and use of renewable energy Development of a stringent accreditation program that sets environmental and reporting standards for renewable energy products offered by suppliers to households and businesses Programs to develop codes and procedures for renewable energy generation and distribution Legislation on promotion of the use of renewable energy sources Programs to assess and develop the legislative, institutional, and regulatory framework for geothermal power development Voluntary agreements Voluntary agreements to install renewable energy capacity 67 Table 3.7 Energy sector policies for mitigation/adaptation to climate change (continued) 1. Policies to promote renewable energy generation and use of renewable sources to include wind, solar, hydro, sea water currents, geothermal energy, soil energy, air energy, biomass energy, landfill gas energy, sewage gas energy and biogas energy (Continued) Climate outcome Specific policy instruments Development and use of Information dissemination and strategic planning: renewable energy reduces the Programs to develop local expertise in the installation, operation, management, and maintenance of demand for and generation of technically and economically proven renewable energy systems energy from coal-fired power plants and thus reduces GHG Development of decision-making tools that reduce the cost of pre-feasibility studies; disseminating emissions knowledge to help people make better decisions Government investment to build knowledge and accelerate the development of renewable technology to include fuel cells and other technologies that will form the basis of the emerging hydrogen economy, including technologies to produce hydrogen from renewable energy sources Support demonstrations of renewable energy technologies to encourage adoption Implement demonstration programs for development and use of renewable energy Programs to encourage private sector participation in renewable energy generation Schemes to develop solar water heating industry and to promote development of private sector in installation and maintenance of these systems Programs to strengthen and expand existing biomass expertise in energy and forest industry to new areas Programs to promote the commercialization of developed biomass products and technologies such as district heating from wood chips, biogas Promotion of biogas plants in rural areas Schemes to build business competence and to support pilot projects and demonstrations of biomass technologies Incentives to encourage small and medium-sized enterprises to work on niche products and markets Strategic planning for development of combined heat and power generation Research, development, and dissemination of technology: Schemes for research and demonstration to promote electricity production from natural gas and renewable sources and quality co-generation Programs to fund technology projects that promise to reduce GHG emissions while sustaining economic and social development Financial incentives to support the development of advanced electricity storage technologies to store generated energy from renewable sources (wind and solar in particular) and use it when required Investment for development and installation of software and systems to allow accurate wind forecasting and promote wind and solar energy in the national electricity market Investment in biomass and waste conversions; cellulosic ethanol from biomass and other biofuels including biodiesel; bio-processes; biomass production, harvesting and transportation; and energy from biomass Schemes to explore technology and research needs for the development of geothermal energy and geothermal resource assessment Programs to assess the training and skills development to exploit geothermal power sources 68 Table 3.7 Energy sector policies for mitigation/adaptation to climate change (continued) 2.Policies to promote energy efficiency Climate outcome Specific policy instruments Energy efficiency in buildings, Economic policy instruments appliances, home electronics, heating and cooling, office Increase taxes on energy and lower subsidies on energy equipment, lighting equipment, other products will reduce energy GHG taxes on power plants, CO2 taxes-green tax program consumption Fiscal incentives to increase energy efficiency Subsidy schemes to provide financial incentives/ discount the retail purchase price of the energy saving bulbs, CFLs Financial incentives (fines/subsidies/penalty) to enforce energy efficiency labels on equipments, appliances and electronic products Financial incentives for investment in energy efficient technologies by small and medium sized business Setting up stand-alone energy efficiency funds or specific windows for energy efficiency in existing funds, as in Bulgaria, Egypt Implementation of tradable emission permits, cap and trade Schemes to provide financing incentives for investment in energy efficiency Regulatory instruments: Schemes to enforce minimum efficiency standards for power plants Schemes to promote energy efficiency labels on appliances, home electronics, heating and cooling, office equipment, lighting equipment, other products Quota restrictions on emissions from point sources Programs to enforce minimum energy efficiency requirements/standards for household appliances, office equipment, and other products Schemes to enforce mandatory energy labeling Programs to phase out yellow incandescent light bulbs Programs for substitution of lamps and technical development of control equipment and luminaries and improved lighting design Legislations requiring standards for energy efficiency of heat and electricity production, transmission, distribution and use, energy planning requirements, energy auditing obligations, certification of energy auditors, energy labeling program, energy performance of buildings, and inspection of boilers and air conditioning units. Energy audit program and incentives to participate in energy audit Programs to encourage energy efficiency in government operations through programs (like the National Appliance and Equipment Energy Efficiency Program in Australia) Energy efficiency requirements for lighting, including fluorescent lighting ballasts Schemes to set up clean-vehicle quotas for government vehicle procurement programs Voluntary agreements: Voluntary agreements to reduce GHG emissions Voluntary agreements to increase power plant efficiency 69 Table 3.7 Energy sector policies for mitigation/adaptation to climate change (continued) 2.Policies to promote energy efficiency (Continued) Climate outcome Specific policy instruments Energy efficiency in buildings, Information dissemination, strategic planning and capacity appliances, home electronics, Development of a national policy on energy heating and cooling, office equipment, lighting equipments, Programs to raise the awareness of senior management of commercial enterprises and motivate action to other products will reduce improve the skill base to identify energy efficiency opportunities, demonstrate leadership to the government, energy consumption business sector and wider community Educational programs to encourage consumers to select energy efficient products, equipments, lighting, and home and office electronics equipments Programs to develop the capacity of the relevant professions and trades to identify opportunities and implement energy efficient solutions Educational programs to demonstrate the benefits of energy efficiency to commercial and industrial sector Programs to build industry capacity to deliver energy efficient solutions Public awareness campaign for promoting energy efficiency Educational programs to encourage users to switch off lights and electronic equipment when not in use Establish a national climate change forum of government officials at the federal, state and municipal level along with representatives from academia, NGOs, and corporations Establish a Sustainable Development Technology Fund/climate fund to stimulate the development and demonstration of technologies aimed at reducing greenhouse gas emissions Creation of a multisectoral technology and innovation initiative Research and development and dissemination of technology: Research and development of cleaner power generation Develop and demonstrate advanced near-zero-emission coal technology through carbon capture and storage 3.Policies to encourage fuel switching for power generation Climate outcome Specific policy instruments Switching from coal-fired Economic policy instruments: power plants to generation from Taxes on GHG emissions, green tax nuclear, natural gas, renewable, and hydrogen sources will Programs to implement tradable emission permits reduce GHG emissions Fiscal incentives to switch to power generation using less polluting technologies/fuels Regulatory instruments: Schemes to introduce standards in power plant fuel portfolio Quota restrictions on emissions from point sources Schemes that require power suppliers to purchase power from renewable generation and CHP and financial incentives Voluntary agreements: Schemes to encourage voluntary agreements to encourage environment friendly fuel portfolio Information dissemination and strategic planning: Development of a national policy on energy Programs to provide up-to-date information and educational campaigns Research and development and dissemination of technology: Research and development of cleaner power generation Develop and demonstrate advanced near-zero-emission coal technology through carbon capture and storage 70 Table 3.7 Energy sector policies for mitigation/adaptation to climate change (continued) 4.Policies to encourage carbon capture Climate outcome Specific policy instruments Carbon capture envisages Economic instruments: capturing carbon dioxide from large point sources such as fossil GHG taxes on power plants, CO2 taxes-green tax program powered power plants and storing Programs to implement tradable emission permits it instead of releasing it into the atmosphere, thus reducing total Subsidies on investment in carbon capture mechanisms greenhouse gases emitted into the atmosphere. Regulatory instruments: Quota restrictions on emissions from point sources Voluntary agreements: Programs to promote voluntary agreements to develop and install carbon capture systems Information dissemination and strategic planning: Development of a national policy on energy Schemes for dissemination of information on carbon capture Research and development and dissemination of technology: Investment in research and development of chemical and biological sequestration Investment in research and development of sequestration in geological formations 71 Table 3.8 Policies for mitigation/adaptation to climate change in commercial and residential buildings 1. Policies to promote energy efficiency of appliances and electric and electronic equipments Climate outcome Specific policy instruments Improvements in energy Schemes to promote energy efficiency labels on appliances, home electronics, heating and cooling systems, efficiency of appliances, home office equipments, lighting equipment and other products electronics, heating and cooling systems, office equipments, Educational programs to encourage consumers to select energy efficient products, lighting, and home and lighting equipments and , other office electric and electronics equipments products will reduce energy Programs to enforce minimum energy efficiency requirements/standards for household appliances, office consumption equipments, and other products Financial incentives (fines/subsidies/penalty) to enforce energy efficiency labels on equipments, appliances, and electronic products Subsidy schemes to provide financial incentives/ discount the retail purchase price of the energy saving bulbs, CFLs Schemes to enforce mandatory energy labeling Programs to encourage energy efficiency in government operations through programs like the National Appliance and Energy Efficiency Program in Australia Educational programs to encourage users to switch off lights and electronic equipment when not in use Program to phase out yellow incandescent light bulbs Programs for lamp substitution and technical development of control equipment and luminaries and improved lighting design Schemes to provide incentives for solar heating and cooling systems Schemes to improve the policy framework of efficient heating and cooling systems 2. Policies on building energy codes Climate outcome Specific policy instruments Performance-based codes that Schemes to develop and enforce Minimum Energy Performance Standards (MEPS) for all classes of buildings require compliance with energy consumption levels will reduce Implementation of prescriptive codes that set separate performance levels for major envelope and overall energy use and thus equipment components such as minimum thermal resistance of walls, maximum window heat loss/gain, and have significant climate impacts minimum boiler efficiency Development of legislation and institutional capacity for implementing energy efficiency in buildings 72 Table 3.8 Policies for mitigation/adaptation to climate change in commercial and residential buildings (continued) 3. Building certification and labeling systems Climate outcome Specific policy instruments The use of buildings and Voluntary energy star ratings for buildings equipment, excluding industrial equipment, account for a major Schemes for energy labeling of buildings-energy star labeling of homes share (about 50% in UK) of CO2 Schemes to provide expert consulting services to households and measures to improve energy efficiency emissions. Significant reductions in energy demand and CO2 Programs to conduct energy audits for public and private buildings and providing incentives to participate emissions may be achieved by in such audits improving energy performance of buildings Certification schemes for all buildings and regular inspection and assessment of boilers/heating and cooling installations Develop energy performance labeling for window products for consumers and backup technical support for industry members designed to inform consumers and influence their purchase decisions 4. Education, training, and energy audit programs Climate outcome Specific policy instruments A survey and analysis of energy Development of technical manuals and consumer guides to raise awareness for building professionals, flows in a building, process interested owner-builders, and consumers on energy saving options and technologies or system with the objective of understanding the energy Programs to disseminate knowledge about strategies and available technologies of sustainable energy use dynamics of buildings and the for cooling and heating services system could improve energy efficiency and thus CO2 mitigation 5. Standards and labeling of appliances, lighting, and office/consumer plug loads Climate outcome Specific policy instruments Standards and labeling facilitates Energy efficiency performance standards and labels of appliances, lighting, and office/consumer plug significant reductions in energy loads to stimulate adoption of more efficient technologies and products demand and GHG emissions Schemes to encourage optimized thermal insulation or even zero-energy-houses 6.Voluntary agreements Climate outcome Specific policy instruments These agreements reduce energy Voluntary agreements between government and manufacturers to a mutually agreeable level of energy use use in buildings and greenhouse per product gas emissions Schemes to promote third-party financing for energy efficiency in public buildings Programs to encourage cooperation of technology suppliers to improve energy efficiency in buildings 73 Table 3.9 Policies for mitigation/adaptation to climate change in the transport and infrastructure sector 1. Promote energy efficiency and GHG emission reduction in the transportation sector Climate outcome Specific policy instruments Transport sector accounts for a Economic instruments: major share of the GHG emissions and there are significant marginal Tax incentives to promote the use of natural gas benefits from emission reductions Scheme to provide vehicle tax incentives based on emission-tax deductions for cleaner cars in this sector Programs to impose lower taxes on cleaner fuels Investment programs to improve fuel efficiency of vehicles Fiscal incentives and production grants for fuel ethanol and biodiesel Policies to promote the use of biofuels and renewable fuels in transport, requiring a minimum proportion of biofuels in the total fuel use Programs to provide discounts and other incentives for using public transportation system Regulatory instruments: Program to enforce energy labeling with fuel efficiency standards of all new cars and other vehicles sold Set up clean-vehicle quotas for government vehicle procurement programs Programs to phase out leaded gasoline, where used Strategic planning and information dissemination: Schemes to improve or develop public mass transit systems in urban areas 2. Policies to reduce congestion on roads, highways, and urban centers Climate outcome Specific policy instruments Reducing congestion and taking Programs for congestion pricing-enforcement of tolls on congested routes vehicles out of the road will reduce consumption of fuels Incentive programs to promote use of mass transit systems Schemes to improve or develop public mass transit systems in urban areas 74 Table 3.10 Policies for mitigation in the forest sector 1. Policies to increase or maintain the forest area by preventing deforestation Climate outcome Specific policy instruments Deforestation, according to Economic instruments: FAO, causes 25% of carbon Schemes to provide financial incentives for private owners for retention of forest cover dioxide emissions. Reduction of forest loss offers significant Programs to implement emission reduction credits opportunities to mitigate greenhouse gas emissions Environmental service payments to private forest owners to retain private forest Incentive policies to reduce emissions from deforestation Programs to develop carbon markets and trading in emission allowances Regulatory instruments: Schemes to improve the regulatory and institutional capacity to prevent deforestation and degradation of forests Schemes to protect forests by designating them as protected areas, indigenous reserves, non-timber forest reserves, or community reserves Reforms and implementation of tenure laws to preserve forests Forest Law Enforcement and Governance (FLEG) to combat illegal logging Policies to encourage forests in private lands; for example, Namibia Reforms that require private landowners to maintain a share of private holding as forests; for example, Brazil Voluntary agreements: Schemes to partner with local communities to reduce deforestation Research and development and dissemination of technology: Schemes to provide technical support in sustainable forest management 2. Policies to increase forest area by encouraging afforestation and reforestation Climate outcome Specific policy instruments Reforestation has no or only Economic instruments: a marginal effect on GHG gas Economic incentives in the form of afforestation grants emissions. However, reforestation could reduce the adverse effects Energy subsidies for reforestation programs due to climate change Tax exemptions for forestry investments Schemes to impose tariffs against competing imports Regulatory instruments: Schemes to create plantation forests in public and private lands Development of institutional capacity of government for reforestation activities Reforestation schemes with joint management agreement between government and communities Voluntary agreements: Schemes to partner with local communities in aforestation programs Schemes to encourage forestation and forest development in private lands Research and development and dissemination of technology: Schemes to provide technical support in sustainable forest management 75 Table 3.10 Policies for mitigation in the forest sector (continued) 3. Policies to improve forest management to increase carbon density at plot and landscape level Climate outcome Specific policy instruments Forests with high carbon Economic instruments density will reduce GHGs and Incentives in the form of tax credits, subsidies, cost sharing and environmental service payments for thus provide positive climate improved management impacts. Changing species mix, lengthening rotations, Incentives to lengthen rotations, species mix, reduce harvest damage, and accelerate replanting reducing harvest damage, and or accelerating replanting rates Trade liberalization in forest products to enhance competition in forest products increase carbon sequestration Regulatory instruments: Schemes to strengthen institutional and regulatory framework Schemes to increase availability of trained personnel Schemes to reform tenure laws and security of tenure Regulations that require procurement of certified wood and forest products from well-managed forests Information dissemination, strategic planning and capacity Development of and or investment in technical and institutional capacity Schemes to protect forests against natural disturbance agents like insects and diseases Schemes to protect forests from forest fires and to suppress forest fires Voluntary agreements: Voluntary certification schemes to encourage sustainable forest management Increased market access or price premiums to certified producers who meet sustainable forest management Programs for aforestation of marginal agricultural lands 4. Policies to encourage substitution of more energy-intensive materials with less energy-intensive ones Climate outcome Specific policy instruments Stocks of products not vulnerable Reforms to encourage substitution of fossil-energy- intensive products by wood products to climate change may be affected. Shift away from energy intensive products will have positive impact on climate change 5. Promotion of bio-energy Climate outcome Specific policy instruments Bioenergy plantations seek to Economic instruments produce maximum biomass per Tax exemptions to encourage plantation establishment for production of industrial charcoal unit area to ensure sustainable supply of biomass feedstock. Tax exemption for income originating from plantation companies Exclusion from excise taxes for ethanol production Tax incentives and accelerated depreciation schedules for equipments that burn biomass Incentives for development of renewable energy from plantations and wood waste Regulatory instruments: Schemes to enforce mandatory requirements of energy use from renewable sources Schemes for bio-energy generation from forestry products 76 Table 3.11 Policies for mitigation in the agriculture sector 1. Policies for improved cropland management Climate outcome Specific policy instruments Improved crop land management Programs to promote use of improved crop varieties reduces emissions of greenhouse gases Schemes to encourage crop rotations, preferably with perennial crops Programs to improve soil fertility by applying fertilizers when soil is deficient in nutrients Schemes to encourage crop systems with reduced reliance of fertilizers, pesticides, and other inputs Schemes to promote rotations or intercrops with leguminous crops Programs to encourage catch or cover crops between successive crops Schemes to implement precision farming and nitrogen application based on precise estimation of crop needs Schemes to promote use of slow or controlled release nitrogen fertilizers or nitrification inhibitors Implement programs to encourage time of application of nitrogen when it is least susceptible to loss Schemes to implement reduced tillage or no-till farming practices to reduce soil carbon loss and maintain crop residues Programs to expand irrigation while reducing possible NO2 emissions and reduce energy use Schemes to improve efficiency of irrigation and water use Development and promotion of rice cultivars with low exudation rates that will reduce methane emissions Schemes for improved water management, keeping fields dry in the off-season to reduce methane emissions Programs to encourage composting before addition of organic matter to reduce methane emissions Agroforestry schemes Schemes to convert crop lands to grassland/native vegetation in set-aside areas, waterways, shelterbelts Programs to encourage adjustments in intensity and timing of grazing to increase carbon sequestration in pasture lands Research and development and/or introduction of new species with higher productivity and carbon allocation capacity in the roots Schemes to discourage row crops and tuber crops in highly organic peaty soils Programs to maintain a shallow water table and encourage minimum ploughing Schemes to plant grasses and vegetation Schemes to encourage water conservation practices 2. Policies for improved livestock management Climate outcome Specific policy instruments Livestock are one of the most Programs to feed more concentrates than forages and include oils or oilseeds to the diet, significant contributors of GHG. thus reducing methane formation Increasing the efficiency of livestock production and feed crop Schemes to improve pasture quality agriculture, controlling degradation Research and development to improve productivity through breeding and heifer management of pastures and improving efficiency of irrigation could Schemes to include additives that reduce methane formation produce desirable outcomes Programs to use grains, crop residue, cellulosic crops and residues, various tree species for promotion of bioenergy Schemes to increase efficiency of irrigation of feed lots and water use efficiency in livestock production and management Schemes to increase efficiency of livestock production Programs to prevent degradation of pastures 77 Table 3.12 mitigation policies in the waste management sector 1. Policies to reduce landfill methane emissions Climate outcome Specific policy instruments Methods to increase energy Economic incentives: recovery from wastes, restrict choices for waste disposal, waste Incentives for electricity generation from landfill gases recycling and re-use and waste minimization could produce Tax credits for electricity generation from landfill gases desirable climate outcomes Regulatory instruments: Schemes to implement standards for land-fill performance to reduce CH4 emissions 2. Programs to promote incineration and other waste-to-energy Climate outcome Specific policy instruments Promotion of incineration and Economic incentives: energy generation from wastes reduces greenhouse gas Subsidy schemes for construction of incinerators with standards for energy efficiency emissions Programs to provide tax exemption for electricity generated by waste incineration with energy recovery Landfill taxes to increase cost of landfilling and reduce waste generation 3. Policies to promote waste minimization, re-use and recovery Climate outcome Specific policy instruments Programs to promote recycling Schemes to implement extended producer responsibility and waste minimization have been successfully implemented Programs to implement unit pricing on waste, or Pay-as-you-Go in Europe Schemes to implement landfill taxes Educational programs to reduce waste and promote recycling Schemes to encourage domestic composting of degradables rather than burning; for instance, leaves in developing countries Programs for procurement of recyclables (green procurement) 4. 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Policies and measures to The Ministers and other heads of delegation present protect the climate system against human-induced at the eighth session of the Conference of the change should be appropriate for the specific Parties to the United Nations Framework Convention conditions of each Party and should be integrated with on Climate Change national development programs, takinginto account that economic development is essential for adopting measures to address climate change; Recalling the ultimate objective and principles of, and the commitments under, the Convention, (c) National sustainable development strategies should integrate more fully climate change objectives in key Reaffirming that economic and social development areas such as water, energy, health, agriculture and and poverty eradication are the first and overriding biodiversity, and build on the outcomes of the World priorities of developing country Parties, Summit on Sustainable Development; Recognizing with concern the findings of the IPCC Advance unedited version Third Assessment Report, which confirms that significant cuts in global emissions will be necessary (d) All Parties, taking into account their common but to meet the ultimate objective of the Convention, and differentiated responsibilities and respective recognizing the on-going consideration in the capabilities, and their specific national and regional Subsidiary Body for Scientific and Technological development priorities, objectives and circumstances, Advice of the implications of this report, should continue to advance the implementation of their commitments under the Convention to address Noting that mitigation actions are now taking place climate change and its adverse effects in order to both in Annex I and non-Annex I countries and achieve sustainable development; emphasizing that mitigation of greenhouse gas emissions to combat climate change continues to (e) Adaptation to the adverse effects of climate change have high priority under the provisions of the is of high priority for all countries. Developing Convention and that, at the same time, urgent action countries are particularly vulnerable, especially the is required to advance adaptation measures, least developed countries and small island developing States. Adaptation requires urgent attention and action Recognizing that climate change could endanger on the part of all countries. Effective and result-based future well-being, ecosystems and economic progress measures should be supported for the development of in all regions, approaches at all levels on vulnerability and Deeply concerned that all countries, particularly adaptation, as well as capacity-building for the developing countries, including the least integration of adaptation concerns into sustainable development strategies. The measures should include developed countries and small island developing full implementation of existing commitments under the States, face an increased risk of the negative impacts Convention and the Marrakesh Accords; of climate change, (f) Parties should promote informal exchange of Recognizing that, as Africa is the region suffering the information on actions relating to mitigation and most from the combined impacts of climate change adaptation to assist Parties to continue to develop and poverty, development initiatives such as the effective and appropriate responses to climate change; New Partnership for Africa's Development (NEPAD) should be supported in the context of sustainable (g) The specific needs and concerns of developing development, country Parties arising from the adverse effects of climate change and the impact of the implementation Resolve that, in order to respond to the challenges of response measures should be given full faced now and in the future, climate change and its consideration; adverse effects should be addressed while meeting the requirements of sustainable development. (h) International cooperation should be promoted in Therefore, we call for the following: developing and disseminating innovative technologies 81 in respect of key sectors of development, particularly (l) Actions are required at all levels, with a sense of energy, and of investment in this regard, including urgency, to substantially increase the global share of through private sector involvement and market-oriented renewable energy sources with the objective of approaches, as well as supportive public policies; increasing their contribution to total energy supply, (i) Technology transfer should be strengthened, recognizing the role of national and voluntary regional including through concrete projects and targets as well as initiatives, where they exist, and capacity-building in all relevant sectors such ensuring that energy policies are supportive to as energy, transport, industry, health, agriculture, developing countries' efforts to eradicate poverty; biodiversity, forestry and waste management. (m) Annex I Parties should further implement their Technological advances should be promoted through commitments under the Convention, including, for Annex II research and development, economic diversification Parties, those relating to the provision of financial resources, and strengthening of relevant regional, national and technology transfer and capacity-building, and demonstrate local institutions for sustainable development; that they are taking the lead in modifying longer-term trends (j) Access should be improved to reliable, affordable, in anthropogenic greenhouse gas emissions, consistent economically viable, socially acceptable and with the ultimate objective of the Convention, through the environmentally sound energy services and resources, adoption of national policies and corresponding measures taking into account national specificities and for the mitigation of climate change; circumstances, through various means; All Parties welcome the good cooperation achieved at (k) Actions are required to diversify energy supply the Conference of the Parties at its eighth session in by developing advanced, cleaner, more efficient, Delhi, in particular the progress of technical work and affordable and cost-effective energy technologies, the constructive discussions that have taken place, including fossil fuel technologies and renewable and express their gratitude to His Excellency energy technologies, hydro included, and their transfer Mr. T. R. Baalu, President of the Conference at its to developing countries on concessional terms as eighth session, and the Government and people of mutually agreed; India for their gracious hospitality. 82 Photography: Shutterstock images 1818 H Street, NW Washington, DC 20433, USA Telephone: 202-473-1000 Facsimile: 202-522-1735 Internet: www.worldbank.org/environmentaleconomics