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Inter-American Development Bank. Washington. AssessIng ClImAte ChAnge. effeCts of IDB ProjeCts: ConCePts AnD ProCeDures. Bruce mcCarl roger norton.
vulnerability serie

Assessing Climate Change Effects of IDB Projects: Concepts and Procedures Bruce McCarl Roger Norton Ximing Wu

vulnerability serie

Assessing Climate Change Effects of IDB Projects: Concepts and Procedures Bruce McCarl Roger Norton Ximing Wu

2014 Inter-American Development Bank Washington

edited by

Inter-American Development Bank Washington, December 2014 © BID JEL classification: Q15, Q25, Q54. Key words: Vulnerability, resilience, adaptation, irrigation, Bolivia.  This research was carried out at the request of the Inter-American Development Bank but was partly financed by a grant from the International Development Research Center in Canada under the Think Tank Initiative. The authors are very grateful for the valuable collaboration of PRONAREC officials during the fieldwork phase and also appreciate the comments and suggestions received from a number of known and anonymous reviewers. The conclusions expressed in this document are the responsibility of the authors and do not necessarily reflect the position of any of the involved institutions. All authors work at the ITexas A&M University. Designed by: Contracorriente Editores (El Salvador)

Table of Contents 05

Abstract



chapter_01

07

Projects and indicators: why do it?

chapter_02 11

Climate change and decision making: How might projects be affected

chapter_03 15 How might indicators be formed and play a role chapter_04 17

What types of projects do we consider



chapter_05

21

Basic characterization of climate change and its effects on IDB projects

21

Fundamental nature of climate change

23

The basic dynamics of climate change implications for IDB Projects

27

Basic categorization of climate change effects

42

Rationale for regional level of vulnerability assessment to climate change



chapter_06

45 Vulnerability indicators 45

Principles of Indicator Construction

46

Broad categories of indicators

47

Construction of project relevant indicators

3

Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

4

49

Constructing Dynamic scenarios for the indicators

49

Incorporating adaptation

50

Developing visual indicators

chapter_07 53

Deriving region specific climate projections

54

Additional data

56

Time dimension and uncertainty

chapter_08 59

Implementation guidelines

59

Simulation methods

60

Statistical analysis

62

Engineering relations

63

Field and Laboratory experiments

65

Expert opinions

66

Utilization of results from other studies

chapter_09 69 Vulnerability Assessment of IDB projects 69

Project One: Dominican Republic: Agricultural Research and Development Program

85

Project Two: Brazil: Development Program for the Southwestern Part of the State of Tocantins

94

Project three: Bolivia: Water and Sanitation Program for Small Localities and Rural Communities



chapter_10

105 Concluding comments 109 Bibliography

Abstract

This report addresses procedures for the assessment of climate change implications for Inter-American Development Bank (IDB) projects in Latin America and the Caribbean. We propose a general framework for constructing project-specific indicators for the purpose of assessing the effects of climate change on projects along with the implications of project elements for mitigation and adaptation. We illustrate the proposed method with applications to three IDB projects of different natures.

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

6

Projects and indicators: why do it? 1

Introducción

chapter_01

Organizations like the Inter-American Development Bank are substantially involved with investments that might be affected by climate and the environment. Traditionally, the appraisal of such projects has involved the assumption of an unchanging or stationary climate and general environment. However, climate observations and the future projections can easily lead one to question the validity of the stationarity assumption. In fact, climate change may introduce risk into many of the outcomes that IDB projects are designed to achieve. For example, studies indicate that: •

Distributions of water availability are changing with the climate (Milly et al., 2008), with this being a potential risk factor affecting the outcomes of projects oriented toward sanitation and water supply.



Climate change is inducing alterations in distributions of crop yields (McCarl et al.., 2008) and agricultural research productivity (McCarl et al., 2013) with this being of concern regarding projects oriented toward agricultural development, research and extension.



Sea level is expected to increase with climate change induced melting of ice and thermal expansion of seawater (IPCC, 2013) with this being of concern to projects that make investments in low lying areas.



Atmospheric concentrations of carbon dioxide, and more generally greenhouse gases (GHGs), are widely acknowledged as a causal factor behind climate change, and projects associated with alterations in land-use, livestock

1. This working paper is part of an effort of developing vulnerability indicators at the project level that is summarized in Ludena and Sanchez (2014).

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

populations, energy sources and many other factors, may contribute to reducing or increasing the future extent of climate change (IPCC, 2007, WGIII). Thus, greenhouse gas mitigation may be altered by project activities and thus may be a relevant factor when considering project design, appraisal and execution. •

Adaptation to climate change may provide an attractive near-term alternative to dealing with climate change and adaptation efforts may be possible to improve project performance and this may well put additional demands on project resources or be factors in appraisal, design and execution.

8



Climate change is continuing to evolve meaning that projects will operate in an environment where growing effects of climate change are acknowledged and there is a growing and continuing change in climate and thus a growth where relevant in project vulnerability plus a potential need for adaptation effort.

In the face of these considerations there is an obvious concern that climate change may influence project performance and returns to project investment, leading to potential changes on the outcomes. Climate change may also introduce another demand for project funds diluting the effectiveness of the current allocation as some are diverted toward adapting to a changing climate or mitigating greenhouse gas emissions. In turn, this may suggest or even mandate project design and midcourse operation adjustments to better accommodate adaptation or mitigation solutions. Such modifications are not likely to be static but rather need to be dynamic and flexible informed by the latest available reliable climate data and project performance. Due to the uncertain nature of climate change, knowing how it affects the performance of projects can be challenging. Nevertheless, many projects are potentially vulnerable to its effects, and the uncertainty about climate itself has implications for project design and potential outcomes. The Intergovernmental Panel on Climate Change (IPCC, 2007) defines vulnerability as “the degree to which a system is susceptible to, and unable to cope with, adverse effects of climate change, including climate variability and extremes.” The majority of vulnerability literature focuses on assessments at the global, continental, country or regional levels. However, empirical evidence has demonstrated that vulnerability to climate changes can differ substantially from locality to locality (local scale) as can the effectiveness of adaptation and mitigation actions.

chapter_01 • Projects and indicators: why do it?

In this document, we develop a framework for the construction of climate change related indicators that are suitable to the appraisal of different types of projects. These indicators largely focus on climate change vulnerability but also cover the topics of adaptation and mitigation. Here, the project scope is defined as a group of interacting, interrelated, or interdependent elements in the IDB project area, which can include people, firms, communities, environment, and socio-economic sectors. The goal of this study would be to develop a set of climate change related indicators that can be used in IDB project design, appraisal, and evaluation that collectively possess the following desirable features: •

Constitute a localized assessment of vulnerability that takes into account both global and local context specific risks, climate change exposures, impacts and development paths;



Provide a flexible approach to the development of indicators that can be used in the many arenas that are the focus of IDB projects (e.g., agriculture, water management, community development, health care);



Provide methodological alternatives that can be employed depending on available time, data and analytical capability;



Contain indications of whether mainstreaming of adaptation considerations in project activities can play a key role in reducing vulnerability;



Contain indications of project implications for net greenhouse gas emission reduction (hereafter called mitigation) efforts and whether there are practical ways of incorporating mitigation into project design and operation;



Facilitate an instructive, educational approach so as to raise the awareness of climate change vulnerability among stakeholders and project designers.

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

10

Climate change and decision making: How might projects be affected

chapter_02

Project performance and outcomes may be sensitive to the overall climate change issue in several different ways. First and fundamentally, the direct or indirect consequences of climate change may alter project results. Direct effects of changes in climate and greenhouse gas concentrations, for example, in the form of temperature increases, altered precipitation, carbon dioxide stimulated plant growth enrichment and more frequent extreme events, may alter the productivity of those who are targets of the project. Additionally, there may be increases in operating costs and alterations in availability of necessary resources like water, plus changes in project region land use. Indirectly, changes in climate may alter product markets and prices because of climate-driven changes in production trends/comparative advantage or changes in production stability, plus potential expansions in pest, pathogen and disease incidence and increased resource competition from other elements of the economy. Second, autonomous adaptation by the target project group or more general societal adaptation (through policy changes, investments or other governmental, international or nongovernmental actions - hereafter called public adaptation), may alter either the environment in which the project is set and/or create additional needs for project activities possibly diverting project resources. In particular, a warming climate may well cause agricultural producers to alter their activity mix discontinuing some crops, trees or livestock species and changing to others which may make some project activities irrelevant in the target area.

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

Furthermore, traditionally, projects have been designed for a stationary climate and the possibility of a non-stationary climate may require modifications in project activities or additional investments to maintain the productivity and cost advantages of the project activities. This could well divert project resources reducing achievement of the original goals. Third, project activities may well influence net greenhouse gas emissions by altering sequestration profiles or leading to changes in emissions by target enterprises. This may involve some project redesign to lower the greenhouse gas footprint and 12

an accompanying diversion of project resources.

Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

14

How might indicators be formed and play a role

chapter_03

Given the potential climate sensitivity of projects as argued above, there may be a need for expanding or altering project design elements and the scope of appraisals along with mid-term and ex post evaluation processes to incorporate some indicators of climate change sensitivity. Such evaluations would consider both the direct and indirect effects of climate change, as well as the potential effects of adaptation actions and the possibilities for enhancing or reducing greenhouse gas emissions. The incorporated indicators would depict potential project implications in terms of vulnerability, adaptation and mitigation. We will argue below that indicators may be formed relative to the climate sensitivity of project objectives/outcomes, key resources and environmental factors, the incorporation and effects of adaptation and mitigation actions. Also, in terms of the basic nature of the indicators, we should note that there is a dynamic element to these. In particular, climate change is expected to progress over time due to changes in forcing agents (largely atmospheric greenhouse gas concentrations) and, as a consequence, projects will have different sensitivities at different points in time. We should also note that many of the climate change effects will happen in the somewhat distant future and may occur well beyond the time that the project is funded and could alter the future returns to project created facilities, development of varieties and other outputs. We should note our approach will have limitations as we do believe that it's vital to realize that such an analysis must be local and project specific and as such this broader paper cannot be extremely specific about the formation of such indicators.

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

16

What types of projects do we consider

chapter_04

The climate change sensitivity of projects naturally depends on the types of projects considered. In developing this manuscript we were asked to identify a couple of different types of projects. We read through the IDB suggested list and came up with a relatively small set of target project types that we will address. In particular these involve: •

Agricultural projects that are designed to enhance crop yield productivity through investments in agricultural research and extension as illustrated by the agricultural research and development program in the Dominican Republic (DR-L1054);



Agricultural projects that are designed to enhance productivity by providing improved access to and/or control of irrigation water as illustrated by the development program for the southwestern part of the State of Tocantins in Brazil (BR-L1152);



Water supply provision projects that are designed to enhance the cleanliness and reliability of urban water supplies as illustrated by the water supply and sanitation program for small localities and rural communities in Bolivia (BOL1065);



Sanitation projects that are designed to enhance treatment of wastes and cleanliness of water as illustrated by the water supply and sanitation program for rural areas, small localities and rural communities in Bolivia (BO-L1065).

This paper aims to provide a general methodology on indicator formation to identify vulnerability to climate change that is suitable for project assessment. Below we first present our general methodology on vulnerability assessment at

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

the project level, starting with broad characterizations of climate change and general principles for assessing climate effects on IDB projects followed by the principles of vulnerability indicators, construction of specific indicators, and treatment of dynamic factors and uncertainties. Finally, we present a discussion on three abovementioned IDB projects that results in the development of project specific indicators and indications of climate change sensitivity pathways. Also, in the specific case of a Dominican Republic project, we present an illustrative quantitative development of an indicator with respect to cropping and climate change scenarios. 18

Additionally, we will focus on the types of climate change effects that have been realized (i.e., those that are observable or measurable) and or are projected for the IDB operations area in the Caribbean, Central and South America.

Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

20

Basic characterization of climate change and its effects on IDB projects

chapter_05

Climate change potentially affects IDB projects in a number of different ways across a number of different time periods. A number of documents have discussed the potential climate effects associated with the overall phenomena. Hundreds of documents have covered aspects about the way climate change might alter aspects of the systems over which IDB projects operate. We simply do not have the time or resources to replicate that coverage and rather overview the topic providing key references. Thus within this document we limit our coverage to an overview of what we regard as the major aspects of climate change relative to implications for the IDB project and indicator topic. In doing this we first, examine the basic dynamic nature of the broad climate change phenomena detailing implications this has for projects over their lifetime. The subsequently we broadly characterize the major types of climate change concerns into four major classifications: 1) direct climate effects, 2) indirect climate effects, 3) adaptation concerns and 4) mitigation concerns.

Fundamental nature of climate change Climate change is generally regarded as a concern that evolves over time but with that evolution subject to a substantial degree of uncertainty. The principal anthropogenic driver for climate change is greenhouse gas emissions and the future level of these emissions is highly uncertain depending upon economic/societal evolution plus the effectiveness of mitigation efforts. The basic evolution of climate change and its inherent uncertainty is typically characterized using a graphic like that in Figure 5.1. That Figure shows:

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures



Climate change evolves over time;



Differential amounts of future change arise dependent on the future atmospheric concentration of greenhouse gases. In the recent IPCC (2013) report, alternative climate futures are characterized as set of Representative atmospheric Concentration Pathway scenarios (RCPs)2. Basically, in either case, these scenarios indicate future GHG emission and/or associated economic growth/ societal evolution pathways. Viewed another way, the RCP scenarios basically describe different levels of societal control of greenhouse gas net emissions and thus different degrees of societal success in mitigating the future extent of climate change. The effort involved with reduction of green-

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house gas emissions is commonly called climate change. •

Under the RCPs there are also depictions of uncertainty that cause variation falling around the effect of the pathways. In the Figure, the basic RCP scenarios are the colored solid lines and the uncertainty bands for a scenario are the shaded areas around each of the colored solid lines.

Figure 1. Global temperature change and uncertainty adapted from Knutti and Sedláek (2013)

What could happen

What we have seen so far

2. Similar pathways also appear in the older IPCC reports and in particular in the IPCC 2007 Special Report on Emissions Scenarios plus the IPCC 2007 assessment reports. In that writing these involve families of scenarios that were called SRES scenarios (e.g. A1, A1B, A2, B1, B2, etc. )

chapter_05 • Basic characterization of climate change and its effects on IDB projects

Importantly the concepts underlying the overall structure of this diagram have important implications for IDB project appraisals as will be covered in the next section. Also we should mention the obvious that climate change is expected to continue to evolve so that an appraisal that considers effects for 10 years from now may not be valid for a 50 year project.

The basic dynamics of climate change implications for IDB Projects The anticipated evolution of climate change as in the dynamically changing projected change in temperature in Figure 5.1 has led to the formation of alternative future scenarios for the climate change and how it changes. These will be emphasized in the next IPCC Working Group II report that will be released in April 2014. A similar approach can be used at the project level regarding climate vulnerability indicators for IDB purposes. Here we will develop the climate futures concept and then later, show our recommendations for implementation in developing indicators. In particular, let us reexamine Figure 5.1 but add a couple of additional lines and some additional captioning (Figure 5.2).

Figure 1. Key time periods for considering climate change effects portrayed on the graph adapted from Knutti and Sedláek (2013)

with markings corresponding to the text discussions of the inevitable amount of global warming plus 2 and 4 degree scenarios for the year 2100.

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

In this case, Figure 5.2 is an augmentation of Figure 5.1 with an added line marking the year 2040 (the orange line) and another marking the year 2100 (the red one). We also introduce labeling of two eras of climate change. Era 1 is the time period between now and 2040 and Era 2 the time period between 2040 and 2100. There is also a grey line in the figure roughly representing today (actually the starting period for the climate change projection). Also note that in Figure 5.2 the data in the black line represents actual historical climate observations to date showing that there has been a substantial amount of changes in climate in the relatively recent past. 24

So now the question becomes: What can we draw from this representation of climate change and evolution that is relevant to the concept of indicators for IDB projects? Several concepts arise and can be separated into the categories of appraisal under today’s conditions, implications for appraisal during Era 1, implications for appraisal during Era 2 and implications of multi-year appraisals that span from today into future eras. Each will be discussed below. Today When doing IDB project appraisals under today’s conditions the amount of observed historical increase in temperature gives rise to the possibility that proposed or ongoing IDB projects may have what's called an adaptation deficit. In particular, the focal enterprises for projects may not be fully adapted to the amount of climate change that has been realized in the last 10 years because of perceptions, funds available or many other factors (See discussion in chapter 14-17 of IPCC, 2014), and thus have a current adaptation deficit coupled with the possibility of additional changes in project performance under continuing climate change. Furthermore, if foreseen climate change impacts are not tackled early in the project design/execution, project efforts may lead to forms of maladaptation either in the short run or the long run. This introduces two concepts that are commonly discussed in the literature plus the possibility of a risk bearing project design, namely the possible existence of an adaptation deficit or maladaptation plus the possibility that the project as designed is already at risk under the current climate. •

An adaptation deficit arises in the IDB project context when there are beneficial climate related alterations that are not included within the project design and which could be implemented and yield improved project performance

chapter_05 • Basic characterization of climate change and its effects on IDB projects

under current climate conditions. Thus this would lead to the case where project activities could be modified and or adjusted to enhance outcomes under the current climate. •

Maladaptation occurs when implementation of a project worsens the societal adaptation status. Such a possibility may arise immediately or over a longer time frame. This occurs when activities stimulated by the project lead to increased climate change vulnerability in the longer run. Such actions may lead to short run maladaptation where for example protecting one area may make other areas more vulnerable or in the longer run where current activities may increase adaptation for short time but then worsen adaptation in the future. For example consider a project that installs a sea wall that protects against a 1meter sea level rise and encourages current construction of infrastructure in the project area. The accompanying increase in infrastructure could certainly place a larger amount of societal assets at risk when the amount of sea level rise exceeds one meter. Similarly raising dikes to avoid flooding may also worsen flooding and thus adaptation in other areas.



A risk bearing project design means that the realized climate effect to date raises risks relevant to the project indicators.

During Era 1 When doing an IDB project appraisal for a project that has an appraisal lifetime that begins and ends during Era 1, i.e. the next 30-40 years, then Figure 5.2 implies the climate change follows one basic path. In particular the amount of warming is the same across all the alternative climate change scenarios regardless of RCPs or any of the scenarios families from the SRES. Thus, reference to more than one of such scenarios is not needed. Why? Because Figure 5.2 shows that the changes in climate during Era 1 are largely inevitable and are about the same regardless of the scenario (as does the equivalent figure in IPCC, 2007a). For say 2040 we can consider an increase of 1°C in global surface temperature without reference any particular scenario. For any appraisal employing a timeframe that ends short of 2040 one can simply use any of the RCP scenarios. During Era 2 When doing an IDB project appraisal for a project that has an appraisal lifetime that extends beyond 2040, then Figure 5.2 shows that the RCP scenarios do come into play. In the IPCC working group, two deliberations are taking center stage as follows:

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures



Era 2 with 2°C of warming. This considers an increase in global surface temperature of roughly 2°C by the year 2100. This embodies the assumption of substantial gas emission mitigation activities to get to the approximate level of some of the more moderate RCP scenarios.



Era 2 with 4°C of warming. This considers an increase in global surface temperature of roughly 4°C by the year 2100. This embodies the assumption of limited mitigation activities or basically a continuation of current emission rates (Business as Usual – BAU).

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Timing and IDB Projects The climate change scenarios above coupled with the basic duration of the funding duration of IDB projects raises an issue. In particular the era 2 effects are likely well beyond the funding horizon of IDB projects. But for long lived projects they may influence the future operation and returns of the projects. This leads to a couple of possible approaches. •

Climate change in the longer run may not have any effects for a project if the fruits of the project are expected to be obsolete by that time. In such a case one may neglect longer run climate effects.



Climate change in the longer run may influence the future operation of the assets created by project if the fruits of the project are expected to be operated well into era 1 or two. In such a case o

one needs to include climate effects in the long run project cost benefit analysis.

o

one needs to consider whether there are adjustments in project design that would better adapt the project to the future climate.

Multiyear appraisals When doing an IDB project appraisal, the case will frequently arise where the project being examined has implications over multiple years spanning from today into at least the midpoint of the first era and perhaps into the second era. Naturally this depends upon assumptions about the persistence of the effects of the project developments and varies by project. In this case, one needs to utilize what have come to be known as transient climate scenarios. Such scenarios characterize a changing climate over time as depicted in Figure 5.2 where one sees a continuous evolution of climate change. In that case what is needed is not an appraisal of the effects of a one-time change in climate conditions but rather of the evolution of the climate during the life of the project.

chapter_05 • Basic characterization of climate change and its effects on IDB projects

Basic categorization of climate change effects Climate change as discussed above is often regarded in terms of temperature however that is certainly not its full scope. A number of climate attributes will be directly affected and in turn those climate attributes alter other factors that will indirectly affect the productivity or function of entities that are the target of IDB projects. Implications for adaptation and mitigation concerns can also arise. Here we broadly characterize the climate change effects as falling in four major classifications: 1) direct climate effects, 2) indirect climate effects, 3) adaptation possibilities and 4) mitigation possibilities. In this section we overview these, with more detail provided in the appendix. Direct climate and forcing agent effects Climate change may manifest itself in a number of ways. Fundamentally these involve alterations in regional temperatures, precipitation levels, and the incidence of extreme events along with alterations in atmospheric concentrations of carbon dioxide. Below we have a table that has coverage of climate change effects within each of these major categories and some coverage regarding important sub effects underneath them. The table contains a brief explanation of what the effect is and then provides reference to a place where one can find an explanation of the magnitude and regional implications of the phenomenon always at the global level and locally when evidence is available for the IDB service area. Unless stated otherwise, all references cited in the Table below refer to the IPCC Working Group II report entitled Intergovernmental Panel on Climate Change, Climate Change 2014: Impacts, Adaptation and Vulnerability: Contribution of Working Group II to the fifth assessment report of the IPCC.

Major category

Minor category

Brief explanation of effect

Place where evidence for IDB service area can be found

Temperature

Warming

Generally the globe is projected to warm mainly on a uniform basis. There are some small projected changes in regional warming.

See Figure 5.1 above and IPCC 2014 figure SPM.1 which shows differences in observed warming to date and figure SPM.8 which shows changes in temperature under two different RCP scenarios globally and for the IDB region. Climate change projections for the IDB operations area indicate generally hotter conditions although there is regional variation in the findings.

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

Major category

Minor category

Brief explanation of effect

Place where evidence for IDB service area can be found

Temperature

Hot days/ nights, heat waves and fewer cold das/nights

Generally, there is a projection that there will be more extremely hot days and heat waves with fewer cold nights or days

See table SPM.1 plus discussion on Central America, the Caribbean and South America in sections 14.8.4 and 14.8.5.

Temperature

Temperature variability

Generally, there is a projection that there will be more extremely hot days and heat waves with fewer cold nights or days

See discussion in 12.4.3.3 that covers the issue globally. No information is presented relative to the IDB service area.

Precipitation

Amount

Generally, there is a projection that there will be changes in rainfall amounts. On the global basis rainfall is expected to increase. However these increases are not expected to be uniform and areas in the sub tropics are expected to be drier. Higher latitudes will generally receive more rainfall and lower latitudes less.

Table 14.3 projects reductions in mean precipitation within many subtropical areas and figure SPM.8 shows projections of decreases in the northern part of South America plus the Caribbean. Climate change projections for Hispaniola indicate that some regions of the island may experience more frequent droughts and generally drier and hotter conditions. Also, the Andean highlands of Bolivia are expected to, and are already experiencing, higher temperatures and less precipitation.

Precipitation

Rainfall intensity

It has been observed that there are big changes in the amount of precipitation coming from the wettest days of the month. This also means that more of the rainfall comes in more severe events that we had more severe state forms which would cause flooding.

The issue is discussed in IPCC 2014 in the technical summary in section 5.4.3 and chapter 2 section 6.2.1 where South America and Central America are indicated as places where heavy rainfall events are increasing in frequency and intensity. Technical summary table TS.2 projects southward displacement in storm tracks over South America decreasing precipitation in central Chile and increasing it in the southernmost part of South America.

Precipitation

Seasonality

There is some evidence that there are changes in the amount of rainfall say in winter versus summer.

The issue is discussed in sections 2.6.2.1 and in 14.2.1 with regard to the onset of monsoonal conditions. The bigger seasonal change probably has something to do with areas where snow pack is important.

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chapter_05 • Basic characterization of climate change and its effects on IDB projects

Major category

Minor category

Brief explanation of effect

Place where evidence for IDB service area can be found

Precipitation

Snowpack

Warming generally means less precipitation falls in the form of snow and also alters the timing of runoff. Much of the moisture accumulating as snowpack typically does not runoff until a later warmer time period.

Figure SPM.3 and the text box TFE.1: water cycle change

Extreme events

Hurricanes

There are mixed findings regarding the whether climate change will alter tropical cyclone incidence and intensity. There are some observations of more storms in recent periods but causality is debated.

Technical summary table TS.2 projects more tropical cyclones making landfall across the Western and southern coasts of Central America. The table also contains a projection of a southward displacement in storm tracks over South America.

Extreme events

Dry periods

Climate change is associated in a number of regions with increased drought frequency and intensity. However, this is on a definite regional basis.

There is some discussion of increased drought drying in the Southwestern United States and northern Mexico (see technical summary section 2.5). However, the drought evidence is not clear and varies regionally as discussed in 2.6.2.3 and in table 2.13 of IPCC (2014).

Carbon Dioxide

One item not directly associated because is not really a climate item, involves carbon dioxide concentrations in the atmosphere, which in turn, have growth stimulating effects and also some influence on plant performance under drought.

There is little doubt that carbon dioxide is increasing as discussed in section B.5 of the SPM. Its effects on plant growth have been widely studied as discussed in Ainsworth and Long (2005) and Attavanich and McCarl (2014).

Warming

Generally, the globe is projected to warm mainly on a uniform basis. However, there are some small projected changes in regional warming.

See Figure 5.1 above and IPCC 2014 figure SPM.1 which shows differences in observed warming to date, and figure SPM.8, which shows changes in temperature under two different RCP scenarios globally and for the IDB region. Climate change projections for the IDB operations area indicate generally hotter conditions although there is regional variation in the findings.

Temperature

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

Indirect climate effects Climate change may also have a number of indirect effects largely stimulated by the changes in temperature, precipitation, extreme events and carbon dioxide as mentioned above. Fundamentally, these involve the implications of these forces for agricultural products to be, agricultural costs, water flows and supply, and general regional health. Below we show a table that goes through each of these major categories and some of the sub effects underneath them coupled with a brief explanation of what is the effect, a reference to a document where one can find 30

an explanation of the phenomenon, and some global or, where relevant, regional evidence for the effects within the IDB service area. Unless stated otherwise, references cited in the Table below refer to the IPCC Working Group II Fifth Assessment Report entitled Intergovernmental Panel on Climate Change, Climate Change 2014: Impacts, Adaptation and Vulnerability: Contribution of Working Group II to the fifth assessment report of the IPCC.

Major category

Minor category

Brief explanation of effect

Agricultural productivity

Crop and forage yields

Climate change can affect, and has affected, crop yields in a number of ways. Generally, any alterations in temperatures and rainfall have implications for crop yields. Another major pathway is the wider spread of crop diseases and pests. A third route is variable seasonal rainfall, which may bring about weeks of excess dryness in crucial periods for plant growth. Equally, intense rainfall may damage crops and sometimes may prevent timely harvesting because of flooded fields. A fifth route is changes in extreme events. A sixth is changes in surface level ozone induced by climate change and its yield depressing effects. Finally atmospheric carbon dioxide is in cases is a yield increasing item (See discussion in Attavanich et al., 2014).

Place where evidence for IDB service area can be found

IPCC 2007 and IPCC 2014a give evidence with the findings that yields will both go up and down depending on region, and an overall conclusion is that there is medium evidence that climate change has negatively affected current and will negatively affect future wheat and maize production in many regions, but that climate change has benefited production in some high latitude regions. Forage yields are also affected as discussed in the US national assessment (Reilly et al., 2002a,b).

chapter_05 • Basic characterization of climate change and its effects on IDB projects

Place where evidence for IDB service area can be found

Major category

Minor category

Brief explanation of effect

Agricultural productivity

Livestock yields

Climate change can affect livestock production directly with heat stress causing changes in their weight gain, milk production, and reproductive performance. Feed availability can also be altered through effects on crops and the productivity and availability of grazing land. Water supplies may also be altered causing a depression in production.

Estimates of climate change effects on livestock are rather scarce and diverse. Please see Mu et al.. 2013 and Feng et al.. 2010 for literature review and evidence.

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Agricultural productivity

Forestry yields

Rising temperatures, increased carbon dioxide and altered rainfall patterns are already altering forestry yields, in some places to the positive.

See discussion in IPCC 2007 in chapter 5.

Agricultural productivity

Fishery yields

Rising temperatures have been causing poleward shifts in fish distributions due to a combination of temperature change in the oceans, sea level rise and carbon dioxide content in the oceans. Furthermore, some coral reefs which are important fisheries food supplies are also threatened by climate change.

The general issue is discussed in IPCC 2007 and 2014 in section 7.2.1.2.

Agricultural productivity

Shifts in timing of flowering, planting, harvest

Climate change has been observed to change crop calendars of flowering and hence alter harvest dates. The growing season is generally starting earlier and lasting longer causing shifts in the timing of plant physiological responses and in the timing of farmer's actions, including planting, harvest time and irrigation. This generates uncertainty about these dates and hence about appropriate planting schedules. This issue poses serious difficulties for farmers, especially in rain fed areas, and creates an adaptation deficit.

Agricultural

Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

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Place where evidence for IDB service area can be found

Major category

Minor category

Brief explanation of effect

Agricultural productivity

Returns to agricultural research

The factors mentioned above that affect crop and livestock productivity also affect the rates of return agricultural research and the returns to research investments in part because new varieties tend to have lower yields and/or higher costs.

See McCarl et al. 2014 for discussion and estimation in the United States context.

Agricultural productivity

Shifts in location: latitude and altitude

Locations of production sites are shifting pole ward and to higher latitudes. The shift of plant and animal species plus agricultural production toward the Poles has been increasingly documented.

Chen et al. 2011 find that “The distributions of many terrestrial organisms are currently shifting in latitude or elevation in response to changing climate. Using a meta-analysis, we estimated that the distributions of species have recently shifted to higher elevations at a median rate of 11.0 meters per decade, and to higher latitudes at a median rate of 16.9 kilometers per decade”. In Guatemala, for example, the consensus of coffee producers is that the minimum altitude for quality Arabica coffee has shifted from 1,200 meters to 1,300 meters. See Reilly et al. (2002b) and Attavanich et al. (2013) for broader discussion.

Agricultural costs and input demands

Pest incidence and treatment costs

Climate change, especially higher temperatures and altered precipitation, can generate a broader spectrum of crop pests and livestock diseases and lead to more virulent strains of them.

As an example, for the case of coffee in Mexico it was found through regression analysis that “another important relation between temperature and production is that higher temperatures favor coffee plagues” (Gay et al. 2006, p. 274) while Chen et al. (2001) find higher pesticide treatment costs and implicitly higher application rates are needed due to climate change. As an example, expert opinion in Central America states that the recent and devastating coffee leaf rust outbreak (a fungal infection) has been brought about in part by warmer, more humid conditions in growing areas.

chapter_05 • Basic characterization of climate change and its effects on IDB projects

Place where evidence for IDB service area can be found

Major category

Minor category

Brief explanation of effect

Agricultural costs and input demands

Water usage and evapotranspiration

Drier and hotter conditions are expected to increase crop water demands of irrigated crops. Evapotranspiration would also increase and soil moisture levels decrease. This may well reduce runoff.

The issue is discussed in Reilly et al. 2002b where you can also see findings on changes in water rates for the US.

Water flows, supplies and quality

Water quantity

Regionally drier and hotter conditions are expected to reduce runoff in places. Evaporation also increases.

Changes in stream flow and water availability have been observed and are projected to continue in the future in regions within Central and South America. See IPCC 2013, WGI figure TFE.1.

Water flows, supplies and quality

Water quality and treatment

Climate change is projected to reduce raw water quality and pose risks to drinking water quality, due to interacting factors: increased temperature; increased sediment, nutrient, and pollutant loadings from heavy rainfall; reduced dilution of pollutants during droughts; and disruption of treatment facilities during floods. Higher water temperatures will increase risks of contaminated water, requiring additional or new treatment of drinking water. On the other hand, biological water and wastewater treatment is more efficient when the water is warmer. Also, regionally drier conditions would increase pollutant concentrations and lessen dilution.

See IPCC 2014 SPM section B-2, plus main text sections 3.5.2.3 and 10.3.3

Water flows, supplies and quality

Seasonality

Monsoonal changes have been observed and are expected to continue. In regions with snowfall, climate change has altered observed stream flow seasonality with increasing alterations projected. In such places increased winter flows and reduced summer low flows have been observed.

The issue is discussed in IPCC 2013 sections 2.6.2.1 and in 14.2.1 with regard to the onset of monsoonal conditions. The seasonal change in with snow pack is discussed in IPCC 2014, (Table 3-1; 3.2.3; 3.2.7).

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

34

Place where evidence for IDB service area can be found

Major category

Minor category

Brief explanation of effect

Water flows, supplies and quality

Droughts

There were some strong assertions of increasing drought in IPCC 2007 but these have been weakened in IPCC 2013

See discussion in chapter 2 of IPCC 2013. Some regions in the IDB service area have been found to be wetter.

Water flows, supplies and quality

Variability

Rainfall, in general, is becoming more variable and unpredictable. Climate variability is expected to increase in cases with more floods and lower overall water available.

See discussion in IPCC 2014, Chapter 3.

Water flows, supplies and quality

Floods

Floods are becoming more frequent, damaging infrastructure and cultivated fields. Flood hazards are projected to increase with increases in rainfall variability. An increased risk of floods brings with it the danger of severe inundation of water and sewage treatment facilities. This kind of incident not only deprives the target population of water and sewage treatment services for a period of time but it also spreads diseases through contaminated floodwaters and hence poses a grave risk to public health. Increases in soil loads in watercourses under flooding can leads to sedimentation of reservoirs and hence to a shortening of the useful life of dams, sometimes markedly.

IPCC 2014 mentions South America as one region where flood risk is expected to increase. See sections 3.2.7; and 3.4.8.

Water flows, supplies and quality

Groundwater demand and depletion

More erratic precipitation patterns cause increased demands for groundwater and hence more rapid aquifer depletion. Also lesser surface water implies less groundwater recharge plus potential over exploitation. In turn, this leads to saltwater intrusion and a lowering of water quality, occasionally far inland from coastlines. Increased salinity in water reduces crop yields and leads to salt buildup in soils, as well as making the water less suitable for human consumption.

For example, this phenomenon has occurred in the irrigation districts of northwestern Mexico (states of Sonora and Sinaloa). See Bates et al., 2008 for extensive discussion.

chapter_05 • Basic characterization of climate change and its effects on IDB projects

Place where evidence for IDB service area can be found

Major category

Minor category

Brief explanation of effect

Water flows, supplies and quality

Glacier supplies

Warmer conditions and altered snow fall patterns are causing glaciers to melt in turn altering log run water supplies with short run increases.

Snow pack and glaciers in the Andes is diminishing affecting the seasonal distribution of stream flows as covered in IPCC 2014, Table 27-3.

Water flows, supplies and quality

Saltwater intrusion

Saltwater intrusion may occur under sea level rise into surface or ground water. Surface water intrusion is due to sea level rise. Ground water intrusion is due to higher sea level levels and possible over pumping of coastal aquifers.

See Bates et al., 2008

Water use competition

Competition agricultural and nonagricultural sectors

Climate change that results in more severe and extended drought creates intensified competition between sectors for access to resources, especially water when its availability declines in surface water sources (rivers, reservoirs).

See Chen et al., 2001.

Sea level rise

Land inundation

Low lying areas may flood with an up to one meter sea level rise projected by the end of the semester. This would cause loss of coastal infrastructure, productive lands and housing.

IPCC 2013 chapter 13 covers sea level rise with the total extent projected in the graph 13.27 and some regional data in section 13.25. Also see Chen et al. 2012 for a study of agricultural vulnerability and does Dasgupta et al. (2009) for maps of sensitive areas.

Sea level rise

Salt water intrusion

Increased se level rise coupled with increases in coastal pumping and subsidence can lead to salt water intrusion into ground and surface waters worsening the productivity of agricultural lands using those waters plus raising municipal treatment costs.

IPCC 2014 chapter 3 section 3.4.5 covers this as does 9.3.4.3. Chapter 27 discusses the issue in the South American context and presents some vulnerability information in figure 27.6.

Infrastructure

Lost or damaged

Project infrastructure can be vulnerable to extreme climate events that bring flooding, and hence, this may raise vulnerability. This includes dams, processing facilities and roads among other items.

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

36

Place where evidence for IDB service area can be found

Major category

Minor category

Brief explanation of effect

Infrastructure

Improper location

Adaptation in terms of pole ward or higher latitude shifts may move products out of the market area of agricultural infrastructure causing the need to move it or rendering it obsolete plus raise capital investment needs in other areas.

Other

Ecosystem and biodiversity concerns

Climate change is causing difficulties for the existence of some species, destruction of suitable habitat and changes in migration patterns.

This is discussed in lPCC 2014 section 27.3.2.2

Other

Cooperative governance and stress placed on it by changed climate

Climate change alters the way that water and agricultural systems work and in turn, places stress on cooperative governance institutions.

This is discussed in IPCC, 2014 Chapter 27 sections 3 through 5.

Other

Migration

Climate change will influence mobility and migration in turn affecting rural and urban populations and labor supplies.

This is discussed in IPCC, 2014 sections 9.3, 12.4, and 19.4

Other

Ozone

The concentration of ozone due to a) increasing anthropogenic emissions of gases which react in the atmosphere to form ozone including nitrous oxide and the increased mixing of stratospheric ozone into the troposphere as a result of climate change. Negative effects on crop and forest yields result of the current levels of ozone have been widely documented.

This is discussed in Denman et al.., 2007 and IPCC 2014 section 4.2.4.3. plus in section 7.3.2.1.2, and Figure 7-2

General economic conditions

Financial stress

Climate change on a regional basis can worsen the income situation of people living in poverty plus reduce crop yields. This can lessen adaptive capacity

See IPCC 2014 discussion in sections 8.2-3, 9.3, 11.3, 13.1-3

chapter_05 • Basic characterization of climate change and its effects on IDB projects

Place where evidence for IDB service area can be found

Major category

Minor category

Brief explanation of effect

General economic conditions

Human health and diseases

Climate change will have both positive and negative effects. Initially it will exacerbate health problems that already exist. Thereafter it will increase regional health issues due to more intense heat waves and fires; under-nutrition resulting from regionally diminished food production; risks from lost work capacity and reduced labor productivity; and risks from food- and water-borne diseases. Positive effects will include modest improvements in cold-related mortality and morbidity shifts in food production, and reduced capacity of diseasecarrying vectors.

See the IPCC 2014 discussion in sections 8.2, 11.3-8, and 19.3 plus Box CC-HS

37

General economic conditions

Market prices

Climate change in some places will reduce agricultural production and elsewhere will increase it; in addition, it will generally increase variability. This is likely to affect prices in most countries although in the opposite way from the production change. It will also create additional market risk for farmers and is likely to make them more cautious about adopting new technologies. Rural landless and urban poor would suffer from price increases as would consumers.

See evidence in McCarl et al. 2008 plus the price results in Adams et al. 1990, Reilly et al., 2002; Butt and McCarl 2005; McCarl et al. 2013; IPCC 2014 discusses this in chapter 7 plus in sections 8.2-3, 9.3, 11.3, 13.1-3

General economic conditions

Agricultural incomes

Climate change may lower production and raise prices enough to raise farm incomes. When it increases production, the effects would be in the opposite direction.

See evidence in in Adams et al. 1990, Reilly et al., 2002; Butt and McCarl 2005 and McCarl et al. 2013. IPCC 2014 discusses this in chapter 7.

General economic conditions

Food costs and poverty

As above, prices may go up disadvantaging rural landless, urban poor and consumers in general.

IPCC 2014 discusses this in chapter 7.

General economic conditions

Urban water demands

Climate change in the form of hotter and regionally drier conditions will impact residential water demand.

O’Hara and Georgakakos, 2008 and Chen et al., 2001 show cases were this occurs.

Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

Factoring in adaptation Adaptation is a key factor in reducing vulnerability to climate change. There are three dimensions on the ability to adapt to reduce vulnerability. First, there is the degree to which the project design incorporates adaptation. Second, there is the degree to which a project addresses a current adaptation deficit (note in IPCC 2014, Chapter 27 the authors argue there are substantial adaptation deficits currently in the IDB service area). Third, there is the degree to which adaptation efforts beyond the scope of the project can improve its performance in the face 38

of climate change. Vulnerability to climate change as projected by IPCC including downscaled regional counterparts, should be appraised in terms of the indicators developed below under the assumption of within project designed practices, i.e., without taking into account possible adaptations not specified in the project design. In addition, to arrive at a with-adaptation vulnerability measure, one needs to assess to what degree adaptations can alleviate vulnerability to climate change. Generally, the nature, feasibility and effectiveness of adaptation strategies are location and project specific. Indicators should embody the potential influence of adaptations within the context of each project and category. Adaptation to climate change is broadly constrained by a set of barriers. In chapters 16 and 17 of IPCC 2014 these are separated into: •

Knowledge, Awareness, and Technology Constraints – a lack of information about the extent of climate change and possibilities to address it.



Physical Constraints – a mixture of geographic features and availability of resources that limits the application of some adaptation possibilities.



Biological Constraints - capacity of organisms to cope with increasing climate stress in situ through acclimation, adaptation, or behavior.



Economic Constraints - the state of development and available economic resources.



Financial Constraints- availability of funding to those who can make the adaptation.



Human Resource Constraints- the availability of a workforce was sufficient human capital to make the adaptation.



Social and Cultural Constraint-social and cultural norms and practices that limit the capability to use certain adaptations.

chapter_05 • Basic characterization of climate change and its effects on IDB projects



Governance and Institutional Constraints - willing us to take action in government and institutional settings.



Objectives and Competing Values - the orientation of those making decisions and their preferences for alternative uses of resources.



Consideration of Cross-Scale Dynamics- complexity of the considerations and need for coordinated action.



Transaction Costs, Information, and Adjustment Costs – the sheer cost of assembling the information and gaining the ability to proceed.



Market Failures and Missing Markets – the existence of externalities, information asymmetry, and moral hazards.



Reactions to uncertainty and resultant conservative decision making especially among the impoverished.

When considering adaptation, one must consider whether any of the above barriers are present and also the extent to which they can be removed through project activities. One should also realize that a substantial amount of adaptation activity is undertaken by private individuals pursuing their own objectives and in cases some form of public intervention may be needed to enable or facilitate the adaptation. This will involve a mixture of activities •

providing the means to adapt,



providing resources like capital, labor or water,



installing some infrastructure for adaptation in the face of common property situations where individuals would be unable to reap the gains from large investments (for example sea walls or major water control dams),



provision of incentives (subsidies, taxes, risk sharing mechanisms),



provision of information on potential adaptation and climate change progression



Development of new technology.

Chapter 17 of IPCC 2014 also lists major types of adaptations and who undertakes them as follows: •

Altered patterns of enterprise management, facility investment, enterprise choice or resource use (mainly private),



Direct capital investments in public infrastructure (e.g. dams and water management - mainly public),



Technology development through research (e.g. development of crop varieties - private and public),

39

Assessing Climate Change Effects of IDB Projects: Concepts and Procedures



Creation and dissemination of adaptation information (through extension or other communication vehicles mainly public),



Human capital enhancement (investment in education - private and public),



Redesign or development of adaptation institutions (e.g. altered forms of insurance - private and public),



Changes in norms and regulations to facilitate autonomous actions (e.g. altered building codes, technical standards, regulation of grids/networks/utilities, environmental regulations-mainly public),

40



Changes in individual behavior (private with possible public incentives),



Emergency response procedures and crisis management (mainly public).

Finally, from a project perspective we note: •

Climate change may make traditional indigenous knowledge obsolete. Indigenous knowledge is generally based on historical environmental conditions, and in the era of climate change those conditions may no longer hold. Hence, projects addressing smallholder agriculture may need to incorporate explicit activities to disseminate new knowledge.



Adaptation may well change the physical characteristics of the project environment. In particular, suppose significant changes in temperature and/or precipitation have happened or are anticipated. In turn these can, in some circumstances, make commonplace cropping activities less profitable or even nonviable, and this can lead to a substantial crop/livestock mix change or a reversion of land to pasture. For example Mu et al. (2012) found land moving to pasture is occurring in the US particularly in the Southwest as conditions become hotter and drier while others find substantial crop mix changes (Attavanich et al. 2013), and Gourdji(2013) found substantial elevation changes in IDB region coffee plantation location. This raises the risk of that the project activities could be designed for something that is no longer done in the project region. Sea level rise may also cause degrees of project obsolescence if low-lying lands or lands dependent on waters subject to saltwater intrusion move out of production.



Adaptation may also rely upon Infrastructure suitability, and the effects of climate change like floods, sea level rise and indirect movement of crops and livestock may cause the need for new facilities or the obsolescence of older ones.

Indicators for projects related to adaptation should consider adaptation measures that are available beyond the project design; whether there are any major barriers

chapter_05 • Basic characterization of climate change and its effects on IDB projects

to adaptation and whether the project exacerbates them; and whether there are public enabling activities that are needed in order for the project to succeed. Including or accommodating mitigation Projects may be involved with either reducing or increasing greenhouse gas emissions or the amount of carbon sequestered in the soil. Generally, the mitigation related indicators should address whether or not project activities lead to emissions expansions. This would involve emissions increases or decreases occurring in association with the project in terms of tons emitted of carbon dioxide, methane and nitrous oxide and possibly some of the other ones discussed in IPCC, 2007. It would also consider whether the project increases or decreases land disturbance or standing vegetation supply (trees and understory) in turn altering the volume of sequestered carbon. From a largely agricultural perspective, this involves whether •

more or less fossil fuel powered machinery operations are being used,



the project soils are subject to more or less disturbance (which alters sequestration),



more of less fertilizer is being used,



ruminant livestock herds are larger or smaller,



livestock manure is managed under anaerobic conditions stimulating methane emissions,



additional rice is planted with accompanying methane emissions,



chemicals or other inputs are used that have substantial emissions involved in their production, and a number of other factors as covered in IPCC 2007 or IPCC 2014 working group 3 report.

The recommended indicators here show expected changes in tons of net emissions of carbon dioxide (CO2), nitrous oxide (N2O) and methane (CH4) along with whether net sequestration is increased or decreased. There may also be indicators showing the potential for altering project activities to enhance the net greenhouse gas emissions reduction contribution. It is also worthwhile discussing the issue of bioenergy as projects may well involve production of agricultural or forestry feedstocks for bioenergy production. In such cases there are obvious gains from bioenergy production in terms of the

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

recycling of carbon dioxide emissions but there are also potential losses when undisturbed lands are cut down releasing their sequestration, market production is reduced stimulating land-use change in other areas and there are food versus fuel type trade-offs (see Murray et al. (2004), Searchinger et al. (2007) or Fargione et al. (2007) for discussion).

Rationale for regional level of vulnerability assessment to climate change 42

A good understanding of the decision-making contexts is essential to define the type and scale of information on climate change related risks required from physical climate science and impacts, adaptation and vulnerability assessments (IPCC 2014, 21.2.1). Adaptation is highly locally and context specific, with no single approach for reducing risks appropriate across all settings.

Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

44

Vulnerability indicators

chapter_06

Now we turn attention to indicators. Indicators have become popular in recent years including their use in many environmental contexts. Hinkel (2011) reviews the literature on climate change vulnerability and adaptive capacity indicators, suggesting they are appropriate for identification of vulnerable people, communities, regions, etc. However, one must be purposeful in their use. For example Hinkel (2011, p. 199) states: “Most policy and academic documents in fact remain silent about the purpose for which the developed vulnerability indicators are to be used.” Thus, we believe that we need to state a purpose for indicators in this document and more generally in IDB project considerations. In particular we assert that the ultimate purpose of indicators is to help make the project design and subsequent project operations more resilient to climate change, specifically, to make its expected results less vulnerable to climate change.

Principles of Indicator Construction There is a large literature on the construction of vulnerability indictors (e.g., Hinkel, 2011; Dale et al.., 2013). We recommend development of indicators under the following operating principles: •

Reflective of project objectives: the indicators reflect the objectives of a project along with key input assumptions.



Reflective of climate change: covers direct and indirect climate change conditions as they influence key project outputs and inputs.



Reflective of the adaptation possibilities: covers potential reduction of vulnerability through adaptive actions provided they are implemented.

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures



Reflective of mitigation implications: covers the way the project affects net greenhouse gas emissions allowing for the possibility that the project may either contribute to emission reduction or increase emissions.



Feasible: the construction of indicators is practical (easy, timely and costeffective) and can be inferred from observational and climate change projection information.



Effective: sensitive and responsive to both natural and anthropogenic stresses to the system, and unambiguous with respect to what is measured and how the measures are made.

46



Dynamically appropriate: indicates project vulnerability considering current conditions, conditions between now and 2040 when mitigation activity largely has little influence on climate change, and onward to 2100 conditions, under which climate change can reach 2 to 4 degrees Celsius.



Indicates risk of not achieving objectives: gives prospects that climate change places objectives of the project at risk.



Comprehensive: when considered collectively, the indicators reflect the overall level of vulnerability of the project as a whole and subcomponents there under being successful in the face of climate change drivers.

Broad categories of indicators We consider five broadly defined categories of indicators: •

Project objective satisfaction indicators that cover the risk regarding goals identified in the project design documents. In the context of the projects we identified above, these include such measures as: 1) Agricultural productivity (e.g., crop yields); 2) Rural income; 3) Rural Employment; 3) project area total agricultural production; 4) project area human health (e.g., mortality rates; incidence of diseases); 5) Sustainability of project operation (e.g., expected life of projects); 6) access to cleaner water; and 7) Access to sanitation services. This group of indicators would identify the effect of climate change developments on measures of project success. Fundamentally this involves considering how potential climate change developments will influence these objectives.



Availability of key project inputs or other prerequisites for achieving the project objectives. These cover the risk regarding the adequacy of key inputs necessary for the successfully implementation of the project. This indicator set

chapter_06 • vulnerability indicators

will not cover all inputs but rather will focus on key inputs and necessary conditions that might potentially be affected by climate change. For instance across the broad set of projects we address herein, items like the following would appear relevant: 1) adequate water supply; 2) quality of input water; 3) availability of suitable lands; 4) farmer adoption of new agricultural technologies; and 5) sustainability of forms of social cooperation that are necessary for operation of irrigation projects and other systems. •

Environmental risk indicators covering items that are not directly part of project objectives. This might include water quality, sustainability of the land base or changes in wildlife/biodiversity provided they are affected but are not formally part of the project objectives.



Adaptation suitability indicators identifying whether project actors in the region are likely to be capable of adapting to climate change. The adaptation coverage here will largely cover the regional capability for adaptation and how that is put at risk. Measures would include the availability of trained personnel (quantity and qualifications), and financial capital, plus measures of the ability to invest in modified project facilities to accommodate adaptation.



Mitigation implications here, indicators will cover whether the project activities will reduce or increase net emissions of common greenhouse gases like carbon dioxide, methane and nitrous oxide. The relevance of these indicators depends on the nature of the project and its time horizon. Most short and medium run projects are not expected to have large mitigation impacts.

Since the focus of this investigation is on project specific indicators, not all indicators will be relevant to each project. For instance, municipal water supply projects generally do not affect agricultural productivity, nor do they require suitable lands or affect the sustainability of the land base. Furthermore, each indicator is broadly defined and can contain different specific aspects that differ across projects. For example, indicators of project success typically include measures such as enhancement of agricultural yields for specific crops, while projects with effects on human health may well have indicators involving deaths and days of work lost to illness.

Construction of project relevant indicators To make the indicators operational, one needs to go through a multi-step process.

47

Assessing Climate Change Effects of IDB Projects: Concepts and Procedures



Step one: identify the appropriate set of indicators in a project-specific setting. To do this, one needs to: -

Draw out climate sensitive aspects of the objectives.

-

Think through the key, climate and climate adaptation sensitive inputs not mentioned in the objectives.

-

Develop a list of other relevant environmental items that would be influenced by variations in project outcomes caused by climate change, climate change mitigation and embodied climate change mitigation actions.

48

-

Identify things that might hinder adaptation.

-

Determine where project activities in interaction with climate effects might influence greenhouse gas net emissions.



Step two: construct a multidimensional, project region relevant, representation of projected climate change across available climate scenarios in terms of temperature, precipitation, etc. (we cover aspects on how to do this in a later section of this document). The representations will be formed not only for future conditions but also for current conditions where there is already a significant adaptation deficit (we cover aspects of this immediately below). The multiple dimensions of the climate change representation would be those illuminated the climate sensitivity section but not all will be relevant to individual projects. Forming the climate scenario will typically involve drawing upon IPCC, scientific literature and other sources.



Step three: think through pathways of exposure and which indicators are at risk in terms of climate change vulnerability.



Step four: reduce the indicators set eliminating those that are not sensitive to the projected changes in climate.



Step five: develop quantitative or at least subjective measures of the risks to the indicators given the climate change information. This should be developed considering any direct adaptation measures that are incorporated in the project.



Step six: Construct subjective estimates on how much the risk can be reduced through supplemental adaptation measures that are not directly included in the project as conceived at the time of project appraisal. We further implement elements of steps one through four in section 10 below when we address specific projects.

chapter_06 • vulnerability indicators

Constructing Dynamic scenarios for the indicators As we discussed above, we recommend that indicators be developed for four cases: today, appropriate periods in Era 1, the period until 2040 where climate change is scenario independent maxing out at a 1°C temperature change, and appropriate periods in Era 2 for where both and ultimate 2°C and 4°C temperature change case should be considered. The rationale for these recommendations is fully discussed above.

Incorporating adaptation Another key factor underlying the development of indicators is the concept of adaptation and its resultant consequences. Herein we recommend that part of the process of developing indicators is the consideration of the effects of adaptation actions. The adaptation considered falls into 2 classes of measures that are within the project design and those that are beyond those incorporated within the project design. This introduces a two-step process. First, in appraising basic vulnerability of the project, one should consider the incorporated adaptation but no additional adaptation beyond that within project scope. This gives a measure of project vulnerability without any additional adaptation. Second, one should appraise the potential risk of reducing benefits of additional adaptation efforts, beyond those contemplated by the project. Adaptation, for example, might consist of using drought resistant crop varieties or livestock species as well as structurally protecting water supply and sanitation facilities from flooding. We thus recommend formation of two values for each indicator: •

One appraising risk in the absence of additional adaptation, and



One appraising risk under high adaptation.

Generally, additional adaptation should almost always lower risk provided maladaptation is not present3. The risk reduction may diminish in effectiveness as the magnitude of climate change increases. We illustrate this in the next section.

3. Some adaptation actions may stimulate maladaptation where they reduce short run or locational specific climate change effects but make longer run or other places adaptation worse. See discussion in section 5.2.1.

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

Developing visual indicators Now we turn attention to a visual portrayal of vulnerability indicators. Figure 6.1, provides an illustrative example of the recommended form of the vulnerability indicators. Horizontally in the figure we see the scale of indicators of risk from low risk to high risk. The indicator has been scaled to between -1 and 1, where 1 indicates maximum risk, while -1 indicates maximum benefit (negative risk as illustrated in a later section later below). Down the figure we see the 50

four climate change scenarios: today’s present climate case, the Era 1 projected climate case under a 1°C change, the projected Era 2 projected case arising under a 2°C increase in average temperature, and the projected Era 2 case arising under a 4°C change in average temperature. Under each scenario, we provide two vulnerability assessments under the current project definition and a high adaptation case, illustrated by red and blue bars respectively. This plot suggests the projected climate change has a detrimental effect and this detrimental effect is mitigated by adaptation. It also reveals that adaptation becomes increasingly less effective as the magnitude of climate change increases.

Figure 6. Illustrative form of vulnerability indicators

Present

Near term Current adaptation 2 degree

High adaptation

4 degree

0

0.2

0.4

0.6

0.8

Note: The horizontal axis indicates risk/loss scaled between -1 and 1, where negative values indicate gains (negative loss). Note only positive reductions are illustrated here but adaptation can lead to increases in items like profits.

chapter_06 • vulnerability indicators

Figure 7. Illustrative form of recommended vulnerability indicator with positive gains included

Present

Near term 51 2 degree

Current adaptation

4 degree

High adaptation -0.6

-0.4

-0.2

0

0.2

Note: The horizontal axis indicates risk/loss scaled between -1 and 1, where negative values indicate gains (negative loss).

Naturally this will not always be the case but rather shows the sorts of things that can be portrayed by this representation of the indicator. We also wish to point out that that climate change should not always be viewed as a negative factor but, depending on the region and situation, might also bring positive impacts. This introduces the possibility of negative vulnerability, or resilience. For example, Reilly et al. 2002 present results where moderate climate change increases and the associated drivers can lead to increased cotton yield due to the effects of carbon dioxide and the drought tolerant nature of cotton. Figure 6.2 presents a graphic representation of an indicator under which beneficial impacts arise. In particular, the indicator regarding yield effects of climate change shows an increase in crop yield as the magnitude of climate change increases. Also suppose that this effect is enhanced by high adaption. Thus under near term climate change, this beneficial effect increases under the current adaptation and is further enhanced by high adaptation.

Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

52

Deriving region specific climate projections

chapter_07

Since this study focuses on project level vulnerability, one key component is identification of climate change projections specific to the project region. This is made possible by the availability of downscaled data from a number of Global Circulation Models (GCMs). For instance, one can assess historical and projected climate data at the Climate Change Knowledge Portal hosted by the World Bank at the following location: http://sdwebx.worldbank.org/climateportal/index.cfm These data are available at the country and major river basin level with an interface that will allow the user to map, chart, query, and compare downscaled data, at the resolution of 50km, across historical and future time periods. The site currently contains historical data from 1900 till 2009, and future GCM data at a time interval of 20 years covering 2020 and 2100 under different SRES scenarios and GCMs. Note as of this writing comparable data for the RCP scenarios could not be found. For instance, below we have Figure 7.1 that shows the projected monthly mean temperature from the GCM CGCM3.1 under the SRES scenario A2 for Basin 239, which covers the Tocantins State in Brazil, where Project BR-L1152 (discussed as project 2 below) is located.

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

Figure 6. Mean projected temperature for basin (239) from 2020 to 2039

Temperature

35 30 25 20

54 15

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

Oct

Nov

Dec

cccma_cgcm3_1 Ensemble median (50%) Ensembre high (90%) Ensemble lox (10%)

Figure 6. Historical modeled temperature for basin (239) (1980-1999)

32.5

Temperature

30

27.5

25

22.5

20 Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Additional data The figures above are provided for illustration. A rich set of climate variables are made available at the portal for comprehensive assessment of climate change risks, including:

chapter_07 • Deriving region specific climate projections



Rainfall



Temperature



Days with rain



Days with moderate rain



Days with heavy rain



Days with extreme rain



Days without rain



Daily rain



Month rain



Cool days



Hot days



Maximum temperature



Cool nights



Warm nights



Minimum temperature



Days below freezing

The set of relevant climate stressors used in a project context need to be filtered so that they are relevant to the site and project. Two projects may be subject to similar climate change impacts, but their respective climate stressors might differ due to project type and objectives plus site characteristics. A careful review of the project documentations would help the researchers identify potential climate stressors, and equally important, potential pathways through which climate stressors may impact project vulnerability. For instance, in the Brazil project we examine in this study, one of the stressors along with the associated pathways and the associated indicators are: •

Stressor: Hotter climate



Pathways: greater crops water needs, poorer crops germination and growth, reduced livestock fecundity and growth, reduced grass growth, increased evaporation.



Indicators: crop yields, livestock yields, farm incomes, water requirements, water supply

For a flooding incidence stressor, these variables are: •

Stressor: greater frequency and severity of climate change induced flood events.

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures



Pathways: damage or destruction of project infrastructure by floods, inundation of fields, more erosion and runoff of chemicals.



Indicators: farm incomes, yields, erosion rates, water quality, water supply.

The Brazil case also includes socio-economic pathways, as discussed below.

Time dimension and uncertainty One challenge of climate change vulnerability assessment is that it attempts to measure adverse impacts of climate change that might or might not happen. In actual implementation of the assessment, this inherent uncertainty manifests itself in the time horizon of the climate projections and at a higher level, the degree of confidence attached to these projections (by the scientific community and stakeholders). The relevant time horizon to assess climate change vulnerability of a project depends on the duration of a project, its nature, and relevant climate stressors. In figure 7.2 we plot the temperature projection from the same GCM and SRES scenario for Basin 239 for the time interval 2080 to 2099 (we recognize that most projects in this study will have shorter duration, this plot is mainly for illustration).

Figure 7.2. Projected 2080-2099 and historical monthly mean temperature from the GCM CGCM3.1 under the SRES scenario A2 for Basin 239

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Temperature

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cccma_cgcm3_1 Ensemble median (50%) Ensembre high (90%) Ensemble lox (10%)

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This shows compared with the current temperatures and projections for 20202039, that there is continued warming. Thus the indicator risk assessment is likely to differ with time horizon. Although not discussed in this report, climate projections vary considerably across GCMs. This calls into the question of which GCM should be used or, when an ensemble of GCM’s are used, how it is constructed. A more fundamental question here is how one deals with uncertainty in vulnerability assessments with respect to projected climate changes. Fortunately, the rapid advance of GCMs in the past two decades provides us with not only climate change projections, but also information on variability of climate change projections. For instance, in the Figure above, the mean projection by CGCM3.1 is reported along with the 10th, 50th and 90th percentiles of the GCM ensemble. This `variation band’ offers an intuitive illustration of variability in GCM projections. The width of the variation band indicates the degree of precision of climate projection (the narrower the band is, the more precise the projection is believed to be), and the 10th and 90th percentiles signify extreme possibilities.

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

58

Implementation guidelines

chapter_08

In this section, we present a general overview of guidelines on procedures that can be used to construct the proposed vulnerability indicators. We shall focus on five commonly used approaches, discussing their respective strengths and weakness. We stress that the selection and implementation of these methods depend on many factors including the nature of the projects being evaluated; the availability of data; the capacity of the appraisal team; the readiness of data/model availability; and monetary and time constraints on the appraisal.

Simulation methods Simulation is the imitation of the real world process or system over time. This method has been widely employed in many scientific fields. For instance, a general circulation model (GCM) is a mathematical simulation model of the general circulation of a planetary atmosphere or ocean of the Earth. Atmospheric and oceanic GCMs (AGCM and OGCM, respectively) are key components of global climate models along with sea ice and land-surface components. GCMs and global climate models are widely applied for weather forecasting, understanding the climate, and projecting climate change. In terms of climate vulnerability it has been quite common to employ crop (Adams et al. (1990), Reilly et al. (2002b), Parry et al. (2004), Rosenzweig and Iglesias (2006), Rosenzweig et al., 2013) and hydrological (Gleick, 1986; Gleick et al., 2000; Elliott et al., 2013) simulations in looking at effects of changes in rainfall and temperature. Such models can take into account many climatic factors and carbon dioxide depending upon whether sensitivity to them is built into the model and forms of adaptation (Howden et al., 2007).

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

Statistical analysis Statistical and historical analysis has been commonly used in climate change analysis plus in project evaluation and risk/vulnerability assessment. The analysis can range from simple descriptive analysis, such as plotting of historical data, to large scale statistical modeling of complex human-climate-ecological systems. To explore the influence of climate change, researchers have done statistical analyses including variables that reflect levels of temperature, precipitation and extreme event incidence plus other factors that play crucial roles in crop production or hydrological flows. 60

Key variables related to temperature usually include average temperature, variance of temperature, extreme temperature, and number of hot days and cold days. Measurements on precipitation include average precipitation, variation, number of wet days and dry days, concentration of precipitation, and drought indicators such as the Palmer drought severity index. Indicators of extreme events reflect the frequency and magnitude of extreme weather events, such as hurricanes, typhoons, extreme thunderstorm and ENSO state (El Nino Southern Oscillation). For examples regarding crop modeling see McCarl et al., 2008 or Schlenker and Roberts, 2009). Pest damages have been estimated by Chen and McCarl, 2001. In hydrology see Morrison et al., 2002; or Chen et al., 2001b. The strength of statistical analysis lies in its flexibility and versatility. It can be applied to systematically explore the influence of climate change on outcome of interests. Statistical analysis combines scientific knowledge and real world historical and observation data to model and forecast wide range of issues. The rapid growth of statistical techniques and computer powers further enhance the prowess of this approach. However key limitations are also present. These include functional form as we discuss below and the possibility of changes well beyond the range of historical data plus an inability to distinguish things like carbon dioxide effects as they progress over time from technical progress (Attavanich and McCarl, 2014). Second, even the most sophisticated models are simplified representations of real world processes and mis-specified models can lead to erroneous conclusions. Third, data collection can be expensive and time consuming, which can be an obstacle to timely investigation of urgent issues, plus data may simply not be available. Below we illustrate this approach via an example of crop yield model. For simplicity, we consider only two climate variables: temperature and precipitation, denoted

chapter_08 • Implementation guidelines

by temp and prec respectively. We denote all other influencing factors to a generic variable x, which captures the vast complexity and heterogeneity of agricultural production. We can succinctly express a general crop yield model as follows: y = m(temp,prec,x) + e, where m summarizes functional relationship between crop yield and various contributing factors and e, the error term. The model can be as simple as a linear regression model: y = β0 + β1 temp + β2 prec +β3 x + e. This model implicitly assumes that temperature and precipitation affect crop yields linearly and separately. However, a large body of literature plus common sense shows that the temperature and precipitation influence is not monotonic and instead suggested a quadratic formulation as crop growth is damaged by either low or high values of the variables. In addition, the effective precipitation that can be utilized by plants depends on not only the amount of precipitation but also temperature at the time of rainfall, suggesting an interaction between these two factors. Therefore a more realistic model is often given by: y = β0 + β1 temp + β2 temp2 + β3 prec + β4 (temp*prec) + β5 x + e. The influence of weather conditions also depends on their timing during the plant growth process. A regression of crop yield on the average temperature and precipitation during the growing season does not reflect the time heterogeneity of weather effects. Suppose we observe the weather variables at multiple time points during the growth season, for t = 1,2,…,T, we can further generalize our model to allow for time varying effects, giving rise to, for instance, y = β0 + ∑t=1{β1ttempt + β2ttempt2 + β3t prect + β4t(tempt*prect)} + β5 x + e. See Schlenker and Roberts (2009) and McCarl et al. (2008) for example applications. Further customization of the model can be made to accommodate more flexible functional forms and other special modeling needs. In addition, researchers can employ flexible nonparametric and semi-parametric methods to model the underlying relationship. Unlike parametric method, non- and semi-parametric methods

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

do not impose fixed functional forms and instead use data driven method to arrive at a proper approximation of the unknown functions. These more flexible modeling approaches, however, usually require extensive data and can be computationally expensive. Next we shall discuss the treatment of the stochastic component of the model, i.e., the error term e. Estimation and inferences of the models presented above are straightforward via the least squares method if the error terms are assumed to follow a simple distribution. Oftentimes crop yields are governed by complicated 62

processes that are marked by potential inter temporal correlation, nonstationarity, spatial correlation and heteroskedasticity. Fortunately, solutions to these issues have been well established in the literature. For instance, for inter temporal correlation and nonstationarity, one can employ time series statistical diagnostic and modeling methods to obtain valid results. Recent developments in spatial statistics have made possible explicit modeling of complicated spatial relationships of large scale models. Regarding heteroskedasticity, a population solution is to use JustPope type production functions that model the conditional mean and conditional variance separately as done in McCarl et al., 2008 or Chen et al., 2004. Lastly, many crop models utilize panel data that include information from a large number of geographic units and span multiple time periods. Modern statistical and econometric methods for panel and longitudinal data can be employed to model this type of data properly. Under the assumption that the observed trend maintains its current course, many statistical models can be used to make projections of future events. The uncertain nature of statistical forecasting warrants careful treatment of the uncertainty in these projections. In principle researchers can use either approximation based on asymptotic theories or resampling methods such as the bootstrap and jackknife to draw inferences on confidence intervals of statistical projections. Asymptotic methods are computationally inexpensive but may not be readily applicable to complicated models. Resampling methods are versatile and generally easy to implement but can be computationally expensive especially for large scale or complicated estimators. For a general treatment of resampling methods, see e.g. Hall (1992). Engineering relations An alternative approach is to use historically well accepted theoretical calculation procedures to develop estimates. Such approaches have been used in crop mod-

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eling (Dellal et al.) and in hydrology (Gleick, 1996, 2000, Wolock et al., 1999, and DiGiovanni et al., 2013). For instance in the crop setting, the Blaney-Criddle equation has been commonly used to estimating crop evapotranspiration, which plays a critical role in modeling the impacts of changes in temperature on crop yield and water use. Let E be the reference evapotranspiration of a given crop, p be the mean daily percentage of annual daytime hours, and T be the mean daily temperature in centigrade. The relationship between evapotranspiration and temperature can be approximated by the following equation: E = p(0.46T + 8). More accurate results can be obtained using the Penman-Monteith formula. To further assess the impacts on crop yield, one can use the following formula: 1 - (Ya/Ym) = Ky [1 - (Ea/Em)], where Ya and Ym are the actual and maximum yields, Ky is a yield response factor, and Ea and Em are the actual and maximum evapotranspiration. The values of the various parameters in this calculation vary across crop, season, location and other crop specific attributes. This information can be obtained from historical records, laboratory experiments, statistical estimates or other scientific means. To project the influence of future climate projections, one can evaluate the above formula plugging in projected evapotranspiration levels under a certain climate projection. Such approaches naturally neglect effects of carbon dioxide and complex interrelationships with local climate, soil and pest conditions.

Field and Laboratory experiments Although simulations and statistical analyses can provide important scientific insights, they consist of approximations to and abstractions of real world processes and are subject to their own share of limitations discussed above. Instead researchers can conduct field or laboratory experiments. The benefits of such experiments are many fold. First, first hand evidence is gathered. Second, researchers can tailor experiment design to suit their investigation needs. The

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

controlled environment of experiments facilitates inference of causal relationship, which is often the goal of scientific investigation. For instance, the practice of Latin square design and random assignments of subjects makes it possible to identify possible causal links with most basic statistical methods. This is in contrast to analyses based on historical and observational data, which are subject to various complications such as selection bias, simultaneity bias, multicollinearity, nonstationarity, measurement errors and so on. Third, experiments can sometimes provide timely answers to emergent questions when relevant information simply does not exist or may be prohibitively expensive to gather in 64

terms of monetary cost or time. Like simulation and statistical analyses, the scale and scope of lab experiments have a vast range. It can be as simple as measurements of certain outcomes under controlled environment, for instance the evapotranspiration pan is a cost effective approach to measure the combined effects of several climate elements: temperature, humidity, rain fall, drought dispersion, solar radiation, and wind. It can also be as sophisticated as the Free-Air CO2 Enrichment (FACE) experiments for carbon dioxide (EA Ainsworth and Long, 2005). One key advantage of such experiments is that they can be designed to accommodate unobservable items. For instance, as discussed above, the level of carbon dioxide concentration has been increasing steadily in the past few decades and is projected to continue to do so. This phenomenon cannot be examined using historical statistical analyses as technical progress has also increased with time. Furthermore expected future levels are well above any contemporarily observed levels. Researchers addressed this with the FACE experiments (Ainsworth and Long, 2005) but did not generate a set of data extensive enough to study the carbon dioxide effects on a wide spread basis. Attavanich and McCarl (2014) combined the FACE data with regular crop yield data and to provide the first overall wide spread geographic estimate of carbon dioxide impacts on crop yields based on largely historical data finding about 40% of the yield progress for cotton comes from carbon dioxide. Lab experiments, however, suffer from a number of limitations. First, these experiments can be expensive in terms of monetary cost, time, facility and personnel requirements. Second, lab experiments may not be a realistic solution to evaluation or risk assessment of large scale projects or projects with long time horizon. Third, the controlled environments of lab experiments oftentimes are oversimpli-

chapter_08 • Implementation guidelines

fied representation of real world scenarios and attempts of better mimicking real world situations can be prohibitively expensive if not impossible.

Expert opinions Sometimes the time and team capabilities plus locally available data/models do not permit the above approaches. Another alternative is to elicit experts’ opinions. Compared with other methods, this approach is less demanding and is capable of delivering timely results with relatively small monetary/time cost. The method of expert opinion elicitation was formally proposed by the RAND Corporation in the late 1940s. There were two methods of expert opinion elicitation: the Delphi method and the scenario analysis. The Delphi method is a popular structured and interactive method of opinion elicitation. It usually consists of the following steps: 1. Selection of questionnaires 2. Selection of experts 3. First round elicitation 4. Review of the first round elicitation results and update of expert opinion 5. Second round elicitation 6. Review of the second round elicitation results and update of expert opinion The elicitation process can last for more than two rounds and will stop when certain stopping criterion is satisfied. The purpose of this elicitation-feedback-update iteration process is to reach a possible consensus by polling expert opinions repeatedly and have them updated in a collective way. If a consensus is not reached, the median outcome is commonly used in its place. The feedback process allows and encourages the selected Delphi participants to reassess their initial judgments about the information provided in previous iterations. Another advantage of the Delphi process is subject anonymity, which can reduce the effects of dominant individuals which often is a concern when using group-based processes used to collect and synthesize information. The degree of dispersion of the final results is generally smaller than that of initial opinion. The scenario analysis is an alternative expert opinion elicitation method that relies on analyses of hypothetical questions. Typical scenario analysis attempts to answer

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

the following questions: (1) how may some hypothetical scenarios come about? and (2) what are the feasible and viable actions under those hypothetical situations? The implementation of this method often involves scenario probability or the so-called surprise-free scenario as a benchmark to define alternative scenario, which are obtained by varying some parameters of the benchmark. In the absence of scenario probability, the surprise free scenario approach has the limitation that it reflects the long run trend but does not provide likelihood predictions. As a tool of consensus building, one desirable feature of the Delphi method is that it 66

delivers a consensus or a convergence of opinions from a panel of experts. However, sometimes a forced consensus can be counterproductive. When the difference in expert opinions cannot be easily reconciled, alternative methods are warranted. The Cooke method is such an alternative that instead of reduce dispersion of expert opinions, quantifies the uncertainty that exists and builds it into the decision making process. The expert elicitation has been recommended as a tool for the IPCC “to ensure that areas of uncertainty poorly captured by models are better represented, such as whether the Greenland ice cap might melt.” It is considered that the Cooke method is a robust approach to elicit and utilize possible diverging opinions and to explicitly accommodate uncertainty in decision process. Crucial to the expert opinion methods is the selection of experts. Survey of individuals knowledgeable to the issues in questions may provide useful insight; on the other hands, confusion and misleading results can arise if the surveyed individuals are not armed with the required expertise or knowledge. In practice, it is not always possible to find a sufficiently large number of experts to fully benefit from this method. In another words, overconfidence may result from the method of expert opinion if the number of experts is small.

Utilization of results from other studies The urgency of an issue coupled with budget constraints and lack of local data/ models may prevent the assessment team from adopting any of the above methods. In that case, one may have to resort to the use of existing results from "similar environments" to proceed. For example in looking at climate change on the Nile, McCarl et al. (2013) used yield estimates from the Egyptian national assessment, water use by cities from Texas, livestock changes from Mader et al. (2009) and oth-

chapter_08 • Implementation guidelines

er estimates for several other factors. Key advantages of this approach include cost efficiency and timeliness. Although this approach appears to be an easy and cost efficient solution, it has its own limitations. First, the literature may not contain useful or relevant results on the issue in question. Second, instead of paucity of information, another possibility is that the literature may offer mixed or conflicting results regarding a particular issue. Third, the relevance of existing knowledge to the issues in question may differ considerably depending on the novelty and uniqueness of the issues plus regional specificity. When borrowing results from existing studies, caution shall be used regarding the external validity of generalization and extrapolation of those results.

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68

Vulnerability Assessment of IDB projects

chapter_09

In this section we present the application of our recommended procedures to three IDB projects. We should also note that the most comprehensive application has been made to the Dominican Republic: Agricultural Research and Development Program or Programa de Investigación y Desarrollo Agropecuario (DR-L1054). This emphasis on that project came about because of the abundance of data available in the DR-L1054 appraisal documents that was not matched in the other projects coupled with the agricultural backgrounds of Drs. McCarl, Norton and Wu - the authors of this document.

Project One. Dominican Republic: Agricultural Research and Development Program The first project we consider is Dominican Republic: Agricultural Research and Development Program or Programa de Investigación y Desarrollo Agropecuario (DRL1054). Particular attention is paid to details in the assessment of this project to illustrate the proposed assessment framework. Project background based on project documents This program aims to strengthen the system of research, validation and technology transfer to respond to the productivity gaps and facilitate producer access to innovation. Its components are: •

Component 1. Support for strategic areas of research and innovation in the Dominican Republic’s national institute for agricultural and forestry research, (IDIAF, by its Spanish acronym).

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Component 2. Improve the capacity to administer research and transfer technology.

The project documents and results matrix identifies priority products/product groups: bananas, cocoa, rice, coffee, avocadoes, milk, Chinese vegetables, greenhouse crops, plantains and mangoes. There is also mention of improving livestock productivity. The principal results expected are: i) increases in the sector’s productivity that will 70

translate into higher farm incomes; and ii) generation and transfer of specific technologies, with emphasis placed on environmentally friendly technologies. These results assume an increase in the sector’s rate of adoption of new technology. Achieving the second result is a precondition for achieving the first one. Accordingly, in the results matrix, the program’s impact is defined as increased productivity of agricultural products impacted by the program; and the indicator that this impact has occurred is defined as increased average net income per hectare of program beneficiaries. Targets are set for increases in yields of the selected crops on demonstration plots and for increases in average net income per hectare of program beneficiaries. An additional outcome, which is an intermediate result, is defined as the number of producers receiving information through the IDIAF’s transfer and dissemination activities. Yet another outcome is preservation of the country’s agricultural resource base, chiefly soils and water quality. The program’s environmental endeavors include efforts developing and disseminating technologies regarding organic production, integrated pest and disease management, soil conservation, efficient increases in the use of irrigation water, and reuse of organic waste. These activities are pursued with the intent of: •

Reducing pesticide use.



Creating health benefits for farmers and consumers through reduced pesticide contamination of food.



Reducing soil erosion, water contamination and deforestation.



Developing technologies that reduce vulnerability to climate change.

The project also mentions a number of other objectives:

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Strengthening women's organizations and enhancing dissemination by incorporating women's organizations in the extension efforts.



Improving the sustainability of management of natural resources and environmental quality.



Managing infrastructure and improving the operation of experiment stations and laboratories to avoid negative impacts for fragile habitats, and species in danger of extinction plus avoidance of any increase in emissions of wastes and reactive agents from the research activity.

Climate Stressors and Pathways

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In light of the material above we identified the three broad classes of vulnerability for the Dominican project, with the relevant indicators in bold type, are: i) potential reduction in yield increments achieved under adoption of the new agricultural technologies generated in the research stations, ii) potential reduction in rates of adoption of the new technologies by farmers, and iii) accompanying changes in income. The foregoing discussion suggests that the specific sources of vulnerability and pathways linked to kinds of climate change stressors can be summarized as follows: Stressor

Pathways

Indicators

Hotter climate

Poorer plant germination and growth reduced livestock fecundity and growth, reduced grass growth.

Crop yields, livestock yields, farm incomes.

Pest increases caused by hotter climate

Lower crop yields, higher costs, higher pesticide usage, reduced human health gains.

Crop yields, livestock yields as affected by mortality and lower weight gain, farm incomes.

More irregular rainfall patterns

Failure to plant at optimal times, reduced plant growth for lack of sufficient water at critical times, increased erosion (from intense rain storms).

Crop yields, farm incomes, erosion rates.

Drier climate or more extended periods of drought

Lower crop germination and growth, forage yields, livestock yields. Loss of experiments.

Crop yields, forage yields, livestock yields, farm incomes

Greater frequency and severity of extreme, non- drought climate events

Destruction of planted fields by floods (zero yields), loss of experiments on new technologies. Erosion of hillside soils and leaching away of agrochemicals.

Farm incomes, yields, erosion rates affecting future yields Worsening of water quality and hence high costs of water purification and damage to coastal ecosystems

Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

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Stressor

Pathways

Indicators

Greater climate variability in the district

Greater yield variability and reduced willingness of farmers to plant particular crops, which (i) lowers farmer willingness to make outlays on inputs required for the new technologies, but (ii) raises the incentives to adapt by switching to other enterprises/sources of income.

Adoption rates for new agricultural technologies

More irregular climate worldwide that may affect global supply of some crops selected for this program

Greater world price fluctuations and price level changes for those crops; willingness to make outlays on inputs required for the new agricultural technologies, which lowers adoption rates for new technologies.

Incomes of farmers, new agricultural technologies adoption rates

Below we elaborate on the number of these factors. •

Climate change, especially higher temperatures, could generate a broader spectrum of crop pests and livestock diseases and lead to more virulent strains, and the planned agricultural research may not provide varieties or integrated pest management alternatives that are resistant to them, or livestock treatments that are effective.



Climate change projections for Hispaniola indicate that some regions of the island may experience more frequent droughts and generally drier and hotter conditions. It is not clear that the proposed crop research is aimed at improving resistance to drought and higher temperatures. Irrigation will help address part of this concern but the low efficiency of water use and salinity of some water supplies may limit its effectiveness, so improving crop resistance to drought will be important.



Climate change has been observed to change crop calendars of flowering and hence alter harvest dates. In addition, it generates uncertainty about these dates and hence about appropriate planting schedules. For example, the rainy season in Nicaragua has been observed to start later and have shorter duration in recent years. This issue poses serious difficulties for farmers, especially in rain fed areas, and the agricultural research program does not appear to be addressing it. A partial exception is the case of mango, for which the environmental analysis document mentions (p. 68) the need for agricultural research on better crop management for the purpose of promoting earlier flowering dates.



The projected consequences of climate change also include a greater frequency and intensity of extreme meteorological events. The Dominican Republic is

chapter_09 • Vulnerability Assessment of IDB projects

one of the most exposed areas of the world for hurricanes, so a worsening of future hurricane scenarios could have very damaging consequences. Regarding smallholder agriculture and the aim of promoting adoption of improved technologies, an implication is that those farmers could suffer financial setbacks of greater magnitude and frequency, thus exacerbating their reluctance to make outlays on inputs including improved seeds. •

Another implication of this kind of climate scenario is that crop research should give higher priority to cropping systems that involve agroforestry, and not only individual crops, because those systems help retain hillside soils in the face of heavy rainfall and flooding. The program calls for work on four tree crops: avocadoes, mangoes, coffee and cocoa but not in the context of cropping systems. It also mentions the need for terracing hillsides, so its designers are not unaware of this concern, but in the agricultural research context an appropriate response is development of cropping systems.



More broadly, there is weak adaptive capacity on behalf of the operators in the face of climate change. This is due to lack of information, credit, and a number of other factors. Clearly this is a source of vulnerability, and it does not appear to be addressed in the planned agricultural research program. “Many countries are already vulnerable to shocks, either to price shocks, non-climate-related disasters (e.g. earthquakes, volcanic eruptions), and to climate-related disasters. This current vulnerability is often termed an ‘adaptation-deficit.” Adaptive capacity can be improved through measures like crop diversification on the farm, development of seed banks for the country’s agro-ecological conditions, and developing methods to improve soil structures to resist extreme climate events.

Climate change related Challenges and Risks arising from our reading of the Program Design The project documents contain virtually no mention of climate change. The environmental risks analyzed are associated with: 1) possibilities of toxic waste discharge from crop research centers, and 2) possibilities of harm to human health from handling pesticides in those centers (Whiting, 2012). In the economic study, sensitivity analysis is carried out with respect to: 1) the possibility that the target rates of farmer adoption of new technologies are not achieved, and 2) the possibility that the target yield increases for new technologies are not achieved. The economic analysis (Mendoza, 2012) shows that under pessimistic assumptions about the latter two possibilities the program’s economic rate of return

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would still be strongly positive. However, it does not discuss possible causes of failure to achieve targets in these areas. Past experiences regarding technology adoption rates in the Dominican Republic are not encouraging, as discussed below. Market risk does not figure explicitly in the economic analysis although crops like coffee and cocoa have experienced significant price fluctuations over time. The program may be vulnerable to those fluctuations because it is well known that producers interest in adopting new technologies, especially on the part of smallholders, decreases when prices fall. Climate change could exacerbate this vulnerability if it expands the 74

zones in the world that are suitable for certain crops, leading to oversupply, and if it causes greater climate fluctuations that make world supply more unstable. As noted, the risks considered in the environmental analysis are narrowly confined to possible localized consequences of handling toxic materials, as a result of project activities. A broader analysis of risk and vulnerability would look beyond those activities and consider vulnerabilities that could affect the program’s desired outcomes and the pathways of those effects. In general terms, climate change may lead to crop and livestock issues that the agricultural research program does not address and hence the attainment of program goals could be undermined by those issues. The hurdles to more widespread adoption of new technologies are not addressed in the document, and low adoption rates represent a major risk to the program. They can be exacerbated by the uncertainty created for farmers by climate change. Project Sensitivity to Climate Change: the Case of the Dominican Republic The preparation of the Agricultural Research and Development Project for the Dominican Republic was accompanied by an economic analysis that included a sensitivity analysis with respect to various assumptions underlying the project formulation. The assumptions are product-specific covering: coffee, cocoa, bananas, plantains, milk, rice, oriental vegetables, greenhouse crops (tomatoes, chili peppers etc.), avocadoes, and mangoes. The basic assumptions are that: •

Between 15% and 40% of producers of a crop will eventually adopt the recommended technology package versus a historical record of 5-10% between 2000-2010).



It will take 4 years for validation of the technological packages, 2 more years for the extension service to incorporate them in its efforts, and then up to fifteen years for reaching maximum adoption.

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At maximum adoption yields will increase by specified amounts (100% in the case of coffee) and or that the costs of production per ton will decrease by specified amounts (22% in the case of rice).



The production of crops will swing to more crops for the export market (oriental vegetables, avocadoes, mangoes, greenhouse crops), away from ones produced for the low-price domestic market.



The intertemporal discount rate is 12%.

In the project documents, sensitivity analysis was conducted considering the effect of: i) slower rates of new agricultural technologies adoption, ii) fewer total adopters in the end, iii) lower farm gate prices, and iv) lower yields or cost improvements attained through the new technological packages. All of these scenarios leave the project’s internal rate of return at acceptable levels. However, combinations of these scenarios are not explored, and it is likely that, for example, slower adoption rates would lead to fewer adopters in the end, and equally that lower yields or prices would also lead to fewer adopters. Climate change, to the extent that it affects the yields of the new packages, can also discourage adopters. The vulnerability of this analysis to climate change has not been mentioned in the project documents but it can be readily visualized. For example, in the case of coffee, the coffee leaf rust fungal disease, that is increasing in incidence due to warmer climatic conditions, is already damaging Dominican and central American coffee production significantly. In particular coffee yields and production are dropping sharply throughout the region, so it is entirely plausible that coffee yields will decrease over the project period rather than increase by 100%, and hence it is plausible that the number of coffee growers and technology adopters will decrease, especially since coffee prices have been in a severe downturn in the last two years and it is expected to continue albeit with fluctuations (because of increased production in Brazil and Vietnam). Similar climate-related scenarios are conceivable for the fusarium wilt disease of bananas, which is rapidly ravaging banana plantations throughout the world, and for cocoa and plantains, which are equally vulnerable to disease issues that can be exacerbated by climate change. Regarding milk production, the climate change scenario of higher average temperatures and drier conditions in the Dominican Republic could lead to lower productivity of milk cows because of heat and reduced access to water, as well as to conditions that favor more rapid multiplication of insects. In the case of oriental

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

vegetables, that crop is particularly vulnerable to flooding, which could arise from more frequent and stronger extreme climate events. Thus, a sensitivity analysis to climate change for this project would post a scenario of zero yield increases for coffee, cocoa, bananas, plantains and dairy cattle, and a loss of up to one-third of the benefits of oriental vegetables in a typical year. Under this scenario, and using the data in the project’s economic analysis, the net project benefits would be reduced by 49.5%, a much higher reduction than in any of the scenarios presented in the project’s existing sensitivity analyses. 76

This illustration is not meant to argue that these consequences of climate change are likely to occur, but it underscores the importance of broadening the ex-ante analysis of a project to take into account scenarios related to climate change. We also looked at constructing an indicator on the income benefits of the project under climate change scenarios. To do this we drew information from the project documents and combined them with assumptions to develop a set of pre-project estimates of regional benefits and costs then derived post project benefits with and without climate change effects. In particular the assumptions we used with respect to the project are given in Table 9.1. The last column gives an assumption of, if technology causes yield to go up, the percent change in cost. For example, if coffee yield rises 100%, the cost rises 70%. Also please note the analysis was done in a static sense assuming the costs and benefits were for a year and the changes instantaneous. To derive the climate change information we used items from the Latin America chapter of IPCC 2014 plus data from Columbia University and data on adaptation effectiveness from Reilly et al. (2002b), Aisabokhae et al.( 2011), and Chen et al. (2001). The resultant assumptions for the Era 1, Era 2- 2 degree and the Era 2 - 4 degree scenarios as defined in section 5.2 appear below in Table 9.2. The yield for the tree crops were based on IPCC 2014 Chapter 27 data for coffee. The vegetable yields were based on maize data from Columbia. The cost change data were extrapolated from Chen and McCarl (2001) under the assumption that that was with adaptation data. The differential impacts of adaption were developed and set at a 50% reduction in negative yields or costs and a positive increase when climate change is beneficial based on the literature review in Aisabokhae et al. (2014) and the quantitative data in Reilly et al. (2002b).

chapter_09 • Vulnerability Assessment of IDB projects

Table 9.1. Assumptions used with respect to the project Revenue Before Technology Adoption

Cost Before Technology Adoption

Adoption rate

With Project yield increase

Coffee

$85,423

$69,762

20%

100%

70%

Cocoa

$109,792

$89,664

30%

59%

70%

Oriental vegetables

$101,793

$90,405

30%

36%

70%

Plantain

$66,202

$54,065

30%

75%

70%

Banana

$265,466

$216,797

30%

35%

70%

Milk

$287,700

$257,476

15%

22%

78%

Rice

$115,073

$214,658

40%

15%

85%

Greenhouse

$624,171

$443,473

30%

20%

70%

Avocado

$387,379

$316,359

40%

20%

70%

Mango

$35,953

$29,362

40%

20%

70%

With project cost decrease

Cost increase when revenue increases

77

Table 9.2. Assumptions used on climate change with respect to the project Era two 2 degrees Era two 4 warming degrees warming

With Adaptation

Era one

Crop

Yield change (%)

Cost increase (%)

Yield change (%)

Coffee

7

0.5

20

1

-13

1.5

Cocoa

7

0.5

20

1

-13

1.5

Oriental vegetables

0

0.5

-10

1

-20

1.5

Plantain

7

0.5

20

1

-13

1.5

Banana

7

0.5

20

1

-13

1.5

Milk

-1

0.5

-4

1

-7

1.5

Rice

-3

0.5

-14

1

-63

1.5

Greenhouse

0

0.5

0

1

0

1.5

Avocado

7

0.5

20

1

-13

1.5

Cost Yield Cost increase change increase (%) (%) (%)

Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

Era two 2 degrees Era two 4 warming degrees warming

78

With Adaptation

Era one

Crop

Yield change (%)

Cost increase (%)

Yield change (%)

Coffee

4

0.75

13

1.5

-20

2.25

Cocoa

4

0.75

13

1.5

-20

2.25

Oriental vegetables

0

0.75

-15

1.5

-30

2.25

Plantain

4

0.75

13

1.5

-20

2.25

Banana

4

0.75

20

1.5

-20

2.25

Milk

-1.5

0.75

-6

1.5

-11

2.25

Rice

-4.5

0.75

-21

1.5

-93

2.25

Greenhouse

0

0.75

0

1.5

0

2.25

Avocado

7

0.75

13

1.5

-20

2.25

Mango

7

0.75

13

1.5

-20

2.25

Cost Yield Cost increase change increase (%) (%) (%)

This then yielded results on project income effects under the three scenarios. We constructed these for just the adapters and for the whole project region. The quantitative results are in Table 9.3 in terms of percentage change from the base level. Thus for example the results show climate change is beneficial in the 2040 case but highly detrimental in the 2100 – 4 degree case. These are portrayed graphically in Figure 9.1. Table 9.3. Percent change in regional income for adopters and for the whole region, for different timing and climate scenarios, with and without adaptation

Era one

ERA two 2 degrees warming Era two 4 degrees warming

Adopters Only

Whole Project Region

No adaptation

1.703

3.594

Adaptation

3.798

7.515

No adaptation

5.598

4.864

Adaptation

10.943

18.12

No adaptation

-21.003

-82.71

Adaptation

-13.965

-54.933

Note: Positive means a gain relative to the no climate change result. Negative means a shortfall relative to project appraised amount.

chapter_09 • Vulnerability Assessment of IDB projects

Note here we find largest results for total region as climate change affects all. To aid in interpretation note the results above show that income would be reduced by 83% in the whole region under and the Era two 4 degrees of climate change case, and that adaptation could reduce this to 55%.

Figure 9.1. Illustrative values for the indicator of percentage deviation of regional income under climate change as opposed to no climate change

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Panel A: Results for only project technology adopters

Plus 40

Effect of adaptation Unadaptable part

Plus 100 - 2 degrees Plus 100 - 4 degrees

30 Highly beneficial

15

0

Beneficial

-15

-30

-45

-60

Low risk

-75

-90

High risk

Panel B: Results for all producers in project region

Plus 40

Effect of adaptation Unadaptable part

Plus 100 - 2 degrees Plus 100 - 4 degrees

30 Highly beneficial

15

0

Beneficial

-15 Low risk

-30

-45

-60

-75

-90

High risk

Note: Estimates are developed for just the project adopters and for the whole region. These are done for the 4 different climate situations discussed above with and without adaptation. Note in the figure positive means a gain relative to the no climate change result. Negative means a shortfall relative to project appraised amount. The values were derived from the assumptions laid out in section 9.1.4.

Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

Adaptation feasibility The kinds of adaptation actions that the program can make to improve the resilience of its indicators in the face of these sources of vulnerability would include the following: •

Include in the research agenda development of crop varieties and livestock breeds that are more resistant to heat.



Continuously seek examples in the Dominican ecosystems of newly emerging plant and animal diseases and pests and include in the research agenda devel-

80

opment of crop varieties and livestock breeds that are resistant to them and animal treatments for them. •

Carry out research on cropping systems in order to lessen farm vulnerability to diseases and pests.



Include in the animal breeding agenda development of crosses that are more heat resistant as well has having other desirable properties.



Include in the research agenda development of crop varieties that are robust in the face of water shortages at critical times in plant growth.



Include in the research agenda development of crop varieties that are droughtresistant, not only for water shortages in some periods of the year but for water scarcity during the entire growing season.



Include in the research agenda development of agroforestry systems, to lessen the soil-eroding effects of floods and improve the resilience of cropping systems in the face of floods.



Carry out research on modalities of agricultural extension and training in order to improve the effectiveness of extension and training efforts, which go beyond the program’s stated outcome of producers receiving information through the IDIAF’s transfer and dissemination activities.

Mitigation To the extent that this project succeeds in promoting the use of cropping systems with permanent tree crops, or slows the rate of conversion of forest to cropland because farmers obtain higher yields on existing cropland, then the project may contribute to mitigation of climate change.

chapter_09 • Vulnerability Assessment of IDB projects

Possible indicators •

From project objectives Yields of the selected crops Total agricultural productivity Higher farm incomes Developed environmentally friendly technologies Number of producers receiving information through dissemination activities Use of pesticides Health incidents from pesticide contamination Strengthened women’s organizations participation in extension efforts Sustainable management of natural resources



Key inputs Level of investment in agricultural research Irrigation water Land areas in target crops



Adaptation Changes in the agricultural research agenda as mentioned above Credit available for adoption/adaptation Market Infrastructure



Mitigation GHG emission effects



Environmental Soil erosion Water contamination and Deforestation Costs of water purification, Health of coastal ecosystems

Below we provide a detailed treatment on climate change’s influence on crop yield vulnerability and potential alleviation from adaptation. We first note that the future climate change is not certain and the assessment of vulnerability depends crucially on the climate change projections that are used in the evaluation and time horizon of assessment.

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

Let first examine some possible climate change scenarios under three GCM’s for the medium term (2030-2039) and long term. In Figure 9.2 below, the boxplots, from left to right, illustrate the projected distributions of mean annual water runoff (Runoff), flood indicator (annual high flow, 10%), drought indicator (annual low flow, 90%), groundwater (Gndwtr), water available to basin (stor), irrigation deficit (Irr. Def), mean annual precipitation (Precip), Annual Potential Evapotranspiration (PET), Average Change of Mean Temperature (Delta temp), Climate Moisture Index for all (Delta CMI). 82

Figure 9.2. Medium and longer term climate change projections for Dominican Republic

chapter_09 • Vulnerability Assessment of IDB projects

Although the magnitudes of climate changes depend on the GCM, the increase in temperature and decline in water is unambiguous in these projections, and increasingly so in the long run. Next, we assess the potential consequence of climate change on crop yields. We focus on two major crops in the Dominican Republic: rice and maize. The historical averages of total yield of these three crops account for roughly 91 and 9 percent of grain production, respectively. The results are obtained from the study “Effects of climate change on global food production under SRES emissions and socio-economic scenarios”, which can be assessed at http://sedac.ciesin.columbia.edu/mva/cropclimate. In this study, the three crop yields were simulated under seven climate change scenarios for the years of 2020 and 2050. Projections are provided on each crop, and their total impacts are calculated as the sum of projected changes (in percentages) weighted by the volume of each crop. We obtain data from this study and summarize the findings in the Figure 9.2. We also take the average across all seven projections and plot it using thick dark black line below. Although difference scenarios give noticeable different projections, the overall results are rather similar. Averaging across all predictions, we obtain of predicted loss of 6% for 2020 and 5% for 2050.

Projected changes in crop yields for Dominican Republic

Figure 9.3. Projected changes in crop yields under different climate change scenarios

-2

-3

-4

A1F1 A2A2 A2B2

-5

A2C2 B1A2

-6

B2A2 B2B2

-7

-8

2020

2050

Years

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

Lastly, we explore how adaptation might alleviate the vulnerability associated with climate change. A closer examination of the results suggests that the predicted loss is due to reduction of rice output. The above calculation is based on the implicit assumption of fixed land use such that the proportions of the two crops remain constant over time. Here we entertain the possibility of adaptation by allowing farmers change their crop choice. In particular, we consider the hypothetical adaptation practice that 20% of the land devoted to rice will be switched to maze. The resultant overall impacts of climate change are then calculated the same way as those reported above. Figure 9.3 reports the projection results. Compared with the fixed land use scenarios, vulnerability in crop production is reduced to around 5% for 2020 and 4% for 2050, demonstrating the benefit of adaptation in term of crop choice.

Figure 9.4. Projected changes in crop yields under different climate change scenarios and hypothesized adaptations

Projected changes in crop yields for Dominican Republic under adaptation

84

-1

-2

-3 A1F1 -4

A2A2 A2B2 A2C2

-5

B1A2 B2A2 B2B2

-6

-7 2020

2050

Years

Source: “Effects of climate change on global food production under SRES emissions and socioeconomic scenarios” and authors’ own calculations.

chapter_09 • Vulnerability Assessment of IDB projects

Overall project vulnerability Overall project vulnerability cannot be quantified with precision because it involves multiple stressors, pathways and indicators, and in any index the weights among them will be subjective. Nevertheless, in any ordinal ranking this project has to be considered as significantly vulnerable because it stands to be affected by five kinds of climate change variables and there are eight pathways through which those variables can lead to changes in the indicators.

Project Two: Brazil: Development Program for the Southwestern Part of the State of Tocantins The second project we consider is Brazil: Development Program for the Southwestern Part of the State of Tocantins (BR-L1152). Project background based on project documents The project aims to intensify economic activities and broaden the productive opportunities in the southwestern region of Tocantins, to contribute to the state’s sustainable development and increase regional quality of life4. This is done through the following components: •

An irrigation component to improve hydrological infrastructure where dams will be built in sub-watersheds of the Pium and Riozinho Rivers [in the first stage of the project] for the purpose of storing, delivering and distributing the water needed to 38,800 has of land. Dams will also be built for raising the water level. In addition there will be construction of distribution canals, and drainage systems.



A complementary Infrastructure component that will improve the transport network for production, providing electrification and sanitary services for households in the area.



Construction of agricultural storage infrastructure and training in its use. Alternatives and incentives will be studied for attracting private sector participation in this component.

4. This introduction has been adapted from: Inter-American Development Bank, Brasil, Perfil de Proyecto, Programa de Desarrollo de la Región Sur-Occidental del Estado de Tocantins (PRODOESTE).

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures



Promotion of regional development: includes actions for investment promotion, development of business plans for strengthening value chains, information centers, support for new enterprises, organization of producers and support for applied research relevant to the conditions of the river plains.



Environmental monitoring and management of the associated water resources including improvement of water quality monitoring systems; development of a hydro meteorological information system, developing a plan for the management of water resources of the Pium and Riozinho River watersheds including identification of priority projects for management and recovery of degraded areas, plus other environmental programs as recommended by the

86

Environmental Impact Assessment. •

Institutional strengthening: creation and strengthening of the districts for operation and maintenance of the irrigation system, creation and strengthening of water user associations, strengthening and training of the state’s Secretariat of Water Resources office and staff, development of policies for water charges and cost recovery and development of models for management of water resources.

The irrigation component utilizes sub-irrigation (or sub-surface irrigation). Subirrigation works by maintaining a specified level of water in canals and drains that, in turn, infiltrates the soil and raises the water table underneath the crops and allows access to their root systems. The technique is said to: (1) reduce the need for the utilization of on-farm irrigation equipment, (2) avoid contact between water and the upper part of the plants thus avoiding conditions that would favor the proliferation of fungal or bacterial diseases; (3) facilitate mechanical preparation of the soil as irrigation equipment is not in the way; (4) make possible a shortening of the of the growing cycle of some annual plants (for example, watermelons) allowing more harvests - up to three harvests per year; (5) facilitate crop rotations and therefore crop diversification; (6) improve fertilizer use efficiency, avoiding the washing away of nutrients by surface water on occasion; (7) increase plant growth because of the continuous availability of water next to the roots; (8) allow water delivery by gravity flow; and (9) have low costs of construction, operation and maintenance. For this project, the project documents point out several specific issues that represent important challenges: (i) viability rests on the success of employing sub-irrigation, which depends on the characteristics of the region’s soils; (ii) the project is located at an environmentally sensitive zone between the Cerrado and the Amazon

chapter_09 • Vulnerability Assessment of IDB projects

Basin and requires environmental studies that are now ongoing and, in turn, incorporation of corresponding mitigation measures for any environmental difficulties; (iii) management capacity is critical: it is necessary to have the participation of various entities and adequate coordination mechanisms; (iv) financial sustainability: water fees need to cover system costs without affecting excessively the willingness of producers to participate; this means combining efficient system administration with technical assistance to producers. Project documents also identify potential environmental impacts, as follows:5 Physical and biotic aspects during implementation a) Changes in landforms. b) Effects on the quality of surface water. c) Damage to and destruction of wildlife habitats and biological resources. d) Damage to hillsides from the cuts made through the landscapes. e) Alterations to landscapes as consequence of land leveling for construction of access roads, worksites, dams, etc. f)

Pollution of worksites from wastes with inadequate disposal.

Physical and biotic aspects during operations a) Soil erosion, silting up of watercourses, soil salinization and insufficient drainage in irrigated areas. b) Changes in patterns of surface drainage and soil permeability. c) Contamination of aquifers with toxic agrochemicals and other products used in irrigation. d) Damage to and destruction of wildlife habitats and biological resources. e) Interruption of migration routes of animals. f)

Negative effects of irrigated agriculture on existing conservation areas.

g) Damage to ecosystems owing to the use of toxic agrochemicals and fertilizers. h) Conflicts over water use that could be intensified with implementation of the project.

5. See: Governo do Estado do Tocantins, Secretaria de Recursos Hídricos e Meio Ambiente, Programa de Desenvolvimento da Região Sudoeste do Estado do Tocantins – PRODOESTE, Elaboração de Estudos e Projetos relativos a Ações nas Bacias dos Rios Pium e Riozinho, na Região Sudoeste do Estado do Tocantins, Estudos e Relatório de Impacto Ambiental, Tomo I – III, 2010.

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

Sociocultural aspects a) Alterations to the landholding structure in the area and risks of generating or intensifying conflicts over land rights in the region. b) Changes to the general quality of life and traditions of the population. c) Consequences of attraction and expulsion of population to and from the area. d) Positive or negative influence of project implementation on the economic activities of the region. e) Indirect effects on indigenous reserves and natural areas. f) 88

Effects on areas of historical and cultural interest.

g) Risks of spreading human diseases, especially waterborne diseases. h) Contributions of the project to the generation of employment and income for the population. It should be pointed out that this risk analysis does not take into account price risk for the crops planned for the newly irrigated areas.6 Rice, for example, has suffered significant price declines on world markets recently, and watermelon (a major export crop for the zone) is notorious for fluctuating prices. Virtually all fruits and vegetable crops exported from developing countries have experienced secular declines in real prices over the past few decades. A number of factors have not been taken into account including secular price trends and their impacts on producer incomes plus willingness to pay irrigation fees. The principal objectives of this project are increased income and employment for the population of this part of Tocantins State. These two objectives go hand in hand. Another principal objective is reduction of the seasonality of income and employment, so that families in the area have sources of livelihood and productive work year around and therefore no longer have to send family members out of the area during part of the year in search of employment. Supporting more operational objectives, include increased agricultural production, year-round agricultural production, and diversification of agricultural production across all producers in the irrigation district.7 Other objectives include farmers improving their water and crop management under the new irrigation system plus maintenance of water quality, both in aquifers and surface waters.

6. Op. cit., Tomo I, capítulo 6. 7. Inequitable distribution of water in some periods is a fairly common issue in the functioning of irrigation systems.

chapter_09 • Vulnerability Assessment of IDB projects

Climate Stressors and Pathways Table 9.4. Stressors, Pathways and Indicators for Tocantins Project Stressor

Pathways

Indicators

Hotter climate

Greater plant water needs, poorer plant germination and growth reduced livestock fecundity and growth, reduced grass growth, increased evaporation

Crop yields, livestock yields, farm incomes, water requirements

Pest increase caused by hotter climate

Reduced plant and livestock growth, greater mortality of crops and animals

Crop yields, livestock yields, farm incomes

More irregular rainfall patterns

Variable water availability, increased erosion

Crop yields, farm incomes, erosion rates

Drier climate or more extended periods of drought

Lower irrigation water availability, increased crop water requirements, reduced crop germination and growth, inequity of water distribution to users during droughts, increased competition for water, less willingness to pay irrigation fees for system maintenance

Crop yields, farm incomes, erosion rates, sufficiency of water in canals (for root zone penetration), social capital (cooperation among users), sustainability of physical infrastructure

Greater frequency and severity of extreme, nondrought, climate events

Damage or destruction of project infrastructure by floods, inundation of fields and loss of income for farmers, more erosion and runoff of chemicals

Farm incomes, yields, erosion rates, water quality, sustainability of physical infrastructure

Greater climate variability

Greater yield variability, shifts in crop timing, lower willingness of farmers to plant particular crops, more incentives to adapt by switching to other enterprises,

Crop and livestock production mix shifts, crop yields, farm incomes

More irregular climate worldwide that may affect global supply of some crops selected for this program in their markets

Greater world price fluctuations and price level changes for those crops, less willingness to make outlays on inputs required for irrigated agriculture, less willingness to pay irrigation fees for system maintenance

Crop and livestock production mix shifts, crop yields, sustainability of the irrigation infrastructure, farm incomes

Below we elaborate on the number of these factors. •

The pathway of damage from drought and extended periods of low rainfall is insufficient water to maintain water in canals at levels that will ensure penetration of water through soils to the plant root zones. This is a serious threat to the viability of the irrigation system. The effect can be compounded by higher temperatures that cause increased evaporation from reservoirs and canals.

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures



A related pathway of damage from low water availability is the emergence of inequities in water deliveries, prejudicing in particular producers at the tail end of distribution canals. If these are producers with lower average endowments of land (which seems likely), the situation could re-ignite conflicts of land tenure and the distribution of landholdings.



A pathway of damage from extremely heavy rainfall is damage to dams, canal structures and drainage infrastructure, making the system inoperative for a period of time. Another pathway from excessive water is damage to crops through waterlogging and also the washing away of soils and fertilizers. A third pathway is creation of more favorable conditions for fungus infections in crops,

90

especially from extended periods of precipitation and high humidity. •

For high temperatures, a pathway of damage is exacerbation of low flows of water through higher rates of evaporation of water, as noted. Another pathway for temperature effects is reduction of yields of heat-sensitive crops, and a third pathway is the creation of a more propitious environment for the spread of crop diseases and pests.



Another potential danger of higher temperatures is increasing the tendency for waterborne human diseases to spread in the region, already noted as a risk in the project documents, thus offsetting some of the welfare gains from higher incomes and employment.



A socio-ecological pathway that can be particularly relevant to cases of excess water or insufficient water is a breakdown in the modalities of cooperation among water users, undermining the capacity to maintain and operate the system. The project documents mention that one of the project tasks is the creation of water users associations and their training in management of the irrigation system. Such associations function on the basis of consensus and cooperation, and their social cohesion can be put under stress by unforeseen climate events that damage the system.

Climate change related Challenges and Risks arising from our reading of the Program Design Most of the risks and proposed solutions identified in the project profile do not address climate change issues. Those that are at least partly related to climate change are summarized in the following table: 8. Inter-American Development Bank, Brasil, Perfil de Proyecto, Programa de Desarrollo de la Región Sur-Occidental del Estado de Tocantins (PRODOESTE), Anexo I.

chapter_09 • Vulnerability Assessment of IDB projects

Table 9.5. Climate-Related Risks and Solutions Identified in Project Design Papers Risk

Proposed Solution

Increase in community exposure to natural resources health-related risks (deemed to be minor).

Provide an environmental health risk plan and report annually on its impact.

Pests and disease vectors.

An Integrated Pest Management and Integrated Vector Management approach has been developed for all pest management activities.

Impact on endangered species of plants or animals (deemed to be minor).

Develop a Biodiversity Action Plan that demonstrates how impacts will be mitigated and what consultation activities are planned. Require regular reporting and independent review of implementation.

Adaptation For this kind of project, adaptation measures can include overdesign of dams and other infrastructure: designs which go beyond engineering norms indicated by historical precipitation data but which allow for the possibility of unprecedented climate events in the future. The enhanced designs would allow for greater volumes of water to be stored and managed as well as for greater water storage capacity to compensate for years of low precipitation. This measure of course will increase project costs and reduce rates of return but probably will reduce the future variance of income and employment for producers in the region. For climate conditions (temperature, humidity) that favor the spread of crop diseases, an adaptation measure can include cooperation with the national agricultural research service (EMBRAPA in the Brazilian case) to develop crop varieties and crop management techniques that are resistant to prolonged periods of excess moisture and/or high temperatures. To tackle the higher temperatures that increase evaporation from canals and reservoirs, adaptation measures would include increasing dam storage capacity somewhat to offset possible water loss from increased evaporation. To buffer the possible social consequences of severe climate events that damage project infrastructure, measures could include creation of a special financial reserve fund that could be utilized for emergency repairs and rebuilding of the system and

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

proper public or private insurance systems. This is another measure that would increase project costs but again with the benefit of reducing risks to future incomes and employment in the project area. An additional measure could be training of the members of the water users associations, and raising their awareness, regarding the steps required dealing rapidly with damage to the infrastructure and ways to ensure equitable responses to the emergency. To prepare for the contingency of low water flows and ensure equitable distribution of the reduced volumes of water (thus avoiding possible conflicts over land rights), 92

an adaptation measure can be preparation of emergency plans for water distribution to users during periods of low overall water availability. Table 9.6. Climate Stressors, Indicators and Adaptation for Tocantins Irrigation Project Adaptation issues and prospects

Climate Stressors

1st-level indicators

2nd-level indicators

Drought, extended period of low rainfall

• More income and employment • Reduced seasonality of income and employment

• Higher agricultural production level • More diversified agricultural production • Adequate irrigation water • Equitable distribution of irrigation water • Water quality

• Overdesign dams • Prepare emergency plans for equitable water distribution to users during periods of low overall water availability

• There may not be enough finance available for building dams with higher storage capacity • Emergency plans for distributing reduced volumes of water may not be sufficient to defuse social conflicts

Higher average temperatures

• More income and employment • Reduced seasonality of income and employment

• Higher agricultural production level • More diversified agricultural production • Adequate irrigation water • Equitable distribution of irrigation water • Water quality

• Engage national research service in development of varieties and crop management methods resistant to higher temperatures • Increase capacity of dams to allow for sufficient water storage to offset higher evaporation

• The national agricultural research service may not be able to develop responses for these conditions • There may not be enough finance available for building dams with higher storage capacity

Risks

chapter_09 • Vulnerability Assessment of IDB projects

Climate Stressors

1st-level indicators

2nd-level indicators

Extreme climate events involving excessive precipitation

• More income and employment • Reduced seasonality of income and employment

• Higher agricultural production level • More diversified agricultural production • Adequate irrigation water • Equitable distribution of irrigation water • Water quality

Adaptation issues and prospects

• Overdesign dams and other water infrastructure • Create financial reserve for repairing system damage • Train water users associations in reaction to these events • Engage national research service in development of varieties and crop management methods resistant to excess humidity

Risks

• There may not be enough finance available for building more robust dams and water delivery infrastructure • The national agricultural research service may not be able to develop responses for these conditions • Emergency plans for responding to system damage may not be sufficient to defuse social conflicts.

Mitigation Mitigation effects of this project are likely to be negative because of the extensive conversion of pastures to cropland. They would be even more negative to the extent that development encroaches on the natural reserves designated in the project area. Possible Indicators •

From project objectives Farm income Farm employment Crop yields Livestock yields Agricultural production

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures



Key inputs Water available at the root zone Water availability in equitable form to all producers Land in crops Farmer's adoption of improved water and crop management techniques Sustainability of physical project infrastructure



Environmental On-farm soil erosion Water quality

94



Adaptation Adaptation measures for the project indicated above Diversification in agricultural production Credit availability



Mitigation GHG Emissions and sequestration implications

Overall project vulnerability This project may also be considered to have a significant degree of overall vulnerability, since its indicators can be affected by six climate change variables via seven pathways. The possibility of severe damage to project infrastructure through extreme climate events (heavy rainfall) cannot be discounted.

Project three: Bolivia: Water and Sanitation Program for Small Localities and Rural Communities The third project we consider is Bolivia: Water and Sanitation Program for Small Localities and Rural Communities (BO-L1065) or Programa de Agua Potable y Saneamiento para Pequeñas Localidades y Comunidades Rurales de Bolivia. Project background based on project documents The overall objective for this project is improved human health in small communities and rural areas due to greater access to potable water and sanitation services. Related objectives are to increase the consumption of safe water and to reduce

chapter_09 • Vulnerability Assessment of IDB projects

household expenditures on water (from sources such as trucks).9 Supporting, more operational objectives include: • •

Access to potable water without the need to treat (boil) it in households. Greater reliability of access to potable water (through improvement of existing systems)



Availability of latrines.



Increased community awareness of the importance of using latrines (enhanced through awareness-building programs).



Enhanced Treatment of wastewater reducing contamination of soils and water supplies plus reduced infections in humans.

These objectives are to be achieved through construction and successful operation of a number of small-scale engineering works in the participating communities, and training of community members and service providers in the management of the systems. The project aims to: •

Increase the access to potable water and sanitary services (PWS) in rural communities of less than 2,000 inhabitants, through construction of 350 projects;



Increase the access to PWS in small localities of 2,000 to 10,000 inhabitants through construction of 23 potable water projects and 18 sanitation projects; and



Promote the creation and strengthening of PWS service providers in the communities and localities of the program.

The project is planned to benefit 11,230 rural households in terms of both water and sanitary services, as well as 9,804 households in small localities with connections to potable water, and 9,615 households in small localities with sewage connections. Likewise it is planned to benefit 2,765 households via rehabilitation of potable water systems.

9. Programa de Agua Potable y Saneamiento para Pequeñas Localidades y Comunidades Rurales de Bolivia (BO-L1065/BO-G1002), Propuesta de Préstamo y Propuesta de Financiamiento no Reembolsable, 2011.

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

Additional benefits of the project include: i)

For water projects, consumers benefit from no longer having to utilize alternative, more expensive sources of potable water (from trucks, from carrying water from a source, and from wells).

ii) Consumers gain access to latrines and connections to sewage systems. The principal problems that create difficulties for improving access to PWS in rural areas are seen to be: i) scarcity of financial resources and budgets; ii) absence of 96

a consistent legal and regulatory framework; iii) insufficient technical and administrative capacity in the municipal governments and providers of these services; iv) weak sustainability of the potable water and sanitary services; v) inadequate and inappropriate technologies for these services; and vi) lack of participation by the beneficiaries in the project cycle. The project proposal points out the importance and role of: i) community participation in all phases of the project cycle (pre-investment, investment and post-investment), assuring that there is coordination between infrastructure construction, community development and institutional strengthening; ii) municipal governments in planning and operating the PWS systems; and iii) training and strengthening of the actors. Accordingly, the project plans to foster a participatory approach, involving the beneficiary communities in project definition, operation, problem solving. It also aims to strengthen capabilities of local and provincial (departmental) governments including their abilities to monitor and support service providers. It is anticipated that the program will produce a positive environmental and social effect. More specifically, the following environmental risks were identified:10 1) Water shortages in some regions could lead to insufficient water to operate the potable water systems or could make water too scarce in other uses, or the existing (pre-project) water quality could be inadequate for household use; and

10. Programa de Agua Potable y Saneamiento para Pequeñas Localidades y Comunidades Rurales de Bolivia (BO-L1065/BO-G1002), Informe de Gestión Ambiental y Social, 2011.

chapter_09 • Vulnerability Assessment of IDB projects

2) Deficient operation or maintenance of the new or rehabilitated sanitation systems could lower the quality of water for household use, whether through contamination of water tables or of other water sources. The principal risks identified for the operation are: (i) difficulties of inter-institutional coordination; (ii) inappropriate operation and maintenance of the infrastructure constructed and hence a lack of sustainability; (iii) the implementing agency (SENASBA’ (Servicio Nacional para la Sostenibilidad de Servicios en Saneamiento Básico, the National Service for the Sustainability of Basic Sanitation Services) is at an early stage of operation and therefore there is a substantial amount of risk regarding its performance in general, especially since to date, it has not directly implemented and IDB project. Climate Stressors and Pathways Table 9.7. Stressors, Pathways and Indicators for Water and Sanitation Project Stressor11

Pathways

Indicators

Extended periods of drought

Supply of potable water, the water needed to operate sewage treatment systems.

Human health, access to safe water, expenditures on water

Extreme rainfall events

Flooding, which could not only render the systems inoperable for a period of time, but also could disperse household waste, increasing the hazards to human health.

Human health, access to safe water, expenditures on water

Droughts or extreme rainfall events

Disruption of the operations of the systems, which additionally can cause friction in community groups responsible for the systems and discourage cooperation for system maintenance, leading to greater frequency of system breakdowns in the future.

Human health, access to safe water, expenditures on water, sustainability of the project infrastructure

11. The terms stress and stressors are used here in a broad sense that includes abrupt changes, or perturbations. Gallopín (2006) distinguishes between the two concepts: “Stress is a continuous or slowly increasing pressure (e.g., soil degradation), commonly within the range of normal variability. Stress often originates within the system, and stressors often reside within it. For simplicity, the term perturbation will be used in this article to denote the external or internal processes interacting with the system and with the potentiality of inducing a significant transformation in the system, be it slow or sudden.”

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

98

Stressor11

Pathways

Indicators

Extreme rainfall events

Washing out of roads that can delay for significant periods of time the arrival of technical experts to remote communities to repair damaged or malfunctioning systems.

Human health, access to safe water, expenditures on water, sustainability of the project infrastructure

Temporal concentration of rainfall in a few weeks (or even days), so water supply is insufficient in other periods of the year.

Disruption of the operations of the systems, which additionally can cause friction in community groups responsible for the systems and discourage cooperation for system maintenance, leading to greater frequency of system breakdowns in the future.

Human health, access to safe water, expenditures on water, sustainability of the project infrastructure

Continuation of the trend toward disappearance of Andean glaciers

Lower water availability in the highlands region.

In the highlands region: human health, access to safe water, expenditures on water

The following comments may be made on these pathways: •

In the highlands, continuation of the observed trend toward disappearance of Andean glaciers; to date, the water supplies for the highlands have depended largely on the historical cycles of glacier melt in warmer seasons and renewal through snowfall. Although glacier melt contributes to river flows and hence to water supplies at lower altitudes, rainfall is a more significant factor in river flows at those altitudes.12



Droughts or extreme climate events that disrupt the operations of the systems can cause friction in community groups responsible for the systems and discourage community cooperation for system maintenance, thereby leading to greater frequency of system breakdowns in the future. In this sense, the community groups in charge of the systems and the ecological variables that affect system performance are a socio-ecological system (Gallopín, 2006).



In light of the steeply sloping landscapes in much of Bolivia’s highlands and intermediate altitudes, and the precarious nature of the road network, extreme climate events can wash out roads and delay for significant periods of time

12. This has been found in the Peruvian Andes, where 10-20% of a watershed’s total flow “was comprised of glacier melt” and it appeared to the researchers this finding was applicable on a larger scale (Bury et. al., 2011, p. 185).

chapter_09 • Vulnerability Assessment of IDB projects

the arrival of technical experts to remote communities to repair damaged or malfunctioning systems. The problematic resilience of the road network is an issue already encountered in Bolivia on occasion and climate change may enhance it. Climate change related Challenges and Risks arising from our reading of the program design The following risks and proposed solutions have been identified in the project profile:13 1) Water shortages in some regions could lead to insufficient water to operate the potable water systems or could make water too scarce in other uses, or the existing (pre-project) water quality could be inadequate for household use; and 2) Deficient operation or maintenance of the new or rehabilitated sanitation systems could lower the quality of water for household use, whether through contamination of water tables or of other water sources. To mitigate these risks, special attention is given to the design of processes and mechanisms of coordination, the design of a unified information system for program management, and the development of operating regulations to be approved by the implementing agencies. There also exists the risk of inappropriate operation and maintenance of the infrastructure constructed and hence its lack of sustainability. To mitigate this risk a specific program for strengthening the service providers will be developed, and also programs in this area for the municipal and departmental governments. One of the more significant risks in this area is acquisition of equipment of low quality, particularly with respect to acquisitions by SENASBA. This risk will be reduced by strengthening the implementing entities. The Project Coordinating Unit and SENASBA will be strengthened by the Bank’s contracting of a professional team to staff those entities.

13. Programa de Agua Potable y Saneamiento para Pequeñas Localidades y Comunidades Rurales de Bolivia (BO-L1065/BO-G1002), Informe de Gestión Ambiental y Social, 2011.

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

Adaptation A more complete vision of climate change related risks and responses to them can be developed with reference to the analysis of stressors, pathways and indications. Adaptation to climate stressors that reduce water availability in at least part of the year (drought, temporal concentration of rainfall) can be enhanced by increasing water capture options, through dams and small catchment structures. A limiting factor may be the available finance for this. Also, the existing engineering and management skills in water-related fields may be mostly committed to the water and sanitation project, and 100

therefore those skills may be in short supply for dams and catchment structures. Adaptation to extreme climate events and floods can be enhanced by building reinforced treatment facilities, with deeper and higher foundations. Also, community leaders and service providers need to be trained for rapid reactions to such events, to restore the functioning of damaged facilities. Adaptation to reduced glacier melt would be more difficult since there is no alternative water supply of significance (excepting the sparse rains) at high altitudes. In this case, the only option would appear to be the preparation of joint plans for resettlement of highland populations at lower altitudes and sustainable water resource management. However, that already is a sensitive issue in Bolivia owing to the nature of the land tenure regimes and marked political tensions between highland and lowland regions.

Table 9.8. Climate Stressors, Indicators and Adaptation for Water and Sanitation Projects Climate Stressors

1st-level indicators

2nd-level indicators

Adaptation issues and prospects

Drought

• Human health • Water consumption • Family outlays for water

• Access to potable water • Reliability of potable water • Waste treatment capacity

• Construct dams and other water catchment structures, plus conveyance structures to water and sewage treatment plants

Risks

• Given the resources devoted to the PWS project, there may not be enough finance and human skills available for dams and conveyance structures

chapter_09 • Vulnerability Assessment of IDB projects

Climate Stressors

1st-level indicators

2nd-level indicators

Adaptation issues and prospects

Extreme, destructive climate events

• Human health • Water consumption • Family outlays for water

• Access to potable water • Reliability of potable water • Availability of latrines • Waste treatment capacity

• Make treatment facilities more resilient with reinforced concrete foundations and walls and deeper and higher foundations • Prepare community leaders and service providers for the possibility of damage to and loss of facilities, and for emergency measures

• Financing shortages may limit the extent to which this can be done • Training for extreme events may be inadequate

Risks

Flooding (less extreme)

• Human health • Water consumption • Family outlays for water

• Access to potable water • Reliability of potable water • Waste treatment capacity

• Make treatment facilities more resilient with reinforced concrete foundations and walls and deeper and higher foundations • Sensitize community leaders and service providers to the need to repair even minor damage to facilities

• Financing shortages may limit the extent to which this can be done • Training for extreme events may be inadequate

Temporal concentration of rainfall

• Human health • Water consumption • Family outlays for water

• Access to potable water • Reliability of potable water • Waste treatment capacity

• Construct dams and other water catchment structures, plus conveyance structures to water and sewage treatment plants

• Given the resources devoted to the PWS project, there may not be enough finance and human skills available for dams and conveyance structures

Glacier melt

• Human health • Water consumption • Family outlays for water

• Access to potable water • Reliability of potable water • Waste treatment capacity

• Government planning should prepare for resettlement schemes at lower altitudes that are less dependent on glacier melt for water

• Land tenure issues and political tensions may inhibit even planning for this activity

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

Mitigation Mitigation of climate change is not likely to occur under this project, nor is exacerbation of climate change. Possible Indicators •

From project objectives Treated and untreated water consumption Availability of latrines

102

Waste treatment volume Water quality downstream Human health Expenditures on water Sustainability of the project infrastructure •

Key inputs Water availability Funding for component projects



Environment Ecosystems



Adaptation The project adaptation measures and related issues as indicated above Credit availability Institutional capability



Mitigation Accounting of the project effects on net GHG emissions and any differences made by climate change

Overall project vulnerability Of the three projects examined in this study, the overall vulnerability of the Bolivian PWS project would appear to be somewhat less than that of the other two projects, because only six pathways are relevant, under only four climate change variables. However, it must be pointed out that the glacier melting trend poses a

chapter_09 • Vulnerability Assessment of IDB projects

strong long-term threat to water and sanitation systems in the Bolivian highlands albeit perhaps after the planning horizon of this project. More generally, to assess the climate change vulnerability of IDB projects related to water and sanitation, the starting points to use the methodology developed herein are: a) identification of climate stressors and pathways which could affect project performance, and b) identification of indicators on the basis of the project objectives and other matters as discussed above. Then these two lists have to be brought together in the manner of Table 9.7 above, followed by a disaggregation of the indicators and a consequent articulation of risks and development of adaptation options, as in Table 9.8. In the case of these kinds of projects, climate stressors will mainly exert their effects mainly through water excess and shortages, i.e., through flooding, drought, and long-term water scarcity.

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

104

Concluding comments

chapter_10

105

Above we present approaches to include climate change considerations in InterAmerican Development Bank appraisals of projects. The approach breaks from the traditional appraisal of such projects has involved the assumption of an unchanging or stationary climate.

In fact, climate change may introduce risk into

many of the outcomes that IDB projects are designed to achieve plus can introduce another demand for project funds diluting the effectiveness of the current allocation. In presenting the appraisal approach we develop four eras of climate change based on work in IPCC working group II. These are •

Today,



Changes spanning until 40 years from now,



Changes spanning until 2100 under high climate change, low mitigation (4 degrees Celsius), and



Changes spanning until 2100 under low climate change, higher mitigation (2 degrees Celsius).

We also suggest the appraisal be done to four categories of items – measures of project objectives, availability of key project inputs, measures of Environmental risk, measures of adaptation suitability and measures of project mitigation implications. The later 4 of these would include items not explicitly addressed in the project objectives. We feel a climate change sensitive appraisal is not always in order and depends on project circumstances.

Assessing Climate Change Effects of IDB Projects: Concepts and Procedures



In terms of arguments for doing such an appraisal, the appraisal may suggest or even mandate project design and midcourse operation adjustments to better accommodate adaptation or mitigation solutions. Such modifications are not likely to be static but rather need to be dynamic and flexible informed by the latest available reliable climate data and project performance.



In terms of arguments against doing such an appraisal, o

Knowing how climate change affects the performance of projects can be challenging with locality and project type information being possibly scarce.

o

106

The short run nature of some projects may mean the project products are obsolete by the time the climate changes in a meaningful sense and thus can justify omitting a climate change part to an appraisal.

We do feel the above document gives a usable framework and examples for the construction of climate change related indicators for cases where an appraisal is judged to be in order providing. •

A list of possible climate sensitivity in terms of direct, indirect, adaptation and mitigation implications both in general and in terms of three specific cases



A localized approach to assessment of vulnerability that takes into account both global and local context specific risks, climate change exposures, impacts and development paths;



A visual way of constructing indicators that is feasible and based in work in IPCC working group 2.



A flexible approach to the development of indicators that can be used in the many arenas that are the focus of IDB projects;



Several methodological alternatives that can be employed depending on available time, data and analytical capability;



A procedure that encourages appraisers to consider whether indications of whether increasing adaptation elements in project design is desirable;



A way to think about developing indications of project implications for net greenhouse gas emission reduction;



A basis for future appraisals that would be instructive and educational raising the awareness of climate change vulnerability among stakeholders and project designers.

Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

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Assessing Climate Change Effects of IDB Projects: Concepts and Procedures

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vulnerability serie Assessing Climate Change Effects of IDB Projects: Concepts and Procedures This report addresses procedures for the assessment of climate change implications for Inter-American Development Bank (IDB) projects in Latin America and the Caribbean. We propose a general framework for constructing project-specific indicators for the purpose of assessing the effects of climate change on projects along with the implications of project elements for mitigation and adaptation. We illustrate the proposed method with applications to three IDB projects of different natures.