Working Paper 89 - Come Rain or Shine - Integrating Climate Risk Management into African Development Bank Operations

Climate change is happening now, and further changes during the next decades are inevitable (IPCC, 2007a). During the last century, the global climate warmed by about 0.7°C. At the same time, there were distinct changes in rainfall patterns, an increase in both frequency and severity of extreme weather events, and a rise in sea levels. The impacts of these changes are already being felt, and will intensify as further changes take place. Another 2–4°C rise is projected for the current century, mostly as a result of greenhouse gases that have already been emitted. This means that, although aggressive mitigation of greenhouse gas emissions is crucial to prevent longer term, potentially catastrophic changes, most of the changes projected for the coming decades cannot be avoided.Africa is especially vulnerable. This is clear from the effects of current climate variability and weather extremes – such as floods, droughts and storms – which severely affect economic performance (AfDB, 2003; G8, 2005; Stern et al., 2006; IPCC, 2007b). The poor pay the highest price, because their livelihoods are most affected, and they have fewer resources to help them adapt to the changing climate. Box 1 describes some of the areas where climate change will have its most severe impacts in Africa.African policy-makers and stakeholders are beginning to recognize the need to address adaptation to climate change. There is growing awareness of the setbacks to development and poverty reduction that will result from climate change, threatening the achievement of the Millennium Development Goals (MDGs). This was articulated in the multi-agency document ‘Poverty and Climate Change’ (AfDB, 2003), and more recently at the African Partnership Forum in May 2007 (APF, 2007). Climate change was placed on the agenda of the AU Heads of State Summit for the first time in January 2007, which resulted in the adoption of a Decision and Declaration on Climate Change and Development in Africa and in the endorsement of the Climate Information for Development – Africa (ClimDev Africa) Stakeholders Report and Implementation Strategy (GCOS, 2006).

A better climate for disaster risk management

Climate-related disasters are by far the most frequent natural disasters, exacting a heavy toll on people and economies. Their frequency and economic losses have steadily increased over the past few decades, stretching the response capacities of governments and humanitarian organizations. One of the many ways this challenge can be addressed is by making more effective use of the increasing wealth of climate information and tailoring it to the needs of those who could use it, to better predict and prepare for such disasters before they occur. Written in partnership with a range of humanitarian organizations, A Better Climate for Disaster Risk Management is the third in the Climate and Society Publication series. This issue highlights recent advances in the use of climate information to manage risks and improve livelihoods, such as new partnerships and user-designed information platforms. It draws together and analyzes experiences from 17 case studies that capture the current state of knowledge. It also highlights research innovations in technical boxes throughout the publication. A problem-solving framework is used to demonstrate the challenges and opportunities facing disaster risk managers in using climate science with a three step approach: identifying the problem, developing tools, and taking action, reflected in the chapter titles. The case studies and experiences presented in this book draw on a wealth of practical experience from within the humanitarian community. They acknowledge the enormous effort and investment by very many national and local governments, international organizations, and an increasing range of other actors in the field of climate information for disaster risk management. This publication adds to the growing body of knowledge, focusing on the experiences of a number of mostly non-governmental actors, especially the International Federation of Red Cross and Red Crescent Societies, and how through partnerships, they have helped to integrate state of the art climate science and information into improved decision-making. Exploring the use of climate information for disaster risk management, it identifies both the achievements and the obstacles associated with this endeavour. From them are distilled the lessons learned, and a series of recommendations. Of these, effective partnership is highlighted as the single most critical ingredient for success. Climate information that can be acted upon is best created in dialogue between the users and providers, and partnerships between climate scientists and disaster risk managers should promote knowledge sharing, trust, and the development of innovative solutions. Efforts to better apply climate information in disaster risk management should first focus on immediate opportunities and potential ‘quick wins’. Practical engagements can be fostered by initially concentrating on countries and regions with relatively good seasonal forecast skills, and where humanitarian decisions can be influenced to provide large and immediate returns on investment. Disaster risk managers must, however, improve their understanding of the potential as well as the limitations of climate information, as the development of realistic expectations is vital to maintaining trust in the information and those who provide it. Cases demonstrate that when climate information can be integrated into existing decision-making support tools or systems, it becomes an important piece of the information that is considered and taken up in the routine activities of disaster risk managers. The relative contribution that seasonal, decadal, and long-term trends make to current and future climate also needs to be better understood. To achieve the goal of providing relevant climate services to support disaster risk management, climate information providers such as national meteorological services must tailor their information to the problem at hand, either by refining products through iterative interaction with partners or by simplifying the presentation. Although there have been many achievements and advances, much potential remains to be realized. Herein lies the opportunity: to build trust and improve the sharing of knowledge between the providers of climate services, and those who can use those services to enhance disaster risk management, jointly reducing human suffering and achieving more sustainable development

Findings of the East Africa Humanitarian Climate Risk Management Workshop

The East African humanitarian community is looking for ways to better respond to the challenges presented by climate risks, including climate change, but is struggling to access appropriate and targeted scientific data that can inform their operations. Recent advances in science and technology have produced a variety of new tools for humanitarian organizations working on climate risk management. Humanitarian actors have an enormous opportunity to utilize these tools to inform risk reduction, preparedness and contingency planning, as well as program implementation. Despite such advances, many challenges remain to the practical application of these tools in the humanitarian context. Often times, climate information is too technical or lacks the context necessary for use in humanitarian planning and operations. Thus, climate information must be tailored to specific needs and presented in formats that are readily accessible to these users. In response, the United Nations Office for the Coordination of Humanitarian Affairs (UNOCHA), in close collaboration with the International Federation of Red Cross/Red Crescent Societies (IFRC), initiated the development of a 2-day Humanitarian Climate Risk Management Workshop on 23- 24 February 2010. Initiatives that enable interaction can help to bridge the divide between humanitarian practitioners and climate experts; feedback provided by end-users can guide research and development of new prediction technologies and tools, as well as more appropriate packaging of current information. At the same time, humanitarian actors need to evaluate how such information can usefully inform their decision-making at various timescales. The challenge of decision-making under uncertainty must be addressed if climate information is to be used effectively within humanitarian planning, preparedness, and response. This workshop aimed to address such barriers to the use of climate information

Science-based insurance

Climate change with its potential to alter seasons, rainfall variability and temperature regimes1 poses a growing threat to the development agenda. Small-scale farmers in developing countries, who have few modern technologies or improved crop varieties at their disposal, are among those most vulnerable to changing patterns of rainfall and temperature. In developed countries, crop insurance is a commonly employed mechanism by which farmers and ranchers can guard against the reduction or destruction of yields by extreme weather events. However, traditional crop insurance is largely absent in less-developed countries, because costs of implementation are high and there are not enough effective financial institutions to broker insurances. Furthermore, insurance policies perversely provide an incentive for farmers to neglect their fields, a problem that is usually countered with expensive site visits by insurance claim adjusters2, which would not be financially feasible in the developing world. So-called index insurances, where an insurance indemnity payout depends on the exceedance of a threshold variable such as water level (for floods) or consecutive days without rain (for droughts), could fill that gap. Many insurance companies and non-profit development organizations are working to develop index insurance for small farmers. In principle, index insurance can serve several purposes. Apart from reducing the risk for small farmers, it can facilitate the availability of credit: banks are more likely to lend to a farmer who is insured against loss of harvest. However, designing and pricing effective index insurance programs has proved to be extremely difficult, even in places where adequate crop and weather data are available. In the developing world, weather stations are few, records are discontinuous and historical weather data difficult to access3. To make the concept viable in these more challenging circumstances, a high degree of participation and engagement from the geoscience community is key, in particular to provide access to satellite remote sensing and high-resolution climate simulations

Capacity building in analytical tools for estimating and comparing costs and benefits of adaptation projects

The broad objective of AIACC project 47 was to develop the capacity to estimate and compare the benefits and costs of projects in natural resource sectors that reduce the expected damages from climate change in Southern and West Africa. There are two parts to this project. The first consists of using well-established principles from economic benefit-cost analysis to develop a framework to estimate the economic benefits and costs associated with the expected climate change damages avoided by a development project that does not take climate change into account. Then, these benefits and costs can be compared to the case where planners incorporate expected climate change into the project assessment. The second part consists of demonstrating this methodology in two project case studies, one in The Gambia and the other in South Africa. The South African case study examines the benefits and costs of avoiding climate change damages through structural and institutional options for increasing water supply in the Berg River Basin in the Western Cape Province. The Gambian study, on the other hand, focuses on the agricultural sector, particularly on millet, the predominant crop in the country. To facilitate analysis, the Gambian study uses a detailed water–crop model, defines and explores adaptation strategies with the model and uses the results to carry out an economic analysis. The South African project develops and applies a Berg River Dynamic Spatial Equilibrium Model as a water planning and policy evaluation tool to compare benefits and costs and economic impacts of alternatives for coping with longterm water shortages due to climatic change. Results from the study will contribute to the development of international climate change policies and programs, particularly in regard to adaptation activities in developing countries under the United Nations Framework Convention on Climate Change (UNFCCC)