Download Project AF47: Technical Progress

Estimating and Comparing Costs and
Benefits of Adaptation Projects in
Africa – Project AF47: Technical
Progress
Mac Callaway
AIACC African Workshop
March 13-15, 2002
Benefit-Cost definitions for Adaptation
Assessments
• Climate change damages – the net economic loss that
occurs if climate changes, relative to the reference case (no
climate change, no project).
• The benefits of adaptation – the reduction in climate
change damages, relative to the reference case if the
project is implemented (i.e., the climate change damages
avoided by the project).
• Adaptation costs – the real cost of the additional resources
used to derive the project’s adaptation benefits.
• The net benefits of adaptation – adaptation benefits minus
adaptation costs.
• Imposed costs of climate change – the net economic
losses due to climate change that can not be avoided by the
project.
What we are doing
• Developing analytical tools and procedures for estimating
adaptation benefits and costs at project level
• Implement tools and procedures on selected projects, we
are identifying, in
– water resources and/or
– agriculture
– with focus on benefits from “market” activities
• Potential candidate projects:
• Completed
• Planned/proposed
• Hypothetical
– Development and other “no regrets” projects
– “Pure” CC adaptation projects (if there is such a thing)
Climate Change - EnvironmentBehavior Interactions
Δ Investment & Management
Climate Δ
Δ Net Primary Production
Production Δ Goods and Services
& Resource
Allocation
Δ Investment & Management
Δ Resource Supply
Preliminary Project Concepts:
South Africa
1. Water supply development and cost recovery,
probably in a small Western Cape Basin
2. Alternatives for offsetting the impacts of climate
change on urban wastewater treatment in Cape
Town
3. Improvement of on-farm management to adjust
to climate variability, probably in the Thukela
Basin.
Preliminary Project Concepts:
The Gambia
• Options for controlling the salt water tongue
in the lower Gambia River:
– Construction of dykes
– Upstream flow regulation
– Water reallocation
• Revision of zoning/design standards
– Flood plane zoning
– Salinity risk zoning
– Updating building codes
Problem Areas
• Translating adaptation options into projects
– Defining project boundaries/participants
– Developing an implementation plan
– Linking policy measures to incentives to
adaptation actions
• Paucity of models and data for:
– Resource allocation/water demand
– Valuation of inputs/outputs
– Especially a problem with non-commercial
agricultural sector
Solutions
• Keep searching for information about:
– Specific projects that fit our needs
– Existing studies/models/data related to:
• Water demand and valuation
• Water allocation
• If that fails
– To shift our focus more in the direction of options
instead of projects
– Focus more on valuing climate change damages,
avoided damages and the imposed cost of climate
change at a larger scale.
The Concept Behind our Approach
• In agriculture and water resources infrastructure and “management”
are always adapted to, or adjusting to, existing climate variability
(using available information).
• The greater the variability, the more it costs to adjust both
infrastructure and management to the “existing climate”.
• But will probably be less costly for areas with high CV to adapt to CC
compared to areas with low CV
• When CC can’t be detected reliably, people adjust to CC as if it were
CV using short-run measures, leading to partial adjustment. Benefits
depend on
– Existing CV
– Overlap between CV and CC
• When CC is detected reliably, there are greater opportunities to adjust
capital stocks (long-run measures), leading to full adjustment.