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The Economics of Climate Change in Tanzania
Development Partners Group
Low Carbon Growth
Key Messages

Future greenhouse gas emissions will increase in Tanzania. With planned development, they
are predicted to double between 2005 and 2030. The current development pathway will also
‘lock-in’ the country to a higher emission pathway, reducing future carbon finance opportunities.

This study assesses the potential for an alternative low carbon pathway in Tanzania and finds
low carbon development is strongly in the country’s self interest.

It finds a large number of ‘no regrets’ options, which have net economic benefits to the
economy and so enhance economic growth, as well as providing access to carbon credits,
improving energy security and reducing air pollution and other environmental impacts.

The study has outlined a number of recommendations and future priorities, the most important
of which is that Tanzania should prepare a national climate strategy, get ready, and act now.


Rising Tanzanian emissions will reduce
opportunities and increase impacts
Tanzania currently has very low emissions of
Greenhouse Gas (GHG) emissions, in total and
per capita. The published inventory for 1994 puts
per capita emissions at 1.3 tCO2e (all GHGs) and
0.1 tCO2 (CO2 only). This is extremely low by
international standards.

However, if land use changes and forestry
(including deforestation) are included, the per
capita emission estimates rise to 2.67 (all GHGs)
and 1.65 (CO2 only).

This study estimates that they will double
between 2005 and 2030 under the current
projected baseline, driven by the transport and
agriculture sectors. The increases are shown in
the figure below. Per capita emissions are set to
increase to 1.5 tCO2e and 0.5 tCO2 (CO2 only).

Moreover, many of the current development
plans, such as greater coal and gas use across
the economy, and the baseline development in
some sectors such as transport, will ‘lock-in’ the
country into a higher emission pathway, reducing
the potential for future carbon financing
opportunities.


The key emitting sectors are forestry, due to
deforestation, and agriculture, primarily from
livestock (CH4 from enteric fermentation) and
soils (N2O from fertilisers, animal manure, etc).
These two sectors accounted for 93% of
emissions in 1994 (forests 70%, agriculture 23%).

However, the emission of Greenhouse Gas
emissions in Tanzania will increase under the
planned current development baseline. 


Indeed, fossil-fuel based emissions are set to
increase by 7 times by 2030. These increases in
fossil fuel use will also lead to other economic,
social and environmental costs such as increased
congestion, greater fuel imports and higher air
pollution. 
Growing demand for energy (biomass and
charcoal) will further risk the sustainability of
forests.
120
1.5
100
Power Generation
Households
Industry
Transport
Waste
Agriculture
1.4
CO2e / Cap.
1.3
Mt CO2e
1.2
60
1.1
tCO2e Per capita
80
40
1.0
20
0.9
0
0.8
2007
2009
2011
2013
2015
2017
2019
2021
2023
2025
2027
2029

Projected GHG emission projections for Tanzania (excl. LUCF), MtCO 2e, 2007-2030 (Total and Per Capita)

Low Carbon Development is in
Tanzania’s self interest
Tanzania has already introduced many low
carbon options, for example in the electricity
sector. However, these are already included in
the estimates above and do not offset the
increases in GHG emissions. The study has
considered an alternative low carbon pathway for
Tanzania, which delivers the same growth levels
but reduces emissions.

For electricity, this includes the use of
alternatives to fossil based generation, including
renewables for large-scale generation and the
decentralised electricity for rural populations. For
households, it includes more efficient use of
biomass in addition to higher consumption of
other lower carbon fuels, such as renewable
electricity and LPG.

For the transport sector, it includes
improvements in vehicle efficiency, use of
biofuels and effective public transport systems.
For agriculture, it includes various options to
address the emission growth that would occur
from agricultural intensification.

Many of these options are ‘no regrets’
opportunities, i.e. they have positive economic
effects and their benefits outweigh their costs.
An example is energy efficiency which saves the
individual or company money (e.g. from reduced
fuel costs) compared to the current baseline.
There are also many low cost options that would
enhance economic growth, as well as allowing
further access to international carbon credits.

These options are shown below, in a
marginal abatement cost curve. This shows the
cost of emission abatement (left hand axis, in
$/tCO2) for increasing total amounts of emissions
reduced across the economy (from left to right).
Options below the zero line are no regret options,
i.e. those that produce cost savings.

These options also have wider economic
benefits from greater energy security and
diversity, reduced air pollution, and reduced
environmental impacts.

In addition, the forestry sector represents an
immediate opportunity, and Tanzania is wellpositioned as a UN-REDD country.

Solar PV (offgrid)
85% Flex Ethanol
HEV Diesel LGV
Onshore wind (high)
HEV Diesel Bus
LPG replacing Charcoal
Increase stock efficiency - cars
Electric cooker replacing Charcoal
HEV petrol car
3000
0
300
Solar thermal (centralised)
HEV Diesel HGV
Improved Charcoal production kiln
Improved Biomass stoves
Biogas replacing Charcoal
250
Solar cookers replacing Charcoal
Improved Charcoal stoves
200
Increase stock efficiency - buses
Imports
10% Ethanol blend (Cassava) in LDVs
150
Increase stock efficiency - trucks
3000
(high)
Large Hydro
2000
100
Large Hydro (low)
SHS replacing kerosene lighting
$/tCO2
50
Gas CCGT
0
-50
2000
-100
x10 Kt CO2 eq.
-150
Electric car
Small Hydro
Electric car
10% urban car switch to BRT system
10% Ethanol blend (Sugar cane juice) in LDVs
10% Ethanol blend (Sugar cane juice) in LDVs
5% Biodiesel blend (Jatropha) in Buses Solar PV (offgrid)
HEV Diesel LGV
85% Flex Ethanol
Solar PV (offgrid)
HEV Diesel LGV
HEV Diesel Bus
Onshore wind (high)
HEV Diesel Bus
Increase stock efficiency - cars
LPG replacing Charcoal
Increase stock efficiency - cars
Onshore wind (low)
Electric cooker replacing Charcoal
Onshore wind (low)
HEV petrol car
Solar thermal (centralised)
HEV Diesel HGV
Improved Charcoal production kiln
Improved Biomass stoves
Small Hydro
5% Biodiesel blend (Jatropha) in Buses
Biogas replacing Charcoal
10% urban car switch to BRT system
85% Flex Ethanol
Solar cookers replacing Charcoal
5% Biodiesel blend (Jatropha) in Buses
Onshore wind (high)
Improved Charcoal stoves
85% Flex Ethanol
LPG replacing Charcoal
Increase stock efficiency - buses
Onshore wind (high)
Electric cooker replacing Charcoal
2000
1000 Imports
0
1000
Onshore wind (low)
LPG replacing Charcoal
Solar thermal (centralised)
Improved Charcoal production kiln
Small Hydro
3000
10% Ethanol blend (Cassava) in LDVs
Electric cooker replacing Charcoal
stock efficiency - trucks
Increase 3000
HEV petrol car
10% urban car switch to BRT system
HEV petrol car
HEV Diesel HGV
Improved Biomass stoves
Biogas replacing Charcoal
Large Hydro (high)
HEV Diesel HGV
Large Hydro (low)
Improved Biomass stoves
Improved Charcoal stoves
SHS replacing kerosene lighting
Biogas replacing Charcoal
Increase stock efficiency - buses
Gas CCGT
Solar cookers replacing Charcoal
Imports
Improved Charcoal stoves
10% Ethanol blend (Cassava) in LDVs
Increase stock efficiency - buses
Increase stock efficiency - trucks
-200
Imports
10% Ethanol blend (Cassava) in LDVs
Increase stock efficiency - trucks
-250
x10 Kt CO2 eq.
Solar cookers replacing Charcoal
Large Hydro (high)
Large Hydro (low)
SHS replacing kerosene lighting
Gas CCGT
Large Hydro (high)
Large Hydro (low)
lighting
keroseneof
SHS replacing
Marginal cost curve for Tanzania (2030) – showing the large
number
no regret options.
Gas CCGT
x10 Kt CO2 eq.
Accessing finance and delivering
actions will not happen on it’s own
carbon and climate resilient growth, considering
synergies and conflicts.
Carbon finance will be critical in helping
Tanzania to follow the low carbon development
path above. Realising these opportunities will
involve challenges and require political will,
robust implementation, and social acceptance.


There are
technical, economic and
institutional barriers that need to be addressed,
such as upfront costs, technology access and
cultural preference. 

Accessing funds will require the development
of effective mechanisms, institutions and
governance structures.

There are also feedbacks and links with
climate change itself
The impacts of climate change will impact
on the baseline development pathway, and on
low carbon options. There is a need to link low

Increases in temperature from climate
change will increase cooling needs, which will
increase energy demand and increase emissions,
unless alternatives are sought. Furthermore,
changes in future temperature and rainfall could
affect the electricity sector, given the high
proportion of hydro power, as well as affecting
coal use because of cooling water requirements.
Wider energy diversification is therefore needed
to build resilience.
Changes in future climate will affect agroecological zones and could impact on forests,
reducing the potential for REDD.
The
consideration of climate change impacts on
forests is a REDD priority. Early steps include
increased monitoring of climate change, to
reduce existing stresses and to develop
adaptation measures such as forest buffer zones
and increased connectivity.

Strategies
Low-Carbon
Growth (LCG)
Recommended Actions
 Full analysis of baseline projections, low carbon options, costs and potential for prioritisation
and development of strategy for mechanisms.
 Develop national strategies to mainstream LCG in planning. Build into long-term vision (e.g.
Vision 2025), including potential effects from international action.
 Facilitate carbon finance opportunities in voluntary and compliance carbon markets (VCM,
CDM) and in REDD
 Prioritize forestry, agriculture, transport and electricity generation low carbon measures,
considering short-term opportunities but also longer-term areas where potential ‘lock-in’.
 Look for synergistic adaptation – low carbon project opportunities, e.g. agro-forestry and
sustainable land-use
Climate
resilience
 Climate risk screening of low carbon growth pathways
 Consideration of energy demand (cooling) and supply (hydro, fossil stations) effects from
climate change, with associated adaptation (diversity, demand management).
 Analysis of potential impacts of climate change on forestry (REDD) and introduction of
monitoring and move towards early adaptation..
Getting Ready to Act
The study concludes there are significant
economic benefits for Tanzania in following a low
carbon development path, as well as large
environmental and social benefits. Such a
pathway is strongly in the country’s self interest,
and would provide extra investment from carbon
finance. It would produce real economic,
environmental and social benefits, enhance
energy security, reduce fuel imports, and improve
air quality and natural resources. 

A key recommendation is for Tanzania to get
ready and act now. Specific actions include.

Improving the estimates to give a more
comprehensive analysis of projections and
opportunities, analysis of costs (including an
investment and financial flow analysis (by sector)
and to match these against potential finance.

To develop a national climate strategy that
links national policy to sectoral objectives and
targets,
with
effective
mechanisms
for
implementation, monitoring, reporting and
verification for low carbon growth and adaptation.
To build capacity, with mechanisms, institutions
and governance systems to allow Tanzania to
access funds.

To encourage the shift to low carbon
pathways, with greater Government, business
and civil society action, and to avoid locking in
Tanzania to a high emission path.

To widen this analysis to develop a longer
term strategy up to and beyond 2030, which also
considers international aspects (supply chains,
tourism), co-operative regional (East African)
responses, and a policy shift, to low carbon
development / climate resilient growth, including
an update of national policy and Vision
documents to examine the potential effects and
opportunities of climate change.

Background and contacts
The development partners group, with support from
UK Government (DFID), have funded this study
(Economics of Climate Change in the United
Republic of Tanzania). It considers the impacts and
economics costs of climate change, the costs and
benefits of adaptation and low carbon growth. The
work is led by the Global Climate Adaptation
Partnership, working with international and local
partners. For information, contact Paul Watkiss or
Tom Downing ([email protected]).
