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Impacts and Economics of Climate Change in the United Republic of Tanzania Paul Watkiss Development Partners Group on Environment and Climate Change From climate change to impacts Changes to the climate of URT will lead to impacts Higher temperatures - built environment, agriculture, natural systems Changes in rainfall – water availability, agricultural, energy production Changes in extreme events - floods and drought events, property damage, losses Sea level rise from higher global temperature affecting coastal areas, islands, ecosystems First National Communication Increasing vulnerability to agriculture, water resources, forestry, grasslands, livestock, coastal resources and wildlife and biodiversity Priority effects of climate change – NAPA NAPA identified key areas at risk of climate change Agriculture and food security Health Forest and wetlands Energy Coastal and marine resources Wildlife Tourism Industry But also economic costs from climate change The climate is changing - higher temperatures, changes in seasonal patterns, more intense droughts these will have important economic costs Global climate policy is changing and opportunities are emerging – new markets, mechanisms and funds Climate change is becoming an economic, planning and finance issue, not (just) an environmental one Economics of Climate Change Scoping Study for Development Partners Group, DFID funded. Aims are 1. Assess potential impacts and economic costs of climate change 2. Scope the cost and benefits of adapting to these effects over time 3. Assess the opportunities and potential for low carbon growth and finances Advised by GoT, working with local partners: Aiming to provide information for different end-users, at different scales Current Climate Existing climate variability already has significant economic costs in Tanzania Tanzania’s economy is very dependent on its climate. High % of GDP associated with climate sensitive sectors, especially agriculture Current climate variability, i.e. periodic floods and droughts, already have significant economic costs in Tanzania These cause major economic costs >1% GDP and affect millions of livelihoods Repeated pattern over time reduces long-term growth Tanzania is not adequately adapted to deal with existing climate, i.e. it has an existing adaptation deficit Existing climate variability Recent severe events 1996/97, 1999-2000 and 2005/2006 - affect many sectors Agriculture production falls and failures Insufficient rainfall for hydroelectric power generation and urban water supplies Central Bank of Tanzania estimated economy grew 1% in 2007 lower than expected due to electricity shortage Also major effects flooding – overall and localised 1997/1998, in 2000/01, in Kilosa in 2009 – cereal losses, infrastructure losses 2005 floods in Zanzibar estimated 10 000 people losing their homes Impacts and economic costs of climate change Headline: Future climate change will lead to additional economic costs, on top of current impacts Africa is predicted to have greater impacts than other world regions, even in short term Economic costs are uncertain, but indicate magnitude Additional (net) economic costs to Tanzania could be equivalent to 1 – 2% / year of GDP by 2030 Compound impact year on year would threaten Vision objectives and reduce growth Key 0 – 1% GDP loss 1 – 2% GDP loss 2 – 3% GDP loss Without global mitigation, impacts in later years after 2030 could be very severe 2030 Source FUND National model The future effects of climate change are uncertain Future climate model projections vary, especially for rainfall and extreme events All models show rising temperatures, but range of 1 – 3C by 2050s Rainfall trends less clear. Results vary with model, season and region Changes in extreme events less certain Many projections show increases in heavy rain (flood risk) Pattern for future droughts unclear, but possible increases or decreases But not a reason for inaction And socio-economic change will as important Future effects of climate change are strongly influenced by socio-economic change The Vision will reduce some climate impacts through sound development. However, population growth and infrastructure will continue to drive effects Population, per capita income – affect vulnerability, adaptive capacity, impacts Development can reduce but also sometimes increase vulnerability Climate change will lead to sectoral risks Source University of Southampton Sea level rise and Coastal Zones Risk of flooding, loss of land, erosion, loss of ecosystems Additional 0.3 – 1.6 million people /year by 2030 Impacts of up to $50 million/year by 2030, rising to $100 to $200 million/year by 2050 Possibly 8% of wetlands lost Total Cost of Damage (US$million/year) 1.4 Rahmstorf 1.2 Sea level rise (m) 1 A1FI high-range A1B mid-range B1 low-range 0.8 0.6 0.4 0.2 0 1990 2000 2010 2020 2030 2040 2050 Year 2060 2070 2080 2090 2100 350 Rahmstorf SLR and A1B SES 300 A1B mid range and A1B SES 250 B1 low-range and B1 SES 200 A1B socio-economic only (no SLR) 150 100 50 0 2000 2025 2050 2075 Coastal risks Mbweni Dar es Salaam Ü Bunju Kunduchi Goba Mbezi Kimara Kibamba Kawe Source University of Southampton MikocheniMsasani Kijitonyama UbungoSinza Kinondoni Manzese MakuburiMabibo Kivukoni Tabata llalaKeko Kigamboni Segerea SandaliMiburaniKurasini Kiwalani VijibweniMji Mwema Mtoni Kipawa Ukonga Yombo VitukaAzimio Kibada Pugu Makangarawe Mbagala Kuu Mbagala Kitunda Charambe Toangoma Kinyerezi Somangira Chamazi Chanika Kisarawe II Msongola Chanika Kimbiji Dar es Salaam: Population Distribution < 10,000 Dar es Salaam – will be a mega city by 2040 Pemba Mnazi 10,000 - 20,000 20,000 - 30,000 30,000 - 40,000 > 40,000 0 2.5 5 10 Kilometers 8% of the land area of city, 140,000 people, and economic assets worth more than $170 million, are currently below the 10m contour line, i.e. in potentially vulnerable Extreme high water flooding – $400 million of assets potentially at risk (2030) important in relation to the current Dar development plans. Zanzibar Archipelago and Islands Source University of Southampton Important risks to Zanzibar (Unguja, Pemba) and other islands People at risk, property – Unguja (425 people per km2), and Pemba (417 people per km2), densely populated coastal areas Impacts to coastal ecosystems (protection, resources) Impacts on corals (bleaching, temperature) Effects on tourism Potential effects on fisheries Market sectors ….Agriculture and Livestock Complex range of effects Source Sokoine University Under more extreme projections, with no adaptation, maize yields could decrease by 16% by 2030 (reduction 1 million tonnes /year) 25 - 35% by 2050 Shifting agro-ecological zones But some potential for benefits as well Impacts on livestock Affect livelihoods in rural areas, pastoralists Water availability and Electricity supply Potential reductions in some river systems (10% Ruvu, Pangani Rufiji ) Key availability issues for drinking water, agriculture Changes need to be seen in context of baseline water demand increases 30000 Potential changes to electricity supply Risks to hydro generation System Generation, GWh 25000 Import 20000 Wind Coal 15000 Oil Gas Hydro 10000 Sales 5000 0 2005 2008 2011 2014 2017 2020 2023 2026 2029 Electricity demand Increasing electricity demand for cooling Homes, offices, tourism Big increases with climate change Higher energy bills Key issue for electricity planning Important for peak electricity needed on the system – more capacity Climate change not in current demand forecasts And non-market sectors…. Health Malaria a key concern, but also other climate related disease Potential rise in treatment costs of $20 to 100 million /year by 2030 Higher temperatures will also reduce labour productivity Also effects of health outbreaks associated with extreme events – droughts and floods Forests, biodiversity and ecosystem services Over 50% of Tanzanian economy relies on ecosystem services key for growth, exports, tourism revenues Provision (food, wood), regulation (water storage), support (nutrient recycling), and recreational /cultural (tourism) Underpin Changes in climate will shifting ecological zones Climate change will have potentially high economic costs Tourism revenues As well as affecting many livelihoods Adaptation Adaptation These impacts assume we do nothing and let impacts happen We can reduce the potential impacts with adaptation Adaptation = an adjustment in natural or human systems - in response to actual or expected effects - which reduces impacts or exploits beneficial opportunities. Various types of adaptation : Anticipatory or proactive adaptation – Adaptation that takes place before impacts of climate change are observed.. Autonomous adaptation – spontaneous – individuals, private sector, natural systems Planned adaptation – deliberate policy decision Adaptation can reduce these impacts, but it has a cost Adaptation can reduce the economic costs of climate change but it has a cost National Adaptation Programme of Action (NAPA) NAPA outlined initial priorities and costs – but only immediate priorities Immediate priorities – project levels proposed 72 project activities Short list of 14 Final 6 priorities National Adaptation Programme of Action (NAPA) National Adaptation Programme of Action (NAPA) 1. Improving food security in drought-prone areas by promoting drought-prone tolerant crops 2. Improving Water availability to drought-stricken Communities in the Central part of the country 3. Shifting of Shallow Water Wells Affected by Inundation on the Coastal Regions of Tanzania Mainland and Zanzibar 4. Climate change adaptation through participatory reforestation in Kilimanjaro Mountain 5. Community Based Mini-hydro for Economic Diversification as a result of Climate Change in Same District 6. Combating Malaria Epidemic in Newly Mosquito-infested areas The estimated total project costs for these projects were $17.2 million. Adaptation can reduce these impacts, but it has a cost NAPA only immediate priorities – underestimate total costs for adaptation Estimates of likely full costs of adaptation in Tanzania Top-down aggregate indicative estimates from scaling African studies to Tanzania Costs of adaptation depend on what is included or excluded Focusing on likely level of investment and financial flows Need to address the current adaptation deficit, as well as preparing for future Adaptation potential for large finance flows, but institutional capacity needed Top-down analysis reveals high investment needs • At least $500 million/year to reduce current vulnerability Immediate needs …….. but probably more • Further $100-150 million/year to build capacity and enhance resilience to future climate change • Needs will rise rapidly to address climate change By 2030 • Investment of $1 billion/year is potentially needed • Accessing adaptation funds will require effective policy, and institutions - need to build capacity is a priority Adaptation must address climate uncertainty Unclear exactly what level of change will occur especially impact on rainfall and droughts Therefore Focus on early areas where build capacity Address existing adaptation deficit (no regrets) and current climate variability Implement options that good across the uncertainty – robustness not optimisation National adaptation – sea level rise Adaptation can reduce risks significantly But high investment needed (up to $80 mill/year by 2030) No Adaptation With Adaptation Source University of Southampton Local adaptation – sea level rise Need for short-term monitoring, disaster risk reduction Reducing vulnerability, e.g. stopping major urbanisation in lowest lying areas Integrated coastal management Dar - Spatial planning (development controls) to reducing current & future risks Sea level rise needs to be included in Dar es Salaam transport and system development master plan key Market sectors, e.g. agriculture Investigated combination of options that robust against future uncertainty • Increase investments in smallholder farmers’ irrigation • Introduce soil and water conservation in the highlands • Strengthen the capacity of agricultural research institutes to conduct basic and applied research 60 • • Institutionalize climate information data District Agricultural Development Plans Invest in rural road infrastructure. Extra investment needs significant $100 million per year (annualised) A1B A2 50 '000,000 of 2010-USD • Source Sokoine University 40 30 20 10 0 Irrigation SWC Research Extension Rural Roads Non-market sectors – ecosystems • Ecosystem based adaptation – recognizing role have in no regret measures • Key issues for national parks – buffer zones • Issues with including future risks of climate change to forest and REDD • Promising options (Mustelin et al), such as with coastal zones and shoreline buffer zones in Zanzibar Key Conclusions 1. Existing climate variability already leads to significant economic costs in Tanzania, with costs of major droughts and floods often in > 1% of GDP. 2. Future climate change will lead to additional and potentially very large economic costs for Tanzania. 3. Adaptation can reduce the impacts of climate change, but it has a cost: the adaptation financing needs for Tanzania are potentially very large. ………..The key recommendation is for Tanzania to get ready and act now Next steps – priority areas Improve the estimates Build capacity Mainstream climate change in sector and national plans Implement urgent priorities – addressing current deficit Risk screening – climate resilience Regional collaboration