Climate change impact assessment

Climate change impact assessment

Without climate change, GDP in South Asia would most likely increase by four or five times above current levels by 2050. However, climate change will lead to loss and damage that is likely to limit the increase to only two or three times. Some of this loss and damage is unavoidable, but in other cases, there are many adaptation actions that can limit the problem. Some of these actions can be taken by the private sector, including farmers and businesses as well as individuals. Others are the responsibility of national and subnational governments.

Many governments have prepared strategies and plans that list key climate change actions and are using these to guide proposals for obtaining finance from core budgets and climate funds. But the challenge facing governments is that most adaptation actions are primarily standard development actions that provide strong benefits before climate change is taken into consideration. Many of these actions become even more important and cost effective when you take climate change into account. To address future problems more directly, climate change impact assessment (CCIA) assesses the extent to which actions will become beneficial when climate change is taken into consideration.

Assessing climate change relevance

CCIA assesses the climate change relevance (CC%) of an action by comparing the benefits of an action when climate change is taken into account with the benefits when it is not. For adaptation actions, the difference is the reduction in loss and damage. For mitigation actions, the difference is the reduction in greenhouse gas emissions. The climate change relevance tells you the percentage of added benefits related to climate change. This can be used to allocate additional funding for climate actions, and to monitor the use and effectiveness of funds for climate action (see example below).

Adopting a standard definition for CC% helps to promote objectivity and build credibility amongst funders, including budget departments and climate funds. The aim is to help guide marginal shifts in resources towards climate change-sensitive actions with the highest set of benefits.

Estimating climate change relevance

Benefits and CC% can be estimated using cost–benefit analysis (CBA). However, CBA places heavy demands on scarce economic skills and should be reserved for major investment projects. In most cases, benefits can be estimated more quickly, relying on expert opinion and/or community participation, informed by whatever quantitative evidence is easily available.

For example, let’s consider a project that promotes community forestry and forest conservation. There are numerous benefits provided–income from sustainable logging, ecotourism, biodiversity protection, conservation of genetic resources, and reduced soil erosion and flooding from protecting certain areas under forest cover. When you take into account climate change, there are additional benefits derived from the carbon sequestered in growing trees, and from the reduction in flooding that occurs as extreme storms become more frequent.

The table below presents the net present value of the benefit estimates from a CCIA analysis.

Table 1

 

The CC% of 25% is illustrated below as the extracted portions of the pie chart.

Community Forest Conservation

 

International experience with estimating CC% has provided some standard default ranges that can be used to crosscheck estimates. Examples of these ranges are shown in the table below.

Table 2

 

Using CCIA to refine programme design

Although estimating benefits is relatively simple, using expert opinion, CCIA does require programme designers to understand the risks of climate change, and how each of their programme benefits is affected by these risks over time. Hence, it promotes programme design that is sensitive to climate change. This is the most important role of CCIA.

Using CCIA to promote funding

Using CCIA to estimate the relative importance of additional climate benefits should strengthen applications for funding, both from government budgets and from climate funds.

Initially, budget departments can be sceptical about climate change, because they receive many claims from inter-sectoral interest groups. These are often qualitative claims about the objectives of programmes that are difficult to evaluate. But budget departments may be persuaded to use CCIA because projections allow departments to more efficiently target climate related expenditure towards activities with the largest climate change relevance. Budget departments are also impressed by any proposals that are supported by rigorous and objective policy analysis.

The significance of CCIA in applications for climate funds is still evolving. Most climate funds require applications to include an assessment of ‘co-benefits’ which provides a rough indication of the relative importance of climate change and development benefits. The implicit assumption is that applications should have strong climate change benefits, but also good development benefits. CCIA provides an objective tool for making that assessment.

Integrating CCIA into planning and budgets

CCIA is being used in climate change financing frameworks (CCFFs) in a variety of countries in South and Southeast Asia, including Cambodia, India, Indonesia, Nepal, Pakistan and Thailand. To date, this work provides policy context that shows the benefits of climate change-related expenditure, but generally it has not yet become embedded in planning and budget procedures. Thailand, however, is beginning to integrate CCIA into budget procedures.

ACT support

ACT is supporting the use of CCIA through a sample of actions in Maharashtra and as part of CCFF-related work in four Indian states, and in Afghanistan, Nepal and Pakistan. Elements of CCIA are already included in the support that ACT provides to help governments access climate funds; ACT aims to strengthen the consistency of this work.

This CCIA support is part of ACT’s broader role of working with government partners to help them develop their own response to climate change.

 

(Header photo credit: sta)

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Climate change impact assessment

This two-page leaflet explains the uses of a climate change impact assessment (CCIA) and the benefits of using this assessment over others.

Date of publication: April 2016

Published by: Action on Climate Today

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