Impacts and Economics of Climate Change in the United Republic of Tanzania Paul Watkiss Development Partners Group on Environment and Climate Change

 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 From climate change to impacts

Increasing vulnerability to  agriculture,  water resources,  forestry,  grasslands, livestock,  coastal resources and  wildlife and biodiversity First National Communication

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 Priority effects of climate change – NAPA

 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 But also economic costs from 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 Economics of Climate Change

Current Climate

 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 already has significant economic costs in Tanzania

Recent severe events 1996/97, and 2005/ 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 people losing their homes Existing climate variability

Impacts and economic costs of climate change

 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  Without global mitigation, impacts in later years after 2030 could be very severe Headline: Future climate change will lead to additional economic costs, on top of current impacts Source FUND National model 2030 Key 0–1% GDP loss 1–2% GDP loss 2–3% GDP loss

 Future climate model projections vary, especially for rainfall and extreme events  All models show rising temperatures, but range of 1 – 3  C 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 The future effects of climate change are uncertain

 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 And socio-economic change will as important

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 Climate change will lead to sectoral risks Source University of Southampton

Coastal risks Dar es Salaam  Dar es Salaam – will be a mega city by 2040  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. Source University of Southampton

Zanzibar Archipelago and Islands  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 Source University of Southampton

 Complex range of effects  Under more extreme projections, with no adaptation, maize yields could decrease by  16% by 2030 (reduction 1 million tonnes /year)  % by 2050  Shifting agro-ecological zones  But some potential for benefits as well  Impacts on livestock  Affect livelihoods in rural areas, pastoralists Market sectors ….Agriculture and Livestock Source Sokoine University

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  Potential changes to electricity supply  Risks to hydro generation

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

 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

 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 Adaptation can reduce these impacts, but it has a cost

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. National Adaptation Programme of Action (NAPA)

 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  Focusing on likely level of investment and financial flows  Costs of adaptation depend on what is included or excluded  Need to address the current adaptation deficit, as well as preparing for future  Adaptation potential for large finance flows, but institutional capacity needed Adaptation can reduce these impacts, but it has a cost

Top-down analysis reveals high investment needs

 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 Adaptation must address climate uncertainty

National adaptation – sea level rise Source University of Southampton  Adaptation can reduce risks significantly  But high investment needed  (up to $80 mill/year by 2030)

 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) key to reducing current & future risks  Sea level rise needs to be included in Dar es Salaam transport and system development master plan Local adaptation – sea level rise

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 Institutionalize climate information data District Agricultural Development Plans Invest in rural road infrastructure. Extra investment needs significant - $100 million per year (annualised) Market sectors, e.g. agriculture Source Sokoine University

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

3. Adaptation can reduce the impacts of climate change, but it has a cost: the adaptation financing needs for Tanzania are potentially very large. 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. ………..The key recommendation is for Tanzania to get ready and act now Key Conclusions

Next steps – priority areas