1. Estimating and Comparing Costs and Benefits of Adaptation Projects in Africa – Project AF47 Participating organisations: Energy and Development Research Centre, University of Cape Town, South Africa Department of Water Resources, Banjul, The Gambia UNEP Collaborating Centre on Energy and Environment, Risø Denmark Contact persons: Ogunlade R. Davidson: (EDRC) ogunlade@energetic.uct.ac.za Bubu P. Jallow (DWR): bubujallow@hotmail.com Mac Callaway (UCC) mac.callaway@risoe.dkmac.callaway@risoe.dk Molly Hellmuth (UCC) molly.hellmuth@risoe.dkmolly.hellmuth@risoe.dk

2. Project Background Increasing emphasis on adaptation by UNFCCC parties Lack of project level methods for Phase III adaptation projects Global and domestic needs of A-1 and non A-1 countries to compare benefits and costs of adaptation projects between –Countries –Sectors –Other investments (climate and non-climate) Lack of analytical and institutional capacity is most acute in Africa

3. AIACC Project Objectives Modify framework developed for UNEP by Callaway et al (1999) for assessing adaptation benefits and costs at project level Develop analytical tools and procedures for estimating adaptation benefits and costs at project level Implement tools and procedures on selected projects Develop the capacity of African institutions to develop and implement similar tools

4. Task 1- Definition of Methodological Framework Objective: Further develop conceptual framework for assessing project-level benefits and costs Based on previous work for UNEP by Callaway et al. Issues addressed: –Integrate adjustments to climate variability (cv) to adaptation to climate change (cc) –Adaptation benefits of sustainable development projects and “no regrets” projects –Linkages between autonomous and strategic adaptation Recent developments to framework will be published by OECD

5. Task 2 – Project Review and Selection Objective: Select projects to be assessed in later tasks (country – sector – project) Limited to projects that will avoid ”market” damages of cc –Water resources –Agriculture Potential projects: –Completed development projects –Proposed development projects –Hypothetical projects linked to national sustainable development objectives Develop and apply screening criteria to select projects

6. Task 3 – Project Definition and Methodology Development Define project: –Physical characteristics –How it interacts with receptor system –Investment + O&M costs Development of methods to: –Simulate effects of cc on environment –Simulate effects of environmental impacts on resource management, allocation and investment –Value avoided damages and costs

7. Task 4 – Scenario Development Objective: To define cv and cc (or impact) scenarios used in the project assessments Types of scenarios (where relevant) –Existing climate - To estimate project benefits and costs under the current climate (including current cv) and existing options –Partial Adjustment - To estimate project benefits and costs if the climate changes (including changes in cv), but only currently existing options for adjusting to climate variability are in place –Adaptation/Full Adjustment – To estimate the sectoral benefits and costs if the climate changes (including changes in cv) and specific options to adjust to climate change are introduced

8. Task 5 - Data Collection Objective: To collect data needed to implement the scenarios, models and methods defined in Tasks 3 and 4 Data needs: –To characterize project construction, maintenance and operation activities and estimate the costs of these activities for each adaptation project –Climatic and geophysical data to implement the various scenarios determined in Task 4 –Data to estimate the parameters of, calibrate, and/or evaluate driver variables in the impact model(s) used for each project –Data to estimate the parameters of, calibrate, and/or evaluate driver variables in the economic/valuation model(s) used for each project.

9. Task 6 – Estimation of Adaptation Costs and Benefits Objectives: To estimate the costs and benefits (value of damages avoided) by each adaptation project: –Climate change damages: the net value of the damages that would occur if the climate changes and the project is not built, compared to the existing climate scenario –Adaptation benefits: the value of the climate change damages avoided by the project, if the climate changes and the project is built compared to the partial adjustment scenario –Adaptation costs: the opportunity cost of the real resources used to construct, operate and maintain the project –Net benefits of adaptation: Adaptation benefits – Adaptation costs –Imposed costs of climate change: the net value of the damages if the climate changes and the project is built, compared to the existing climate scenario

10. Task 7 - Reporting Mid-term report – work through Task 4 Project completion report Project guidance document for the World Bank Input to IPCC experts meetings Peer reviewed publications

11. Relationship to Other Projects Other AIACC –Potentially there are mutual benefits from co-operating with other AIACC projects In project identification and selection Data and model sharing Sharing results World Bank –Proposed cooperation on water resources sector –Investigate completed water projects –Provide guidance about how cc can be integrated into regular project assessments by the World Bank

12. PROGESS POINTS

13. 1. Task 1 (completed): a. Paper presented at OECD/will be published b. Second framework paper will be prepared for publication c. Research to apply the framework in the Colorado & Missouri River Basins is in progress with New Mexico State University

14. Task 2 (in progress): a. First stage screening completed in SA and Gambia b. Project areas and concepts identified c. Alternative methodologies identified for each area/concept d. Information search underway to determine what is feasible with existing data/models

15. Task 3 (early progress): a. Project definition: This is an iterative task that begins during project selection. Projects are re-defined and refined on an iterative basis as we find out what information is available. Methods development: During the project identification phase, we are forced to think about what models/methods we need to accomplishment the assessment of each project, since these needs must be consistent with what is available or can be developed within the project budget.

16. Task 4: We won’t begin to work on scenarios until we have identified the projects we are going to assess and the models we are going to use generate physical impacts.

17. Task 5 (early progress): Related to project identification we are in the process of identifying data needed to assess candidate options, including: a. Characterization of projects b. Hydrologic data c. Data needed to “characterize” water demand by different sectors/uses.

18. Task 6: (no progress) Task 7: Progress report submitted