Climate Action 2009-2010

BUSINESS AND FINANCE
© IRRI Images/Flickr
How should developing
countries adapt to
climate change and how
much will it cost?
Typhoon Ondoy (locally known as Ketsana) caused floods in low-lying areas near the
Laguna bay area around 60kms south of Manila. The extreme weather brought a month’s
worth of rain in a short span of six hour’s causing flash floods and overflowing lakes.
CLIMATE INVESTMENT FUNDS 78
Sergio MarguliS
Lead environmentaL economist,
environment department, the WorLd Bank
Even with drastic reductions in global emissions of
greenhouse gases in the coming years, the global annual
average temperature is expected to be two degrees
Celsius above pre-industrial levels by 2050. Such a rise
in temperature will bring about a world warmer by two
degrees Celsius will experience more intense rainfall,
and more frequent and intense droughts, floods, heat
waves, and extreme weather events. Countries will need
to adapt, and access to necessary financing will be
critical in helping them implement measures that will
make their populations better adapt to climate impacts.
A clear understanding of these costs is necessary for
policy-makers to better allocate resources.
Previous studies on adaptation costs provide a wide
range of estimates, from $4 billion to $109 billion
a year. Similarly, National Adaptation Programs of
Action (prepared by Least Developed Countries under
the United Nations Framework Convention on Climate
Change, (UNFCCC)) identify and provide costing only for
urgent and immediate adaptation needs.
To better understand adaptation costs and to inform
international negotiations in Copenhagen, the World Bank
initiated the Economics of Adaptation to Climate Change
(EACC) study, which is funded by the governments of The
Netherlands, Switzerland, and the United Kingdom.
The objectives of the study are to develop an estimate
of adaptation costs for all developing countries, to help
these countries understand and assess the risks posed
by climate change, and to design better strategies
to adapt to climate change. The initial study report
launched in September 2009, focused on the first
objective and estimated the costs of adapting to climate
change for developing countries in the range of $75-
100 billion per year from 2010–2050. A second report,
due out in early 2010, will focus on the second objective
and will be based on case studies in the following seven
countries: Bangladesh, Plurinational State of Bolivia,
Ethiopia, Ghana, Mozambique, Vietnam and Samoa.
INNOVATIVE RESEARCH APPROACHES
Although the estimate involves considerable
uncertainty, the study gives policy-makers – for the
first time – a carefully calculated number to work with
that uses a unique approach to estimate the costs of
adapting to climate change. This involves comparing a
future world where there is no climate change and one
where climate has affected daily life. The difference
between these two worlds entails a series of actions
to adapt to the new world conditions and the costs of
these additional actions are the costs of adapting to
climate change.
V I SIT: WWW.CLIMATEACTIONPROGRAMME.ORG