PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE. Report No.: AB2140 Project Name

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1 PROJECT INFORMATION DOCUMENT (PID) CONCEPT STAGE Report No.: AB2140 Project Name Design and Implementation of Pilot Climate Change Adaptation Measures Region LATIN AMERICA AND CARIBBEAN Sector General water, sanitation and flood protection sector (80%); General energy sector (20%) Project ID P GEF Focal Area Climate change Borrower(s) CONAM Implementing Agency Environment Category [ ] A [X] B [ ] C [ ] FI [ ] TBD (to be determined) Date PID Prepared February 2, 2006 Estimated Date of June 20, 2006 Appraisal Authorization Estimated Date of Board September 12, 2006 Approval 1. Key development issues and rationale for Bank involvement Climate is rapidly changing at a global scale. The key driving force is the accumulation of greenhouse gases in the atmosphere that result from anthropogenic activities. Since the industrial revolution, the mean surface temperature has increased at the rate of one degree Celsius per century, with most of the change concentrated in the last decades of the 20 th century. Seen over the scale of the last millennium, the rapid warming represents a strong deviation from the norm. With the continuing emission of greenhouse gases, it is now projected that the mean surface temperature may increase up to 6 degrees Celsius during the net 100 years (IPCC, TAR, 2001). A change of this magnitude is unprecedented and will result in significant impacts to be felt at a global scale, potentially disrupting the overall biosphere. Climate change is a very serious environmental challenge that can affect the prospects for sustainable development. Recent research shows that climate change will be even more pronounced in high elevation mountain ranges (Bradley et al. 2004). While much attention has been paid to climate change in polar regions, mountains that etend in the troposphere have been warming faster than adjacent lowlands (Diaz et al. 2003). Thus heavily populated, high elevation areas in the tropics, such as the tropical Andes, are now and will likely continue to eperience particularly dramatic changes in climate.

2 Highland Andean ecosystems are very vulnerable to climate change impacts. For eample, glacial retreat in the Andes is happening at an alarming rate (Corripio, 2004; Tropical Glaciology Group, 2004) affecting water cycles and Glacier in the Peruvian Andes in 1980 and from the same position in Cordillera Blanca, Peru. (Bryan and Mark Lynas). watersheds. At lower mountain altitutes, changes observed include loss of water regulation, increased likelihood of flash fires and changes in ecosystem composition and resilience. Moreover, there is a substantive risk of recurring glacial overflows (GOFs) placing large downstream populations and infrastructure at imminent risk. These dramatic hydrological and ecological changes would result not only in a loss of global biodiversity ( no way up for unique mountain species) but also in a loss of much of the environmental goods and services provided by these ecosystems, especially water supply, basin regulation, and associated hydropower potential. On this last point, many rivers that are used to generate hydroelectricity in the region are glacier-fed. For eample, recent studies in Ecuador (First National Communication, 2003) suggest that during the low-water period, the Paute river basin would now only be providing up to 45% of average power capacity (compared to 70% under normal conditions), largely as a result of lost natural regulation in the basin. In addition, many of the valleys in the Central Andes have low rainfall patterns and largely depend on the regulated flows from glaciers and snowcaps for water supply. Destruction of these water regulation systems will contribute to a gradual process of desertification with damaging implications to ecosystems and the services they provide. Further, observed combined impacts and projections of global warming, ENSO (El Niño Southern Oscillation) and etreme weather events on mountain hydrology are very worrisome (IRD 2004). Effects of El Nino and La Nina events on snow accumulation and glacial melt are critical. Given that ENSO has a dominating influence on the climate in the region, better managing associated climate fluctuations should be an integral part of any adaptation strategy. Combined impacts of strengthened ENSO signals and continuing climate change impacts in high mountains may be devastating for downstream (including coastal) areas. Urgent actions are thus required to document, with a higher level of certainty the range of potential future climate scenarios (including ENSO) for the tropical Andes, the anticipated impacts of such climate scenarios on water resources (especially those derived from glacier and snow melt), hydro power and rural resource-based economies, and to formulate adaptation policy actions and measures as well as development projects within which adaptation can be mainstreamed. Governments in the region are thus beginning to emphasize the need to formulate and implement development plans that take into account the impacts of climate change in high mountain ecosystems. This project will provide a sound scientific basis for assessing the effectiveness of different policy and management alternatives and then implement the best options. The Bank/GEF. The World Bank in Latin America is playing a key role in the adaptation field. Two of the three projects already in the GEF s Strategic Program on Adaptation portfolio are in Latin America.

3 The project would thus benefit from World Bank-assisted preparation activities for projects (Colombia: Integrated National Adaptation Program, P and Dominica, St. Lucia and St. Vincent: Implementation of Adaptation Measures in Coastal Zones, P090731) that dwell on adaptation issues. This project would be framed within decisions taken both at COP7 and COP 8 emphasizing the need to focus GEF resources towards adaptation issues. At the GEF council meeting of November, 2003 and the COP9 in Milan in December, 2003, a business plan has been adopted that for the first time recognizes the funding needs for adaptation activities under a pilot window designed to identify policy options and measures that could demonstrate how adaptation to climate change can be implemented. Two more adaptation funds are now operational. In 2005 G8 participants, including the Bank (The Gleneagles Communiqué, 2005), acknowledged the seriousness of the challenge posed by climate change and reaffirmed the urgency of adaptation efforts. The leading industrial nations made the commitment to work with developing countries to improve their resilience and to integrate adaptation goals into sustainable development strategies. 2. Proposed objective(s) The project development objective is to support regional efforts to define and implement pilot adaptation measures to meet the anticipated impacts from climate change in the Andean highlands. This will be achieved through: a) capacity building and improvements to the knowledge base (documenting trends and projecting impacts); b) identifying and assessing measures and policy options to adapt to the effects of climate change as well as development projects within which adaptation can be mainstreamed; and c) implementing regional and strategic adaptation pilots to address key climate impacts on their economies. Priority will be given to pilots from vulnerable highland and coastal dependent watersheds, other mountainous ecosystems, cross-border watersheds, and regions of mutual interest to participating member countries, where the impacts on global commons and associated local impacts are the highest. 3. Preliminary description Components and Activities a) Identification, selection & formulation of adaptive measures: The project would support consultancies and services required for: i) development of potential future regional climate scenarios; ii) assessment of future climate scenario impacts on runoff through major regional watersheds as driven by glacial, snow melt and warming of moorlands; iii) assessment of future climate scenario impacts on the incidence of etreme precipitation events (both floods and droughts); iv) assessment of potential runoff scenario impact on downstream potable water supplies, irrigation water for agriculture and power generation; v) identification and selection of highly vulnerable economic activities and ecosystems and identification and preliminary assessment of possible adaptation options (management, policy, infrastructure); and, vi) formulation of a regional adaptation strategy. The project will build analytical capacity for policy and project evaluation that can be epanded subsequently to include other sectors. Likely areas for immediate intervention include watersheds, and consequent impacts on hazards to life and property, watershed ecology and desertification, water availability, agricultural productivity/fishery & food security. b) Implementation of pilot adaptation measures. The project would support consultancies, goods and services required for (i) institutional analysis, legal and regulatory assessments, a stakeholder analysis and consultation process, and public awareness for the implementation of adaptation measures; (ii) design and implementation of pilot adaptation projects in selected communities, and key economic sectors where vulnerability is greatest and the region s interest the highest.

4 4. Safeguard policies that might apply [Guideline: Refer to section 5 of the PCN. Which safeguard policies might apply to the project and in what ways? What actions might be needed during project preparation to assess safeguard issues and prepare to mitigate them?] Safeguard Policies Triggered (please eplain why) Yes No TBD Environmental Assessment (OP/BP 4.01) Natural Habitats (OP/BP 4.04) Forests (OP/BP 4.36) Pest Management (OP 4.09) Cultural Property (OPN 11.03) Indigenous Peoples (OP/BP 4.10) Involuntary Resettlement (OP/BP 4.12) Safety of Dams (OP/BP 4.37) Projects on International Waterways (OP/BP 7.50) Projects in Disputed Areas (OP/BP 7.60) A regional environmental impact assessment approach will be done, serving as a planning tool for a regional adaptation strategy. The Regional EA would also help evaluate possible triggering of other safeguard policies. 5. Tentative financing Source: ($m.) BORROWER/RECIPIENT 10 GLOBAL ENVIRONMENT FACILITY 8 Total Contact point Contact: Walter Vergara Title: Lead Chemical Engineer Tel: (202) Fa: Wvergara@worldbank.org

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