Sipho Billiat Ministry of Finance, Economic Planning and Development. NAP Training Workshop, SALIMA 4th Sep 2014

Transcription

1 Sipho Billiat Ministry of Finance, Economic Planning and Development NAP Training Workshop, SALIMA 4th Sep

2 Intro Climate change makes scarce resources more scarce Water, food, land, trees, clean air, etc. There is a need to adapt: Change style of living e.g. move away from fishing to hunting or crops to animals be able to survive the problem, either change your behr or go for varieties or breeds that are suiting current environment 2

3 Why adapt..?? Change behavior to survive the impacts of CC; Want efficient way to deal with impact; Maximize net benefits (benefits minus costs) given that local climate has changed; Equate marginal benefit to marginal cost, for adapting Depends on local conditions Local climate Local market Other local factors i.e. resources, technology 3

4 Types of adaptation Reactive and anticipatory adaptation Reactive: after the fact. Anticipatory: i.e. taken in advance of climate change, before the fact. E.g. drought in Mangochi irrigation or food donation Autonomous adaptation Natural or spontaneous adjustments in the face of a changing climate Conscious intervention, e.g. building (sea )walls. 4

5 Framework for selection, evaluation and prioritizing adaptation options 5

6 Appraisal of Options Many options will be identified by affected communities or research institutions; MoAIWD etc Any adaptation option will have several implications /reqts; We need information for decision research, experience 6

7 Which one do we go for. Several options will be available Before making a choice consider these aspects: Social and economic aspects Environmental aspects; Technology; Human and financial resources; Political will;?? Net benefit= cost benefit NB>0 Valuation will determine which option will bring more benefit than cost 7

8 Cost Benefit Analysis (CBA) In the LEG guidelines, CBA can help us to deal with: Preparatory Elements; Implementation Strategy; CBA becomes valuable in the NAP process: Reviewing and appraising adaptation options Prioritizing climate change adaptation in national planning 8

9 CBA. Costs and benefits of undertaking or not undertaking some an option needs to be understood for policy decisions. This will involve trade off, When the difference between total costs and total benefits is positive, the project is taken.?????? But not all the time Some benefits and cost are difficult to quantify Inability of identifying streams of benefits in the future Often times, costs simpler tend to be one-off and are market transactions e.g. one time cost of constructing a dam Benefits can be tricky to dertemine, e.g. How do we calculate the market value of improved ecosystems? 9

10 Quantify the impacts in future We need to know: What would happen if the project did not take place? Compare how the situation will be with the project and how it is expected to be without the project. What is value? 1. value is determined by people and not law or government. 2. value is determined by peoples willingness to make trade-offs. 10

11 Time preference & discounting When determining the optimal allocation of resources over time, one must deal with time preferences. CBA requires consideration of stream of benefits over time against costs incurred today. E.g. Catchment area conservation vs sinking a borehole Problem - the value of money does not stay constant over time Most individuals prefer to receive benefits now as opposed to receiving the same level of benefits in future (i.e. positive time preferences). Discounting??????? 11

12 Why CBA? It is possible to estimate both the market and non-market values of benefits that accrue. Provides a key piece of information to facilitate a decision. CBA enables comparison on investments that have to be made today with benefits that accrue over time. Limitations: Not all costs and benefits can be quantified in monetary terms. Need to also account for uncertainty over time. 12

13 Modeling an Option.. An option can be analyzed using a model; The model will capture all critical factors for implementing a particular option; Option selection through: Significant difference- economic and financial analysis For example: Tobacco Production (MP) and/or Animal Rearing (AR) for income increase 1. MP= f(input, rainfall, temp, soil fert, seed type, land) 2. AR= f(disease control, water, temp, breed, land, skills) 13

14 Timing of adaptation Timing of many adaptation actions matter Done too soon, raises cost and can be ineffective (new crop before warm enough will not grow well) Done too late, damages can be large (as if there is no adaptation) Since adaptation actions must wait for climate to change, need information 14

15 What do I say.? Malawi should strategize to become less dependent on climate sensitive economic sectorse.g. agriculture; If we don t plan very well, our adaptation will be reactive, and eventually very costly; 15

16 Thank you 16