Regional: Economics of Climate Change in Central and West Asia

Sovereign Project | 44068-012

Summary

This TA will identify priority investments for climate resilience and low-carbon growth. The TA has two components: (i) the component 'adaptation to climate change' will assess the costs and benefits of implementing adaptation measures to reduce the adverse effects of climate change on energy and water resources in the most vulnerable countries, i.e., Afghanistan, the Kyrgyz Republic, and Tajikistan; and (ii) the component 'mitigation of climate change' will assess the costs and benefits of GHG emission reduction measures and formulate low-carbon growth investment proposals for energy and transport in the most carbon-intensive countries in the region, i.e., Azerbaijan, Kazakhstan, and Uzbekistan.

The TA's impact will be climate change actions implemented in the target countries.

The outcome will be a better understanding of the cost of climate change in the target countries.

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Project Name Economics of Climate Change in Central and West Asia
Project Number 44068-012
Country Regional
Project Status Approved
Project Type / Modality of Assistance Technical Assistance
Source of Funding / Amount
TA 8119-REG: Economics of Climate Change in Central and West Asia
Climate Change Fund US$ 1.25 million
Clean Energy Facility - Asian Clean Energy Fund US$ 2.00 million
Strategic Agendas Environmentally sustainable growth
Inclusive economic growth
Regional integration
Drivers of Change Partnerships
Sector / Subsector

Agriculture, natural resources and rural development - Water-based natural resources management

Energy - Energy efficiency and conservation

Gender Equity and Mainstreaming
Description

This TA will identify priority investments for climate resilience and low-carbon growth. The TA has two components: (i) the component 'adaptation to climate change' will assess the costs and benefits of implementing adaptation measures to reduce the adverse effects of climate change on energy and water resources in the most vulnerable countries, i.e., Afghanistan, the Kyrgyz Republic, and Tajikistan; and (ii) the component 'mitigation of climate change' will assess the costs and benefits of GHG emission reduction measures and formulate low-carbon growth investment proposals for energy and transport in the most carbon-intensive countries in the region, i.e., Azerbaijan, Kazakhstan, and Uzbekistan.

The TA's impact will be climate change actions implemented in the target countries.

The outcome will be a better understanding of the cost of climate change in the target countries.

Each country team will tailor the methodology to the local context, while maintaining a basic standardized approach to be used across the target countries. Activities will build on national communications; the fourth assessment report of the Intergovernmental Panel on Climate Change; and work carried out by governments, international organizations, academics, and nongovernment community-based organizations.

The TA has four outputs:

Output 1. The cost of climate change mitigation in energy and transport will be estimated in Azerbaijan, Kazakhstan, and Uzbekistan. Output 1 will assess the cost of mitigation measures and the deployment of clean energy technologies, i.e., how much it would cost to reduce GHG emissions using cost-effective clean energy technologies in the target countries under different emission scenarios. Output 1 will also assess the policy and measures needed for low-carbon growth, including market-based mechanisms, energy price setting, carbon taxation, subsidy removal, and urban planning. Through country workshops, consultation, and surveys, energy and transport emissions data will be gathered and a GHG mitigation analysis methodology defined. Output 1 will (i) develop the countries' GHG baselines and projections for two time periods up to 2050; (ii) identify GHG abatement options and targets with the use of marginal abatement cost curve analysis; and (iii) identify gaps and needs in climate policies and plans. A cost-benefit analysis of mitigation technologies and policies will be performed, including co-benefits in terms of energy security, competitiveness, and local environmental quality, to identify low-carbon growth priorities in each country. Output 1 will be supported by a capacity development program aimed at training decision makers in economic analysis of low-carbon growth measures and policy, and strengthening national systems for GHG emission monitoring, verification, and reporting.

Output 2. Climate change mitigation investment opportunities will be identified in Azerbaijan, Kazakhstan, and Uzbekistan. Output 2 will formulate nationally appropriate mitigation actions for each country, with priority climate mitigation policies and measures in energy and transport. Options to ensure access of women and other vulnerable groups to clean energy and other mitigation measures will be considered. Climate mitigation investment proposals will be formulated in consultation with national and local stakeholders. Criteria for proposal selection will include GHG abatement potential, alignment with national development priorities, high sector demonstration value, replication and scaling-up potential, and cost effectiveness.

Output 3. The cost of climate change adaptation will be estimated for Afghanistan, the Kyrgyz Republic, and Tajikistan. Output 3 will estimate the costs and benefits of climate change adaptation policies and technologies in energy and water resources, i.e., by how much the benefit of adaptation (avoided losses) exceeds the cost incurred. Climate change scenarios for temperature, precipitation (rain and snow), climate-induced extreme events, and other climatic parameters will be developed in Afghanistan and the Kyrgyz Republic for different time periods up to 2100 under different GHG emission scenarios to identify the likelihood of exceeding manageable thresholds. The impacts of climate change on energy and water resources will be assessed and adaptation measures identified in consultation with government and nongovernment stakeholders. The impacts of climate change on vulnerable groups such as women and the youth will be assessed. Priority adaptation measures will be identified through cost benefit analysis based on an integrated economic assessment combined with consultations and field assessments. Adaptation measures will consider different systems such as cities and river basins, as well as address the vulnerability of groups such as women and the youth. In Afghanistan and the Kyrgyz Republic, output 3 will be supported by a capacity development program aimed at: (i) training decision makers in climate scenario development, economic analysis of adaptation technologies, and policy development; and (ii) strengthening national systems for climate resilience monitoring and reporting. In Tajikistan, output 3 will focus on the economic assessment of adaptation measures and draw on ongoing work on climate scenario development and impact assessment being carried out the capacity development technical assistance Building Capacity for Climate Resilient.

Output 4. Climate change adaptation investment opportunities will be identified in Afghanistan, the Kyrgyz Republic, and Tajikistan. Output 4 will formulate national adaptation plans in each country with priority investments, policy needs, and financing options. Adaptation investment proposals in water resources and energy will be developed.

Project Rationale and Linkage to Country/Regional Strategy

Climate change presents unprecedented threats to the achievement of development goals in the countries of Central and West Asia. Some of these countries - Afghanistan, the Kyrgyz Republic, and Tajikistan - are among the most vulnerable to the adverse effects of climate change, requiring significant investments in climate change adaptation to reduce risks to critical infrastructure, vulnerable communities, and ecosystems. Some other Central and West Asia countries - Azerbaijan, Kazakhstan, and Uzbekistan - are among the most carbon-intensive economies in the world, offering substantial opportunities for investments in energy efficiency and greenhouse gas (GHG) abatement.

The proposed TA will complement current efforts by filling the knowledge gaps on economic, social, and environmentally viable climate change adaptation and mitigation options in the target countries. The TA will support the countries' readiness for leveraging public and private sector finance to address prioritized adaptation and mitigation investment needs. The TA is aligned with ADB's Strategy 2020 priorities on environmentally sustainable growth, including addressing the impact of climate change and supporting developing member countries in moving their economies onto low-carbon growth paths by improving energy efficiency and expanding the use of clean energy sources. The TA is also aligned with the target countries' national priorities as identified in country partnership strategies and development strategies. Extensive interdepartmental discussions took place to define the scope and methodology of the TA, and to learn from other departments' experience in conducting similar studies.

Impact Climate change actions are implemented in the target countries.
Project Outcome
Description of Outcome The cost of climate change in the target countries is better understood.
Progress Toward Outcome

The climate change mitigation consultants were mobilized in May 2013 to have initiated discussions with relevant government agencies to have a better understanding of the unique situations in each of the countries identified for climate change mitigation (Azerbaijan, Kazakhstan and Uzbekistan).

National/Regional Inception Workshops were held in Kazakhstan and Azerbaijan in January 2014 respectively to discuss findings in an Inception Report. An Inception Mission fielded in May 2014 in Uzbekistan and identified Ministry of Economy and the Centre of Hydrometeorological Services (Uzhydromet) as focal agencies. A regional Interim Workshop was held in Kazakhstan in June 2014 to share findings among all three countries and discuss development of NAMAs concept.

Cost and benefit analysis for Azerbaijan and Kazakhstan have been made good progress and the results will be included in the economic analysis report planned to be submitted May 2015. The Consultant received ecnonomic data from the Uzbekistan government in January 2015 and have been working on analysis.

Implementation Progress
Description of Project Outputs

1. The cost of climate change mitigation is estimated in Azerbaijan, Kazakhstan, and Uzbekistan.

2. Climate change mitigation investment opportunities are identified in Azerbaijan, Kazakhstan, and Uzbekistan.

3. The cost of climate change adaptation is estimated in Afghanistan, the Kyrgyz Republic, and Tajikistan.

4. Climate change adaptation investment opportunities are identified in Afghanistan, the Kyrgyz Republic, and Tajikistan.

Status of Implementation Progress (Outputs, Activities, and Issues)

Output 1. An Interim Report was submitted in September 2014, which includes projections of greenhouse gas (GHG) emissions by 2050 and estimation on costs and benefits of climate change mitigation options in Azerbaijan and Kazakhstan. The Consultant conducted 5 days LEAP training in Azerbaijan and Kazakhstan in November 2014.

To analyze cost estimates and develop LEAP models for Uzbeksitan, the consultants are collecting energy and transport data. The LEAP traing in Tashkent, Uzbekistan is scheduled in April 2015.

Output 2. The Consultant has been identifying and developing NAMAs ideas among proposed ideas in all three countries through workshops and consultations with concerned stakeholders. Final NAMAs report is planned to be submitted in May 2015.

As fot the adaptation component, the recruitment process was done and the contract with a consulting firm has been finalized. The Consultant will be mobilized shortly.

Geographical Location
Summary of Environmental and Social Aspects
Environmental Aspects
Involuntary Resettlement
Indigenous Peoples
Stakeholder Communication, Participation, and Consultation
During Project Design The TA design builds on informal consultations held with a number of stakeholders in the target countries. The TA also draws upon the experience accumulated by ADB and stakehdolers in Asia and leasson learned from the implementation of similar studies in other regions in Asia.
During Project Implementation

In Azerbaijan and Kazakhstan, informal steering committees were set up to share inputs and give feedback from the governments on results of the economics of climate change. The committees comprise government focal points and have attended workshops.

Knowledge sharing through national and regional workshops take place during TA implementation to define the methodology for climate scenario development, impact assessment, and GHG baselines, and to strengthen climate change mitigation and adaptation practices and awareness among stakeholders, including civil society and highly vulnerable groups such as women and the poor. Knowledge products will be disseminated at international conferences. National/Regional Inception Workshops were held in Kazakhstan and Azerbaijan in January 2014 respectively to discuss findings in an Inception Report. A regional Interim Workshop was held in Kazakhstan in June 2014 to share findings among all three countries and discuss development of NAMAs concept.

Business Opportunities
Consulting Services

The TA will be implemented over 25 months, from April 2013 to May 2015. ADB will be the executing agency. ADB will recruit consulting firm(s) to provide a total of 68.25 international (30.00 person-months for the adaptation component and 38.25 person-months for the mitigation component) and 173.5 national person-months of consulting services (89.50 for the adaptation component and 84.00 for the mitigation component).

ADB engaged Abt Associates in association with the Stockholm Environment Institute in May 2013 to implement the climate change mitigation component of the TA.

ADB is in the process of engaging consultants to implement the adaptation component of the TA.

Procurement Procurement will be made in accordance to ADB Procurement Guidelines (2010, as amended from time to time).
Responsible ADB Officer Nathan Rive
Responsible ADB Department Central and West Asia Department
Responsible ADB Division Environment, Natural Resources & Agriculture Division, CWRD
Executing Agencies
Asian Development Bank6 ADB Avenue, Mandaluyong
Metro Manila, Philippines
P.O. Box 789, 1099 Manila,
Philippines
Timetable
Concept Clearance 06 Jan 2012
Fact Finding -
MRM -
Approval 18 Jul 2012
Last Review Mission -
Last PDS Update 10 Mar 2015

TA 8119-REG

Milestones
Approval Signing Date Effectivity Date Closing
Original Revised Actual
18 Jul 2012 - 18 Jul 2012 31 Dec 2014 13 Jun 2016 -
Financing Plan/TA Utilization Cumulative Disbursements
ADB Cofinancing Counterpart Total Date Amount
Gov Beneficiaries Project Sponsor Others
1,250,000.00 2,000,000.00 0.00 0.00 0.00 0.00 3,250,000.00 18 Jul 2012 1,018,524.47

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