Regional : Economics of Climate Change in Central and West Asia

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

Energy / Energy efficiency and conservation

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.

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.

Both the climate change mitigation and adaptation consultants have been mobilized.

The final reports of the mitigation consultant were submitted and approved in September 2015. The final report of the adaptation consultant were submitted and approved in October 2016.

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.

Outputs 1 and 2. The final report for was approved September 2015.

Outputs 3 and 4. The final report was approved in December 2016.

Knowledge products based on the final reports was posted on 31 March 2017.

RETA is physically completed, financial closure is in progress.

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. For Outputs 1 and 2, regional workshops were held in in Kazakhstan and Azerbaijan to share findings among all three countries and discuss development of NAMAs concept. For Outputs 3 and 4, regional workshops were held in Tajikistan and Kyrgyz Republic to share findings among all three countries and identify adaptation concepts.

Consultations have been held with Government counterparts and local stakeholders to develop and rank adaptation concept notes. Training sessions have been provided on adaptation and climate risk management.

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.