(EnergyAsia, October 30, Friday) — It may cost developing countries as much as US$100 billion per year to adapt to the impact of climate change over the next 40 years, according to preliminary findings in a new global study from the World Bank.
The Economics of Adaptation to Climate Change (EACC) study, funded by the governments of the Netherlands, Switzerland and the UK, provided an in-depth analysis of the economics of adaptation to climate change to date and used a new methodology for assessing these costs.
The study aims to develop help decision makers in developing countries better understand and assess the risks posed by climate change that will help them formulate better strategies to adapt to climate change.
The World Bank said a second report, based on seven country case studies, will be produced by next spring, with more focus on creating better strategies.
The bank said the new approach involves comparing a future world with and without climate change, and the actions and costs needed to adapt to the new world conditions.
In the draft consultation document released, a key part of the overall analysis involved estimating adaptation costs for major economic sectors under two alternative future climate scenarios: “wet” and a “dry”. Under the relatively dryer scenario, the adaptation cost is estimated at US$75 billion per year, while under the scenario that assumes a future wetter climate stands at US$100 billion.
Katherine Sierra, World Bank vice president for sustainable development, said:
“Faced with the prospect of huge additional infrastructure costs, as well as drought, disease and dramatic reductions in agricultural productivity, developing countries need to be prepared for the potential consequences of unchecked climate change. In this respect, access to necessary financing will be critical.”
Bert Koenders, Dutch minister for development cooperation, said: “The World Bank study makes plain that taking action in favour of adaptation now can result in future savings and reduce unacceptable risks. At this point, the costs this will entail can still be borne by the international community, to judge by the GDPs of rich countries, but for poor countries, they are unacceptably high.
“More than ever, mitigation, adaptation and development cooperation are needed to make the poor less vulnerable to climate change. International public financial support for adaptation in the poorest developing countries should be new and additional, so as not to jeopardize the Millennium Development Goals.”
The report found that the highest costs will be borne by the East Asia and Pacific Region, followed closely by Latin America and the Caribbean, and Sub-Saharan Africa. The drier scenario requires lower adaptation costs in total in all regions, except South Asia.
The report stressed that development strategies must maximise flexibility and incorporate knowledge about climate change as it is gained. It also finds that adaptation costs decline as a percentage of GDP over time, suggesting that countries become less vulnerable to climate change as their economies grow.
Warren Evans, director of the World Bank’s Environment Department, said:
“Economic growth is the most powerful form of adaptation. However, it cannot be ‘business as usual’. Adaptation minimises the impacts of climate change, but it does not address its causes. There is no substitute for mitigation to reduce catastrophic risks.”