M. Aminul Islam Assistant Country Director UNDP Bangladesh ___________________________ 13-14 October 2009

2. Context

3. CC Policy and Strategy: Bangladesh Context Bangladesh CC Strategy and Action Plan CC policy and strategy are articulated in several policy documents. Climate change and related extreme events are recognized as major impediments to growth in recently developed policy documents such as Coastal Zone Policy. The National Water Policy has recognized that it is necessary to reduce the knowledge gap for addressing climate change impacts in water sector. Bangladesh�s PRSP recognizes the direct links between poverty and vulnerability to natural hazards: �Given the risk and vulnerability to natural hazards that are likely to continue as a serious threat to national development efforts, macro level policies for disaster risk reduction, mitigation and management must be adopted in view of alleviating disaster-induced poverty�.

4. Climate Change: Bangladesh Context

6. Types of Adaptations & Economic Issues

7. Potential Adverse Impacts on Economy The agricultural sector is likely to experience uneven impacts throughout the country with the increase in temperature and saline water intrusion. Regional droughts, water shortages, as well as excess precipitation, and spread of pest and diseases will negatively impact agriculture in most regions. Storms and sea level rise threaten extensive coastal infrastructure � including social and economic infrastructures, coastal developments, and water and energy supply systems. Current energy supply and demand equilibrium will be disrupted as electricity consumption climbs when demand grows in peak summer months. At the same time, delivering adequate supply of electricity may become more expensive because of extreme weather events. Increased incidence of asthma, heat-related diseases, and other respiratory ailments may result from climate change, affecting human health and well-being. More frequent and severe storm surges, floods and increase in salinity are expected, putting ecosystems and human settlements at peril.

8. Increasing Trend of Hazards and Risks  Has experienced about more than 200 disasters in the last four decades, the largest in numbers in the region with casualties equally large, nearly 500,000. It ranks as one of the most worst-hit countries in the world in terms of disasters With its growing populace, low-lying coastline (just 1 meter above of sea line), economy linked closely to its natural resource base North western part of Bangladesh is becoming affected by drought and drought like situation The country is highly vulnerable to the consequences of climate change

9. Assumptions on CC Adaptation Costs Two core assumptions in such cost estimates: (i) % of assets/investments exposed to climate change risk; and (ii) % of incremental cost of �climate-proofing� such investments. There is very limited (or no) underlying knowledge on both these parameters. Cost estimates are extremely sensitive to the assumptions made about these parameters, given the large magnitude of baseline flows they are applied to. Even slight change in assumptions can change results by billions of dollars. The �consensus�, even in order of magnitude terms of global adaptation costs maybe premature

10. Global Estimates World Bank, (2006), $ 9 � 41, billion/yr, at Present time in developing countries. Costs of �climate proofing� are assumed in the analysis. Stern Review, (2006), $ 4 � 37 billion/yr, at Present in the developing countries UNDP (2007) $86 � 109 billion/yr, by 2015, for developing countries UNFCCC (2007) $28 � 67 billion/ yr, by 2030, for developing countries, Agriculture, forestry and fisheries; water supply; human health; coastal zones; infrastructure In-depth costing of specific adaptations in water, health and coastal zones. Less detailed costing for agriculture, infrastructure, and ecosystems. UNFCCC (2007), $44 � 166 billion/yr, by 2030 at global, Agriculture, forestry and fisheries; water supply; human health; coastal zones; infrastructure. Infrastructure adaptation costs, overlap with costing in coastal zones and water resources.

11. Total costs of Priority Adaptation in NAPA Bangladesh need 77.4 millions for adaptation cost as per NAPA, 2005 This cost was estimated on preliminary assumptions and not adequately analyzed for all sectors.

12. Spontaneous adaptation � calculating costs It is difficult to estimate the costing of this pattern as it involves the cost of the social capital, human capital, direct economic value etc. People in the coastal belt is regularly loosing their options of agriculture due to the increase of salinity in the arable land. The sweet water fishing options has been reduced due to the same reason. In 2007, more than 2 million families lost their shelter, livelihood and household asset due to the flood and SIDR cyclone. The mangrove forest experienced tremendous devastation. Thousands of families are dependent on the forest resource Most for the natural resources has been directly affected by the flood and Cyclone in 2007 which increased the vulnerability of coastal and river bank people to climate change. A single household need USD 1500 -2500 to build a cyclone resilient houses (up to category 4) (based on estimates for SIDR recovery in 2008) In the flood zone, a household need USD 1000-1500 to build a flood resilient house/family shelter (based on estimates for Flood recovery in 2007)

13. Planned adaptation As per the National Climate Change Strategy and Action Plan 2008, USD 5 billion needed at national level in next five years time for prioritized sectors. In first two years, the estimated money needed is USD 500 million. For drinking water sector, it is estimated that the least cost would take USD 30-35 million per annum. Embankments � key questions are: how many embankments are currently vulnerable? how many kilometer of embankments we need to refurbish every year to protect the salinity intrusion? Current cost of repairing of the old embankments per km? - For River Dredging, a huge resource needed to face the climate change challenges and overcome congestions in the rivers

14. Anticipatory Adaptation

15. Reactive or Ex-post adaptation In Bangladesh the road network (including bridges and culverts ) value is USD 10,613 million, a prime importance for the national economy. After 1988 flood, USD 229 million needed to repair the roads network (major highways damaged). During the reconstruction, the major highways were alleviated more than 1.5 meter above the Highest Flood Level (HFL). In flood 1998, the damage was USD 146 million and the major highways were not affected which reduced the loss The assumption of CC impact says, by the year 2030, 14% non-flooded areas will be flooded which means sever damage to infrastructure.

16. Investment In Communication, River Bank And Coastal Bank Reconstruction In last 30 years, till November 2008, total USD 4.3 billion loss occurred due to natural disasters like flood, cyclone and river bank erosion (CRED Data base, 2009). Average cost per km of carpeted road is USD 291,000. After SIDR cyclone 2007, estimated cost of road repairing was USD 294 million for 35 damaged roads (National damage report, SIDR 2007) On average, per km of embankment costs USD 0.15 million For repairing, per km embankment costs USD 365,000 The rehabilitation costs for damaged embankments after SIDR 2007 was USD 104 million (as per WDB) Recently, 1400 km of embankment damaged/destroyed by AILA cyclonic storm in the coastal districts

17. Key Lessons First generation NAPA costs are too low compared to current poverty thresholds Supplementary funds are needed to update costs/undertake detailed design and costing � Budgets are less important than accurate cost estimates � Bangladesh need to enlarge research circles/expand skill sets/strengthen overall capacity to manage climate change impacts � Updated NAPA research projects may be justifiable in data-poor environments

18. Way Forward Adaptation responses are also embedded within responses to a broad range of stimuli; it might not be feasible to cost the climate specific component Cost estimates are extremely sensitive to the range of impacts as well as the range of adaptation measures considered. Focus on mean climatic changes can under-estimate costs. On the other hand, focus on �hard "infrastructural adaptations (as opposed to behavioral/institutional measures) can over-state costs and skew responses.

19. Way forward The economic valuation is still an evolving science and it is not straight forward for the adaptation process. For some goods and services, market provides prices that are reflection of the values at societal level. There is no short cut method for calculating social capital, cultural heritage, endangered species or natural beauty. For economic valuation, the following issues need to be considered � use value, non-use value, direct use value, indirect use value and/or optional value. It involved different appropriate techniques regarding the measurement of benefits and costs of climate change adaptation. Basic questions are: whos values to be counted? What value to be estimated/ and how to carry it out?

20. Key questions on Economics of Adaptation? What�s the value of common property loss � source of livelihood of ultra poor? Who decides on adaptation issues for whom? How can we measure the value of ecosystem services, expenditure saving activities�? Can we measure the cost of silent disasters due to climate change, loss of social disruption and rehabilitation of displaced people? Where is equity and justice in adaptation?