Page 1 INTEGRATED SAFEGUARDS DATA SHEET CONCEPT STAGE Report No.: AC2868 Date ISDS Prepared/Updated: 04/05/2007 I. BASIC INFORMATION A. Basic Project Data Country: China Project ID: P105229 Project Name: Mainstreaming Adaptation to Climate Change into Water Resources Management and Rural Development Task Team Leader: Qun Li GEF Focal Area: Climate change Global Supplemental ID: Estimated Appraisal Date: September 21, 2007 Estimated Board Date: January 22, 2008 Managing Unit: EASRE Lending Instrument: Specific Investment Loan Sector: Irrigation and drainage (65%);Agricultural extension and research (15%);General public administration sector (11%);Forestry (9%) Theme: Climate change (P);Environmental policies and institutions (P);Natural disaster management (P);Water resource management (P);Rural services and infrastructure (S) IBRD Amount (US$m.): 0.00 IDA Amount (US$m.): 0.00 GEF Amount (US$m.): 5.00 PCF Amount (US$m.): 0.00 Other financing amounts by source: BORROWER/RECIPIENT 50.00 50.00 B. Project Objectives [from section 2 of PCN] The broader development objectives of the proposed GEF project are to: (a) strengthen the resilience of agricultural development to climate change in North China; and (b) help mainstream climate change adaptation in irrigation and rural water resource management and, thus, in the wider context of rural development in China. The more specific, operational objectives of the project are to select, develop, implement and promote adoption of selected climate change adaptation measures and techniques by main stakeholders (farmers, water resource bureaus, etc.) at selected demonstration sites under the new Bank-financed IAIL3 project in the 3H Basin; and more broadly to promote mainstreaming and incorporation of such demonstrated adaptation measures into the national Comprehensive Agricultural Development (CAD) program through policy and promotion, knowledge dissemination, capacity building and training, technical support, M&E, and other measures. Page 2 The main project development impact indicators would be as follows: (a) climate change adaptation measures identified and tested in the proposed demonstration sites and integrated into IAIL3 implementation; and (b) the process of integrating adaptation into CAD started. These indicators would be studied in detail and finalized during project preparation. As indicated above, although key components of IAIL3 are climate sensitive, adaptation measures for climate change were not included in project design because the role of adaptation has been widely recognized only recently. Therefore, the proposed project would, among other things, identify gaps in the IAIL3 project design with regard to needed adaptation measures and help integrate adaptation measures in its main components. The project would be designed to partially blend with IAIL3. Of the $463 million total cost of the latter, an estimated $50 million would be used as cofinancing for the proposed GEF project. The proposal seeks a $316,000 GEF Project Preparation Grant (PPG) to help prepare a $5 million grant project from the Special Climate Change Fund (SCCF), managed by the GEF for the proposed five-year project. C. Project Description [from section 3 of PCN] In line with the above objectives, and based on a very preliminary gap analysis of IAIL3 from a climate change adaptation perspective, the proposed GEF project would include the following components: Component 1. Identification and prioritization of adaptation options. Adaptation involves making adjustments in ecological, social, or economic systems in response to actual or expected climatic changes and their effects or impacts. The goal is to reduce the vulnerability of communities, regions, or activities to climatic change and variability. Adaptation is important in the climate change issue in two ways: (1) relating to the assessment of impacts and vulnerabilities, and (2) relating to the development and evaluation of response options. Understanding expected adaptations is essential to impact and vulnerability assessment and hence is fundamental to estimating the costs or risks of climate change. Specific activities under this component would include: (a) Stocktaking of previous studies on assessment of vulnerability to climate change and potential adaptation options, including local knowledge and practice. A brief assessment of current vulnerability and adaptation efforts would be provided, including assembling and synthesizing existing data on land and water use based on the basin-scale hydrology and meteorology in a quantitative baseline framework. (This baseline framework would support all M&E activities.) (b) Adapt or fine-tune existing hydrology models (such as Variable Infiltration Capacity, or VIC; Distributed Hydrology Soil Vegetation, or DHSVM) that are dynamic and responsive to changing land cover-land use (including cropping patterns) and climate to assess climate change impacts on local hydrology (such as surface and ground water quantity and quality). Page 3 (c) Use the above models to (i) develop potential adaptation options in content, implementation, costs, and impacts (this work would be started during preparation under the PPG), and (ii) develop climate change scenarios? impacts on surface and ground water fluxes and flood/drought predictions and risks. Selection of the most cost-effective adaptation measures will be the basis for the design of this demonstration component. (d) Estimate the sensitivity of 3H Basin agriculture to climate and water availability. As agriculture in the 3H Basin depends heavily on irrigation, the activity would study and quantify the interface between water and agriculture in the Hai Basin (the most water-short basin) as an example. The work would address the gap in the technical and economic information in agriculture and water resource management. In this regard, it would rely on two interactive models involving estimates of climate change impact and adaptation (i) in agriculture (climate sensitivity) and (ii) in water resources management (at the river basin level). The use of these state of the art modeling techniques to integrate hydrology, spatial and time factors and the supply-demand and economic drivers of farmer decision making is an important and essential innovation in the approach being adopted by the proposed project. This work should relate to (c- ii) above and would start also under the PPG. (e) Economic analysis of climate change impacts, risks and costs, and benefits of various adaptation measures based on the results achieved at the demonstration sites. Component 2. Demonstration and implementation of adaptation measures. Demonstration sites would be identified mainly within the 3H Basin. As described above, water demand in this region is high and growing, and water scarcity and risk of climate variation is one of China's biggest challenges. Special demonstration sites under IAIL3 outside the 3H Basin also may be selected to illustrate adaptation under other specific conditions for adaptation. Specific activities under this component would include: (a) Identification and selection of adaptation demonstration sites. The activity will first identify the project demonstration sites, which would be in accordance with selection criteria to be developed during preparation under the PPG. Priority will be given to areas in which there is both high vulnerability and a high likelihood of making significant impacts in terms of strengthening resilience to climate change. (b) Design and implementation of adaptation demonstration measures. These would be followed by a prioritization and selection of the adaptation measures at the demonstration sites. Initially identified adaptation techniques would include adaptation-oriented farming practices, water-saving irrigation techniques, and land rehabilitation and amelioration. Water pollution control measures also would be tested in noncontrol points. In the above, selected innovative activities already included in IAIL3, which are closely related to climate change adaptation, would be supported and expanded where appropriate. These activities would include ET management, groundwater management, laser land leveling, and Water User Associations (WUAs) development. Page 4 (c) Develop and test comprehensive and integrated adaptation measures and approaches at demonstration sites and, where possible, integrate such measures in the implementation of this project. Component 3. Mainstreaming adaptation in the national Comprehensive Agricultural Development (CAD) program and institutional strengthening. The component would aim at integrating climate change variability adaptation in the national CAD program. Given CAD's limited experience and capacity with this new issue, a series of capacity building, technical assistance, knowledge sharing, and public awareness activities would be needed. Based in part on experience with adaptation sites under IAIL3, a national adaptation plan for CAD would be prepared under the leadership of SOCAD, with the close cooperation of NDRC's and MOF's national climate change adaptation offices. Activities under this component would include: (a) Identification of adaptation policy and design gaps in the CAD program and of measures to address the identified gaps. This activity would utilize the experience with adaptation policy and measures to fill design gaps at the demonstration sites carried out under Component 1. (b) Development of a replication plan to integrate climate change adaptation in the CAD New Countryside program. The plan would include, for example, institutional measures to improve irrigation and rural water resources management, such as development and support of WUAs and other farmer participatory organizations. Integration plans also will include activities, training, and budgets for the identified adaptation activities as well as testing and monitoring of the integration activities and process at demonstration sites. These plans would be designed to use CAD as an example and SOCAD as the lead agency for incorporating components of climate change adaptation strategies in an ongoing program, with the aim of promoting and assisting other agencies to do likewise. (c) Development of a knowledge and information dissemination strategy to generate and propagate awareness and knowledge needed to achieve policy change, promote general understanding, and implement the adaptation integration process. Information and knowledge about climate change adaptation would be disseminated through the print and communications media, public awareness campaigns, workshops/training, the internet, and other means. (d) Implementation of a results-based monitoring and evaluation (M&E) system. M&E of adaptation measures should also cover impact analysis of climate change adaptations, building on item (i) of Component 1 above on stocktaking and the quantitative baseline framework. Adaptation M&E would be linked to and coordinated with (and may be added on to) the comprehensive M&E system of IAIL3. An M&E system also will be designed to regularly assess the effectiveness of adaptation implementation mechanisms and measures. (e) Feasibility studies on agriculture insurance would be carried out. If possible, experiments with pilot insurance schemes would be designed and tested in certain selected demonstration areas. This aspect may provide opportunities for the insurance industry to assist due to the increased resilience of the adapted agriculture. Page 5 (f) Capacity building including development of institutional coordination, training plans, and technical assistance programs. Sources of the strengths and weaknesses of specific and generic adaptive capacity would be identified. A national coordination mechanism would be developed. (g) Development of mechanisms to promote and support cooperative work on adaptation between MOF, NDRC, and SOCAD. This could take the form of establishing a Special Working Group on Climate Change Adaptation, supported by a special policy-level Leading Group on Climate Change and Adaptation, both with mutually agreed terms of reference. D. Project location (if known) Project Location and salient physical characteristics relevant to the safeguard analysis: The Adaptation project will take place in the IAIL3 area - 3H basin which comprises portions of the provinces of Hebei, Henan, Shandong, Jiangsu, and Anhui - China's major grain basket. The project will be developed on a gap analysis of the IAIL3 project and the selection of demonstration sites (5 counties or villages) will be based on a series of studies and analysis. Groundwater has been falling rapidly in specific areas of the 3H Basin (also known as the North China Plain) due to both surface water scarcity and over-extraction of available groundwater resources. A thorough water balance analysis has been carried out for all provinces, which vary in their respective situations: Jiangsu and Anhui provinces have overall surplus water resources, both surface and groundwater due to more abundant annual rainfall. Both provinces have large reservoirs, major rivers flowing through the provinces, and large lakes. Henan and Shandong Provinces have a minimal surplus of surface and groundwater resources with seasonal shortages during dry spells and depending on the area. Henan and Shandong also have Yellow River diversion water allocations (3.5 billion cu. m. in Henan and 7.0 billion cu. m. in Shandong). Hebei Province has less surface water, and its shallow aquifer groundwater has been over- exploited resulting in falling groundwater levels. E. Borrower’s Institutional Capacity for Safeguard Policies [from PCN] Under IAIL2 and IAIL3, significant capacity has been developed within SOCAD and its level implementing bodies. Their capacity to address social and environment issues would be further strengthened during the process of the preparation and implementation of the Adaptation project. F. Environmental and Social Safeguards Specialists Ms Chongwu Sun (EASRE) Mr Zong-Cheng Lin (EASSO) II. SAFEGUARD POLICIES THAT MIGHT APPLY Safeguard Policies Triggered Yes No TBD Environmental Assessment (OP/BP 4.01) X Environmental Assessment: As partially blended with the IAIL3 project, which is focused on rehabilitation of existing sites with limited construction and no major civil works, the proposed GEF Adaptation project is an environmental project and aims: (a) to help strengthen the resilience of agricultural development to climate change in China through implementation of selected adaptation measures at demonstration sites; and (b) to mainstream climate change Page 6 Safeguard Policies Triggered Yes No TBD adaptation into irrigation, water resource management and thus, in the wider context of rural development. The proposed project aims to further strengthen environmental and social impacts by bringing new concepts of risk management, new standards in irrigation infrastructure, and the use of natural resilience functions (land, water, forests) to moderate extreme weather conditions. Environmental and social impacts of project activities are expected to be positive and the project has therefore been classified as a category C project. Based on the screening of proposed activities, other environment safeguards policies are not triggered. In case there are EA related issues, the proposed project will follow the Bank safeguards and mitigiation policies applied to IAIL3. Natural Habitats (OP/BP 4.04) X Forests (OP/BP 4.36) X Pest Management (OP 4.09) X Physical Cultural Resources (OP/BP 4.11) X Indigenous Peoples (OP/BP 4.10) X Indigenous Peoples: The IP policy was not triggered by IAIL3 as appraised, as there are no ethnic minority groups in the project areas in the five 3H basin provinces, as confirmed in the social impact review carried out during preparation. However, five additional Participating Provinces will be added to IAIL3 in accordance with the Loan Agreement for pilot WUA development, and three of those (Ningxia, Inner Mongolia, and Yunnan) have communities of ethnic minority groups.Social assessments and free, prior and informed consultations have been carried out among the ethnic minority groups in preparation for the adding the WUA pilots in the three provinces, and Ethnic Minority Development Plans were prepared for the WUA programs in these provinces. The GEF project may include a county in Ningxia for demonstration purposes but is very unlikely to have significant IP issues due to its small, pilot demonstration scale. If needed, the proposed GEF project will follow the IP Bank policies and the IAIL3 Ethnic Minority Development Plans for WUAs in Ninxia province, and will ensure equitable opportunity for all ethnic groups in gaining access to and benefiting from the program. Involuntary Resettlement (OP/BP 4.12) X Safety of Dams (OP/BP 4.37) X Projects on International Waterways (OP/BP 7.50) X Projects in Disputed Areas (OP/BP 7.60) X Environmental Category: C - Not Required III. SAFEGUARD PREPARATION PLAN A. Target date for the Quality Enhancement Review (QER), at which time the PAD-stage ISDS would be prepared: N/A Page 7 B. For simple projects that will not require a QER, the target date for preparing the PAD-stage ISDS: 09/30/2007 C. Time frame for launching and completing the safeguard-related studies that may be needed. The specific studies and their timing 1 should be specified in the PAD-stage ISDS. April - September 2007. IV. APPROVALS Signed and submitted by: Task Team Leader: Ms Qun Li 04/03/2007 Approved by: Regional Safeguards Coordinator: Mr Juan D. Quintero 04/03/2007 Comments: Sector Manager: Mr Rahul Raturi 04/04/2007 Comments: 1 Reminder: The Bank's Disclosure Policy requires that safeguard-related documents be disclosed before appraisal (i) at the InfoShop and (ii) in-country, at publicly accessible locations and in a form and language that are accessible to potentially affected persons. Page 8