100043 IDA17 Mid-Term Review Special Theme on Climate Change IDA Resource Mobilization Department (DFIRM) Development Finance (DFi) September 28, 2015 ACRONYMS AND ABBREVIATIONS CAMP4ASB Climate Adaptation and Mitigation Program for the Aral Sea Basin CRGE Climate Resistant Green Economy COP Conference of the parties CPF Country Partnership Framework DRM Disaster Risk Management ESMAP Energy Sector Management Assistance Program ESW Economic and Sector Work FIP Forest Investment Program GCF Green Climate Fund GDP Gross Domestic Product GFDRR Global Fund for Disaster Reduction and Recovery GP Global Practice IBRD International Bank for Reconstruction and Development ICR Implementation Completion Report IDA International Development Association MDBs Multilateral Development Banks MHCP Ministry of Finance and Public Credit NEP National Electrification Plan OFLP Oromia Forested Landscape Program OECD/DAC Organization for Economic Cooperation and Development/Development Assistance Committee PCRAFI Pacific Catastrophe Risk Assessment and Financing Initiative PIC Pacific Island Country PIFS Pacific Island Forum Secretariat PPCR Pilot Program for Climate Resilience PREP Pacific Resilience Program REGROW Resilient Natural Resource Management for Growth SCD Systematic Country Diagnostic SPC Secretariat of the Pacific Community TA Technical Assistance UNFCCC COP United Nations Framework Convention on Climate Change – Conference of the Parties WBG World Bank Group Contents EXECUTIVE SUMMARY ........................................................................................................... i I. INTRODUCTION ................................................................................................................ 1 II. PROGRESS ON MAINSTREAMING CLIMATE AND DISASTER RISK MANAGEMENT ................................................................................................................. 3 A. Incorporating Climate and Disaster Risk Considerations in Country Partnership Frameworks ...................................................................................................................... 3 B. Screening Operations for Climate and Disaster RISKS and Integrating Appropriate Resilience Measures ......................................................................................................... 5 C. Multi-Sectoral Approaches to Manage Climate and Disaster Risk ................................ 8 D. Strengthening Monitoring and Reporting of IDA Resources for Climate and Disaster Risk Management ........................................................................................................... 15 III. DEVELOPING INDICATOR(S) TO MEASURE RESILIENCE ........................................ 17 IV. The CATALYTIC ROLE OF IDA IN MOBILIZING OTHER RESOURCES .................... 17 V. CHALLENGES AND OPPORTUNITIES .......................................................................... 19 Annex 1: Country Partnership Frameworks and Climate and Disaster Risk Considerations ....................................................................................................................................... 21 Annex 2: Methodology to Assess Disaster Risk Management Co-benefits ...................... 22 Annex 3: Methodology to Track Analytical Work and Technical Assistance that Addresses Climate Change in IDA Countries .................................................................................. 23 EXECUTIVE SUMMARY i. The Seventeenth Replenishment of the International Development Association (IDA17) recognized the increasing risks from climate change and disasters to the development of IDA countries. It agreed on a set of policy actions to address these risks, including mainstreaming climate and disaster risk management in country strategies, policies and investments; providing support to develop national energy action plans and investment prospectuses to achieve the Sustainable Energy for All objectives; and strengthening monitoring and reporting of IDA resources used for climate change and disaster risk management. The World Bank was also requested to develop indicator(s) to measure climate and disaster resilience. This report summarizes the progress towards these commitments for the first year of IDA (FY15) and highlights associated challenges faced by countries and the World Bank. ii. Efforts to mainstream climate and disaster risk management in IDA countries’ strategies, policies and investments are on track. Three specific actions capture the mainstreaming: 1) IDA Country Partnership Framework in one country (Myanmar) was completed and two others (Cote d’Ivoire and Haiti), are in late stages of preparation. All three have incorporated climate and disaster risk in their programs. 2) A total of 263 IDA operations had concept reviews; 76 percent of these operations were screened for climate and disaster risks while the remaining 24 percent are in the process of being screened. Seventy operations were approved by the Board; all of these were screened for climate and disaster risk. 3) Twenty-seven IDA countries have been identified for support to develop multi-sectoral plans and investments; in 11 countries detailed discussions with the governments have been held and in-country work started; initial discussions have been held in another nine countries; and work is expected to start before December 2015 in the remaining seven. iii. IDA has supported seven countries to develop national energy action plans and investment prospectuses to achieve the Sustainable Energy for All objective of universal access to energy by 2030. iv. Systems to monitor and report on the use of IDA resources for climate change and disaster risk management have been strengthened. A total of 186 economic and sector work and non-lending technical assistance (ESW/TA) included climate change issues; of these, 147 focused on adaptation and 132 on mitigation. A methodology to track and report disaster risk management co-benefits in investment operations, based on the approach used for tracking adaptation to climate change, has been developed and shows that in FY14, US$3.2 billion of IDA commitments contributed to disaster risk management. v. An approach to measure reduction in socio-economic vulnerability at the national level has been established. It is the first step towards developing resilience indicator(s). This measure is based on a simple economic model of the impact of disasters on the well-being of the population. It provides a qualitative measure, or a scorecard, for each country describing the impact of a disaster on well-being and resilience through a set of 14 sub-indicators. As of June 2015, the indicator and scorecards had been piloted for river floods in 92 countries to provide country- specific measurement of socio-economic resilience and to inform the prioritization of policies to reduce the impact of river floods on the well-being of the population. Further work is underway to ii apply this methodology to other hazards such as storms, coastal floods and non-extreme climatic changes. vi. Countries face several challenges in integrating climate and disaster resilience into their plans. Managing climate risk and building resilience at the project level requires technical knowledge, access to data (such as projected climate change, hydrology, construction costs in specific locations) and finance to support risk-based planning over the short and longer-term, and to conduct feasibility studies to inform the design of infrastructure and other investments. Knowledge and expertise is often limited, constraining the ability to identify and manage risks that are location and sector specific. Implementation of ongoing operations in Nepal, Samoa and Zambia shows that including climate and disaster considerations into the design of infrastructure (dams, canals, and coastal roads) investments can take about 12-18 months and cost US$1.5 to 2 million. The costs of building resilient infrastructure (with climate change projections to 2050) varies considerably depending on the activity and the location. For example, in a range of countries in sub-Saharan Africa, an ongoing study on infrastructure and the impacts of climate change shows that upgrading roads to standards that factor in anticipated climate risks are estimated to incur significantly higher costs. vii. IDA has the opportunity to demonstrate the value of combining climate, disaster reduction/recovery and development financing. Many IDA countries lack systems to integrate climate change and disaster risk management into development processes that have oversight from ministries of finance and planning. This has resulted in fragmentation of finance, duplication of processes such as national adaptation and disaster risk management planning, and has limited risk reduction and resilience outcomes. In this IDA replenishment period, supporting countries to strengthen institutions and governance systems for multi-sectoral and strategic planning and policy coherence provides a platform for combining different financing streams to effectively achieve climate resilient development outcomes. These efforts are often combined with increasing access to knowledge, capacity, education and outreach on the risks from climate change and activities to enhance resilience including those led by communities. I. Introduction 1. The adverse impacts of climate change are affecting IDA countries. Average annual losses due to climate-related events were around 1 percent of GDP globally over a 40 year period spanning 1970-2010.1 In some countries, estimated losses from a single event have been as high as 64 percent of GDP (e.g. Vanuatu2 in 2015). These estimated losses do not capture the rising costs of storm surges, intense rainfall, gradual temperature increases or heatwaves. Nor do they include local events, such as short-term local droughts that can decimate crops and livelihoods. In countries affected by tropical cyclones, there is evidence that exposure to recurrent events results in a growth penalty that severely affects long-term development.3 2. Development patterns, particularly population growth in high-risk areas, poor development practices and environmental degradation, continue to be important drivers of disaster risk.4 Since the 1960s, human-induced climate change has increasingly contributed to extreme events such as warmer spells and heat waves, changing precipitation patterns (e.g., flash floods) and sea storms. 5 It is likely that land areas affected by heat waves would double by 2020.6 In the coming decades, expected climate change will affect the mean temperature, rainfall and sea level rise as well as extremes, exacerbating the observed impacts and placing additional stress on the development of the IDA countries. 3. During IDA17 Replenishment, IDA Deputies recognized the increasing risks from climate change and disasters as amongst the “frontier development issues” and included climate change as one of the special themes in IDA17. They also underlined IDA’s critical role in supporting IDA countries to address these risks as an integral part of their development agenda and ensure that development gains are sustained and improvements in opportunities, lives and livelihoods of the poor continue. Building on the climate change related recommendations in IDA16, the Participants agreed to the following set of policy actions for implementation during IDA17: A. Mainstreaming climate and disaster risk management in IDA countries’ strat egies, policies and investments: 1. All IDA Country Partnership Frameworks incorporate climate and disaster risk considerations into the analysis of the country’s development challenges and priorities 1 World Bank, 2013. Building Resilience: Integrating climate and disaster risk into development. Lessons from World Bank Group experience. The World Bank, Washington DC. 2 In Vanuatu, the damage as loss estimate as of June 2015 were US$449 million equivalent to 64 percent of the GDP. 3 Reference as in footnote 1. 4 IPCC 2012. Managing the Risks of Extreme Events and Disasters to Advance Climate Change Adaptation. A Special Report of Working Groups I and II of the Intergovernmental Panel on Climate Change. Field, C.B., V. Barros, T.F. Stocker, et al (eds.). Cambridge University Press, Cambridge and New York. 5 IPCC. 2013. Climate Change 2013: The Physical Science Basis. Summary for Policymakers. Working Group I Contribution to the IPCC Fifth Assessment Report. http://www.ipcc.ch/pdf/assessment-report/ar4/wg1/ar4-wg1- spm.pdf 6 World Bank. 2013. Turn Down the Heat: Climate Extremes, Regional Impacts, and the Case for Resilience. A Report for the World Bank by the Potsdam Institute for Climate Impact Research and Climate Analytics. Washington, DC. 2 and, when agreed with the country, incorporate such considerations in the content of the programs and the results framework; 2. Screen all new IDA operations for short- and long-term climate change and disaster risks and, where risks exist, integrate appropriate resilience measures; 3. Scale up support to IDA countries to develop and implement country-led, multi-sectoral plans and investments for managing climate and disaster risk in development in at least 25 additional IDA countries. B. Supporting IDA countries to develop national energy action plans and investment prospectuses to achieve the Sustainable Energy for All objective of universal access to energy by 2030. C. Strengthening monitoring and reporting of IDA resources used for climate change mitigation and adaptation by enhancing monitoring through: 1. Expanding climate finance coding system to cover tracking of ESW and non- lending TA that address climate change issues in IDA countries; and 2. Piloting a coding system to measure the share of IDA investments with disaster risk management co-benefits. 4. Recognizing the absence of a single indicator to measure and monitor progress on climate and disaster resilience, the Participants further requested the Management to develop indicator(s) on climate and disaster resilience. 5. The Participants requested the Management to report at the IDA17 Mid-Term Review on the progress made on these policy actions. This paper is in response to that request and reports on the progress thus far in the IDA17 period. It is based on data for the first fiscal year of IDA17 which limits a fuller assessment of the impacts of policy actions. Examples of actions taken and illustrations of impacts are included to highlight achievements thus far and also to estimate the potential impacts of IDA17 on climate and disaster resilience. 6. This report is structured as follows: Section II summarizes the progress made in the first year of IDA17 on policy commitments. Section III discusses the methodology, approach and preliminary results of the resilience indicator(s). Section IV provides examples of how IDA funds are used to mobilize other resources. Section V discusses how IDA’s work under this special theme is influencing the WBG’s work and highlights challenges and opportunities going forward. 3 II. Progress on Mainstreaming Climate and Disaster Risk Management A. Incorporating Climate and Disaster Risk Considerations in Country Partnership Frameworks 7. As of September 12, 2015, Country Partnership Framework (CPF) for Myanmar has been completed and those for Bolivia, Cote d’Ivoire, Haiti and Mali are at an advanced stage of preparation (Box 1). All five CPFs include analysis of climate and disaster risks to development, programs as well as indicators to address and measure such risks. Prior to the preparation of the CPFs, the WBG conducts a Systematic Country Diagnostic (SCD7), which considers climate and disaster risks, and underpins the analytics of the CPFs. As of end of August 2015, 20 IDA countries and one regional SCD for eight Pacific island countries were started. 12 of the 13 SCDs are at advanced level of preparation and include varying levels of analysis of climate and disaster risks (Annex 1), whilst the remaining are expected to include such analysis. 8. A technical support team in the Climate Change Group and regional programs facilitates access to climate and disaster risk data during SCD and CPF preparation. Many Bank units preparing SCDs and CPFs face challenges in accessing country-specific information. A technical support team, established in the Climate Change Group, provides expertise in climate change and disaster risk management and access to the appropriate scale and level of information. However, the Bank continues to face the challenges of data availability in fragile and conflict states, such as South Sudan, Sierra Leone, and Afghanistan. In the Pacific and the Caribbean, regional programs that combine national and regional IDA have provided support for expanding access to the risk exposure data and enhanced local capacity and expertise. The Bank is also preparing additional guidelines to collate good practices that would facilitate SCDs/CPF preparation. 7 The SCD is carried out in close consultation with recipient governments, development partners and other stakeholders and is used to identify the most critical constraints and opportunities facing countries to end extreme poverty and promote shared prosperity in a sustainable manner. 4 Box 1: Illustrations of inclusion of climate and disaster risk considerations in Country partnership Frameworks Myanmar: The SCD “Ending Poverty and Boosting Shared Prosperity in a Time of Transition” and the CPF 2015-17 acknowledges that natural disasters and the impact of climate change represent major challenges for Myanmar. The country is already experiencing increased climate variability which will have a growing impact in the coming decades, especially given the importance of agriculture for livelihoods. Rising sea levels pose a substantial threat, with 10 percent of the country projected to be affected by a rise in sea-level of between one and five meters. Myanmar is also among the countries most vulnerable to natural disasters and has suffered from several devastating cyclones. Both documents recognize that the poor and vulnerable feel the greatest pressure when food prices fluctuate due to disasters and note that disaster risk management is a critical element in reducing vulnerability and poverty. Agriculture is identified as a particularly vulnerable sector. The CPF identifies “cli mate change and disaster risk management” as one of the four cross-cutting areas. Improved flood control and the reduction of vulnerability to shocks are included under the main engagement areas of reducing rural poverty and continued support for building “emergency response contingencies” into IDA operations where appropriate, allowing the rapid r eprogramming of funds to respond to natural disasters. The objective of this approach is to “improve national capacity for sustainable environmental and social management”, in which resilience to climate change and disasters is a key component. Major proje cts in the pipeline include a Contingent Emergency Response Component to support rapid response to disasters; and, where appropriate, also support the use of IDA’s Immediate Response Mechanisms. In addition, the regional program on DRM for South East Asia includes projects with emergency response components with the objectives to reduce the vulnerability of people and assets to natural hazards in targeted disaster prone areas of Cambodia, Lao PDR and Myanmar. Cote d’Ivoire: The CPF recognizes that climate-related events and the associated disaster risks are affecting development and are likely to intensify over the coming decades and could undermine development outcomes. The CPF identified a number of climate and disaster risks: i) heavy downpours in some parts of the country are leading to flooding, especially in southern section of the country, leading to soil erosion and decreased infiltration of water and disrupting agricultural production cycles; ii) Increased frequency of droughts in the semi-arid northern savannah region; iii) Temperature increases caused by climate change are likely to affect many crop growing areas, making the smallholders who produce the majority of the crops most vulnerable to the adverse impacts as they have the least resources and capacity to manage the increased risks. As a result of these findings, the CPF places particular focus on the agricultural sector, given its dependency on climate change and its role as a major driver of economic growth, jobs and livelihoods. It stresses the importance of initiating programs to promote the use of climate-smart agricultural systems, and research into new varieties that will tolerate higher temperatures. These programs would help the farmers and smallholders adapt to the impact of climate changes, and would include access to new markets, changes in agricultural practices, improving soil fertility, and technologies.  Haiti: The CPF highlights that Haiti one of the most exposed countries in the world to natural disasters, including hurricanes, floods and earthquakes. It notes that migration into urban areas has created densification in areas that are more vulnerable to climate risks, exacerbating vulnerability. The CPF also articulates the links between poverty and vulnerability: the poorer an individual is in Haiti, the more vulnerable he or she is to natural disasters and thus focuses on building resilience. The objectives of the CPF are to “strengthen natural disaster preparedness” and “improve disaster prevention and strengthen climate resilience”. It adopts a multi-sectoral approach and includes support to improve the institutional capacity of the government of Haiti to consider vulnerability and risk in its public policy and investment decisions. Specific support includes: i) the development of hydro-meteorological capacity to help farmers reduce annual productivity losses due to extreme climatic events and increase accuracy of forecasting and effectiveness of early warning systems, through the Strengthening Hydro-Met Services Project; ii) reducing vulnerability to climate change by strengthening resilience of infrastructure and communities to weather risk through the Center and Artibonite Regional Development Project; iii) increasing resilience of secondary cities through delivery of resilient infrastructure and support to resilient urban planning and management through the proposed Urban Resilience Project; iii) exploring source protection, land management practices and environmental services to address the water availability and scarcity challenges through the Sustainable Rural and Small Towns Water and Sanitation Project; iv) considering avenues for urban resilience to relieve pressures and increase the potential in small cities to better absorb migration, through the Urbanization Review analytical work ; and v) analysis of land management practices and definition of entry points for investment to promote resilient productive landscapes, through the Relaunching Agriculture: Strengthening Agriculture Public Services II Project. Bolivia: The SCD integrated key findings on environmental and climate sustainability as main analytical element, recognizing that the country’s current path of inclusive growth is extensive in the use of natural resources and as such vulnerable to important sustainability risks. The SCD identifies limited availability of clean water supply and unsustainable and low productivity agricultural production practices as two of the eleven priority constraints for reducing poverty and increasing shared prosperity. The SCD also highlights environmental sustainability risks being enhanced by climate change, as climate variability has increased significantly in Bolivia over the last few years. Climate scenarios indicate significant warming and drying for Bolivia by 2050. The CPF, currently under preparation, follows up on the SCD findings and includes climate change and disaster risk management as one of the explicitly agreed priority areas. 5 B. Screening Operations for Climate and Disaster Risks and Integrating Appropriate Resilience Measures 9. All new IDA operations have or are being screened, for climate and disaster risks.8 As of end of August, 2015, 263 IDA operations had concept reviews and, of these, 81 have been approved by the Board. About 76 percent of the 263 operations have been screened for climate and disaster risks while the remaining 24 percent are in the process of being screened.9 Of the 81 IDA operations approved by the Board, 22 were identified qualitatively by the operational teams as having substantial climate and disaster risks and specific activities to overcome such risks were included. 10. Screening tools have been developed to support systematic screening of climate and disaster risks in IDA operations. Screening tools were made available internally from the start of IDA17 and externally as of February 2015.10 They support the screening for climate and disaster risk at an early stage of project preparation. They have been discussed with, and have benefited from, inputs from other Multilateral Development Banks (MDBs) 11 and external experts. The screening tools cover seven sectors and sub-sectors12 for investment project financing operations and an additional tool supports risk screening for the SCD/CPF process and development policy financing. These tools are accessible through the Climate Change Knowledge Portal13 which also provides a range of geographically referenced climate and disaster related information for IDA countries on climate change and adaptation options. 11. Task teams are being supported to conduct climate and disaster risk screening and identify appropriate resilience14 measures. Training has been provided to Bank staff to help build their capacity for screening operations and SCD/CPFs for climate and disaster risks. Tailored support to operational teams is also being provided by the Climate Change Group. In addition, GFDRR has established specialized teams to support preparation of operations that include climate and disaster risk and resilience and specifically incorporate risk identification, risk financing, risk- based planning and strengthened resilience codes for public infrastructure, such as schools and evacuation centers. 8 Operational teams started screening for climate and disaster risk with project concept notes on or after 1 July 2014, start of IDA17. 9 Four operations (emergency operations and additional finance) early in FY15 were submitted for Board approval without being screened. Subsequent screening found that climate and disaster presented little or no risk to the objectives and activities in the operations. Bank management took measures to clarify that all IDA operations, including emergency and additional finance, needed to be screened and no operations later in the FY have gone to the Board without being screened for climate and disaster risk. 10 https://wbclimatescreeningtools.worldbank.org/ 11 In addition to the World Bank Group, the MDBs include the African Development Bank (AfDB), Asian Development Bank (ADB), European Bank for Reconstruction and Development (EBRD), European Investment Bank (EIB) and the Inter-American Development Bank (IDB). 12 Agriculture, coastal, energy, health, roads, water and a general one that includes several sub-sectors. 13 (http://sdwebx.worldbank.org/climateportal/) 14 Resilience here is seen be a multi-faceted concept that is characterized as “the ability of people and societies and countries to recover from negative shocks” as stated in WDR 2014, Risk and Opportunity: Managing Risk for Development. 6 12. The Bank is promoting the use of trained volunteers to map critical assets. Based on the success of asset mapping in the Pacific as part of the Pacific Catastrophe Risk Assessment and Financing Initiative (PCRAFI)15, the Bank is promoting the use of trained volunteers to map critical assets in IDA countries and to establish baseline information on risk exposure. This asset mapping is supporting risk assessment and informing post-disaster needs assessments. In FY15, as part of the OpenDRI and Open Street mapping, 350 health facilities and 2,256 schools in Nepal were mapped, and risk mapping of 450 kilometers of roads and 30,000 buildings in Sri Lanka was completed. 13. IDA operations now include resilience measures to address identified climate and disaster risks. Where risks have been identified, IDA project documentation describes a range of general measures that can be taken to address climate and disaster risks (Box 2). In many operations, such measures would be further developed during the early stages of implementation by the respective governments and supported by the Bank teams. 14. IDA countries and the Bank teams face several challenges in designing and implementing resilience measures. Designing resilience measures requires a range of technical knowledge and expertise as well as good quality, location specific data on exposure, climate change, hydrology, and construction costs. It also requires upfront budget to conduct detailed risk-based planning over different time horizons and commission prefeasibility studies to inform location and activity/sector specific design of infrastructure and other interventions. In this emerging field, the technical knowledge and expertise in partner countries and in the Bank is often limited, creating constraints in identifying and managing location and sector specific risks. Experience from operations under implementation in Nepal, Samoa and Zambia on infrastructure operations (dams, canals, and coastal roads), that have been supported by the Pilot Program for Climate Resilience (PPCR) shows that it can take about 12-18 months to find qualified firms to conduct the feasibility and design studies that cost about US$1.5 to 2 million. The cost to construct infrastructure that take climate change projections into account can vary significantly depending on the activity and the location. For example in countries across sub-Saharan Africa, the additional costs to upgrade roads to new climate-resilient standards for projected climate change to 2050 is estimated to be up to 34 percent16 depending on whether the roads are paved or unpaved and the nature of projected changes in temperature and rainfall. For instance, dams and canals may have a lifetime of 30 to 70 or more years, while it is less clear whether roads (including rural) need a design that holds until 2050, as they usually do not last beyond 10 years. These costs, however, do not capture changes that may occur in populations and thus infrastructure use as well as in land use and the associated hydrological changes. The cost estimates also assume that current road systems are well maintained. The costs of upgrading bridges, which are often the cause of transport disruptions, are unknown but recent rebuilding efforts suggest a 100-500 percent17 increase depending on the design and/or if there is a need to change the location of the bridge. In some cases, the government’s decision may have to be a trade-off between enhancing resilience overall or the extent or part of the infrastructure that can be made more resilient within the available funding envelope (e.g. length of the canal in flood plains of Zambia or the specific sections of a road). 15 http://pcrafi.sopac.org/ 16 Updated estimates of these costs will be available in late October 2015 when the analysis and the report is completed. 17 World Bank, 2013. Building Resilience: Integrating climate and disaster risk into development. Lessons from World Bank Group experience. The World Bank, Washington DC. 7 15. Risk-based land use planning can minimize risks upstream and increase resilience, but this process takes time and has an upfront cost. Broader land use planning minimizes risks to assets and people but to design and incorporate resilience measures at community level take time and resources due to limited data availability; especially on land use/cover, hydrology and topography. For example, in the coastal infrastructure and community resources mapping in Samoa and Zambia, it took between 12-18 months to engage a firm with the necessary expertise and about three years to complete the exercise. There is a need for a concerted effort to incentivize the private sector (who Box 2: Examples of Climate and Disaster Risk and Resilience Actions Integrated in the Design of Recently Approved Projects Systematic screening of projects for climate and disaster risks has led project teams to introduce specific activities to manage such risks. Some specific examples follow: An education operation in Cote d’Ivoire on youth employment and skills development addressed climate and disaster related risks to agriculture by including agricultural training to support the promotion of a sustainable, climate smart agriculture. The Niger Electricity Access Expansion Project identified that the increase in temperature and heat waves posed significant risks to the delivery of the project outcome. As a result, it suggested review of the technical specifications for the equipment to be purchased to ensure that they withstand higher than normal temperatures. In Afghanistan, additional financing for two operations will address climate and disaster related risks and include support for (a) further restoration of damaged hydromet stations and establishment of new stations, (b) development of river basin hydrology models for better planning and forecasting, (c) dam safety works for the identified critical dams, and (d) critical river protection works. A Malawi project aimed at strengthening social safety nets is addressing the risks from floods and climate related emergencies as a main criterion for targeting support to communities. A Central African Republic health system project is including support for the livelihoods and improved access and quality of health services for the communities most vulnerable to drought risk. The Mozambique roads and bridges management project identified increased vulnerability to extreme weather events and longer-term climate change. It includes support for the development of national technical design standards and specifications for roads as well as investments where the new road design standards will be piloted. A Burundi project on infrastructure rehabilitation identified transport and urban infrastructure as highly vulnerable to climate change impacts. It includes support for climate resilient engineering construction techniques to improve the long-term sustainability of the infrastructure to be rehabilitated under the project. In Myanmar, the Ayeyarwady Integrated River Basin Management Project seeks to strengthen integrated climate resilient management and the development of river basin and national water resources by focusing on hydro- meteorological observation and information systems modernization. In Cambodia, Lao PDR and Myanmar, the Bank, with support from GFDRR and the Government of Japan, is supporting the development of strategic disaster risk management plans, prioritization of structural and non-structural resilience measures, and identification of potential disaster risk financing and insurance mechanisms at the national and regional levels. Based on this work, a South East Asia Disaster Risk Management IDA lending program is proposed; it will target activities that offer immediate opportunities for mutually beneficial regional cooperation as well as national-level priority investments which would yield high benefits for reducing risks in respective countries. Significant cross-boundary benefits are expected through this engagement in disaster risk financing and insurance, regional early warning systems, and transboundary basin level approaches for flood risk management. It will also strengthen the policy dialogue and help build institutional and technical capacities in disaster risk management in the participating countries and generally in South East Asia region. Bolivia: A Disaster Risk Management Development Policy Financing operation was approved by the Board in February 2015 to support the identified risks. mostly conduct such work) to further develop expertise and work with development partners to produce quality terms of reference, realistic cost estimates to conduct such work, expedite the 8 detailed designs and provide expertise for specialized supervision of such interventions. In addition, there is a need to devise ways to fund these upfront costs. Partnerships that bring together expertise from climate scientists and practitioners (engineers, economists, procurement specialists, social scientists, ecologists) in a project preparation facility for key climate sensitive sectors and countries/areas could help to meet the increasing needs especially in the most vulnerable countries/regions such as Africa and small island states. 16. Recognizing these challenges, the Bank is developing knowledge products to synthesize experience from around the world to support designing of resilience measures. Such products include collating examples of addressing uncertainty when longer-term changes are considered. This uncertainty arises from economic development paths as well as climate change (mean and extremes). Studies show the need to consider trade-offs over different time frames, and between the physical and the economic performance of infrastructure.18 In some cases, for example energy and water utilities, ensuring optimal outcomes under current conditions could help in managing future and changing climate risk. The Bank is also providing additional analytical support to several IDA countries to help identify risks relevant to project activities, location and is contributing to the design of potential resilience measures in the water and energy sectors amongst others19. For example, in Pakistan, an analytical study on climate resilient development will focus on how to build resilience and improve the productivity/efficiency of urban, water and energy infrastructure. C. Multi-Sectoral Approaches to Manage Climate and Disaster Risk 17. IDA is on track to fulfil the commitment to support countries develop multi-sectoral plans and investments for integrating climate and disaster risk into development. Twenty-seven IDA countries20 have been identified for multi-sectoral plans and investments for managing climate and disaster risk in development (Table 1). The work is at different stages:  In 11 of the 27 countries, detailed work, including dialogue with various ministries, has already been initiated. Dialogue with the governments and subsequent requests have led to specific analysis that would inform the multi-sectoral plans. The planning and identification of investments is expected to be completed by the end of FY16. 18 Examples include: Hallegatte, S., Shah, A., Lempert, R.J., Brown, C., Gill, S., 2012. Investment Decision Making Under Deep Uncertainty: Application to Climate Change. Washington, D.C., World Bank; World Bank 2015: Enhancing the Climate Resilience of Africa’s Infrastructure; World Meteorological Organization, World Bank, GFDRR, USAID. Valuing Weather and Climate: Economic Assessment of Meteorological and Hydrological Services. Geneva, 2015; ODI, GFDRR and the World Bank Group, Unlocking the ‘Triple Dividend’ of Resilience: Why investing in disaster risk management pays off. Washington D.C. and London, 2015; World Bank; World Bank. 2013; and World Development Report 2014: Risk and Opportunity —Managing Risk for Development. Washington, DC. 19 Methodologies have been developed for the water (decision tree) and energy sectors that help not only screen for climate risks but also identify appropriate measures for building resilience and making good decisions in situations of deep uncertainty. They have been applied to urban flood management, urban planning, hydro-dam development, and large infrastructure. 20 The countries were selected by GPs based on where there is need/demand, links to CPFs/operations and value- added of such process to the countries. As noted in the IDA17 replenishment report, these excluded the initial set of PPCR countries as they had carried out such an exercise as part of their Strategic Program for Climate Resilience (SPCR). 9  In nine countries, initial discussions have been held with the governments and other stakeholders and the analytical work is at an early stage of preparation.  In the remaining seven countries, initial dialogue with the countries has taken place but work and analysis is yet to be defined21. Table 1: List of countries selected for developing multi-sectoral plans and investments Status of work Number Countries In-country work started 11 Benin,* Burundi, Cote d'Ivoire*, Honduras, Mauritania*, Nicaragua, Nigeria, Sao Tome and Principe*, Togo*, Tanzania, Zimbabwe Consultation with 9 Burkina Faso, Ethiopia, Ghana, Mali, Moldova, Uganda, Government under way Uzbekistan, Vanuatu Vietnam Early stages 7 Bhutan, Cameroon, Djibouti, Kenya, Malawi, Senegal, Sri Lanka Total 27 * Part of Regional Resilience of West Africa Coastal Areas Program 18. The scope of multi-sectoral plans and investments varies across countries. A country’s national development goals, technical and institutional capacity, and existing or planned investments in disaster and climate resilient development are key determinants of the scope of multi- sectoral plans (Table 2). Most participating countries have already incorporated climate change in national or sectoral development policies (e.g., Benin). Some have developed specific climate change strategies and plans (e.g. Ghana, Togo, and Uzbekistan). Some countries are focusing their plans on specific geographic areas (Benin, Uganda) while others are targeting specific issues such as integrated coastal zone management or landscape-based approaches (Togo, Mauritania, Benin, Uganda, Uzbekistan). Experience from the PPCR shows the need for support from the highest level of government. In most countries in Africa, the primary counterparts include one or more line ministries, typically covering water, environment, natural resource, forestry or urban planning. However, in Sao Tome Principe, Cote d’Ivoire, Burkina Faso, Mali and Ethiopia, the main counterparts are the Planning or Finance Ministries. Some countries are broadening the engagement and ownership of sectoral plans beyond the line ministries with the aim of developing an overall national climate policy (e.g., Zimbabwe). Much of the effort in the coming months will be on assessment of vulnerabilities. The identification of priority investments or policy support is expected later next year. 19. Most countries in Africa are developing multi-sectoral plans to help mobilize investment financing. Some are drawing on existing knowledge or planning efforts to develop an investment pipeline for possible funding from IDA17 or other sources. Tanzania is developing a Resilient Natural Resource Management for Growth (REGROW) project to strengthen cross- sectoral efforts to improve water management in areas of high environmental services and vulnerability to climate change. Ethiopia’s proposed Oromia Forested Landscape Program (OFLP) to promote sustainable forest management in the regional state of Oromia is directed at enhancing 21 In addition, discussions have been initiated with Tonga, but are not reflected in Table 1 due to their preliminary nature. 10 the climate resilience of forest communities and reduction in net greenhouse gas emissions resulting from changes in forest cover. 20. The multi-sectoral investment planning process is helping identify priority investments, knowledge gaps and needed advisory services. In Uzbekistan for example, the process is closely linked with the preparation of an IDA regional Climate Adaptation and Mitigation Program for the Aral Sea Basin (CAMP4ASB). CAMP4ASB supports investments, capacity building and improved access to datasets, knowledge, and tools for climate assessment and decision making amongst national stakeholders (e.g., government agencies, academia, civil society). IDA resources will finance the first phase of CAMP4ASB and combine it with additional resources from multiple sources (e.g., IBRD, Green Climate Fund, national governments) for future phases of the Program which will also cover non-IDA countries in Central Asian (e.g., Kazakhstan and Turkmenistan). Government engagement on multi-sectoral investment planning has also helped mobilize knowledge and institutional consensus on priorities for climate action. For example, Ethiopia, Uganda, Malawi and Honduras were recently selected as new pilot countries for the PPCR as a result of multi-sector investment planning efforts. In addition, Uganda, Cameroon and Honduras were selected for support under the Forest Investment Program (FIP). In Ethiopia and Tanzania, priority investments have been identified and projects are being prepared for financing in IDA17. In Vanuatu, the government is considering support to strengthen the capacity of institutions to better manage climate and disaster risks across multiple sectors and islands given the damage and devastation caused by Cyclone Pam22. Similarly, engagement on multi-sector investment planning has facilitated dialogue and coordination for the proposed PPCR country program (for example in Ethiopia, Uganda and Malawi). Overall, IDA countries see the plans as important for the identification of investment opportunities for future IDA cycles and access to international climate finance and private sector engagement. Through a combined IDA17, Climate Investment Funds, other trust funded initiatives, the Bank’s role will be to provide advisory services, institutional strengthening and financial support to enable IDA countries to design and implement climate-smart solutions and combine climate and development finance. 22 In response to the significant displacement and loss of productive assets and infrastructure in Tuvalu resulting from Tropical Cyclone Pam, financing support from the IDA Crisis Response Window (CRW) is being used to help meet financing gap resulting from the Cyclone, support the government of Tuvalu in post-disaster recovery, and ensure that reforms supported under the Second Development Policy Operation remain on track and are implemented without the risk of delay due to competing capacity or budgetary priorities arising from post- disaster recovery. 11 Table 2: Key features of the multi-sectoral plans and investments under development in IDA countries (Note (*): countries included in the Regional Resilience of West Africa Coastal Areas Program Country Objectives Sectors Counterparts Expected outputs Benin (*) Enhance resilience to coastal Urban development, transport, Ministry of Environment, Coastal Master Plan and multi-sectoral erosion trade, agriculture, livestock and Ministry of Urban Planning, investment plan fisheries, industry, commerce, communication, tourism and the environment Burkina Faso Reduce risks to the development Agriculture, social protection, Ministry of Economy and Multi-sector plan process, related to climate, natural urban development, water and Finance, National Platform for disasters and other stressors sanitation Disaster Risk Reduction, National Council for Environment and Sustainable Development Burundi Improve climate change Environment, water, Ministry of Water, Multi-sector investment plan adaptation and disaster risk social/urban/rural development, Environment, Land Planning management in priority sectors energy and mining and Urbanization Cote d'Ivoire (*) Increase coastal resilience to Urban development, fisheries, Ministry of Environment, Regional Territorial Development climate change and natural transport Ministry of Planning Plan for Grand-Lahou; multi-sectoral disasters investment plan Ethiopia Increase the resilience and carbon Forest, energy, manufacturing, Ministry of Finance and Multi-sector investment plan (form efficiency of the development urban, transport, water, and Economic Development; TBD) process in selected sectors, in agriculture sectors Ministry of Environment and Under preparation: Oromia Forested accordance with Ethiopia’s Forests; line ministries Landscape Program (large-scale Climate Resilient Green Economy REDD+ carbon finance operation) (CRGE) Strategy Ghana Improved understanding of Urban development, coastal Ministry of Water Resources, Document on investment priorities in climate risks, formulation of zone management as well as Works and Housing , National support of the Action Program for relevant policies and identification flood and water resources Disaster Management Implementation of the Ghana National of investments in adaptation and management Organization, Ministry of Climate Change Policy (2015 -2020) risk reduction Finance (MOF) Mali Reduce risks to the development Agriculture, social protection, Ministry of Economy and Multi-sector plan process, related to climate, natural urban development, water and Finance, National Platform for disasters and other stressors sanitation Disaster Risk Reduction, Environment and Sustainable Development Agency Mauritania (*) Reduce the vulnerability of Environment, fisheries, Ministry in charge of Updated Mauritanian Coast coastal areas to climatic and transport, economic affairs, Environment and Sustainable Management Master Plan anthropogenic stresses development and finance Development; office of the Prime Minister 12 Country Objectives Sectors Counterparts Expected outputs Nigeria Increase the resilience of the Water, agriculture, navigation Federal Ministries of Water, Catchment management plan in the development process to floods environment and agriculture Benue river basin and other climate shocks in priority areas (Benue river basin) Sao Tome and Reduce the vulnerability of Urban and coastal development Ministry of Finance, Ministry of Spatial and Investment Plan for Principe(*) coastal area to climate and other Public Works, Natural vulnerable coastal areas shocks Resources and Environment Tanzania Improve the management and Tourism, natural resources, and Ministry of Natural Resources Multi-sector investment project development of water and key water and Tourism tourism assets, for increased climate resilience of rural livelihoods in selected vulnerable areas Togo (*) Enhance resilience to flooding and Urban development, transport, Ministry of environment and Coastal Integrated Management and coastal erosion trade, agriculture, livestock and forest resources Climate Resilience Plan. fisheries, industry, commerce, communication, tourism and the environment Uganda Ministry of Water and Forestry, land, water, rural Strengthen the resilience of 3 Multi sector investment plan report Environment development priority areas through an focusing on resilient landscapes in 3 integrated landscape approach priority areas of Uganda - Karamoja, Albertine Rift and Mount Elgon Zimbabwe Increase the climate resilience of Water, agriculture, energy, Ministry of Environment, water National climate policy; action plan on the development process in infrastructure and climate; Ministry of priority actions for its implementation selected sectors Agriculture, Ministry of Energy Vietnam Is linked to the new Socio Ministry of Planning and Multi-sectoral plan Economic Development Plan Investment and the Ministry of 2016-2020 and the Government Environment and Natural climate and green growth program Resources 2016-2020. Honduras and Promote the consideration of Environmental and natural The Ministries of Environment, Knowledge outputs and a positive list Nicaragua climate change and disaster resource management, public Infrastructure and Public of investments for managing climate resilience into planning and investment, water, and Services (INCEP), Finance, and disaster risk information. management processes into agriculture Agriculture, Finance and Public selected priority sectors in Credit and the Permanent Honduras and Nicaragua. Commission of Contingency, the Disaster Risk Management National System and the National Water Authority – ANA. 13 21. Some countries are focusing multi-sector investment planning on sub-sectors and opportunities where there has been limited focus to date and aligning it with ongoing processes. Countries that have already started to strategically integrate climate considerations across sectors (e.g., Ethiopia in its Climate-Resilient Green Economy strategy and facility) are focusing their attention on a subset of sectors and themes that are less developed where additional planning can add value to ongoing programs. Some African countries are drawing on project preparation support under the FY15 strategy for Disaster Risk Management for Africa to provide further impetus and operational focus when developing multi-sectoral plans and investments. A major study – “Enhancing the Climate Resilience of Africa’s Infrastructure23” (Box 3) – has been completed that provides methodological approaches to prepare climate-resilient development plans in the power and water sectors. The analysis is being extended to the road transport sector and is expected to be completed in early FY16. A set of initiatives to enhance Africa's resilience to climate variability and change is under preparation in the run up to the UNFCCC COP in Paris. These initiatives focus on regional priorities such as renewable energy (solar, hydro and geo-thermal), integrated river basin management, climate smart agriculture, climate resilient landscapes, forests, hydro-met systems, climate-resilient investment planning, climate resilient coastal development (particularly Box 3: Enhancing the Climate Resilience of Africa’s Infrastructure – Value of Regional Approaches In 2010, the Africa Infrastructure Country Diagnostic found that to enable Africa to bridge its infrastructure gap, about US$93 billion per year for the next decade will need to be invested. The Program for Infrastructure Development in Africa, endorsed in 2012 by the continent’s Heads of State and Government, lays out an ambitious long-term plan for closing Africa’s infrastructure gap, including through step -wise increases in hydroelectric power generation and water storage capacity. Much of this investment will support the construction of long-lived infrastructure (e.g., dams, power stations, irrigation canals), which may be vulnerable to the uncertainty associated with changes in climatic patterns. A dedicated report (soon to be finalized) evaluates the impacts of climate change on hydro-power and irrigation expansion plans in Africa’s main river basins (Niger, Senegal, Volta, Congo, Nile, Zambezi, and Orange). It uses a single and internally consistent methodology and latest climate scenarios and outlines an approach to reduce climate risks through suitable adjustments to the planning and design process. The report concludes that failure to integrate climate change in the planning and design of power and water infrastructure could entail, in scenarios of drying climate conditions, losses of hydropower revenues of between 5% and 60% (depending on the basin), and lead to increases in consumer expenditure for energy up to three times the corresponding baseline values. In wet climate scenarios, business-as-usual infrastructure development could lead to foregone revenues in the range of 15 percent to 130 percent of the baseline; to the extent that the larger volume of precipitation is not used to expand the production of hydropower. Despite the large uncertainty on whether drier or wetter conditions will prevail in the future in Africa, the report finds that by modifying existing investment plans to explicitly handle the risk of large climate swings, can cut in half, or more, the cost by building infrastructure on the basis of the climate of the past. Through this and other IDA regional initiatives it is clear that modifying national level investment plans is fundamental, but not enough, and regional visions and common agreements have to be reached to better tackle resilient regional investments. AFR is thus using regional approaches to build resilience and promote low carbon, through operations that support transboundary river basin management (e.g. for Niger, Zambezi, Nile), support to pastoral livelihoods on a sub-regional basis (Horn of Africa, Sahel), support to the regional hydro-met systems, promote interconnection of power system to create adequate markets for large scale renewables (e.g., hydropower), regional fisheries development and improved forest management that reduce deforestation and degradation and encourage reforestation/afforestation. 23 http://www.worldbank.org/content/dam/Worldbank/Feature%20Story/Africa/Conference%20Edition%20Enhanci ng%20Africas%20Infrastructure.pdf 14 in West Africa), climate smart cities, and Indian Ocean Economies. The goal is to reach consensus among stakeholders and financing agencies and mobilize resources. The initiative is expected to provide a regional platform to build climate and disaster resilience, thereby contributing to the achievement of the overall objectives of mainstreaming climate and disaster risk in development and build on the multi-sectoral investment planning efforts. 22. As of July 31, 2015, the Bank has supported seven IDA countries in planning actions that will contribute to the development of national energy action plans and investment prospectuses to achieve the Sustainable Energy for All objective of universal access to energy by 2030. The Bank support includes securing financial resources, analytical studies, developing strategies/plans, reviewing laws and investments in renewable energy and energy efficiency. In addition, two regional umbrella programs in Africa and south Asia are contributing to analytical studies across a range of common issues such as innovative financing for renewable energy. The support and activities include:  In Myanmar, with support from ESMAP and Sustainable Energy for All, development of: (a) a geospatial least-cost electrification plan – National Electrification Plan (NEP) – aiming to achieve universal access to electricity by 2030; and (b) an investment prospectus and road-map for the first phase of NEP (2015-20). Wide consultations with the public and private sector and civil society organizations have led to broad-based support for the NEP and for the Government’s commitment towards the NEP objectives and mobilization of up to US$400 million of IDA resources for its implementation. The Bank and IFC teams are preparing the Myanmar National Electrification Project which will include public-private support for the grid roll-out and off-grid pre-electrification;  In Nepal, under the Development of Improved Solutions for Cooking project funded by ESMAP, the Bank team is working closely with Alternate Energy Promotion Centre under the Ministry of Science and Technology to develop Investment Prospectuses for clean cooking and is supporting activities that are expected to be completed in 2015;  In Bangladesh the Bank team is providing support to the US State Department – the lead SE4All agency in the country – in their efforts to prepare Investment Prospectuses;  In Burundi, advice has been provided to support the review of the electricity law that will enable opportunities for private sector investment in electricity services. Work to prepare an investment prospectus is expected to commence in early 2016;  In Guinea, activities have been launched for the preparation of a hydro atlas, creating a Hydro Public-Private Partnership facility, developing an Investment prospectus, and strengthening monitoring and evaluation to track access rates using the multi-tier approach. The outbreak of Ebola has delayed on-going contracts.  In Senegal, activities have focused on Local Electrification Plans, and studies are underway. Work to prepare investment prospectus on rural electrification are expected to commence in early 2016.  In Liberia, advice has been provided to support the review of the electricity law that will enable opportunities for private sector investment in electricity services. The outbreak of Ebola has delayed on-going contracts.  In Mozambique, support has been provided to the ministry of energy to develop and implement a new energy strategy and to the utility to support various studies regarding their 15 financial sustainability. Work on the investment prospectus is expected to commence in mid-2016.  Under a regional SE4All umbrella initiative in south Asia, following activities have been supported with funding from ESMAP: a) a detailed financial model has been developed for mini-grids as a negotiating tool and will be expanded to include larger mini-grids; b) survey work for mini-hydropower projects is being undertaken in Nepal to help with planning and load prediction; and c) in the Maldives, implementation is underway on an initiative for rooftop solar power. It will require development of standard contracts such as roof lease and Power Purchase Agreements, to increase renewable energy penetration. There are also ongoing initiatives directed at mapping renewable energy resources for the development of investable projects, as well as to scale up activities for renewables and energy efficiency. Support is being provided for biogas-based clean cooking in Nepal, solar home systems in Bangladesh, renewable energy mapping activities in Pakistan, Maldives, and Bangladesh, and initiation of energy efficiency work in Bangladesh  A regional flagship study in Africa to enable electricity trade has been launched, and the first Phase was completed in July 2015. An activity on innovations in financing will be launched following the identification of transformative projects. D. Strengthening Monitoring and Reporting of IDA Resources for Climate and Disaster Risk Management 23. The IDA commitment with climate change co-benefits over FY13-15 averaged US$3.86billion and were delivered through 59 operations averaged over the same time period. Systems to monitor and report the use of IDA resources for climate change mitigation and adaptation have been strengthened and extended to cover tracking of analytical work that address climate change issues. In FY15, IDA commitments with climate change co-benefits are USD2,994 million of which USD2,193 million had adaptation co-benefits and USD1,041 million mitigation co-benefits24 (Table 3). In FY15, IDA supported the completion of analytical works and non-lending technical advisory services with focus on climate and disaster risk, resilience and inform strategies, policies and investments. Examples include:  Confronting drought in Africa’s drylands: Opportunities for enhancing resilience aims to inform new policies and programs for resilience by characterizing current and future challenges to reducing vulnerability and increasing resilience in drylands, identifying main interventions to enhance resilience, estimating their costs, and assessing their effectiveness. It also provides an evidence-based framework to improve decision making on alternative options to enhance resilience as well as sharing of regional and global knowledge on resilient development in drylands;  Tanzania programmatic analytical and advisory work is linked to the multi-sectoral investment planning and is informing planned operations;  The West African Coast programmatic technical advisory work considers multiple sectors and is informing national investment planning and operations as well as potential regional work; 24 The adaption and mitigation co-benefits are assessed independently and therefore should not be added together. The total climate number provided nets out the overlap of adaptation and mitigation . 16  An analytical study – Pacific Possible – the purpose of which is to take a long term view of the development challenges and opportunities faced by PICs and focus on activities that could have transformational impacts on countries in the region. The study will seek to provide a realistic assessment of these opportunities and includes consideration of the risks to increased poverty from climate change and potential measures to reduce such risks;  In Vietnam, programmatic Climate Change and Green Growth analytical and advisory assistance supports a multi-sector engagement on climate change adaptation and mitigation that complements the preparation of new IDA lending program through a new programmatic DPO series on climate change and a climate adaptation project for the Mekong Delta that will be delivered in FY16.  In Nicaragua, the Task Team has started working with the Ministry of Finance and Public Credit (MHCP) to improve the integration between climate change and disaster resilience into public investments. A budget classifier and analysis of public expenditure for Adaptation to Climate Change and DRM have been supported under the IDA17 commitment. Table 3: FY11-15 WB IDA Total Climate Finance (with overlap numbers) Adaptation co-benefits Mitigation co-benefits Commitments Commitments (USD million) (USD million) FY11 FY12 FY13 FY14 FY15 FY11 FY12 FY13 FY14 FY15 1,439 2,321 2,051 2,328 2,193 893 2,334 2,296 2,941 1,041 24. A methodology has been developed and implemented to measure the share of IDA investments with disaster risk management co-benefits (Annex 2). More emphasis is now being placed on mainstreaming climate change and disaster risk management considerations into Bank operations. As part of IDA17 commitments, the Bank has committed to systematically integrate climate and disaster risk into country strategies and operations. To measure the progress towards the IDA17 commitment, the Bank has piloted a methodology to measure DRM co-benefits. This methodology is based on the approach to measure finance supporting adaptation to climate change. It was initially tested on FY12-15 data and has been mainstreamed and integrated into the Bank systems. It assesses a development activity for its contribution to DRM even if this was not its main objective. In FY 14, USD5.3 billion of World Bank commitments contributed to disaster risk management, of which USD3.2 billion were funded by IDA. In FY15, the numbers are slightly higher, USD5.6billion of World Bank commitments contributed to DRM of which USD3.3billion were funded by IDA. 25. During FY15, 186 economic and sector work and non-lending technical assistance (ESW/TA) products conducted in IDA countries included climate change considerations. This is about 22 percent of the total ESW/TA conducted in IDA countries and is up from about 11 percent in FY14. Of the 186, 147 focused on adaptation, 132 on mitigation and 93 included both adaptation and mitigation (Annex 3). 17 III. Developing Indicator(s) to Measure Resilience 26. An approach to measure reduction in socio-economic vulnerability at the national level has been established. It is a first step towards developing resilience indicator(s). This measure is based on a simple economic model of the impact of disasters on the well-being of the population. It provides a qualitative measure, or a scorecard, that describes each country through a set of 14 sub-indicators which moderate the impact of a disaster on well-being and resilience. The sub- indicators are based on globally available data and include information on protection measures (e.g. through dykes and sea walls), prevention through better land-use planning, early warning and evacuation systems, or social protection for poorest communities. As of June 2015, the indicator and scorecards had been piloted for river floods in 90 countries (of which 22 are IDA countries) to provide country-specific measurement of socio-economic resilience. 27. The approach aims to support policy choices and enhance resilience by identifying policy actions that reduce the impact of disasters on people’s wellbeing and safety. Often there are multiple policies or investments which can protect the population against disasters and/or help people rebuild and recover from disasters through, for example, investments in protection measures such as dykes, prevention through improved land-use planning, early warning and evacuation systems, contingent finance and public protection, and social safety nets. But designing a consistent policy package and measuring progress is challenging. Building on existing work in the Bank and elsewhere, the resilience indicator and scorecard provide an approach to support the policy process within countries. Furthermore, the options (e.g., improving social protection for the poor, improving early warning signals, and reducing poverty) within each country, which can reduce the impact of a disaster on well-being (and improve resilience), are examined through a country-specific scorecard approach. 28. Further work would include applying this methodology to other hazards such as storms, coastal floods and non-extreme climatic changes and piloting it in a few countries where additional sub-national level data might also be available. A visualization tool is also planned to enable decisions-makers to easily use and interpret the model outputs. As global data is currently used, more detailed national-level data, if available, can be used instead to provide sub-national guidance. The indicator and scorecard can help deliver a trackable measure of resilience using regularly updated global/national data. IV. Catalytic Role of IDA in Mobilizing Other Resources 29. IDA is combining multiple sources of funding, especially through IDA’s regional window, to support development solutions, address economies of scale/cost-effectiveness and the spatial connectivity. IDA’s regional resources are incentivizing countries to use their national IDA allocation for climate and disaster resilience. Examples include efforts in Africa (Box 3) and in central Asia, and the Pacific and the Caribbean (Box 4). Such efforts are also needed in cases where national level work is not cost-effective and/or when dealing with risks and resilient solutions beyond the national boundary, such as in shared watersheds/landscapes or regional infrastructure investments. 18 Box 4: Regional Approaches to Managing Climate and Disaster Risk There are a number of regional approaches that are providing value added through economies of scale, shared knowledge, data acquisition and a framework for action on climate resilient development. Some examples are presented below. Climate Adaptation and Mitigation Program for the Aral Sea Basin . Five Central Asian countries (Kazakhstan, Kyrgyz Republic, Tajikistan, Turkmenistan, and Uzbekistan) are part of a regional program being prepared by the World Bank in collaboration with development partners to address the impacts of climate change especially on water, agriculture and energy sectors that are most at risk; threatening the achievement of many of Central Asia countries’ development prio rities (food and energy security) and rural populations that depend on subsistence agriculture and pastoralism and have high poverty rates. A coordinated and integrated approach toward climate-smart development, with greater gains than the individual national level interventions, is needed to address the interlinked challenges across space and sectors from climate change. Such an approach would improve the effectiveness of national climate actions through (i) economies of scale (e.g., shared research and knowledge efforts); (ii) faster learning through experience-sharing for replication and scaling-up across countries of successful climate innovation; (iii) strategic planning and financing (e.g., access to climate finance, collaboration with development partners); and (iv) complementarities (e.g., multi-country risk-management mechanisms in agriculture). CAMP4ASB will also lay the foundation for the first institutional platform in Central Asia for regional cooperation on climate change across a broad range of sectors and ensure that i) national stakeholders (e.g., government agencies overseeing climate- sensitive sectors, academia, civil society) have access to improved climate change knowledge services (e.g., data, knowledge, tools for climate assessment and decision making) to strengthen the knowledge and capacity base for climate action; ii) provide increased financing and technical assistance, on a demand-driven basis to rural communities for climate investments that improve livelihoods and productivity and safeguard key economic sectors facing increasing risks from climate change. The Program will be processed in phases, over an approximate seven year period, with each phase having a five-year duration and operations in different countries: Phase One (fall 2015) will support Republic of Tajikistan, Republic of Uzbekistan, and the Program’s regional implementing agency; Phase Two will support Republic of Kazakhstan, Republic of Turkmenistan and Kyrgyz Republic. The Pacific Resilience Program (PREP) supports a number of countries and regional organizations (e.g. Secretariat of the Pacific Community (SPC) and the Pacific Island Forum Secretariat (PIFS). PREP takes a programmatic and phased approach to building resilience and seeks to strengthen multi-hazard early warning systems, build resilient investments, and reduce risks through investments in public infrastructure and financial protection for participating countries. This helps deliver benefits to local communities, including women and children, through increased awareness and clearer messages and warnings for disaster events, as well as the government agencies in Samoa and Tonga that are in charge of Multi-Hazard Early Warning and Preparedness, emergency response and finance. Phase I is supporting Samoa, Tonga, Republic of Marshall Islands and Vanuatu. Subsequent phases will cover additional investments and countries. The regional approach as part of PREP will benefit participating countries and the region as a whole by providing: (i) economies of scale; (ii) standardized approaches to climate resilience and disaster risk management, and is anticipated to result in reduced costs; and (iii) pooling of financial and human resources to address risks across the region and help regional risk diversification. The PREP will create an enabling environment for improved resilience in targeted Pacific Islands Countries and strengthen relevant institutions (including Ministry of Finance) to prioritize and undertake resilience-building initiatives across different sectors and communities. SPC and PIFS will provide regional coordination and implementation support to the participating countries. The program leverages resources combining regional and national IDA, PPCR, SCCF and the Global Facility for Disaster Reduction and Recovery / Japan DRM program. The Caribbean Resilience Program : After the disaster response operations dating back to the 1970s, the WBG engaged in ex-ante disaster risk management and adaptation investments in the Caribbean in the early 2000s (with initial operations in St. Lucia). These investments expanded quickly due to three main factors: (a) technical assistance provided through the Global Facility for Disaster Reduction and Recovery (GFDRR), allowing for intensive technical and fiduciary assistance to clients – such as the formation of dedicated teams; (b) concentrating program coordination and fiduciary management under a single Government unit, often located in Ministries of Finance; and (c) developing programmatic operations which combined several sources of funding, using IDA, IBRD or the Pilot Program for Climate Resilience (PPCR) as a core. The Caribbean Resilience Initiative Program combined national and regional IDA, PPCR, GEF and GFDRR funding. This has the advantage of leveraging much larger sums, with the grant components softening the terms of IDA or IBRD. Countries benefit from using a single set of procedures and a single coordinating unit, resulting in proportionally lower overhead costs, and an ability to manage larger sums of funding. The result has been that in many countries, the approach has evolved from reactive to proactive climate and disaster risk management and countries are now embarking on comprehensive and multi-sectoral vulnerability reduction programs. (Also see Box 3 for examples from the Africa Region) 19 30. Analytical studies and investments delivered through IDA are influencing financing from other sources in blend countries. In blend countries, such as Vietnam, the Government’s commitment to disaster and climate resilience is carrying over to IBRD investments. For example, the Ho Chi Minh City Flood Risk Management project and the Vinh Phuc Flood Risk and Water Management Project are being prepared for financing from IBRD. 31. Blending IDA funds with trust funded advisory and analytical activities can help build the business case for investing in disaster and climate risk management. The Global Facility for Disaster Reduction and Recovery (GFDRR) has supported advisory and analytical activities that have informed the design and implementation of World Bank operations. Over the last three years, GFDRR has provided support on hazard exposure information to over 43 countries. Within the Pacific region, the Pacific Catastrophe Risk Assessment and Financing Initiative (PCRAFI) helped to geo-reference more than two million buildings, producing a comprehensive inventory of public assets that are vulnerable to adverse natural events. This information was used to design the regional Pacific Catastrophe Risk Insurance Pilot – a financial protection scheme that provides participating Pacific states with liquidity in the event of earthquakes and cyclones. The collected and shared risk data has informed post-disaster needs assessments, disaster recovery and reconstruction as well as mitigation projects. The PCRAFI insurance scheme will continue under the PREP. V. Challenges, Opportunities and Issue for Discussion 32. IDA supported operations and instruments are helping create the enabling environment and institutional structures to address climate and disaster risks in highly vulnerable countries. The rising frequency and severity of climate extremes is increasing risks to development, slowing and in some cases eroding development gains and increasing indebtedness. This is especially the case in small island states and drought prone African countries. IDA resources have also contributed to mainstreaming climate and disaster risk management in fragile countries (such as Yemen and Haiti), but these gains can be eroded quickly during times of prolonged political and financial crises. In the case of Yemen, the improvements in the capacities of institutions and the line agencies through IDA and PPCR support have been eroded as a result of the prolonged crises, making it difficult to engage in climate change and disaster risk management issues . A big challenge for IDA and the Bank as well as development partners is how to deal with fragile situations, how to maintain capacities and design simple interventions that can continue even during a conflict given the increasing and additional impacts of climate change facing many of these countries. 33. Many countries face challenges in sourcing the expertise to conduct feasibility studies and designs that integrate well considered resilience measures. While the upfront costs can be modest, for some countries, they can be prohibitive. Partnerships are needed with the private sector to design and execute quality solutions. IDA could help countries access additional resources and expertise to meet these needs through setting up preparation facilities such as those being piloted for small island states, i.e., the proposed catastrophe risk insurance facility under the PREP for the Africa Region. In addition, IDA could play a role in convening countries and other partners to think through new norms and standards, potential feasibility studies and the terms of references that could incorporate climate and disaster resilience. Such efforts will also facilitate shared learning and accelerate the application of knowledge across multiple countries. To date support has been provided to access expertise on disaster risk management and the risk financing and work in the 20 water/energy Global Practices (GP) have brought together private sectors and professional associations. Such efforts would need to be scaled-up to meet the IDA needs. 34. Poor countries and those highly vulnerable to climate change need targeted support that does not increase the risk of fragmentation of the financial resources and/or capacity. Over the last four years, analysis show that low income countries and small island states have 10 or more partners supporting work on climate and disaster resilience. As the Green Climate Fund (GCF) gets established, the Sendai Framework is operationalized and the Sustainable Development Goals are agreed, there is high risk of further fragmentation of finance and capacity especially in countries with limited capacity for effective implementation. Collaboration and partnership amongst a small number (about 5) stakeholders could be sufficient to reduce such risks. Such a process is proving to be important when client countries take a strong leadership role and coordinate climate and disaster resilience agenda as part of the development process. Tools such as budgetary expenditure review and coordination between multiple sectoral ministries/agencies are proving to be useful in informing decisions and supporting coherence across the development and climate change issues. This will also ensure that the climate and disaster resilience agenda is owned and supported at the highest levels of government. This has been recognized, for example, in the PREP, which will utilize a regional approach to promote a more integrated and comprehensive strategy to address the fragmentation and poor coordination of climate resilience projects and initiatives in the Pacific Region. Many of the technologies and business models being developed in response to climate change provide opportunities for countries to address long-standing development challenges, and engage the private sector and other partners (Box 5). Examples include the substantial research and industrial scale-up in solar technology – combined with advances in high-efficiency lighting and batteries – which give governments another tool beyond the established utility models to serve 1.6 billion people currently lacking access to reliable power supply. New solutions in clean water and climate-smart agriculture help countries adapt to climate change but also provide novel models to address challenges in those sectors. All countries need to have ready access to these new developments as well as the capacity and the funding to facilitate widespread deployment to ensure these opportunities are realized. Box 5: Coordination between Private sector, Governments and Development Partners for Solutions to Development and Climate Challenges A number of World Bank programs are helping IDA countries deploy appropriate climate-smart policies that take advantage of rapid technological advancements and industrial transformation to spur greater economic stimulation and competitiveness. The Climate Technology Program (CTP) works with local and international private sector, local governments and other development partners to support indigenous innovation in new technologies and business models addressing local climate challenges. Through its network of seven Climate Innovation Centers – including Ethiopia, Ghana, Vietnam and the Caribbean – local start-ups and entrepreneurs are using emerging technologies and climate finance flows to scale-up novel approaches into businesses that provide greater resilience and greenhouse gas emission reductions, creating jobs and investments. The Climate Efficient Industries program brings global best practice in efficient and clean technologies to industries in selected countries reducing greenhouse gas emissions and enhancing overall sectoral and national competitiveness. 35. Issue for Discussion:  Staff would welcome the views of Deputies on the implementation to date of the IDA17 climate change commitments. 21 Annex 1: Climate and Disaster Risk considerations in Systematic Country Diagnostics (SCDs) 36. A number of countries have started SCD process. Some examples include:  Afghanistan: The analysis and prioritization in the SCD and CPF is done through a fragility lens but likely to include climate variability and change as amongst the challenges the country faces.  In 2011, Ethiopia approved its Climate Resilient Green Economy (CRGE) Strategy and has been increasingly prioritizing investment in low-carbon and climate risk management actions in eight priority sectors. The WBG policy dialogue – underpinned by the SCDs – in the forest, energy, manufacturing, urban, transport, water, and agriculture sectors takes the CRGE Strategy as a starting point for further outlining pathways for Ethiopia towards more sustainable development and to achieve its longer term goal of middle income country.  Honduras: The SCD acknowledges Honduras’ high vulnerability to natural hazards and disaster risks, including the socio-economic impacts of recent disasters. The inherent vulnerability to natural hazards and climate change is an additional source of macroeconomic uncertainty, and how growth is regularly slowed by supply-side shocks that are individually small but cumulatively severe (particularly related to hydro-meteorological disasters). Key policy areas to enhance environmental sustainability and resilience to climate change and disasters were proposed, including: (i) an effective budget management strategy that allows for rapid mobilization of resources in case of a disaster while protecting fiscal accounts; (ii) improving the management of meteorological and geological knowledge, early warning systems, and climate data to inform decision-making; (iii) further developing knowledge and assessments of disaster risk at sectoral levels in order to reduce existing high levels of structural vulnerability in public assets; and (iv) strengthening of territorial and sector planning processes to appropriately integrate risk reduction criteria and land use planning.  Pacific Region SCD acknowledges the high vulnerability of PICs to climate and disaster events, highlights the importance of integrating climate change adaptation and disaster risk management into policy, planning and investment decision making, and notes that the economics of investments in improved disaster risk management and early adaptation to climate change show unambiguously high rates of return, particularly for affected people in coastal areas. 22 Annex 2: Methodology to Assess Disaster Risk M anagement Co-benefits 37. A development activity can provide disaster risk management co-benefits even when it is not a stated objective but may capture broader mainstreaming efforts. The methodology and steps for measuring disaster risk management (DRM) co-benefits are as below:  DRM Co-Benefits must be assessed for all Investment Project Financing and Development Policy Operations.  Review each Project Appraisal Document, or other available supporting document, for the occurrence of any DRM related keywords, to determine if there is any relevance to DRM.  Review each (sub) component or prior action and determine if there are any disaster risk management co-benefits.  Activities must meet the following criteria to be considered as contributing to DRM: o Explicit DRM reasoning in the project’s appraisal and/or supporting documents. o The activity directly addresses vulnerability resulting from natural disasters and Climate Change (activity linkage). o The activity contributes to post-disaster reconstruction measures through implementation support, infrastructure development, recovery strategies, or post- disaster assessments.  Some projects have a support component that covers activities such as project management, M&E, audits or other assistance that cover the whole project, and are essential for the rest of the project to proceed smoothly. In these instances, the DRM co-benefit is pro-rated as a proportion of the DRM finance for the other components.  Assign aggregate DRM percentages by tallying up the total financing per sector assigned co-benefits, and dividing it by the total amount of financing for that sector. 23 Annex 3: Methodology to Track Analytical Work and Technical Assistance that Addresses Climate Change in IDA Countries 38. To meet commitments set out in the World Bank Strategic Framework for Development and Climate Change in 2008, and the IDA16 replenishment, a system to track the financing of climate change co-benefits in Bank lending has been developed. The system enables the Bank to report on its financing of activities that lead to direct adaptation and/or mitigation co-benefits, independent of the activities’ primary objective(s). The system, which has been operational since FY13, also supports global efforts to monitor and report on climate finance in a consistent and verifiable manner. A separate but similar system, which complements the previous and provides a more comprehensive perspective of the Bank’s efforts in relation to climate change, has been developed for tracking climate change co-benefits associated with the Bank’s Economic Sector Work and Technical Assistance (ESW/TA). The tracking system became operational at the beginning of FY15. Through this system, task teams are required to flag an activity that provides climate change adaptation and/or mitigation co-benefits. The system will track the number of ESW/non-lending TAs at the time of completion. Unlike the methodology for investment lending, the system does not quantify expenditures directly related to the actions with climate co-benefits. 39. When tagging projects, task teams indicate whether the project is supporting: diagnostic and policy advice; the provision of tools and/or data; and knowledge management. Task team leaders and operational staff can use the illustrative typology of activities financed by the Bank that could provide direct adaptation and/or mitigation co-benefits, which was developed as part of the finance tracking system. The typology of activities is organized by Bank sector code. Detailed “Guidelines for Economic Sector Work (ESW) and non-lending Technical Assistance (TA) Activities” for the coding of climate change co-benefits in Bank activities have been developed and made available to teams across the Bank.