51802 November 2009 . Number 13 ADDRESSI G CLIMATE CHA GE I THE MIDDLE EAST A D ORTH AFRICA REGIO (ME A) sectors are plagued by inability or unwillingness to Raffaello Cervigni, Silvia Pariente-David, Kanta K. restrict water consumption and allocate water to Rigaud, Johanne Holten, Roger Coma Cunill1 the highest value uses; urban expansion is seldom Introduction - MENA's Vulnerability to Climate planned to control exposure to current climate Change: The Middle East and North Africa is one extremes (e.g. floods, storm surges), let alone future of the regions that is most vulnerable to climate ones. change, with the highest level of water scarcity in Carbon emissions and low carbon growth: the world, a significant income and employment Because of the large reliance on fossil fuel for dependence on climate-sensitive agriculture, the energy provision, greenhouse gas emissions (GHG) concentration of populations and economic activity in MENA countries are high in per capita terms in flood-prone urban coastal zones, and the (60% higher than average for developing presence of conflict-ridden areas in which climate- countries). However in absolute terms the region is induced resource scarcity could escalate violence a relatively small carbon emitter, accounting for and political turmoil even beyond the region's some 5-6% of the world total; and boundaries. a) MENA countries share a vast and largely By mid-century, per capita water availability will untapped endowment of renewable energy. In halve by 2050 because of population growth alone, particular, they have some of the world's best and climate change is predicted to reduce average production conditions for solar power: precipitation levels by 20-30 percent in some parts of the region and to increase variability, making abundant sunshine, low precipitation, and water harder to manage, everywhere. Additionally, plenty of unused flat land close to road the temperature in most MENA countries will networks and transmission grids. In the increase by some 2 degrees, and in the Nile Delta a Mediterranean Basin as a whole, demand for sea level rise of 0.5m could displace 2 million "green" electricity is growing very rapidly, and people and lead to more than $35 billion in loss of ­provided a suitable physical, technical and land, property and infrastructure. institutional integration of energy markets While the region has a tradition stretching back takes place, MENA countries can help meet over millennia of dealing with a dry and warm such a demand. climate, the policy framework prevailing in several b) Oil-producing countries in the region ­ vulnerable sectors makes the region ill-equipped to adapt to a further deterioration of climatic particularly in the Gulf- are taking the lead conditions. For example, the water and agriculture (from the technological and financial point of view) in the development of low carbon technologies, including renewable sources of 1 energy and -perhaps more importantly, carbon R. Cervigni (AFTEN, Lead Environmental Economist), S. Pariente- David (MNSEG, Sr. Energy Specialist), K. Rigaud (MNSEN, Sr. capture and storage (CCS). They might Environmental Specialist), J. Holten (MNSEN, Jr. Professional decisively contribute to the maturing of CCS Officer), R. Coma Cunill (MNSEG, Jr. Professional Officer) (which is at present largely at the testing stage) · Upstream integration in the strategic policy towards commercial scale deployment. dialogue: addressing climate change is one of the objectives of the recently approved Yemen Low carbon growth can also generate important CAS; and is poised to be one of the pillars of national benefits for MENA's economies, including the Country Partnership Strategies (CPS) of the productivity gains and fiscal savings associated Morocco and Tunisia, currently under with improved efficiency in energy use, improved air quality, reduced traffic congestion, etc. preparation; However, technological barriers and low-priced · Mainstreaming of adaptation to climate energy in the region provide limited incentives ­in Change in the lending to priority, high the absence of external financial support- for a large vulnerability sectors. For quite some time the scale pursuit of low carbon development options. Bank has been helping MENA countries reduce Hence the key role that an instrument like the their vulnerability to climate variability and Clean Technology Fund (CTF) has in unlocking change through its regular business, in sectors MENA's potential in renewables and energy efficiency. such as water, agriculture, and urban development. Examples include improved World Bank Program - overall approach: The irrigation and groundwater management, MENA Climate Change program, in terms of both diversification of income sources in rural areas, adaptation and low carbon growth, focuses on the strengthening of agricultural productivity in following areas of the World Bank Group (WBG) the face of droughts, etc. While internationally Strategic Framework on Climate Change: accepted classifications of adaptation projects a) Supporting climate actions in country led are not yet available, it is estimated (Table 1) development through integration of adaptation and that projects worth some $0.6 billion in both the low carbon growth activities in policy dialogues and in CPSs, CASs, SILs and DPLs; these can be portfolio and pipeline, respectively, contribute clustered under the heading of "Integration of to reducing vulnerability to climate change. Climate Change in ordinary Bank Business;" Table 1 ­ MENA's Estimated climate -related b) Mobilize additional concessional and innovative project funding (US$ Million, IBRD, IDA and finance (including the CTF, and PPCR2), support GEF; SDN Network projects only)3 accelerated development/deployment of new Area CC Relevance Portfolio Pipeline technologies, step-up policy research, knowledge (FY10-13) and capacity building; these may be grouped in a Adaptation 606 664 Of which: second pillar, "Scaling-up climate-related Directly related 115 activities." Indirectly related or to be confirmed 606 549 Low Carbon 1,574 1,253 While recognizing that classifications of climate- Not related 1,810 1,351 related projects are still under discussion in the Grand Total 3,989 3,268 development community, some preliminary b) Scaling Up estimates (Table 1) suggest that about half of MENA's portfolio and pipeline in SDN sectors The second pillar of Bank action is to mobilize finances climate-related action; with low carbon dedicated knowledge (AAA work) and financial playing a larger role (around 70% of the total). Reducing Vulnerability: 3 These estimates are preliminary. Adaptation includes projects which are either directly aimed at reducing climate vulnerability, or finance a) Integration activities that are consistent with such objectives (e.g. improved irrigation, reforming water institutions, etc.). Low Carbon projects In the domain of reducing the region's include energy efficiency, renewable energy, natural gas promotion vulnerability, integration of climate change (through network expansion and switching away from higher carbon consideration in the Bank's regular business is fuels), improved solid waste management for reduced methane emissions and landfill gas collection/use, low carbon transport (e.g. being pursued through the following activities: policy or investment support to modal shift or public transport expansion). Figures do not include financing expected from the Clean Technology Fund. Source: Business Warehouse data, MNSSD staff calculations 2 Pilot Program for Climate Resilience. November 2009 Number 13 2 resources (IBRD, IDA, GEF and CIF funds) to · The Bank is promoting the energy efficiency reduce MENA's vulnerability to climate change: (EE) agenda both at the regional level (through the recently completed MENA report on the · Some 20 pieces of analytical work worth over subject), and individual countries (such as $3 million (either completed or under way, Tunisia and Morocco) through TA and lending. purport to strengthen the countries' knowledge While the main entry point of the dialogue is its likely GDP and public finance benefits, EE is a base on the magnitude, timing and location of key component of low carbon development in climate impacts; and on alternative adaptation virtually every country; strategies. The AAA program is more advanced in the agriculture, water and urban sectors; and · Opportunities for reducing carbon emissions in countries like Yemen, Morocco, and Egypt; are being sought in a number of investment · Building on the findings of analytical work, the and policy lending operations. For example, in Bank is strategically using GEF resources to the solid waste management sector (SWM), this promote dedicated adaptation efforts and is the case of the Morocco solid waste DPL, integration in the rest of its program. It is the which promotes (through a programmatic use case of Morocco, where the Bank is promoting of carbon finance) the reduction of methane the "climate-proofing" of the government's emission as part of the operation's broader new agriculture strategy (Plan Maroc Vert) in support to the sector's reform. the context of a broader package of policy and b) Scaling-up: Bank action to promote low carbon investment lending; growth is being stepped up in a number of ways: · In Yemen, AAA work and initial GEF funding · A growing effort to produce analytical work is of adaptation through local agro-biodiversity helping MENA countries develop sector are laying the ground for a larger scale effort strategies, technological knowledge or (in the order of $50 million) to enhance climate institutional reforms needed to adopt low resilience across sectors, through the Pilot carbon growth solutions. It is estimated (Table Program for Climate Resilience (PPCR), 3) that some 50 tasks (completed or underway), included in the Climate Investment Funds worth around $8 million, address (directly or (CIF). indirectly) climate change mitigation issues. Table 24 - Estimated funding for adaptation- · At the operational level, the main element of related AAA work (US $ 000, SDN Network) the Bank's efforts to scale up low carbon is the CC Relevance Delivered Pipeline Grand Total Clean Technology Fund (CTF). Investment (FY08-09) (FY10-12) Directly related 890 890 plans for sizeable expansions of renewable Indirectly related (or to be confirmed) 1,125 1,455 2,580 energy or low carbon transport development Not related 5,589 9,072 14,662 are being put in place for Egypt ($300 million) Grand Total 6,714 11,417 18,132 and Morocco ($150 million). Promoting Low-carbon Growth: · In addition, a regional initiative to scale-up Concentrated Solar Power (CSP) in the region ­ a) Integration: The Bank is integrating low carbon the context is the Union for the Mediterranean growth objectives into a number of its analytical ­ is being developed. The goal is to install 1 and financing activities. Some highlights include: GW of capacity through a contribution of $750 · At the strategic, upstream level, low carbon million from the CTF.5 growth is likely to feature prominently in the climate change pillars of the Country Partnerships of Morocco and Tunisia; 4 Source: Business Warehouse data, MNSSD staff calculations. 5 Funding includes Bank budgets and Trust Funds. For more, type Concentrated Solar Power on intranet search site November 2009 Number 13 3 · An Africa climate scenario portal is being Table 36 - Estimated climate-related project developed, in partnership with the Africa funding in MENA (US$ Million, IBRD, IDA region of the Bank, to help decision-makers and GEF; SDN Network projects only) Area CC Relevance Portfolio Pipeline internalize the evolution of climate in (FY10-13) investment design and other development Adaptation 606 664 Of which: choices; Directly related 115 · A regional forum on agriculture, climate Indirectly related or to be confirmed 606 549 change and food security is being designed in Low Carbon 1,574 1,253 partnership with FAO, IFAD and WFP, to assist Not related 1,810 1,351 the regions' Ministers of Agriculture (through Grand Total 3,989 3,268 knowledge sharing and investment support) in responding to the challenges that climate Region-Wide Activities: The Bank has started a variability and change poses to the sector's number of initiatives at the regional level to help development, to food security and to rural MENA countries address climate change challenges poverty alleviation. The launch of the forum is in a framework of regional cooperation. These being planned for the FAO annual conference include: in November 2009. · A Regional Technical assistance program Contact MNA K&L: (supported by a $5 million multi-donor trust Emmanuel Mbi, Director, MNA Operational Core Services Unit fund) to assist countries in the Middle East and David Steel, Manager, MNA Development North Africa (MENA) region in making their Effectiveness Unit development more resilient to climate change and less carbon intensive, through knowledge Regional Quick Notes Team: Omer Karasapan, Roby Fields, Najat Yamouri, and sharing and identification of project ideas; Aliya Jalloh · A study on the climate change implications for Tel #: (202) 473 8177 coastal cities in Egypt, Morocco and Tunisia is The MNA Quick Notes are intended to summarize lessons being undertaken, with the objective of learned from MNA and other Bank Knowledge and evaluating key vulnerabilities and defining Learning activities. The Notes do not necessarily reflect the climate-proof and low carbon development views of the World Bank, its board or its member countries. options; 6 Source: Business Warehouse data, MNSSD staff calculations. Funding includes Bank budgets and Trust Funds. November 2009 Number 13 4