Climate Change and Development

STUDY
Policy Department
Economic and Scientific Policy
Climate change impacts on

Developing Countries - EU Accountability
IP/A/ENVI/ST/2007-04
JANUARY 2004 PE 393.511
This study was requested by the European Parliament's Committee on the Environment, Public Health
and Food Safety.
Only published in English.
Authors: Fulco Ludwig, Catharien Terwisscha van Scheltinga, Jan

Verhagen, Bart Kruijt, Ekko van Ierland, Rob Dellink,
Karianne de Bruin, Kelly de Bruin and Pavel Kabat.
Wageningen University and Research Centre

Droevendaalsesteeg 4, 6708 PB Wageningen,
The Netherlands
www.wur.nl
Co-operative Programme on Water and Climate

(CPWC)
Westvest 7, 2611 AX Delft, The Netherlands
www.waterandclimate.org
[email protected]
[email protected]
Administrator: Yanne Goossens

Policy Department A: Economic and Scientific Policy
DG Internal Policies
European Parliament
Rue Wiertz 60
B-1047 Brussels
Tel: +32 (0)2 283 22 85
Fax: +32(0)2 284 90 02
E-mail: [email protected]
Manuscript completed in November 2007.
The opinions expressed in this document do not necessarily represent the official position of the
European Parliament.
Reproduction and translation for non-commercial purposes are authorised provided the source is
acknowledged and the publisher is given prior notice and receives a copy. E-mail: poldep-
[email protected].
IP/A/ENVI/ST/2007-04 PE 393.511
Table of contents
Executive summary.............................................................................................. iii
1. Introduction................................................................................................... 1
2. Impacts of climate change on developing countries................................... 2
2.1. Observations of recent impacts of climate change ..................................2
2.1.1. Observed changes in climate .......................................................... 2
2.1.2. Observed impacts of climate change on the natural and human
environment. ................................................................................................... 3
2.2. Future impacts of climate change on developing countries.....................3
2.3. Impacts of climate change on poverty and development.........................7
2.3.1. Vulnerability to climate change ...................................................... 7
2.3.2. Climate change impact on poverty– why the poor will suffer most8
2.3.3. Climate change and development ................................................... 9
2.3.4. Climate change and the Millennium Development Goals ............ 10
2.4. Costs and benefits of climate change.....................................................11
2.4.1. Costs and benefits of climate change mitigation .......................... 12
2.4.2. Costs and benefits of climate change adaptation .......................... 12
2.5. Impacts of climate change and climate policies on local economies in
developing countries ..........................................................................................14
2.5.1. Impacts of mitigation efforts on local economies......................... 15
2.5.2. Impacts of adaptation options for local economies....................... 16
3. Mitigation of greenhouse gas emissions in developing countries ........... 18
3.1. Assessment of current climate change mitigation efforts.......................18
3.2. Clean technologies transfer to developing countries .............................19
3.3. EU development policies regarding deforestation.................................21
3.3.1. Policies in the area of climate change mitigation ......................... 21
3.3.2. Policies related to soy bean trade.................................................. 22
3.3.3. Policies related to the timber trade................................................ 23
3.3.4. Infrastructural aid.......................................................................... 23
3.3.5. Policies related to biofuels ............................................................ 23
3.4. Options for climate change mitigation in developing countries ............24
3.4.1. Reducing greenhouse gas emission from land use and agriculture25
3.4.2. Supporting sustainable and low emission development pathways 26
3.5. Food miles: An inadequate indicator .....................................................28
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4. Climate change adaptation in developing countries ................................ 29
4.1. EU assistance to developing countries to cope with the effects of
climate change .............................................................................................. 29
4.1.1. Review of current funding mechanisms for adaptation in developing
countries ....................................................................................................... 29
4.1.2. The link between adaptation and development............................. 30
4.1.3. Funding for adaptation and poverty reduction in developing
countries .........................................................................................................31
4.1.4. Capacity building, data availability and research.. ....................... 32
4.2. Available EU instruments for development policy in relation to climate
change adaptation...............................................................................................33
5. Challenges for EU policy coherence.......................................................... 35
5.1. Policy Coherence for Development .......................................................35
5.2. Green Paper on Adaptation....................................................................35
5.3. The Global Climate Change Alliance (GCCA) initiative ......................37
6. Conclusions and recommendations ........................................................... 39
6.1. Conclusions............................................................................................39
6.2. Recommendations for new EU policies to support climate change
adaptation and mitigation in developing countries ............................................40
6.2.1. Recommendations related to Mitigation....................................... 40
6.2.2. Recommendations related to adaptation ....................................... 41
7. References.................................................................................................... 42
List of Figures.........................................................................................................44
List of Abbreviations...............................................................................................45
IP/A/ENVI/ST/2007-04 PE 393.511
Page ii
Executive summary
This report presents a summary of the impacts of climate change on developing countries and
what the European Union can do to minimise the effects of climate change on the developing
world through both mitigation and adaptation.
A. Climate change impact on developing countries
Climate change will increase global temperatures, change rainfall patterns and will
result in more frequent and severe floods and droughts
Depending on future emissions of greenhouse gases, global temperatures are likely to rise
between 2 and 4 °C within the next century. The main impacts of climate change will
however not be felt through higher temperatures but through a change in the hydrological
cycle. Rainfall is likely to increase around the poles and the tropics while in the sub-tropics
average precipitation is likely to decrease. Not only the average annual or seasonal rainfall
will change; there will also be an increase in the number of extreme events resulting in more
frequent and severe floods and droughts.
Developing countries are most vulnerable to climate change
Climate change will have an impact on all countries around the globe. Developing countries
are much more vulnerable to climate change than the developing world. Climate change
aggravates the effects of population growth, poverty, and rapid urbanisation.
The poor are likely to suffer most from climate change
Without serious adaptation, climate change is likely to push millions further into poverty and
limit the opportunities for sustainable development and for people to escape from poverty.
Climate change is likely to reduce economic growth in developing countries; significant
investments in climate change adaptation are necessary
Climate change is likely to have a significant impact on the economies of developing
countries. Without adaptation and mitigation the losses are estimated to be up to 20% of GDP.
To minimise the impacts of climate change, adaptation in developing countries is urgently
needed. Reliable estimates of adaptation costs are still unavailable, but they are likely to run
into the billions of dollar per year. Climate change is also likely to affect the attainment of
several of the Millennium Development Goals (MDGs). Through its impacts on agriculture,
climate change is likely to have a significant impact on reducing severe poverty and hunger.
The developed world should reduce their emissions to minimise future climate change
In order to minimize impacts of future climate change, efforts to reduce the emissions of
greenhouse gasses in the developed world should be increased. The EU should continue its
efforts to stimulate the US to join the Kyoto agreement and to commit itself to future targets.
If the developed countries would increase their efforts to reduce their emissions, rapidly
developing countries, such as China and India, might be much more likely to join mitigation
efforts.
Climate change policies for the rapidly developing countries should focus on mitigation;
policies for the least developed countries should focus on adaptation
The EU should stimulate and support adaptation and mitigation in developing countries. New
climate change policies developed by the EU should have different focuses for different
countries. Separate climate change strategies should be developed for rapidly developing
countries - such as China, India, Mexico and Brazil - compared to the Least Developed
Countries (LDCs). For the LDCs the EU should focus on assisting in adaptation.
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Page iii
These countries are the most vulnerable to climate change and urgently need support.
Furthermore LDCs, generally, have very low emissions so there is not much too gain from
mitigation projects. However, greenhouse gas emissions from rapidly developing countries
have sharply increased over the last years and the EU should focus on helping these countries
to mitigate their emissions.
B. Climate Change Mitigation in developing countries
Mainstream and integrate climate change mitigation into development project
programmes and trade negotiations
Reducing emission levels from the developing world is extremely important. If current
developments are continuing, emissions from China and India will soon be much higher than
the total emissions from all EU countries. Currently the EU is stimulating mitigation and
transfer of clean technologies through the Clean Development Mechanism (CDM). Although
it is still unclear what the mitigation potential of the CDM is, especially in India the
investment in CDM projects is significant. However, the EU should take a much wider
approach. In developing countries a lot can be done in terms of increasing energy efficiency,
land use change and agriculture. It is also important that developing countries are stimulated
to choose a sustainable, low emission development pathway. Choices for more sustainable,
low emission technologies should be made early in the process.
Focus mitigation efforts in least developed countries on land use change, agriculture
and sustainable development
In the least developed countries mitigation efforts should not focus on the energy or transport
sector but on agriculture and forestry. Agriculture is responsible for a relatively large
percentage of the emissions in many developing countries. In this sector there are many win-
win options both reducing poverty and reducing greenhouse gas emissions. For example
improved water and nutrient management can sharply increase production efficiency and
reduces at least the amount of emissions per kg food produced. Agro-forestry reduces
greenhouse gas emission through increased carbon storage and reduces poverty through
diversifying the incomes of local communities.
New soy bean varieties which can grow in rainforest areas pose a great threat to rainforests,
especially in South America. Currently, there is a movement to call for a moratorium in soy
bean expansion and/or make soy bean production more sustainable. The EU could contribute
to these developments by appropriate support to developing alternative planning and by
imposing regulations on the international trade in soy beans. This is not an easy task, as soy
beans are produced in many other regions than moist tropical climates only, and trade
volumes are hard to separate. Nevertheless, the feasibility of some kind of subsidized
‘sustainable quality label’ should be investigated. EU can also help reduce deforestation by
developing policies focussing on supporting the development of sustainable timber extraction
methods, and by helping to provide alternatives for the poor.
Actively support post-Kyoto mitigation options in reduced deforestation and/or forest
conservation
Deforestation is currently responsible for between 15-25% of global carbon emissions 1 . By
designing appropriate development policies and by actively supporting incentives for forest
conservation through the Kyoto protocol or its successor, a lot could be achieved to reduce
deforestation. So far, in the first commitment period of the Kyoto protocol, counting carbon
losses and gains through deforestation or avoiding it, were not allowed. Only limited amounts
of re/afforestation activities can be funded through the Clean Development Mechanism.
1
IPCC (2007), Stern Review 2007
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Present negotiations for the next commitment period of the Kyoto protocol indicate that the
parties are agreeing that forest conservation should be allowed in a next ‘CDM’. The EU
should actively support these post-Kyoto mitigation options in reduced deforestation and/or
forest conservation
Stimulate sustainable and low emission development pathways
One of the best ways to minimise future global emission is to stimulate sustainable
development. The development pathway countries, regions or communities choose have large
impacts on future emissions, and it is important to acknowledge that lower emission
development pathways are not per se associated with lower economic growth. Currently, one
of the main limitations of developing sustainable pathways of growth is institutional capacity
both in the planning and implementing phase. EU should stimulate and make funds available
for sustainable and low emission development plans in developing countries and help
building the capacity needed for the design and implementation of these plans.
C. Climate change adaptation in developing countries
Development reduces climate change vulnerability and improves adaptive capacity
There are important links between adaptation and development and one of the best adaptation
strategies is probably development. Stimulating development and reducing poverty will
increase the adaptive capacity of people and is likely to make them less vulnerable to climate
change. In general, adaptation should be an extension of sustainable development and as such
it should focus on: the growth and diversification of the economy, improving education and
health, and improving disaster preparedness. Besides adaptation to climate change there are
also many immediate benefits in improving the management of current climate variability in
developing countries. Many poor countries are confronted with highly variable rainfall but
very few systems are in place to manage this variability and prepare for the next drought
and/or flood.
Incorporate impacts of and adaptation to climate change into projects and programmes
aimed at achieving the Millennium Development Goals
Climate change will make it harder to achieve the MDGs. However, strategies for achieving
the MDGs do not account for climate variability and change. To meet MDG targets
substantial investments are necessary. Many of these investments, especially those related to
water and agriculture, are sensitive to climate change. To ensure that climate change will not
undermine achievement of the MDGs, climate change impacts and adaptation should be
incorporated into development projects and programmes.
Investing in disaster preparedness is much more efficient and saves considerable
spending on emergency aid
There are important links between development and adaptation in terms of disaster
preparedness. Natural disasters from floods, droughts and cyclones have major impacts on
developing countries, not only in terms of human loss, but also on long term development.
Disasters can easily remove the progress of years of development and significantly increase
poverty. To help developing countries in the aftermath of disasters large amounts of Official
Development Assistance (ODA) are spent on emergency aid. It is however much more
efficient to invest in disaster preparedness and management.
Official Development Assistance (ODA) funds should be made available for adaptation
projects
There is a general consensus that the currently available funding for adaptation is insufficient.
The total costs of adaptation are still unclear but will run into the billions of dollars per year.
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In addition to insufficient funds for adaptation also the structures which are currently in place
to finance adaptation are limiting effective action. To get funds for adaptation it is often
necessary to proof that the proposed adaptation is needed because of explicitly identified
climate change. Currently, most funds are made available through the UNFCCC process and
there are many complaints from developing countries that it is too difficult to get funding for
adaptation projects through the Global Environment Facility (GEF). So it is necessary to find
more and better functioning funding mechanisms for adaptation in developing countries.
Due to the mutual benefits of sustainable development and adaptation it would make sense to
integrate funding for adaptation and development. However, large hesitations exist among
donors to integrate funding for adaptation into mainstream development because it goes
against the stipulation of the UNFCCC that adaptation funding should be in addition to
Official Development Assistance. Some governments would like to see adaptation paid
through a polluter pays principle and although this is morally superior there are a lot of
practical objections. First of all, except for the funds available through the UNFCCC no
effective polluter pays principle is in place yet. Secondly, due to the mutual benefits of
adaptation and development, funds should be integrated and thirdly the cost and benefits of
adaptation are often hard to estimate. If adaptation is to be funded separately, it is necessary
to estimate the costs and benefits. However, in a variable and changing climate it is
impossible to estimate which part of the costs is due to “normal” climate variability and
which is due to climate change. So in order to fund adaptation, the EU countries should, as a
practical and effective solution, increase their Official Development Assistance to 0.7% of
GDP (as internationally agreed and re-affirmed by the Council of the EU in June 2005) and
mainstream adaptation into developing projects and programmes.
Capacity building related to climate change within developing countries should first and
foremost focus on adaptation with particular attention to reducing vulnerability of the
poor
In most developing countries the main limitation in coping with the impacts of climate
change is a lack of capacity. Climate change often has complicated impacts with large
uncertainties. Very few people and institutions have the capacity to do impact studies and
identify climate change adaptation options. To interpret climate change information, for
designing adaptation strategies and to implement adaptation projects highly educated people
are needed. Adaptation needs differ locally; therefore strategies should be tailor-made. Local
knowledge and experience is thus important to plan and implement adaptation. Until now
most climate change capacity building in developing countries has focused on mitigation, for
example in relation to the Clean Development Mechanism (CDM). However, the least
developed countries do not need CDM projects. Climate change capacity building in the least
developing countries should focus on adaptation in stead of mitigation.
Support research collaboration in order to enable knowledge based adaptation and
facilitate knowledge exchange
Besides a lack of capacity, in many developing countries there is also a significant lack of
data and knowledge on climate change impacts. Developing countries should be stimulated to
improve data gathering and make existing data more easily available. The EU should also
support research collaboration between partners in the EU and developing countries. Such
collaborative projects will facilitate knowledge transfers between European and developing
countries and will ensure that climate change research becomes more relevant for developing
countries.
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1. Introduction
Impacts of climate change will have a disproportional negative impact on developing
countries (Stern 2007, IPCC 2007). Climate change will exacerbate problems related rapid
population growth, existing poverty and a heavy reliance on agriculture and the environment.
Developing countries have a much more limited capacity to cope with the problems caused
by climate change.
This report presents climate change impacts on developing countries and what the European
Union can do to minimise those impacts. Chapter two gives an overview on how climate
change affects the different sectors, what the impacts are on poverty and development and
what the most vulnerable regions are.
Chapter three focuses on mitigation of greenhouse emissions in developing countries and
what the EU can do to support mitigation. In 2006, greenhouse gas emissions in China were
for the first time higher than in the United States. In India and other rapidly developing
countries emissions are rising quickly. Although these countries still have lower per capita
emissions than the EU, the development of their emission levels will largely determine how
fast the climate will change. In addition to domestic mitigation, the EU should support them
and export technologies to reduce (the growth of) greenhouse gas emissions. This study gives
several recommendations and options for mitigation without jeopardising development.
No mitigation effort however will stop the need for adaptation. Especially the least developed
countries, who have contributed little to the problem, will suffer the most. Chapter four
focuses on climate change adaptation and what needs to be done to reduce climate change
vulnerability in developing countries and how the EU can help the poorest to cope with
climate change. Adaptation to climate change should not be seen independently of
development. Development will help and facilitate adaptation which could be integrated into
other/existing development policies and projects.
Chapter five describes challenges for EU policy coherence. Chapter six gives general
conclusions and a list of recommendations for EU policies.
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2. Impacts of climate change on developing countries
2.1. Observations of recent impacts of climate change
2.1.1. Observed changes in climate
Climate change is not only something of the future, but the climate has already changed
significantly over the last 30 years. The average temperature around the globe has increased
by 0.75 °C over de the last 100 years. Eleven of the 12 hottest years on the instrumental
record occurred during the last 12 years. The 1990’s were probably the hottest decade of the
last millennium (IPCC 2007). The IPCC (2007) concluded earlier this year that at least part of
the increase in temperature is caused by human emissions of greenhouse gases (Figure
1). However, global warming has not been uniform. Since 1979, warming has been most
intense in North America, Europe and Northern Asia while developing countries have
generally seen less of a warming trend than the developed world.
Figure 1: Comparison of observed changes in temperature (black lines) with results simulated by
climate models using only natural forcing and using both natural and anthropogenic forcing (including
greenhouse gases)
Source: IPCC 2007.
Not only temperatures have changed but also rainfall patterns. Due to a higher variability in
rainfall compared to temperatures, trends are often harder to detect and it is more difficult to
link them to human greenhouse gas emission. However it is still likely that human activity
has contributed to the increase in the number of droughts, heat waves, extreme rainfall events
and more intense cyclone activity. These kinds of extreme events particularly affect
developing countries.

2.1.2. Observed impacts of climate change on the natural and human
environment.
The IPCC (2007) report stated that: “observational evidence from all continents shows that
many natural systems are affected by regional climate changes”. Most of the observed
changes are linked to temperature changes. Unfortunately, most of the studies and
observations are from the developed world and there is an important lack of data from
developing countries.
Those studies available focussing on the developing world show that Sahel ecological zones
have shifted due to a dry and warmer climate which has also caused reduction in run-off (Van
Duivenbooden et al. 2002; Gonzalez 2001). In Southern Africa a longer dry season and more
uncertain rainfall has reduced agricultural production and has forced people to adapt through
switching crops, diversifying livelihoods and planting trees (IPCC 2007). In Africa, lower
lake levels have been observed in Zimbabwe, Zambia and Malawi.
In Latin America and Asia, important observed changes are linked to changing glaciers. Due
to higher temperatures glaciers and mountain snow packs are disappearing and both in the
Andes and the Himalaya, the risks of Glacial Lake Outburst Floods (GLOF) are increasing.
Changes in melting patterns of glaciers due to global warming also have an impact on
streamflows. River streamflows tend to increase during the spring with a peak earlier in the
season. Where glaciers are starting to disappear streamflows are reduced especially during
dry seasons. Especially, in the Andes smaller glaciers have already disappeared or will do so
in the near future. These glaciers are often important sources of freshwater (IPCC 2007).
2.2. Future impacts of climate change on developing countries
Depending on emission scenarios and models used, temperature rise is estimated to be
between 1 and 6 °C in the next century (likely to be between 2 and 4 °C; see Figure 2). The
amount of warming during the next century mainly depends on the rate of increase in
greenhouse gas emissions. To keep temperature rise within 2°C – a major EU target -
significant action to reduce emissions are needed. Global temperature increase will not be
uniform (Figure 2). Regions around the poles will see more warming than tropical regions.
However, the main impacts of climate change will not be felt through higher temperatures
but through a change in the hydrological cycle. Global warming will intensify the
hydrological cycle which will increase global precipitation. Changes in rainfall patterns will
not be evenly spread around the globe. Around the tropics and in the northern part of the
Northern Hemisphere (Canada, Russia, and Northern Europe) rainfall is likely to increase but
in most of the sub-tropical regions – where many developing countries are located - rainfall is
likely to reduce.

Figure 2: Projected surface temperatures changes for the 2020-2029 and the 2090-2099 period for
three different emission scenarios. The left panel shows uncertainties of temperatures rises as the
relative probabilities of estimated global average warming from different models
Source: IPCC 2007
Figure 3 shows in more detail how rainfall is projected to change around the globe. Briefly,
the following changes are predicted for developing countries: Southern Africa is likely to get
drier; East Africa and the Horn of Africa will probably receive more rainfall. For the Sahel
the changes are still unclear. In Latin America, the Caribbean, the Amazon and Chile are
likely to see a reduction of rainfall. For the South-Eastern part of South America an increase
in summer rainfall is predicted. In Asia, the Indian subcontinent could see an increase of
precipitation during the monsoon season but lower rainfall is predicted outside the rainy
season. This indicates that the differences between the seasons will increase, with more
drought stress during the dry season, due to higher temperatures and less rainfall, and more
floods during the monsoon. Also for South-East Asia the projected changes in rainfall depend
on the season. During the Northern Hemisphere winter (December-February) rainfall might
reduce while rainfall is likely to increase in the June - August period.
However, not only the average annual or seasonal rainfall will change, there will be an
increase in the number of heavy rainfall events resulting in more floods. Furthermore, the
number of days with rainfall is likely to decrease which consequently increases chances of
prolonged periods without precipitation resulting in more frequent and more severe
droughts.
Table 1 summarizes the most important impacts of climate change on water, agriculture, health,
biodiversity and coastal zones in the various regions 1 .
1
See IPCC 2007 report for more detailed information on the impacts of climate change

Table 1 Summary of the most important projected impacts of climate change on the different sectors in developing countries.
Africa Asia Latin America
Water o More frequent droughts, especially in o Disappearing glaciers reduce summer streamflow of o Rapid increase of number of people affected by water stress
Southern Africa most large rivers affecting more than one billion due to a combination of climate change and increased
o More frequent low water storage in people demand. By 2050, between 60 and 150 million people will
reservoirs and lakes o Snowmelt earlier in the season will increase risk of experience water stress.
o Reduced run-off in Northern and spring floods o re-treat of glaciers and reduction in mountain ice and snow
Southern Africa; increased run-off in o Increased water shortages during the dry season in cover will severely reduce water availability in some
East Africa South and East Asia countries.
o More frequent floods, especially in East o higher flood risks during the monsoon season in South o By 2030, 60% of the people in Peru will experience reduced
Africa East Asia and the Indian subcontinent water availability due to disappearing glaciers
o Increased water stress due to both o Likely increase of water stress due to a combination of o In Chile the delivery of water to several coastal cities could
climate change and increased demand increased population growth, higher per capita water be comprised in the near future due to melting snow packs
o Increased water scarcity could trigger demands and climate change. and disappearing glaciers.
more conflicts o Reduced hydropower generation capacity
o The combined effect of land clearing and more intense
rainfall events is likely to increase the number of landslides.
o More frequent and intense cyclones will increase the
number and severity of floods in Central America
Agriculture o Severe impact on food production and o Increased climate variability will generally increase the o Reduced yield of annual crops such as wheat, maize, rice
security number of crop failures due to either floods or and soybean in several regions due to higher temperatures
o Agriculture in several marginal semi- droughts. and shorter growing seasons.
arid regions will become unsustainable o In areas where rainfall is predicted to increase o In some regions such as central Argentina wheat yields
o Increased poverty of small scale farmers agricultural production is likely to improve. could increase due to more precipitation.
o Small increases in productivity in o Irrigated agriculture which depends on run-off from o Regions most suitable for coffee production will move to a
regions with mild climate change where snowmelt and/or glaciers is likely to be affected; snow different location; coffee yields and quality are likely to
rainfall is increasing will melt earlier in the season which will reduce water change already with small temperature increases (1-2°C).
o Changing season will make agriculture availability during the (late) summer when irrigation is o Specifically coffee but also other crops are likely to be
more difficult, e.g. changed sowing most needed. affected by more diseases and pests.
dates due to later or earlier start of wet o Agricultural production in low lying coastal areas such o Disappearing glaciers and reduced snow melt is likely to
season as large parts of Bangladesh will be affected by reduce water availability for irrigation.
o Less predictable water availability will increased flooding and salt water intrusion. o Likely increased land degradation and salinisation in the
make nomadic agriculture more difficult o Likely increase of diseases and pests affecting both drier part of the continent
plant and animal production systems.

Ecosystems and o Most natural ecosystems will be o Large parts of the biodiversity at risk, although o Particularly the combination of land use
biodiversity affected; detailed impacts remain detailed analyses are lacking for most countries. change/deforestation and climate change can have
unclear due to a lack of data and well o Forest fires have been observed to increase over the devastating impacts on biodiversity.
documented studies last 20 years due to higher temperatures; this trend o More savanna like vegetation will replace tropical forest in
could increase into the future. the Eastern Amazonia and parts of Mexico.
o Biodiversity in the highlands of East o Grasslands are likely to see a reduction in productivity o Arid vegetation is likely to expand and replace semi-arid
Africa is severely threatened due to higher temperatures and increased evaporation; vegetation in particular in North East Brazil and Mexico.
o 25-40% of large mammal species in desertification will increase if land use remains o Higher temperatures and more frequent droughts are likely
National Parks will become endangered unchanged. to increase the number of fires.
o Wildlife Tourism at risk in East and o In Mountainous regions such as the Himalaya different o Reduced run-off from glaciers and snow melt in summer
Southern Africa due to lower density of vegetation zones will move higher into the mountains. threatens many ecosystems which depend on these kind of
large mammals o Species with low migration rates could become water resources.
o Desertification likely to increase due to (locally) extinct and vegetation zones could disappear o Increased competition for water is likely to result in much
combined threats of climate change and lower water availability for ecosystems which could result
unsustainable land use in the disappearance of wetlands.
o Coral reefs are particularly vulnerable to
warmer temperatures.
Health o Increased malaria risks due to warmer o Higher temperatures in combination with increased o Increased malaria infection risk around the southern limit of
temperatures forest firers and urbanisation will reduce air quality the disease due to higher temperatures; changes in rainfall
o Increase of water borne diseases due to and increase respiratory diseases. patterns will also affect the impact of Malaria.
more frequent floods and droughts o Likely increased risks of malnutrition and diarrhoea in o Air pollution is likely to increase due to more frequent
o Higher temperatures and reduced water the poorer countries such as Bangladesh, Nepal and wildfires.
availability increase risks of cholera and Myanmar. o Higher temperatures will increase heat stress especially in
other diseases related to bad sanitation o Increased risk of vector borne diseases; several urban “heat islands”; extra impact in areas with a lot of air
o More frequent floods increase the risk diseases like Malaria will expand into new areas which pollution.
of drinking water contamination were previously not affected. o Migration and increased poverty as a result of climate
change could cause unexpected increases in several
diseases.
Coastal Zones o 40 % of West-African people live in o Several mega-cities are located along the coast and are o Higher sea surface temperatures have a large impact on
coastal cities; increased flooding risks likely to be affected by sea level rise; ten to hundreds coral reefs; loss of coral reefs could have an impact on
due to sea level rise of millions of residences are directly at risk of tourism in the Caribbean.
o Sea level rise and changed precipitation flooding. o Sea level rise will affect low lying coastal regions through
patterns in combination with o Coastal erosion is likely to rapidly increase with rising increased flood risk and salt water intrusion.
environmental pressure will result in the sea levels. In some Asian regions a 30 cm sea level rise o Flood risks will especially increase if they are combined
disappearance of many coastal could result in 45 meter of landward erosion. This with increased storm and hurricane occurrences.
ecosystems such as deltas, mangroves erosion is likely to destroy many human made o Most of the tourism industry is concentrated along the
and coral reefs structures built for flood protection. coasts and is vulnerable to sea level rise and increases in the
o Livelihoods of millions at risk due to o Higher sea levels will destroy large areas of mangrove number of storms and hurricanes.
disappearing coastal ecosystems forest which will increase flood risks of coastal o Changes in the frequency of El Niño and higher sea surface
regions. temperatures are likely to affect fisheries, especially along
o Large areas of coral reefs will disappear due to a the Peruvian coast.
combination of warmer sea surface temperatures and
sea level rise.

Figure 3: Relative changes in precipitation (in percent) for the period 2090-2099 relative to 1980-
1999. Values are based on multi-model comparisons for December to February (left) and June to
August (right). White areas are where models disagree on the sign (increase or decrease) of the
change and stippled areas where more than 90% of the models agree on the sign of change
Source: IPCC 2007
2.3. Impacts of climate change on poverty and development
The previous paragraph summarised what impact climate change will have on the different
sectors. This chapter focuses on the combined impacts of climate change on poverty and
development, and which communities/regions will be most vulnerable to climate change.
There is a general consensus that poor people in developing countries will suffer the
most from climate change (Sperling 2003). Developing countries are affected more because
of the economic importance of climate sensitive sectors such as agriculture in combination
with their low adaptive capacity. Many developing countries lack human and financial
capacity to respond to the threads of climate change.
2.3.1. Vulnerability to climate change
Climate change vulnerability analyses are important for defining priorities for policies.
Regions or sectors with the highest vulnerability need the most attention. In the IPCC (2007)
report vulnerability is defined as: “The degree to which a system is susceptible to, and unable
to cope with the adverse effects of climate change”. Vulnerability is a function of the
character and rate of climate change and variation to which the system is exposed, its
sensitivity, and its adaptive capacity (Figure 4). So vulnerability can be high because of
high exposure (severe hurricanes), high sensitivity (small islands), or low adaptive
capacity (least developed countries). Of course, vulnerability can also be reduced as a result
of high adaptive capacity.
Developing countries are particularly vulnerable to climate change because of the sensitivity
of their fragile environments; small changes in climate can cause large environmental
changes through, for example, rapid desertification. National economies of many developing
countries are very sensitive to climate change because of their dependence on agriculture and
forestry. Major floods can also destroy major parts of the infrastructure.

•Economic Wealth
•Infrastructure and Technology
•Institutions and Services
•Information, Knowledge and Skills
•Equity
•Social Capital Exposure Sensitivity
Adaptive Capacity Potential Impacts
Vulnerability to Climate Change
Figure 4: Vulnerability to climate change: the IPCC Third Assessment Report

Source Ionesco et al. 2005
Already now most developing countries are often exposed to climate extremes. In fact,
most developing countries are in the (sub)-tropics where natural climate variability is high.
Both long term droughts and periods with excessive rainfall often occur in many African and
Asia countries. Also in many tropical countries, almost all the annual rain falls within a
period of a few months. If the monsoon fails people have to wait at least another year before
the next rains come, with devastating effects on agriculture and water resources. El Niño and
La Niña cycles have large impacts on rainfall in Asia and Latin America. Most countries
cannot manage this current climate variability. For example, due to floods and droughts in
Kenya during the 1997-2000 El Niño and La Niña, the economies lost up to 22% of the total
GDP (Biemans et al. 2006). The failed monsoon in 2002 in India significantly slowed down
economic growth (Stern 2007). Another important aspect is that temperatures are already
very high in many developing countries and several agricultural systems will not tolerate
much warmer weather. The high exposure and sensitivity to climate change in developing
countries is often combined with low adaptive capacity. There is a lack of both human and
financial capital for effective adaptation.
2.3.2. Climate change impact on poverty– why the poor will suffer most
There are several reasons why climate change has the most severe impact on poor people.
Firstly, people live in areas which will be particularly affected by climate change. Many
poor people live in semi-arid regions in Africa and Asia. These regions already have an
erratic climate with unpredictable rainfall causing both floods and droughts. It is especially in
these regions where increased climate variability caused by global warming will push them
further into poverty. More floods and droughts will reduce their income and destroy their
properties. In addition, poor people often live in places which are most vulnerable to climate
change. In urban regions, slums are often in flood prone areas where “official” development
is not allowed or they are built at steep mountain slopes vulnerable to mud slides.
Another reason why the poor suffer more from climate change is their dependence on
vulnerable economic sectors: 65% of the workforce in Sub-Saharan Africa and 60% in
South Asia work in agriculture. Agriculture in these regions is very vulnerable to changes in
rainfall and temperature.

In marginal semi-arid areas, agriculture is likely to become unsustainable. In several regions,
future rainfall will be too low or too unpredictable for people to continue to base their
livelihood on agriculture. People depending on irrigation are at great risk. For many large
Asian rivers, flows are likely to reduce due to disappearing glaciers, reduced snow fall and
changing seasons. This will reduce the amount of water which is available for irrigation
which is likely to impact many small scale farmers.
The impacts on health due to climate change will be felt most by the poor who often have
reduced resistance to those diseases which are likely to increase due to climate change. For
example, diseases like cholera, diarrhoea and malaria often hit the poor the hardest. In
addition to reduced resistance, the poor also have much more limited access to healthcare.
Due to climate change new diseases will be introduced into areas which were previously not
affected. Many rural communities depend on traditional medicines which are mostly not
suitable for these new diseases.
Many poor people lack the adaptive capacity to cope with changes in climate due to lack of
education and access to information. They usually have no access to insurance and or credit
markets. There is little or no institutional framework which can be used to help poor people
adapt to climate change. Several adaptation options involve the use of (new) technologies like
for example flood control systems, new agricultural techniques and the use of climate
predictions and early warning systems. Finally, poor people lack the knowledge and
education to use these new technologies.
2.3.3. Climate change and development
There is an increasing awareness and a number of studies show that climate change is likely
to reduce economic growth and development especially in Asia and Africa (Stern 2007;
Biemans et al. 2006). Climate change could reduce GDP by 10% in India by 2100 compared
to a situation without climate change (Stern 2007). The Stern review also identifies that
especially the combination of a slowly declining environment and the shock of extreme
events will affect development. The extreme events will knock back years of development
while the declining environment will slow down development between extreme events and
decrease the resilience to cope with the impacts of extreme events.
Historic events show that droughts and large scale floods had a significant impact on the
economy of developing countries. During these droughts or floods government incomes are
often reduced due to a lower productivity while government spending needs to increase to
supply food aid and repair damaged infrastructure. Future climate change is likely to increase
the number of floods and droughts which will reduce government incomes and increase
spending with a negative impact on budgets.
The impacts on development are likely to differ between countries. Some countries are
currently undergoing rapid development. These countries are likely to be more prepared than
countries with slow or no growth. These so called "least developed countries" could see their
vulnerabilities increase. For a more detailed discussion of impacts on the local economy see
paragraph 2.6. In conclusion, without proper adaptation climate change is likely to have a
significant negative impact on development.

2.3.4. Climate change and the Millennium Development Goals
In the Millennium Declaration of 2000, 189 nations agreed aiming at a 50% reduction in
poverty by 2015, by establishing eight Millennium Development Goals (MDGs). Several
recent reports have indicated that climate change and variability will make it harder to
achieve the MDGs. The relation between each MDG and climate is discussed below.
1. Eradicate extreme poverty and hunger
As explained above, climate change and variability is reducing economic growth which limits
the opportunities to reduce poverty. In addition, climate change is likely to affect the poor the
most, putting more people back into poverty and reducing the number of people getting out of
poverty.
Food production and security will be seriously affected by climate change. Many of those
living in hunger are from the rural areas of developing countries. Most of those people
depend on small scale and often marginal agriculture. The income and food production of
these people is highly vulnerable to changes in climate.
2. Achieve universal primary education
Climate change impacts will be indirect. For example climate change can reduce
development and increase resources spent on disasters. As a result, fewer funds will be
available for education and if rural food production is reduced people are less likely to send
their children to school.
3. Promote gender equality and empower women
There is little specific knowledge about whether climate change will affects woman and man
differently. However about 70% of the poor are women (UNDP, 1995) and as the poor are
affected the most by climate change women are likely to be affected more by climate change
than men. Climate change is thus likely to slowdown efforts to work on gender equality and
the empowerment of women
4. Reduce child mortality
Modelling work 2 showed that reduced economic growth is likely to increase child mortality
because of the link between income and child mortality. Also proper nutrition greatly reduces
child mortality but with reduced food security children’s diets are likely to be negatively
affected. Also waterborne diseases are likely to increase due to climate change; these diseases
especially affect young children.
5. Improve maternal health
Impacts of climate change will be indirect. Climate change can reduce food availability and
increase the efforts needed to fetch water. This can aggravate the conditions of pregnant
woman and changed occurrence of diseases will negatively affect maternal health.
6. Combat HIV/AIDS, malaria, and other diseases
The occurrence and distribution range of malaria is likely to increase as a result of climate
change. For example, without proper control measures malaria is likely to expand in parts of
central Asia and the East African highlands. People suffering from HIV/AIDS are more
vulnerable to a range of diseases caused by lack of clean water and sanitation problems such
as diarrhoea, cholera and other water borne diseases.
2
Stern (2007).

7. Ensure environmental sustainability
The target of halving the proportion of people without sustainable access to safe drinking
water and basic sanitation will be harder to achieve due to climate change. The risk of a
reduced quality and quantity of drinking water will increase due to more extreme weather
events. Also gradual changes due to reduced supplies and increasing demand due to growing
(urban) populations will increase the risks of supply shortages.
8. Develop a global partnership for development
Developing a global partnership for development should become a world priority. To reduce
vulnerability and minimise the number of people severely impacted by climate change a well
functioning global partnership is urgently a must.
2.4. Costs and benefits of climate change
The costs (and benefits) of mitigation and adaptation strategies can be assessed through cost-
benefit analysis and Integrated Assessment Models. These methods are, however, very data
intensive, and the current state-of-the-art does not allow a full quantitative analysis of the
costs and benefits involved. Mitigation and adaptation have different impacts on the economy.
Adaptation has an immediate but local effect while mitigation is an investment in
limiting future global climate change. It is by now generally accepted that both measures
are needed to combat climate change. Adaptation, however, can only reduce impacts of
climate change to a limited extent and mitigation is necessary to keep climate change
damages manageable.
Climate change costs can be divided into three different categories. Firstly, there are
damages caused by climate change which are referred to as the residual damages. These
damages are the actual harm that climate change causes through e.g. floods and droughts. The
second cost category is the cost of mitigation. Through mitigation climate change can be
limited. Mitigation, however, can consume resources and these costs are referred to as
mitigation costs. Thirdly there are the costs of adaptation.
Several cost estimates are available for the damages of climate change and for mitigation
options. Reliable estimates of the cost of adaptation are largely unavailable. A study by de
Bruin et al. (2007), however, showed that adaptation and mitigation costs are in the same
order of magnitude. For developing countries there are very few estimates of the costs
of climate change. There are some studies that focus on different regions but these are
limited and still do not focus at developing nations as a group. However, it is likely that the
damages of climate change will be greater in developing countries than in developed regions.
Mitigation and adaptation affect each other and in economical terms they can be traded off.
However due to the different time from the extent to which this can be done is limited.
Furthermore due to the exponential costs of adaptation and mitigation it is never beneficial to
concentrate on one control.
The next paragraphs shortly review the costs and benefits of mitigation and adaptation.
Mitigation is a global issue that is being considered in many contexts. Adaptation, however,
has had relatively little attention but is of crucial concern to developing nations. This study
focuses on the cost of adaptation.

2.4.1. Costs and benefits of climate change mitigation
Mitigation refers to an anthropogenic intervention to reduce the sources or enhance the sinks
of greenhouse gases (GHG). Mitigation can take many forms on various scales: GHG
emissions can be reduced for instance by limiting the volume of production and consumption,
by restructuring the economy to switch towards less energy-intensive sectors (or more
generally by energy savings), and by carbon capture and storage.
As the energy sector is the cause of most of the GHG emissions in developed countries, most
mitigation options studied until now focus on the energy sector. For example, through the
introduction of sustainable energy sources such as wind turbines and solar panels, GHG
emissions can be reduced. The use of biomass fuel can also be a promising form of mitigation.
Furthermore through the development of more efficient energy use, emissions can be reduced.
Examples of this are more efficient hybrid engine cars. Another important field of mitigation
is end use mitigation, where through filters emissions are reduced to a minimum. Finally also
carbon removal and storage are a promising form of mitigation, where for example carbon
can be stored underground in old oil fields. Until now the cost of carbon storage is too high to
use it at a large scale.
Mitigation can also have development advantages for developing countries. It can be
beneficial for the European Union to finance mitigation in developing nations. This
mitigation cooperation has been encouraged through the Kyoto Protocol where emissions
reduction targets could also be met through projects in developing regions. This is referred to
as the Clean Development Mechanism (CDM). Most economists praise the efficiency
improvements that are realised by the flexible mechanisms such as CDM, but others claim
that it prevents “real action” in the developed countries and may “pick the low-hanging fruit”,
implying that when developing countries join an international climate agreement in the future,
they will be faced with high reduction costs.
2.4.2. Costs and benefits of climate change adaptation
Several reports provide estimates of the costs and benefits of adaptation measures 3 .
IPCC report (2007) distinguishes the following sectors:
• agriculture, forestry and ecosystems;
• water resources;
• human health; and
• industry, settlements and society.
Also UNFCCC report (2007) focuses on the same sectors as identified by the IPCC when
providing an overview of investments needed for adaptation. This report considers the
potential impacts of climate change and the possibilities for adaptation. Furthermore, it
provides an overview of current and needed investment and financial flows and identifies the
necessary changes of these flows regarding investment, financial and policy arrangements. A
World Bank (2006) report states that “the impact of climate change and the need for
developing countries to adequately adapt to changes in climate and weather variability” is
important to the World Bank’s core mission of poverty reduction. According to the World
Bank “urgent action is needed to climate-proof development because, as with energy
investments, decisions taken today about infrastructure, production systems and institutions
determine the vulnerability of those systems for many decades to come”.
3
(Stern, 2006; World Bank, 2006; Raworth, 2007; UNFCCC, 2007).

In the Oxfam International report ‘Adapting to climate change, what’s needed in poor
countries, and who should pay’, Raworth (2007) argues that there is an unacceptable
inequality in global response to climate change: “rich countries plan multi-billion dollar
adaptation measures at home, but provide very little to international funds for least-developed
country adaptation”. The report presents an Adaptation Financing Index, which indicates how
much rich countries should support adaptation, in proportion to their responsibility for
contributing to climate change, and their ability to assist.
The Stern Review (2007) pays considerable attention to the implications of climate change
for development and states that “climate change poses a real threat to the developing world”.
In addition it comments that more quantitative information on the costs and benefits of
economy-wide adaptation is required. According to Stern (2007) integrated assessment
models are “currently of limited use in quantifying the costs and benefits of adaptation,
because the assumptions made about adaptation are largely implicit”.
Table 2 World Bank preliminary estimate of the cost of additional impacts of climate adaptation
(Source: World Bank (2006)/Stern (2007) and updated after discussions with the World Bank)
Item Amount per Estimated Estimated costs Total per year
year portion climate of adaptation (US $ 2000)
sensitive
ODA and concessional finance $ 100 bn 20% 5 – 20 % $ 1 – 4 bn

Foreign direct investment $ 160 bn 10% 5 – 20 % $ 1 – 3 bn
Gross domestic investment $ 1500 bn 2 – 10% 5 – 20 % $ 2 – 30 bn
Total international investment $ 2 – 7 bn
Total adaptation finance $ 4 – 37 bn
Costs of additional impacts $ 40 bn (range
$ 10 – 100 bn)
bn = Billion
An overview of preliminary estimated costs of additional climate change impacts and
adaptation is presented in the World Bank report “Clean energy and development: towards an
investment framework”. Table 1 shows estimated core flows of development finance and the
proportion of the investment that is sensitive to climate change risks. Table 1 also shows an
estimation of the additional cost to reduce that risk to account for climate change. Stern
(2007) states that the indicated 5 to 20% ‘estimated costs of adaptation’ is by no means
certain. In most activities only certain components will need to be modified, often with
relatively low costs and sometimes no additional cost. In other cases, new activities may have
to be added.
The World Bank (2006)/Stern (2007) estimated the added costs necessary to adapt
investments to climate change risks at $40 billon per year, with a range of $ 10 -100
billion.
Raworth (2007) and UNFCCC (2007) present overviews of estimations of the cost of urgent
and immediate adaptation needed based on the National Adaptation Plans of Action (NAPAs)
submitted to the UNFCCC by Least Developed Countries (LDCs). NAPAs provide a process
for LDCs to identify priority activities that respond to their urgent and immediate needs with
regard to adaptation to climate change (UNFCCC, 2007). Of the 16 NAPAs submitted by
June 2007, the cost of priority activities identified amount to a total of USD 292 million.
With the most important sectors: agriculture, forestry and fishers (USD 129.16 million);
water supplies (USD 50.38 million), extreme events (USD 35.45 million) and capacity
building including research (USD 35.02 million) (UNFCCC, 2007).

Stern (2007) made a very rough estimate by extrapolating the total estimated cost presented
by the first five countries that completed a NAPA (total estimates costs of five countries:
USD 133 million, averaging to USD 25 million per country) to the 50 Least Developed
Countries suggesting adaptation costs of USD 1.3 billion.
The IPCC report considers Africa to be one of the most vulnerable continents to climate
variability and change because of multiple stresses and low adaptive capacity. The IPCC
report provides an outline of the literature on costs and benefits of adaptation measures
related to sea-level rise, agriculture, energy demand for heating and cooling, water resource
management, and infrastructure. The report concludes that “the literature on adaptation costs
and benefits is limited regarding sectoral and regional coverage; adaptation costs are mostly
expressed in monetary terms, while benefits are quantified in terms of avoided climate
impacts, and expressed in monetary as well as non-monetary terms” (IPCC, 2007).
In conclusion costs of climate change will be very high and run into billions of dollars,
however, especially for developing countries there are large uncertainties in estimated costs.
2.5. Impacts of climate change and climate policies on local economies in developing
countries
The expected impacts of climate change on local economies in developing countries will be
very diverse, depending on the specific characteristics of the these economies, and the
specific climate impacts in the various regions of the world. In addition to the direct impacts
related to specific local changes in temperature and precipitation, the local economies will
experience indirect impacts, through changes in international trade and international
commodity prices. This section will discuss the impacts related to (i) climate damages, (ii)
mitigation efforts and (iii) adaptation efforts.
Box 1 gives some examples of potential impacts but it is not yet possible to provide detailed
estimates of the impacts for the various local economies in the different regions of the world.
There is uncertainty in the distribution and the impacts of changes in temperature and
precipitation. Also due to natural climate variability it is difficult to indicate whether extreme
weather events are part of the natural cycle or if they are cause by human-induced climate
change. This makes it also very complex to decide about the practical allocation of funds for
reducing the damages of climate change.

Box 1 Examples of possible impacts on the local economy
Example 1: A local economy suffering from prolonged drought
If the economy is dependent on locally grown crops, the impacts of crop failure will be very
severe and may result in food shortages and hunger. Depending on how relief programmes
are organized, the impacts may have a devastating impact on the health of children and their
opportunities for education. Drought does not only have short term impacts but also affects
future growth potential.
Example 2: A local economy suffering from flooding
Serious flooding damages the infrastructure and the stock of capital goods in the area,
including roads, houses, bridges and telecom. This will require large investments in new
infrastructure and depending on the resilience and support given to the communities, the
impacts may last for several years or even longer, seriously reducing the growth potential of
the region.
Example 3: A local economy that might benefit from the potential of growing biomass
If additional demand for biomass occurs, local economy may benefit from growing biomass
and selling it at relatively high prices on the world market. This will generate income and
jobs and, as compared to Business As Usual (BAU), economy will benefit from "new
opportunities" offered by climate change.
Example 4: A local economy suffering from indirect impacts through food markets
If a local economy is dependent on imported staple food like maize, the economy may suffer
when the relative price of these commodities start increase as a result of more demand for
land for bio-fuel production. Local consumers will be facing higher food prices and their real
income will decline as a result of these increased prices.
Example 5: A local economy suffering from water shortages during a prolonged period of
drought
People living in arid or semi arid areas are already very vulnerable to shortages of clean
drinking water. If less water is available in specific areas this will directly affect the local
population because of an acute shortage of drinking water or because of higher costs for
obtaining drinking water from larger distances or from deeper wells.
2.5.1. Impacts of mitigation efforts on local economies
As developing countries do not yet have mitigation targets, the impact of mitigation on the
local economies is indirect or through the clean development mechanism. For example if
more biofuels will be used for mitigation prices of land and agricultural products are
likely to increase. At the same time it might reduce the price of fossil fuels and these
counteracting forces will finally determine the impacts on the various prices of commodities
and products in the world market. An increase in the price of agricultural products may offer
opportunities for some developing countries, but it provides problems for countries which
depend on food imports.
In general it is expected that increased demand for biofuels and biomass will offer new
opportunities for developing countries, but it is essential that sustainable ways of production
are guaranteed. A risk exists that increased demand for biomass and biofuels will result in
large-scale deforestation, in e.g. Brazil or Indonesia. Only if clear conditions and a system
of certification of biomass and biofuels can be established, will sustainable production of
biomass and biofuels be possible on a large scale.

If mitigation will be achieved by means of modern sustainable energy technologies in
industrialized countries, the impacts on the local economies in developing countries may be
much more modest. The world demand for fossil fuels would be reduced and developing
countries might actually benefit from relatively low prices of fossil fuels. If mitigation will
involve a large portfolio of clean development activities, there can be short term benefits for
developing countries by offering CDM projects and by upgrading the energy infrastructure,
funded by industrialized countries. However, in the long term, if developing countries will
also have emission reduction targets, it may become more difficult to reach these targets, if
the low hanging fruit has already been used for CDM projects. Positive impacts on local
economies may be related to the establishments of wind parks, improved management of
solid waste (in order to reduce methane emissions from landfills), or sustainable energy
projects and the related employment in establishing new energy infrastructure under CDM
projects.
2.5.2. Impacts of adaptation options for local economies
Adaptation options for developing countries include a wide variety of actions, ranging from
improved water management (both for protection against floods and droughts) to changes in
agriculture making it more resilient to changes in climate and extreme events. These
adaptation costs are in principle a burden to the local economy, and may require investments
that otherwise could have been made with the purpose of enhancing economic growth in the
region. The most important adaptation options in developing countries will concern the
following economic sectors or categories:
• agriculture;
• water management;
• infrastructure;
• housing;
• industry;
• public utilities;
• recreation and tourism; and
• natural ecosystems.
Main challenges in agriculture are to make the sector more resilient to increased climate
variability. New crops and varieties need to be adjusted to changed climatic conditions.
Adjustments to livestock systems are needed in order to secure that these systems will be
sustainable both economically and environmentally in a future climate (FAO, 2006).
Immediate adaptation can in most cases be modest; however, towards the middle of the
century adaptation might be very substantial in some regions. In some regions growing crops
will become impossible due to water scarcity.
For water management, adaptation involves both investing in more water storage and
protection against flooding Important issues for adaptation with regard to infrastructure are
improving roads, bridges and buildings and reinforcements of dikes. Also protection against
landslides often requires infrastructural changes.

For housing it is essential to locate houses in areas that will be affected less by climate
change through for example developing further away from the coast. This requires careful
spatial planning and a good choice of location for residential areas. In some extreme cases
complete neighbourhoods need to be relocated due to coastal erosion or expanding river
systems.
For Industry, industrial installations need to be secured to be able to stand weather extremes,
and located in safe areas, in order to avoid disturbances and damages during extreme weather
events. Public utilities need to be prepared for climate change and for instance management
and design of hydro-installations need to be adjusted to be able to cope with a changing
climate in terms of precipitation, evaporation and water storage.
The recreational sector needs adaptation in terms of safety measures against fires, and in
terms of selecting locations that are safe for tourists and the local population under all
weather circumstances. This may require relocation of facilities if they are currently under
risk.
For all these adaptation options the costs will be location specific and therefore difficult to
assess in monetary terms. Of course, the costs of adaptation options need to be balanced with
the benefits obtained in order to be efficient. In general, the adaptation costs will strongly
reduce the damage costs that would occur without adaptation.
If large amounts of funds will be generated by the international community to support
developing countries in adapting to climate change, these funds may provide new
opportunities for local economies to strengthen the agricultural sector and to improve water
management and infrastructure.

3. Mitigation of greenhouse gas emissions in developing countries
In order to minimize future climate change, emissions of GHGs should be kept as low as
possible. The developed world has by far the highest per capita emission and should take the
lead in reducing emissions. However, GHG emissions from developing countries are
increasing rapidly and mitigation in these countries should be stimulated.
However, independent of future mitigation some climate change will be inevitable due to
historic emissions. To minimize the impacts of climate change in developing countries and
reduce vulnerability adaptation to climate change is needed and the earlier adaptation starts
the better countries will be prepared.
This chapter focuses on what the EU can do in terms of stimulating mitigation; chapter 4 will
focus on adaptation.
3.1. Assessment of current climate change mitigation efforts
The Kyoto Protocol outlines three types of market-based mechanisms: emissions trading,
Joint Implementation (JI) and the Clean Development Mechanism (CDM). Emissions trading
allows the 39 governments committed to collective reductions under the Protocol to trade the
right to pollute among themselves. Under this scheme, a country may choose to buy emission
credits from another country that has managed to reduce its emissions below its Kyoto targets.
Joint Implementation is a mechanism under the Kyoto Protocol through which a developed
country can receive "emissions reduction units" when it helps to finance projects that reduce
net greenhouse-gas emissions in other developed countries (in most cases the recipient state
is a country with an "economy in transition").
The Clean Development Mechanism (CDM) allows industrialized countries with a
greenhouse gas reduction commitment to invest in projects that reduce GHG emissions in
developing countries, providing an alternative to more expensive emission reductions in their
own countries. The CDM has two main objectives:
1. To assist developing countries hosting CDM projects to achieve sustainable development.
2. To provide developed countries with flexibility for achieving their emission reduction
targets by taking credits from emission reducing projects undertaken in developing
countries.
The CDM mechanism provides developing countries with an additional source of income
through an environmental service: carbon management. The market as it is now emerging is
still in its infancy. As for any market, prices will depend largely on supply and demand
relations and the risks involved. The possibility of getting paid for carbon management is
expected to stimulate environmental protection and conservation and is expected to be
beneficial for social circumstances as well. The implementation of the trade mechanisms and
how this will benefit the local poor will differ per region.
Besides the financial initiatives linked to carbon, the UNFCCC agreed in 2001 to establish
new funds to support technology transfer, capacity building, and adaptation planning in
developing countries. More specifically these are the Special Climate Change Fund, the Least
Developed Countries Fund and the Adaptation Fund. The Adaptation fund receives part of
the money via a 2% charge of the CERs from CDM projects. All funds are ready to receive
money from industrialized countries but so far these money flows have not materialized.

It seems that carbon related money flows are more attractive for both the public and private
sector in developing countries. Heller and Suhkla (2003) argue that there is only marginal
potential for development related work through CDM projects. There remain
uncertainties about the rules and practices governing the certification of projects other than
small-scale end-use efficiency and renewables. And perhaps more significantly, the removal
of U.S. demand for mitigation has depressed prices for all emissions trading programs,
including CDM. Projections of the annual mitigation market in 2008-2012 have dropped
from 300-700 million tons of carbon equivalent (Mtce) to 0-300 Mtce. Carbon price estimates
for 2010 have dropped from a range of $60 to $160 per tce with U.S. participation in the
Kyoto regime to $3 to $87 per tce without U.S. participation. (IEA 2001, Heller & Shukla,
2003)
Private markets have become the primary mode for technology and resource flows from
developed to developing countries. While Official Development Assistance (ODA)
stagnated over the past decade, private flows increased roughly five-fold. The share of flows
represented by private capital peaked in 1996 at 90 % and has declined only slightly since,
despite the East Asian crisis, the resultant volatility in capital markets, and a global economic
slowdown (Heller & Shukla, 2003). The official benchmark, as set in 1970, for developed
countries to increase their level of assistance to 0.7 % of their Gross National Incomes (GNI)
is only reached by a few countries 4 .
Africa is a critical case to test the potential for CDM in the development process: Lecocq and
Capoor (2003) show that volumes are low and only few projects include development
priorities. For example a review of Moroccan CDM projects by Karani and Gantsho
(2006) shows that 7 projects on energy efficiency can only generate 85,000 CER’s per year
(Senhaji, 2004). Also most South African projects tend to be small for example the first
South African CDM project on Low-Income Housing Energy Upgrade to be registered by the
CDM Executive Board on 29th August 2005 can only generate 2.85 CO2 equivalent tones per
household per year over 21 years (South-North Africa, 2005). In addition, UNIDO’s
identified CDM projects in Senegal, Nigeria, Zimbabwe, Kenya and Zambia can only
generate 1.17 million tones of CO2 equivalent (UNIDO-COP8 Side event October 26th 2002).
These indicative total emissions from Africa are almost equivalent of one CDM project in
Brazil, Mexico, India, China or Poland. Although emissions in South Africa, Nigeria and
Egypt are seemingly higher, Africa, in particular is behind the rest of the world as far as
sustainable development is concerned. This is unfortunate, considering that in the period
2000–2003, Africa’s overall share of Direct Foreign Investment (DFI) was about 5.6% of the
total compared to 4.7% for economies in transition 5 .
3.2. Clean technologies transfer to developing countries
Article 4.5 of the United Nations Framework Convention on Climate Change (UNFCCC)
states that developed country Parties and other Parties included in Annex II "shall take all
practicable steps to promote, facilitate and finance, as appropriate, the transfer of, or access to,
environmentally sound technologies and know-how to other Parties, particularly developing
country Parties, to enable them to implement the provisions of the Convention."
Transfer of clean technologies to developing countries has lately had a lot of political
attention as they would be win-win situations, providing both development and mitigation of
greenhouse gas emissions.
4
In 1970, at the UN General Assembly, donor governments agreed to increase their ODA up to 0.7% of GNI.
To live up to these commitments, the European Heads of State announced in June 2005 a time-table to reach
0.7% of GNI by 2015.
5
Lecocq and Capoor, 2003.

However, as argued in the previous paragraph mechanisms stimulating the transfer of clean
technologies do not mix well with development. Investment through the CDM focuses mostly
on rapidly developing countries such as India, China, Brazil and Mexico. The number of
CDM projects in the Least Developed Countries is marginal. The market in these
countries is either too small or not attractive for investors.
The CDM aims at both a relative cost effective reduction of greenhouse gas emissions of
developed countries and sustainable development in developing countries. Review of CDM
projects showed that the sustainable development benefit is very limited (Olsen 2007).
Within the market in which CDM is functioning trade-offs are being made between
sustainable development and reducing the cost of GHG emissions. In most cases sustainable
development is ignored and the highest market benefit is reducing emission costs. Also
in regions where development is most needed such as sub-Saharan Africa the number of
CDM projects and the total investment is very low. So the CDM projects have mainly helped
the developed countries reducing their emissions and from a sustainable development policy
point of view they have failed.
The main question for future policy is how to respond to the fact that CDM projects are
missing the sustainable development goal and how and if CDM could be used to also support
sustainable development. One option is to change the rules of the game in order to give more
opportunities and incentives for the CDM systems to better achieve the sustainable
development goal. In a recent IISD 6 report, Cosbey et al. (2005) give a few options to do this.
For example, due to the difficult approval and monitoring process the transactions costs of
CDM projects are high which works against small projects which tend to have more of a
sustainable development benefit. Reducing this transaction cost, especially for small projects
could increase the number of CDM projects contributing to development. Another possibility
is to spend more development assistance funds on CDM’s. However before doing this it
should be investigated whether Official Development Assistance (ODA) funds directly
invested into development is not more efficient in reducing poverty than through the CDM.
The last option is accepting that the CDM works in terms of efficient mitigation for the
developed countries and developing separate policies for the support of sustainable
development. Sometimes separate policies work better than looking for hard to find win-win
situations.
The EU is committed to a balanced geographical distribution of CDM projects and tries to
increase the number of CDM projects in particularly Africa. To do this the EU is investing in
capacity building projects raising the knowledge and awareness for CDM in Africa and other
regions. Until now these efforts are not very successful, still less than 2% of the CDM
projects and investments are in Africa. Projects which have been identified to be suitable for
CDM in Africa tend to be small scale and getting CDM approval for these projects is often
difficult and relatively expensive.
The recently launched Global Energy Efficiency and Renewable Energy Fund (GEEREF) is
likely to target the same market as the CDM. This fund is requesting significant co-
investment from the private sector and currently it is very difficult to find private investor for
the least developed countries. This GEEREF is thus also unlikely to fund the transfer of clean
technologies to the least developed countries. The projects announced in the ACP-EC energy
facility however are promising. In June 2005, this facility was created to support sustainable
energy services for rural communities in Africa, the Caribbean and the Pacific.
6
IISD, International Institute for Sustainable Development

Currently, the programme is in its contractual stage and the projects announced in the July
2007 newsletter sound promising 7 . Especially, in rural communities which are far away from
the countries’ main electricity grid, local energy projects can sustainably use low emission
technologies. For example, solar, biomass and small scale hydropower are excellent options
for small scale isolated rural energy supply. In addition to low emissions these projects also
have other advantages. By using technologies like solar, wind and hydropower, the rural
communities do not depend on energy supply from the major cities. When connected to the
main grid or depending on fossil fuel these communities often have the lowest priorities. In
case of electricity or fuel shortage these communities are to first to be cut off. The main
problems with these rural projects will be with capacity and spare parts to repair breakdowns.
Previously, projects related to for example water have shown that introduced new
technologies often fail due to improper maintenance. It is important to honestly monitor the
ACP-EC energy facility and if it works to expand investment in these kind of initiatives.
In conclusion, the CDM system seems to work in terms of investment in rapidly
developing countries such as Brazil, India, China and Mexico and this system needs
continuous support in order to continue investment in clean energy in these countries. In
terms of sustainable development the CDM is not delivering and investment in LDC
countries are very low. For the transfer of clean technologies to these countries other
initiatives, such as the ACP-EC, are necessary.
3.3. EU development policies regarding deforestation
EU development policy explicitly states the importance of integrating environmental
protection. In developing countries, poverty reduction is often the most fruitful aim to
integrate aspects of climate change mitigation, adaptation, biodiversity conservation, as well
as conservation of natural resources essential to communities (clean water, air, soil fertility
and stability). In general, in combating both poverty and deforestation, it is important to take
a ‘holistic’ view of a region, where the ‘services’ of forests ‘paid’ to local, regional and
national communities are well-defined and accounted for. Emerging services, such as carbon
conservation, should be included if only for the high potential of direct economic benefit.
International trade to the EU of commodities produced either in intact forest or in deforested
land needs to be regulated according to their impacts on deforestation and finally, it should be
realized that forest conservation in isolation of protection of environment and global climate
is likely to be less effective as the stability of intact forest may be affected if the world around
them changes. The following paragraphs highlight three issues that may be topical to current
EU development policy.
3.3.1. Policies in the area of climate change mitigation
So far, in the first commitment period of the Kyoto protocol, counting carbon losses and
gains through deforestation or avoiding it were not allowed for non-annex-I countries. The
only mechanism that could contribute to a net reduction in forest loss was the CDM, but the
rules in this measure are such that only limited amounts of re/afforestation activities can
be implemented. Present negotiations for the next commitment period of the Kyoto protocol
indicate that the parties are agreeing that forest conservation should be allowed in a next
‘CDM’.
7
http://ec.europa.eu/europeaid/where/acp/regional-
cooperation/energy/documents/newsletter/newsletter_energy_july2007_en.pdf

Discussions have revolved around the way this could be achieved without stimulating
negative activities, such as enhancing deforestation outside conservation areas (‘leakage’) or
only postponing deforestation (‘permanence’), etc. Issues include whether only reductions in
deforestation rate should be acknowledged or also preventing increases; whether benefits
should be counted in carbon equivalents; whether sequestration potential of intact forest
should be counted; and whether forest degradation should also be counted. Current
negotiations indicate that the most likely mechanism will be to account for ‘Reduced
Emissions from Deforestation and Degradation’ (REDD), where the if and how of the last
‘D’ is still under discussion. Because of the enormous difficulties to accurately quantify
actual carbon stocks in tropical forests and associated changes due to deforestation, and
because of the even larger difficulty in defining baselines against which benefits of measures
should be quantified, the tendency is to keep things as simple as possible. For example, to
avoid complex rules about leakage, it is proposed to apply REDD at national levels only,
counting national deforestation rates and awarding those countries that reduce rates below
previously agreed thresholds.
Which mechanisms should be used to apply REDD is another issue. Should there be a
(regulated) carbon marked for this, or should REDD be implemented through the
establishment of funds? The EU seems to favour market mechanisms for this. Probably, a
mixture of mechanisms is needed, and it could be left to individual countries to decide which
mechanisms and which activities would work best for them.
It is unlikely that all CO2 emissions caused by deforestation can be avoided this way. It is
also unlikely that all deforestation can be stopped this way. Governance is never ideal and
other markets will compete with the carbon market, so that only partial effect will be
achieved. To make transparent what would be the cost of stopping deforestation, so called
‘chocking prices’ could be quantified that indicate what investment would be needed to
completely out-compete other economic activities causing deforestation. The results of such
calculations indicate that prices are very reasonable, in the same order or less than current
rates for carbon sequestration at the ‘Kyoto market’.
EU needs to actively contribute to the search for optimization of benefits for both reducing
carbon emissions and deforestation. Also, especially relating to the EU development policies,
measures should be integrated with other objectives, such as protecting watersheds and other
essential resources for communities, and seeking ways to combine conservation with the
reduction of poverty.
3.3.2. Policies related to soy bean trade
Formerly, soy beans did not grow well in moist tropical regions. Recently, new varieties have
been developed that can grow in rainforest areas. This poses a great threat to rainforests,
especially in South America. In an intensive agriculture system, with fertilizer input, soy bean
culture can now be economically feasible even in the Amazon. Presently it is not yet grown at
a large scale there, but it is in the Southern and South-Eastern margins of the Amazon and in
the savanna regions (Cerrado) of Brazil and Bolivia. Scenarios for the development of soy
bean culture and trade between Amazon countries and the global market vary widely, but
there is growing concern that the demand from Europe, the USA and especially the growing
economies of Eastern Asia will be dominating these developments. Apart from that, in Brazil
there is a substantial internal market. Also in Brazil, concerns for conservation are rising at
government and state levels. There is a strong movement towards the design of sustainable
development schemes, including controlling the expansion of soy bean culture. It is realized
that with good governance, much of the demand could be satisfied by optimizing the use of
already deforested, now abandoned, areas. There is a movement to call for a moratorium in
soy bean expansion.

The EU could contribute to these developments by appropriate support to developing
alternative planning and by imposing regulations on the international trade in soy
beans. Of course this is not an easy task, as soy beans are produced in many other regions
than moist tropical climates only, and trade volumes are hard to separate. Nevertheless, the
feasibility of some kind of subsidized ‘sustainable quality label’ should be investigated.
3.3.3. Policies related to the timber trade
As the density of valuable timber varies by continent, the role of the timber trade in
deforestation varies. In South-America the direct effects of wood extraction is limited,
whereas in SE Asia this is a major factor, with Africa as an intermediate case. Nevertheless,
wood extraction is almost everywhere the first step in deforestation: loggers, whether
companies or individuals, are the first to go in and provide access to settlers. The control on
these activities is limited, especially if wood is extracted for domestic markets. Especially in
countries such as Brazil and Indonesia these markets are dominant. Illegal activities are
prominent and enforcement is difficult as often the primary logging activities are not visible
with remote sensing means. At international levels, of course, regulating the wood trade is
relatively easy and controllable. What is needed here is political will and consensus among
traders. The EU adopted in 2003 the Action Plan for Forest Law Enforcement, Governance
and Trade (FLEGT). The Action Plan blends measures in producer and consumer countries to
facilitate trade in legal timber, and eliminate illegal timber from trade with the EU 8 . The EU
development policies could help in supporting development of sustainable extraction methods,
and by helping to provide alternatives for the poor, landless people who are the first to follow
the loggers, illegally squatting land.
3.3.4. Infrastructural aid
There is a demonstrable link between access and deforestation. Access to forests is a
prerequisite for settling and subsequently for trade in forest and/or agricultural products.
However, a causal link is not entirely certain. It is also possible that roads are built primarily
in those areas where deforestation has already started, driven by subsequent demand for
transport. But in any case, it is clear that spatial planning and infrastructure policies do
affect the dynamics and speed of deforestation.
The EU DG Development actively promotes improvements in infrastructure in developing
countries 9 . This policy does account for sustainability and environmental effects of road
building. Of these effects, effects on land-use change is only one of many. If the EU is to
establish an effective policy to combat deforestation, the effects of providing access to remote
forest areas for people and trade should be a much more prominent element in the
development aid to infrastructural improvement. This can be achieved by combining
scenarios, predictive land-use change models and by training authorities in sustainable spatial
planning methods.
3.3.5. Policies related to biofuels
The increasing demand for biofuels, as a means to combat atmospheric CO2, is a potentially
large threat to tropical rain forests. An environmentally sustainable biofuel culture should
look for crops (like oil palm) that can grow on poor, degraded soils and concentrate the
production in already deforested areas. As with soy bean, EU could influence this market
with subsidies, specific projects on planning and production, and by assigning a sustainability
label to imported fuels. As with soy bean, it is very hard to enforce and control such labels
because fuels will be mixed and cannot carry physical labels.
8
http://ec.europa.eu/development/Policies/9Interventionareas/Environment/forest/flegt_en.cfm
9
COM(2000) 422 of July 2000

Finally, measures in the area of soy bean trade, wood trade, biofuels and infrastructure alone
are unlikely to make a big difference for deforestation. The internal markets are strong, and
only integrated approaches are promising, combining the various issues, also providing
incentives for changing internal markets.
3.4. Options for climate change mitigation in developing countries
Eradicating extreme poverty should be the main priority for development policies. The
prospects of people living on less than one dollar a day should not be undermined by issues
like mitigation of greenhouse gas emissions. Energy use and greenhouse gas emissions by the
poor from fossil fuel burning are generally low, and most emissions come from land use
change (including deforestation) and agriculture. So to reduce the emissions of the poor
one should focus on these sectors.
In order to keep future emissions as low as possible, developing countries should be
supported to take a different development path than western countries. The earlier decisions
are made to take a sustainable, low emission development pathway, the easier it is. For
example once large coal power stations are built it is much harder to replace them by
renewable energy such as solar, wind or hydropower. However, if there are no power stations
yet there will be much more support for these renewable energy sources.
Figure 5: Net change in forest area between 2000 and 2005.

Source: IPCC 2007

3.4.1. Reducing greenhouse gas emission from land use and agriculture
Both land use change and agriculture are responsible for a significant part of
greenhouse gas emissions in the developing world. These are also the sectors which are
most suitable for mitigation measurers. In 2004, land use change accounted for 17% of all
greenhouse gas emissions 10 . As shown in figure 8 developing countries in Latin America,
Africa and Asia are responsible for most reduction in forested area during recent years.
IPCC report (2007) identified three major barriers for effective measures in order to
reduce deforestation. (i) Profitability incentives are often stronger and work against forest
conservation strategies, (ii) Many drivers of deforestation, such a agricultural policies and
markets are outside the influence of the forestry sector and (iii) limited institutional and
regulatory capacity in combination with low resources reduce the ability of governments to
implement policies related to reducing deforestation. Especially, for this last point there is a
link with poverty; in poor countries few resources are available and there is a lack of capacity.
So it likely that development and reducing poverty will have a positive impact on forest
protection and reducing greenhouse gas emissions.
The positive link between development and reduced deforestation is also shown by that
fact that especially countries which are developing rapidly such as China, India and Thailand
are mentioned as positive examples in the latest IPCC report (2007). In these countries a
combination of public support and a strong and motivated government resulted in
successfully reducing deforestation.
In general, however, non-climate policies have been very unsuccessful in reducing
deforestation. Although looking at the positive examples it seems to be possible, with
sufficient funding and political will, to reduce deforestation. Within poor countries the extra
funding will probably have to come from outside. A potential source of funding would be by
linking avoided deforestation to the carbon market.
Currently, there are no policies to reduce emissions from deforestation under the UNFCCC
and Kyoto protocol. As preventing further deforestation is much cheaper than other
mitigation options, there are good opportunities in this sector if the right funding
mechanisms are developed. For example developing countries could (on a voluntary basis)
choose to reduce their emissions from deforestation and get carbon credits for these actions
which they could sell to other countries.
In general, policies on deforestation should be left to developing countries but with support
from the EU. In order to build support from local communities, the funding the EU provides
for preventing deforestation should also be of benefit to the local communities and should not
automatically go to the central government. By focussing these funds to the local
communities it is possible to combine mitigation and poverty reduction.
Another important link between mitigation and poverty is the use of traditional biomass as
source of fuel. About 2.5 billion people still depend on fuel wood and charcoal as their main
source of energy for cooking. The use of this biomass is a source of greenhouse gas
emissions. Biomass burning is a relatively inefficient fuel source and emissions can be
reduced by using modern and cleaner cooking fuels. The use of wood and charcoal also has
other negative environmental and health impacts. Smoke from biomass cooking causes severe
local air pollution while biomass collection results in deforestation, land degradation and
desertification. Stimulating the use of alternative fuels thus has multiple benefits: reducing
climate change and improving health and the environment.
10
IPCC 2007

Agriculture is responsible for a relatively large percentage of the emissions in many
developing countries. In this sector there are many win-win options both reducing poverty
by increasing productivity and reducing GHG emissions. The main win-win options have
to do with increasing production efficiency. Production per unit of land area is still very low
in developing countries and increasing productivity is likely to reduce greenhouse gas
emissions and will in general have a positive impact on poverty reduction (IPCC 2007).
There are a range of options to increase productivity. For example adding fertilizer (organic
or inorganic) often greatly increases productivity. Although adding extra nitrogen can
increase N2O emissions (a powerful greenhouse gas) and offset part of the benefits. Improved
water management can have a very positive impact on productivity. Introducing agroforestry
where growing trees is combined with crop or livestock production reduces greenhouse gas
emission through increased carbon storage. Agroforestry is also a powerful tool to reduce
poverty because it diversifies the incomes of the local community and it helps to prevent
erosion and land degradation. Improving the management of grazing lands through avoiding
overgrazing and underutilization is likely to increase animal production and reduce
desertification. Usually carbon storage increases if management of grazing lands is improved
having a positive impact on the reduction of greenhouse gas emissions. Preventing
desertification is also very important in improving livelihoods and reducing poverty.
Improved fire management can also reduce greenhouse gas emissions at low extra costs. Due
to bush-land fires large amounts of methane are emitted into the atmosphere. Fires also
indirectly increase the tropospheric ozone concentration, a powerful greenhouse gas.
Reducing the frequency of these fires should be done by educating local communities about
the impact of fires and by actively discouraging them. Local communities could be educated
through doing example experiments showing them that reducing the number of fires has no
negative impacts on the landscape.
3.4.2. Supporting sustainable and low emission development pathways
While for the least developing countries most mitigation gains can be made in agriculture and
land use, in rapid developing countries most emission comes from fossil fuel burning. It is
important that India and China will develop more sustainably and have a less carbon
intensive economy. Current energy use of the least developed countries is still very low and
emission levels from fossil fuel burning are likely to increase when these countries (further)
develop. It is probably unrealistic to expect a no emission growth for these countries but a lot
can be done by supporting sustainable development and choosing a low emission
development pathway.
One of the conclusions of the IPCC report was that lower emission development pathways
are not associated with lower economic growth. The best way to minimise future global
emission is to stimulate sustainable development around the globe. The development
pathway countries, regions or communities chose have large impacts on future emissions.
Currently, one of the main limitations of developing sustainable pathways of growth is
institutional capacity both in the planning and implementing phase. Developing plans for
sustainable development often requires the input from several ministries and
multidisciplinary teams. The capacity built up in these teams and links between the different
departments is often not available in developing countries. Furthermore, important decisions
on industry, transportation and energy are made by ministries which have no knowledge on
climate change and sustainable development. The EU should stimulate sustainable
development plans in developing countries and help building the capacity needed for the
design of these plans. After plans are developed there is often also a lack of capacity and
resources to implement them.

For example, in many African countries there are good laws to protect nature conservation
areas but the laws and regulations are often not implemented due to insufficient funds and
badly trained and unmotivated personnel. For sustainable development to succeed, local and
regional governments need to be involved but the capacity at these lower levels is often much
lower than at the central government. The EU should stimulate and make funds available
which help developing countries implementing sustainable development measurers.
Not only the state is responsible for the environment but also civil society and the
private sector. To reduce emissions all three sectors should be involved. Industry is
responsible for a significant part of the emissions. In many developing countries the
production process is often not very efficient and significant emission reduction can be
achieved by using energy more efficient. With environmental and emission regulations in
Europe becoming stricter, some industries move to the developing world to avoid these strict
rules. The EU should develop regulations to stimulate clean development and industry in
developing countries. These could be done for example through stimulating or forcing more
openness and communication to consumers about the impact of the production process on the
environment. Also the civil society and the consumers have an important role in stimulating
sustainable development. NGO’s often have an important role in awareness raising and in
setting up sustainable development projects. Especially in countries where the state
government is weak, working with the private sector and civil society could be the most
efficient way to reduce emissions.
Increasing energy efficiency is one of the best ways to cut GHG emissions without other
negative impacts. In many developing countries still a lot can be done through increasing
efficiency. Increasing energy efficiency also has a positive impact on competitiveness and
can relax some of the supply constraints. The EU should stimulate technology transfer and
governance structures which increase energy efficiency. Part of this efficiency is ensuring
that everyone pays for all electricity used. In many developing countries large part of the
electricity is not paid for due to illegal use and corruption. Energy efficiency issues should
also be included in the stimulation and limitation of international trade patterns. Currently,
many products are made in China and exported to Europe and North America which could
have been made much more energy efficient in Europe or the USA. Basically, energy is
wasted in return for cheap imports.
In rapidly developing countries like China, India, Brazil and Mexico there is a large gap
between rich and poor people. A large part of the population still lives in extreme poverty but
the number of rich people is rapidly increasing. These rich people have a lifestyle and
emission pattern which is similar of people living in the EU or US. However, currently they
have no obligation to do any mitigation. In order to limit future emissions it is extremely
important that richer people in these countries will develop a sustainable, low emission
lifestyle as this group will be the example for all those people which will escape from poverty
in the future. When considering future mitigation options not only greenhouse gas emissions
per capita of individual countries should be important. Within large countries specific
regions, groups of people or sectors with high emission patterns should also be targeted for
mitigations. So within a future UNFCCC protocol maybe China and India will not agree on
targets for the whole country but will commit to mitigation within certain regions, sectors are
societal groups. This can create immediate opportunities for mitigation within the rapidly
developing countries without compromising development of the poor.

3.5. Food miles: An inadequate indicator
The term “food miles” refers to the distance food travels between the farm gate and the
consumers. The term was introduced about 10 years ago to highlight negative impacts on the
environment of increasing food transport. One of the main goals of introducing food miles is
to stimulate more locally organized food systems. One of the main advantages of local food
systems would be reduced transport. In general, less transport would mean reduced energy
use and lower greenhouse gas emissions. However, the relation between distances travelled
and the amount of greenhouse gases emitted is far from linear. For example, how the food is
transported is very important: sea freight for example is much less energy intensive than air
freight and also the kind of fuel used is important. Also while international transport of food
crops can be energy-intensive, the energy use may be (partially) compensated by lower
energy demand for growing food crops in developing countries. For example, in developing
countries, food production and agriculture is often less intensive and less or more organic
forms of fertilizer are used. Reduced use of fertilizer also reduces the emissions of N2O
which is a very powerful greenhouse gas. These comparative advantages are foregone when
food systems are “localized”.
Agriculture also has many other environmental impacts of which some are related to climate
change. For example, most land clearing is done to create space for agriculture. In addition,
land management choices have important impacts on the environment. For example, is the
land totally cleared or are some trees around paddocks still left in place. Also the choice of
the agricultural system has important impacts on the environment and potential greenhouse
gas emissions. Agroforestry systems are usually more sustainable and capture more carbon
than monocultures.
In conclusion, the distance travelled (food miles) is one of only many impacts food
production has on the environment. A recent report for DEFRA (2006) concluded that: “A
single indicator based on total food kilometres is an inadequate indicator of sustainability”.
The EU should be committed to reduce the negative impacts of food production on the
environment, including lower greenhouse gas emission. More environmental friendly
production should be stimulated both within and outside the Union and labelling initiatives
should be developed which make it easier for consumers to choose environmental friendly
products. However, the use of “food miles” would only capture a small part of the impact
agriculture has on the environment and would be unfair to developing countries.
Developing countries tend to be relatively far away from Europe and if food miles would be
used as an indicator it could reduce the export potential of developing countries.
The carbon footprint is a more appropriate measure to provide information on the energy
needed or emissions produced to get a product to the consumer. It provides information on all
emissions related to the full life cycle of a product (including production, processing,
packaging and consumption). Transport is included in this measure but not singled out as the
overruling factor. In some cases, food can be produced with a much lower energy input in
developing countries than in Europe so the carbon footprint will give developing countries
some advantage and it will stimulate low energy transport such as sea freight compared to air
freight. The use of carbon footprints will also stimulate more food production in countries
where it can be done with the lowest emissions.
The carbon footprint provides only information on the emissions related to the life cycle.
Clearly economic and social aspects are not included. These aspects are however equally
important when assessing the sustainability of a value chain or a life cycle or defining
policies and measures to assist countries and regions in their development. Single issue
indicators, like the carbon footprint, may provide clear information on one aspect and should
be used with great care.

4. Climate change adaptation in developing countries
As summarized by IPCC in its Fourth Assessment Report (AR4) (IPCC, 2007), and already
highlighted in earlier sections of this report, adaptation will be necessary to address impacts
resulting from global warming which are already unavoidable due to past emissions. There is
a need for adaptation, independent of how much mitigation will be done. Following chapters
discuss the EU assistance towards developing countries to cope with the effects of climate
change (paragraph 4.1) and available instruments for adaptation (paragraph 4.2).
4.1. EU assistance to developing countries to cope with the effects of climate change
4.1.1. Review of current funding mechanisms for adaptation in developing
countries
Currently funding available for adaptation projects is distributed by Global Environmental
Facility (GEF). The instruments available via the GEF are: the GEF Trust Fund, and special
funds like the Least Developed Countries Fund (LDCF), the Special Climate Change Fund
(SCCF) and the Adaptation Fund (AF), the latter two established under the Convention
(UNFCCC).
Least Developed Countries Fund was established under the Kyoto protocol to support a
work programme to assist LDCs to carry out, among others, the preparation and
implementation of National Adaptation Programmes of Action (NAPAs). The GEF, as the
entity that operates the financial mechanism, has been entrusted to operate this fund. Pledges
for the LCDF are US$ 115.8 million (April 2007) 11 .
Special Climate Change Fund was established in 2001 to finance projects relating to
adaptation; technology transfer and capacity building; energy, transport, industry, agriculture,
forestry and waste management; and economic diversification. This fund should complement
other funding mechanisms for the implementation of the Convention (Decision 7/CP.7). The
GEF, as the entity that operates the financial mechanism, has been entrusted to operate this
fund. Pledges for the SCCF are US$ 62 million (April 2007)12 .
Adaptation Fund was established to finance concrete adaptation projects and programmes in
developing countries that are Parties to the Kyoto Protocol. The AF receives, besides funds
from other sources, a 2% share of the proceeds of the CDM, i.e. 2% of certified emission
reductions issued for a CDM project activity. How much money this will be is depending on
the use of CDM and the price of carbon, and might range in the order of 100-500 million by
2012 (Mohner and Klein, 2007).
Originally, the GEF supported initial studies, to gather information, vulnerability and
adaptation assessments, and capacity building. More recently, the UNFCC asked the GEF to
support pilot and demonstration projects in the field of adaptation. Under its strategic priority
Piloting an Operational Approach to Adaptation, the GEF supports projects that provide real
benefits and may be integrated into national policies and sustainable development planning.
In addition, the GEF supports adaptation activities through the LDCF and the SCCF 13 .
The amount of funds available under the GEF Trust Fund, the LDCF and SCCF is at least
250 million USD on a yearly basis (GEF website 14 ). Since 1991, the Global Environmental
Facility has committed approximately USD 1.98 billion to climate change activities, most of
it for mitigation activities (UNFCCC Handbook, 2006).
11
EU COM (2007) 540 final
12
EU COM (2007) 540 final
13
http://www.gefweb.org/interior_right.aspx?id=16696
14
http://www.gefweb.org/interior.aspx?id=232&ekmensel=c580fa7b_48_126_btnlink

As expressed in UNFCCC Decision 3/CP.12, developing countries have indicated their
concern about the possibility to use the funds available for adaptation. It is too complex to
obtain the funding, partly because it is difficult to proof the exact climate change for which
adaptation is required.
4.1.2. The link between adaptation and development
The best adaptation strategy is probably development or as the Stern Review (2007) put it:
“Development itself is key to adaptation”. Stimulating development and reducing poverty
will increase the adaptive capacity of people and is likely to make them less vulnerable to
climate change. Stern also stated that, in general, adaptation should be an extension of good
development and as such it should focus on: the growth and diversification of the economy,
improving education and health, and improving disaster preparedness. As argued by Swart et
al. (2003), there is a mutual dependence between climate change and sustainable
development (Figure 9).
Figure 6: Linkages between sustainable development, climate change, and policies in these areas
Source: Swart et al, 2003, in: IPCC, 2007
An example of a win-win situation in terms of both addressing adaptation to climate change
and development is diversifying agriculture to improve food security. A more diverse
agriculture system is likely to be more resilient to changes in climate. Also improved water
management through for example more efficient irrigation improves development and is a
good adaptation practice because more efficient systems will be it easier to cope better with
reduced supplies. In many countries, current climate variability already has a large impact on
the economies and livelihoods. Although droughts have always occurred in many developing
countries the preparedness for such droughts are still not well developed. Preparations for the
next drought should start during periods with sufficient rainfall. During these periods buffers
should be created which prepare people for periods with no or fewer rainfall. Improving the
management of and ability to cope with climate variability will have immediate benefits and
will be a very good first step to adapting to future climate change.
Also in terms of disaster preparedness there are important links between development and
adaptation. Natural disasters from floods, droughts and cyclones have major impacts on
developing countries not only in terms of human loss but also having a direct impact on long
term development. Disasters can easily remove the progress of years of development and
significantly increase poverty.

To help developing countries in the aftermath of disasters large amounts of ODA are spent on
emergency aid. It is estimated that in 2003, 7.8% of all ODA was spent on emergency and
distress assistance (Stern 2007). It is however much more efficient to invest in disaster
preparedness and management. For every Euro spend on disaster preparedness, seven
Euros can be saved by reducing the impacts of disasters (ERM 2006). With climate
change, disaster preparedness is becoming more and more essential because the number of
extreme events such as droughts, floods and hurricanes are likely to increase.
4.1.3. Funding for adaptation and poverty reduction in developing countries
There is a general consensus that funding for adaptation currently available through the
mechanisms described in 4.1.1 is insufficient. The total costs of adaptation are still unclear
but the Stern review estimated that it will run into the billions of dollars per year. In addition
to insufficient funds for adaptation also the structures which are currently in place to finance
adaptation are limiting effective action (Smith 2006). To get funds for adaptation it is often
necessary to proof that the proposed adaptation is needed because of explicitly identified
climate change. As described in the previous paragraphs there are many links between
adaptation and development and often it is not 100% clear whether actions are taken in the
perspective of climate change or whether they focus on sustainable development. For
example is a project focusing on improving preparedness to climate variability sustainable
development or adaptation to climate change? . Also many adaptation actions such as
increasing resilience and improving adaptive capacity cannot be done separate from other
actions in development and because these actions do not explicitly focus on a particular
climate change threat they cannot be funded by GEF.
In many developing countries, economies and communities are not well adapted to current
climate variability. Improving the capacity of communities to better cope with current climate
variability delivers immediate benefits and can reduce poverty. Communities which are able
to manage droughts and floods without extensive external help are less likely to suffer from
extreme poverty and hunger. Also communities which can better cope with current climate
variability are likely to be better adapted to future climate change. However projects focusing
on improved management of climate variability are currently not supported by the different
adaptation funds.
Due to the mutual benefits of sustainable development and adaptation it would be better to
integrate funding and mainstream adaptation into sustainable development projects. However,
among multilateral and bilateral donors there is great hesitation to integrate funding for
adaptation into mainstream development because it goes against the stipulation of the
UNFCCC that adaptation funding should be in addition to ODA. For example, in a report for
the Dutch government Van Aalst et al. (2007) argue that if climate change adaptation would
be paid through ODA it will be in competition with other programmes focusing on poverty
reduction. To avoid this dilution of ODA money climate change adaptation should be paid
through a different mechanism, for example through a levy or tax on carbon emissions
according to a “polluter pays” principle. Although paying for adaptation in developing
countries through a polluter pays principle is morally superior than using ODA, the pragmatic
solution of increasing ODA up to promised standards would be a more efficient way of
supporting adaptation because: (i) Except for the funds available through the UNFCCC no
polluter pays principle is in place yet and the funding adaptation should not be put on hold
until such a mechanism is in place. (ii) Due to the mutual benefits of adaptation and
development, funds should be integrated and a separate mechanism which would mean
getting funding from 2 different sources would reduce the efficiency of the integration. (iii)
The cost and benefits of adaptation are often hard to estimate.

Studies on the costs of adaptation are necessary and useful but for the time being they are
unlikely to give a full picture. For example it is impossible to calculate which part of the
damage caused by the recent floods in Africa (September 2007) is caused by climate change.
Also it is very hard to estimate which part of the benefits of a programme focussing on
managing climate variability in agriculture can be contributed to adaptation and which part is
poverty reduction. The first part should then be paid by the polluter pays principle while the
second part should come from ODA.
In conclusion this study suggests funding more climate change adaptation projects and
studies through ODA as long as these adaptation projects focus on sustainable development
and alleviating poverty.
4.1.4. Capacity building, data availability and research
In most developing countries the main limitation in coping with the impacts of climate
change is a lack of capacity. Climate change often has complicated impacts with large
uncertainties. Very few people and institutions have the capacity to do impact studies and
identify climate change adaptation options. If capacity in developing countries, in particular
the LDCs is not improved than increasing funding for adaptation is unlikely to have an
impact.
To interpret climate change information, for designing adaptation strategies and to implement
adaptation projects highly educated people are needed. Adaptation needs to differ locally and
strategies should be tailor-made to address local adaptation needs. Local knowledge and
experience are thus important to implement adaptation. Implementation of adaptation
measures should not depend on international consultants or personnel from UN offices so
building local capacity should be started as soon as possible. So far, a lot of capacity building
in developing countries is still focused on mitigation, for example in relation to the CDM.
However, the least developed countries do not need CDM projects but they have to start
adapting to climate change. So capacity building in climate change in the least developing
countries should focus on adaptation in stead of mitigation.
In addition to a low adaptive capacity in many developing countries, there is significant lack
of data and knowledge on climate change impacts. Developing countries should be stimulated
to improve data gathering and make existing data more easily available. Too often developing
countries cannot fully benefit from international research projects because of the
unwillingness to share data. Strategies should be developed which stimulate developing
countries to collect and share data. For example within international research projects the in-
kind contribution of developing countries should be through making the data freely available.
The EU should also stimulate data gathering in developing countries not only climate data but
also for example hydrological and biodiversity data. In order to do this the EU should
support research not only on a short term project basis but also through longer term
monitoring projects.
Lastly, scientific research in developing countries in relation to climate change should be
stimulated. This can be done through for example increasing the number of projects focussing
on, or including, developing countries within FP7. Research institutes participating in current
EU research programmes (e.g. FP7), should be encouraged to work together with researchers
from developing countries on case studies focusing on developing countries.

4.2. Available EU instruments for development policy in relation to climate change
adaptation
Resources for development assistance are made available through the regular EU budget, as
well as through the European Development Fund (EDF). At present, the 9th EDF is on-going,
and in 2008 the 10th EDF will start (till 2013). The EDF is the main instrument for providing
aid for development cooperation in the ACP States and overseas countries and territories
(OCT). For the 2007 aid budget, the EDF contributes EUR 3.5 billion and the regular EU
budget for aid foresees EUR 2.2 billion 15 .
Instruments under this funding are e.g. the European Neighbourhood and Partnership
Instrument (ENPI), the Development Cooperation Instrument (DCI) and the European Water
Initiative (EUWI). These instruments are discussed below in relation to funding of climate
change adaptation. Until now, climate change adaptation is mostly absent in the
development oriented funding mechanisms.
European Neighbourhood and Partnership Instrument (ENPI)
The ENPI is particularly targeting the neighbouring countries of the EU (25) and as such this
instrument does not provide many possibilities for funding in developing countries. Climate
change is an element in 11 of the 12 ENP Action plans. The activities mainly refer to
implementation of the provisions under the Kyoto Protocol and UNFCCC. Only in the case
of Azerbaijan, where collaboration for the Nation Action Plan on Adaptation is part of the
ENP Action Plan, adaptation is explicitly referred to.
Development Cooperation Instrument (DCI)
The Development Cooperation Instrument (DCI), as agreed in December 2006 (Regulation
EC 1905/2006), targets 7 thematic programs: Climate change is part of the theme
‘Environment and sustainable management of natural resources, including energy’. The
challenge for the Environment theme is to address the increasing global environmental
pressures, e.g. the need for sustainable energy services, or the unsustainable use or
degradation of ecosystems which inhibit achievement of the MDGs. The purpose of the
programme is ‘to address, through a single coherent programme, the environmental
dimension of development and other external policies as well as to help promote the
European Union’s environmental and energy policies abroad. The programme will
complement environmental and energy actions undertaken through country and regional
programmes’ 16 .
For the period of 2007-2013 a total of €16.9 billion is available for the DCI instrument,
distributed geographically and thematically. Only 4.7 percent (€ 800 million is allocated to
the theme of environment. One of the activities of the DCI environment theme is the EU
Action Plan on Climate Change in the Context of Development Cooperation 2004-2008 17 .
The aim of this Action Plan is to combine development cooperation and other priorities.
Currently, the Action Plan is under review – as the first phase, 2004-2008, is nearing its end.
In the framework of this Action Plan, yearly US$ 369 million (approx. EUR 3 million) will
be available for developing countries - predominantly bilateral assistance as part of the
commitment in the “Bonn Political Declaration” on climate change funding for developing
countries 18 .
15
http://ec.europa.eu/budget/library/publications/budget_in_fig/dep_eu_budg_2007_en.pdf
16
Text EU REGULATION (EC) No 1905/2006
17
(CEU, 24 Nov.2004, 15164/04, DEVGEN241, ENV637)
18
http://ue.eu.int/ueDocs/cms_Data/docs/pressdata/en/envir/82253.pdf

The Action Plan on Climate Change (APCC) has five strategic objectives:
- Raising the policy profile of climate change;
- Support for adaptation;
- Support for mitigation and low GHG development paths;
- Capacity development;
- Monitoring and evaluation of the Action Plan.
The objective of raising the policy profile has, among others, also lead to other agreements
like the Joint Declaration on Climate Change and Development (EU & ACP, 2006) and the
EU Strategy for Africa (Dec 2005).
EU Water Initiative 19
The EU Water Initiative (EUWI) is an effort to increase the effectiveness of the significant
financial and technical resources available within the EU and its Member States for overseas
development assistance, in order to maximize individual and joint efforts in meeting the
needs of the world's poorest and achieving the MDG targets for water and sanitation. On an
annual basis, available resources are about EUR 1.7 billion (2004). Addressing adaptation to
climate change is currently not a target of the EUWI.
In conclusion, there are very few EU programmes in relation to development aid which
include climate change adaptation. Within most programmes adaptation plays no or only a
minor role.
19
www.euwi.net

5. Challenges for EU policy coherence
The EU recognizes the importance of policy coherence, and in particular for development
cooperation. This chapter introduces briefly the EU policy coherence for development–
initiative, followed by a discussion on policy coherence related to issues following from the
earlier chapters.
5.1. Policy Coherence for Development
The issue of environment, climate and development is one of the 12 policy areas identified
within the ‘Policy Coherence for Development’ (PCD) document. (COM(2005)134-final). A
first mid-term ‘Policy Coherence for Development Report’ is expected in the second half of
2007. While a full review of the PCD mechanism is beyond the scope of this study, the report
focuses on the issue of vulnerability – and how the most vulnerable people in development
are affected.
The challenge for EU policy coherence will be to combine policy measures to speed up
mitigation and enhance adaptation within the EU (trade and profit central), with sustainable
development support initiatives in the least developed countries. The major aim of
development policies is to have countries and people take control over their own
development. However, trade and aid are central to EU development policies. Therefore, it
will be a challenge for EU policy coherence to stimulate development, improving food
security and sustainable rural development, as it requires coordinated coherent policies and
effective instruments (e.g. financial, technical).
At the international level, the MDGs as leading development goal do not include reference to
addressing climate change or variability. However, in Chapter 2.3 it is made clear that there
are important links between climate and the MDG. The EU should take up the challenge to
build better links between the MDGs and climate change.
One of the main policy coherence challenges in relation to climate change is the production
of biofuels. The EU is promoting the use of bio-fuels (10% in 2010) to reduce greenhouse gas
emissions from burning fossil fuels. However, increased production of biofuels in developing
countries is likely to increase deforestation. This deforestation causes higher GHG emissions.
For example, in Brazil and Argentina large areas of land are cleared to produce soy beans and
in Indonesia native vegetation is replaced by palm oil plantations. Due to increased emissions
caused by land clearing it is no means certain that biofuels production reduces the total
amount of GHG emitted into the atmosphere. The EU should develop a biofuel policy which
ensures that the production of biofuels has a net positive impact on reducing GHG emissions.
5.2. Green Paper on Adaptation
The EU has recently started an open policy dialogue on adaptation. As a start, the ‘green
paper on adaptation’ was presented in June 2007. The European Commission organises a
web-based public consultation open till the end of November 2007.
The green paper clearly states that Europe must adapt to climate change. Early action is
preferred, because it will save on future costs, and might give the European companies a
leading role.

Adaptation efforts are sub-divided into four pillars:
1. Early action in the EU;
2. Integrating adaptation into EU external actions;
3. Reducing uncertainty by expanding the knowledge base through integrated climate
research;
4. Involving European society, business and public sector in the preparation of
coordinated and comprehensive adaptation strategies.
The link of EU with developing countries is an element of the second pillar. The green paper
points out that developed countries will need to support adaptation actions in developing
countries. The general approach discussed in the Green paper is very good as it supports
integration of adaptation into other external policies and funding mechanisms and
stresses the importance of integrating adaptation into poverty reduction strategies. These are
all clearly new approaches which are currently not operational within the EU. To achieve
these goals the green paper suggests three action points (see box 2). In contrast to the general
text in the green paper the three actions points are rather limited and not very ambitious.
Box 2 Action points from the Green Paper on Adaptation in relation to developing countries
To promote adaptation in developing countries, the European Union should act at
both global and European level:
- In the context of the UNFCCC, the EU will continue to advance the issue of
adaptation, and promote the integration of adaptation into national development
plans (e.g. through the National Adaptation Programmes of Action (NAPA) and
the 5-Year Work Programme on Adaptation recently adopted in Nairobi). EU
leadership will be required to help ensure the availability of sufficient financial
and technical resources, including through the Adaptation Fund under the Kyoto
Protocol, the Global Environment Facility and bilateral channels, to implement
NAPAs and similar strategies.
- The 2004 EU Action Plan on Climate Change and Development already includes
support strategies for adaptation in developing countries that can, for instance, be
supported under the Environment and Natural Resources Thematic Programme
and through geographical funds at country and regional level. The inclusion of
adaptation measures in geographical programming will have to be strengthened.
The next occasion for this is the mid-term review of country and regional
strategies in 2010. The ongoing mid-term evaluation of the Action Plan provides
the first opportunity for review of the plan in the light of accelerating climate
change.
- The Commission is examining how to promote and enhanced dialogue and
cooperation between the EU and developing countries on climate change, through
the building of a Global Climate Change Alliance. The Commission has
earmarked a total of € 50 million over the period 2007-2010 for dialogue
activities, and to support developing countries through targeted mitigation and
adaptation measures. Actions could include providing follow-up to the National
Adaptation Programmes of Action through concrete pilot projects in particular
regarding integration of adaptation activities in key sectoral policies. Moreover,
the forthcoming EU strategy on Disaster Risk Reduction will build a bridge
between adaptation and disaster response.

The first action point considers continued support of adaptation in the context of the
UNFCCC. Politically this is a safe option, however, if adaptation is continued to be funded
through the UNFCCC and the GEF, opportunities for integration with other development
issues remain very limited. Also the success of promoting adaptation through the UNFCCC is
until now very limited.
The second action point mentions the Action Plan on Climate Change (APCC) and
Development and suggests incorporating adaptation in geographical programming and the
Environment and Natural Resources Thematic Programme. The APCC is however still very
mitigation focused. While supporting integration of adaptation into other programmes is
important, the Green Paper is very vague how this should be achieved and does not suggest
immediate action but proposes to wait until the midterm reviews in 2010.
The third action point is the Global Climate Change Alliance. The communication of the
Commission on the Alliance is discussed in the next paragraph. It is clear that this alliance
was prepared before the green paper and this is not a new or additional policy. Also the funds
for this policy are limited (EUR 50 million) and this amount needs to be shared between
adaptation and mitigation efforts.
In addition, the part on developing countries in the green paper does not mention
vulnerability while particularly for developing countries it is important to focus on the most
vulnerable.
In conclusion, it is good that there is specific attention in the EU for adaptation, but it would
be good if the EU would develop a clear well funded strategy specifically on adaptation in
developing countries including a focus on poverty and vulnerability. ‘Poor and vulnerable’ is
currently considered at the level of countries, while it would be much more useful to call for a
focus on the poor and vulnerable also within countries.
5.3. The Global Climate Change Alliance (GCCA) initiative
In September 2007, the EU has launched the Global Climate Change Alliance (GCCA)
initiative. The objective of the GCCA is ‘to provide a platform for dialogue and exchange
among the EU and poor developing countries most vulnerable to climate change, in particular
the LDCs and SIDS 20 , on practical approaches to realising the integration of development
strategies and climate change.’ Besides, it provides technical and financial support for
adaptation and mitigation measures, and for the integration of climate change in development
strategies (EU COM(2007)540 final).
Financing of the GCCA is foreseen with €50 million additional resources to the thematic
environmental program (ENTRP), within the framework of the 10th EDF, and by additional
resources from the Development Cooperation Instrument (DCI). Further, the EU Member
States are sought to join forces on this issue.
There are five areas of focus:
1. Adaptation to climate change;
2. Reducing emissions from deforestation;
3. Enhancing participation in the Clean Development Mechanism;
4. Promoting disaster risk reduction;
5. Integrating climate change into poverty reduction efforts
20
SIDS, Small Islands Developing States

The GCCA can be a first step on building the links between climate change and development.
The focus on adaptation, deforestation and disaster risk reduction as most important climate
change issues in the least developed countries seems promising and links well with the
recommendations of this report. Also very important, is that the Alliance focuses on building
a knowledge base. Although there is a general consensus that adaptation in developing
countries is important, most knowledge - where adaptation measurers need to be based on - is
still lacking in most developing countries. As far as this study is concerned, the weak point of
the GCCA is the focus on ‘Enhancing participation in the CDM’. As discussed previously in
this report, the CDM is a good market based mechanism for the rapidly developing countries
such China, India and Brazil, but not very suitable to the LDCs. It is probably better to
develop other mechanisms to support and pay for mitigation in these poor countries than to
continue to push the CDM.

6. Conclusions and recommendations
6.1. Conclusions
Without serious mitigation and adaptation, climate change is likely to have a significant
impact on developing countries and the poor are likely to suffer most. The later serious
actions are taken, the worse the impacts and the higher the future costs will be. Taking
actions now on climate change mitigation and adaptation will significantly reduce future
damage. In order to minimize future climate change, efforts to reduce the emissions of
greenhouse gases in the developed world should be increased. The EU should continue to
stimulate this within their member countries and should improve efforts to stimulate the US
to join the Kyoto agreement and commit itself to future targets. If the developed countries are
doing more to reduce their emissions, rapidly developing countries are much more likely to
join mitigation efforts. Getting developing countries to commit to mitigation is very import
because reducing future emissions of India and China is essential for slowing future climate
change.
The European Union should have different focuses for different countries in terms of
climate change adaptation and mitigation. For rapidly developing countries such as China and
India the EU should focus on mitigation of greenhouse gas emissions. For the least developed
countries there should be a focus on adaptation.
Greenhouse gas emissions from developing countries are rapidly increasing. Reducing the
growth of emissions from these countries is in the interest of the EU because it will slow
down climate change. In developing countries, a lot can be done in terms of mitigation
without slowing down the economy; especially in terms of increasing energy efficiency,
reducing deforestation and improving efficiencies in agriculture. It is also important that
developing countries are stimulated to choose a sustainable, low emission development
pathway. It is often much easier and cost effective if the choice for more sustainable, low
emission technologies is made early in the process. Currently, the EU is stimulating
mitigation and transfer of clean technologies through the Clean Development Mechanism.
Although it is still unclear what the mitigation potential of the CDM is, especially in India the
investment in CDM projects is significant. However, to really stimulate mitigation in
developing countries, the EU should take a much wider approach in stimulating sustainable
development in these countries. Obviously it must be left to the individual countries on how
they develop but especially in terms of production of goods imported in the EU, there are
possibilities to stimulate cleaner production. For example by developing labelling systems
or import duties depending greenhouse emission and/or on how sustainable goods are
produced. These mechanisms should not be used as a new instrument for protectionism, but
should stimulate more environmental friendly production. Reducing GHG emissions should
be integrated into the next round of trade negations and the WTO should also acknowledge to
role of trade in causing and preventing dangerous climate change. Currently, the world
market is stimulating the production of goods at the lowest price without taking the
environment into consideration. By putting a price on greenhouse gas emissions, there will be
a stimulation to produce goods where it can be done with the lowest energy input (for
production and transport).
Also in the least developed countries there are options for mitigation but they should not
focus on the energy or transport sector but on agriculture and forestry. First of all, new
mechanisms should be developed in such a way that the protection of forest can be paid
through well constructed carbon markets. The EU should actively support post-Kyoto
mitigation options in reduced deforestation and/or forest conservation, but only if it does not
provide incentives for Annex-I countries to realize most of their commitments abroad.

This can be achieved by combinations of higher commitments, imposing limits or by
designing an independent mechanism, committing developed countries to both national
emission reductions and supporting reductions abroad. In agriculture the EU should look for
win-win situations where both productivity and/or efficiency are increased without
compromising the environment, while at the same time reducing emissions.
Especially the least developed countries should get help from the EU for climate change
adaptation. Currently, most funds available are through UNFCCC process. There are many
complaints from developing countries that it is very hard to get funding for adaptation
projects through the GEF. The recently started GCCA might provide an opportunity to work
on adaptation outside the sphere of negotiations. Also there is an increasing consensus that
the funds currently available are not enough to support developing countries to cope with the
impacts of climate. What seems forgotten in the discussion about funding for adaptation is
that most adaptation is very similar to good development practices. Due to the close links
between adaptation and sustainable development it makes much more sense to mainstream
adaptation into sustainable development and built better links between the adaptation and
development funds.
The major reason that many developing countries are vulnerable to climate change is a lack
of adaptive capacity. General adaptive capacity and resilience is likely to increase with
development. However, to take specific adaptation measures a certain knowledge base is
necessary. The knowledge base on climate change is often very limited in developing
countries. There is lack of data, studies and trained personnel. The EU should actively
support increasing (scientific) knowledge on climate change impacts and adaptations in
developing countries and improve capacity building on climate change adaptation. Still a lot
of capacity in the least developed countries is focusing on mitigation (e.g. CDM training)
while these countries would benefit much more from capacity building related to adaptation.
6.2. Recommendations for new EU policies to support climate change adaptation and
mitigation in developing countries
To minimize future impacts of climate change in developing countries action should be
taken urgently. Actions should focus on:
- Minimizing greenhouse gas emissions within Europe and help developing countries
reduce their emissions;
- Helping developing countries adapting to climate change by reducing their
vulnerability.
6.2.1. Recommendations related to Mitigation
1. Mainstream and integrate climate change mitigation into development projects and
programmes.
2. Differentiate mitigation options among different developing countries:
a. Focus mitigation efforts in least developed countries on land use change,
agriculture and sustainable development.
b. In rapidly developing countries (India, China and Brazil) focus on
supporting lower energy intensive development and cleaner energy
production.
3. Actively support post-Kyoto mitigation options in reduced deforestation and/or forest
conservation

4. When defining emission strategies not only greenhouse gas emissions per capita
should be important. Within large countries specific regions, groups of people or
sectors with high emission patterns should be targeted for mitigations. This creates
immediate opportunities for mitigation in countries like China and India without
compromising development of the poor.
5. Avoid oversimplified indicators like food miles and use single issue indicators with
great care
6. Bio-fuel production should not undermine development and food security
6.2.2. Recommendations related to adaptation
1. Mainstream and integrate climate change adaptation into development projects
a. Check current projects whether they are vulnerable to climate change
b. Incorporate adaptation to climate change and variability systematically
into (existing and new)development projects
2. Official Development Assistance (ODA) funds should be made available for
adaptation projects.
3. Incorporate impacts of and adaptation to climate change into projects and
programmes aimed at achieving the MDGs.
4. Capacity building related to climate change within developing countries should first
and foremost focus on adaptation with particular attention to reducing vulnerability of
the poor.
5. The European Union should support more collaborative research projects in order to
enable knowledge based adaptation and facilitate knowledge exchange in a
science/policy dialogue between EU and developing countries and among developing
countries.
6. Build on existing processes addressing adaptation within the UNFCCC (NAPA’s,
National Communications) and outside the UNFCCC (WTO, Poverty reduction,
MDGs).
7. Increase investment in disaster preparedness and disaster risk reduction. Investing
before disasters is much more efficient and saves considerable spending on
emergency aid.

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List of Figures
Figure 1: Comparison of observed changes in temperature (black lines) with results simulated
by climate models using only natural forcing and using both natural and anthropogenic
forcing (including greenhouse gases) ....................................................................... 2
Figure 2: Projected surface temperatures changes for the 2020-2029 and the 2090-2099
period for three different emission scenarios. The left panel shows uncertainties of
temperatures rises as the relative probabilities of estimated global average warming from
different models ........................................................................................................ 4
Figure 3: Relative changes in precipitation (in percent) for the period 2090-2099 relative to
1980-1999. Values are based on multi-model comparisons for December to February (left)
and June to August (right). White areas are where models disagree on the sign (increase or
decrease) of the change and stippled areas where more than 90% of the models agree on the
sign of change ........................................................................................................... 7
Figure 4: Vulnerability to climate change: the IPCC Third Assessment Report...... 8
Figure 5: Net change in forest area between 2000 and 2005.................................... 24
Figure 6: Linkages between sustainable development, climate change, and policies in these
areas .......................................................................................................................... 30

List of Abbreviations
ACP Africa, Caribbean and the Pacific
AF Adaptation Fund
APCC Action Plan on Climate Change
BAU Business As Usual
CDM Clean Development Mechanism
CER Certified Emission Reductions
DCI Development Cooperation Instrument
DFI Direct Foreign Investment
EDF European Development Fund
ENPI European Neighbourhood and Partnership Instrument
EUWI European Water Initiative
FLEGT Forest Law Enforcement, Governance and Trade
GCCA Global Climate Change Alliance
GDP Gross Domestic Product
GEEREF Global Energy Efficiency and Renewable Energy Fund
GEF Global Environment Facility
GHG Greenhouse Gas
GLOF Glacial Lake Outburst Flood
IAM Integrated Assessment Models
IISD International Institute for Sustainable Development
IPCC Intergovernmental Panel on Climate Change
JI Joint Implementation
LDC Least Developed Countries
LDCF Least Developed Countries Fund
MDG Millennium Development Goal
NAPA National Adaptation Programmes of Action
OCT Overseas Countries and Territories
ODA Official Development Assistance
PCD Policy Coherence for Development
REDD Reduced Emissions from Deforestation and Degradation
SCCF Special Climate Change Fund
SIDS Small Islands Developing States
UNFCCC United Nations Framework Convention on Climate Change
WSSD World Summit on Sustainable Development
WTO World Trade Organisation

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STUDY

Climate change impacts on

Only published in English.

Authors: Fulco Ludwig, Catharien Terwisscha van Scheltinga, Jan

Wageningen University and Research Centre

Co-operative Programme on Water and Climate

Administrator: Yanne Goossens

Manuscript completed in November 2007.

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Adaptive Capacity Potential Impacts

Vulnerability to Climate Change

Figure 4: Vulnerability to climate change: the IPCC Third Assessment Report

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ODA and concessional finance $ 100 bn 20% 5 – 20 % $ 1 – 4 bn

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Figure 5: Net change in forest area between 2000 and 2005.

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