63718 V2 SUMMARY OF THE REPORT TAJIKISTAN: ECONOMIC AND DISTRIBUTIONAL IMPACT OF CLIMATE CHANGE Is Tajikistan at-risk from climate change? If so, how should it adapt, given the many other pressing challenges it faces? Can long-term adaptation be reconciled with near-term development priorities? The report advances three main propositions in response, and provides supporting arguments and evidence to buttress them. First, it warns that households in Tajikistan are significantly threatened by climate change, and illustrates the main transmission channels through which they will likely be impacted. Second, the report shows how, far from being in conflict, Tajikistan’s climate adaptation priorities are in fact in close conformance with key development objectives, and highlights the strong public support for more government spending on agriculture, water management and public infrastructure, disaster management, and public health—four key areas identified in the country’s latest poverty reduction strategy as being especially important from both climate-change and development perspectives. It presents a regional vulnerability index for Tajikistan, which could help direct climate change adaptation investments towards areas of highest vulnerability. Finally, the report argues that it is imperative that project-based climate-related interventions be supported by an enabling environment and overall policy framework that is conducive to facilitating faster climate adaptation. 1. The 2006 Stern Review on the economics of climate change marked a watershed in attracting widespread public attention to the effects of climate change on the global economy. As the study highlights, an overwhelming body of scientific evidence indicates that climate change resulting from increased accumulation of greenhouse gases is a serious and urgent issue. Global mean temperatures may rise between 2-5 degrees Celsius over the next 2-3 decades, exacerbating existing patterns of water shortages and excesses and increasing the risk of drought and floods. Climate change impacts will be felt differentially across regions: while some countries may benefit from modest rises in temperature, most are expected to suffer heavily, especially some of the world’s poorest countries. 2. Tajikistan is highly vulnerable to the adverse impacts of global climate change. A recent World Bank study warns that countries in the Europe and Central Asia (ECA) region are significantly threatened by climate change, with serious risks—e.g. floods, drought, and melting of glaciers—already in evidence across the region. Over the next two decades, vulnerability to climate change and adaptive capacity are likely to be dominated by socio-economic factors and legacy issues. Based on the analysis carried out, Tajikistan emerges as the most vulnerable country in ECA using three key indicators of countries’ exposure, sensitivity, and adaptive capacity to climate change (figure). In large part this is because it has social and productive structures that make it very sensitive to the impact of a changing climate, as well as has amongst the lowest low adaptive capacity among countries in the region. ECA countries ranked by vulnerability to the adverse impacts of climate change Source: World Bank (2009): Adapting to Climate Change in Europe and Central Asia 3. Awareness of the different consequences of climate change is quite high in Tajikistan, with potential impacts on health, natural disasters, and agriculture of greatest public concern. The findings of a nationally representative household survey commissioned for the report (P-LITS) show that public awareness of the different consequences of climate change is quite high, and is comparable to prevailing levels in much richer countries (figure): a majority of respondents felt they were either very well-informed, or fairly well-informed, (9 and 48 percent respectively), about the different consequences of climate change. Public awareness of the different consequences of climate change 100 9 10 9 90 80 Percent of respondents 33 37 34 70 60 50 40 48 48 30 49 20 10 9 5 9 0 EU27 countries Kazakhstan Tajikistan Very well informed Fairly well informed Not very well informed Not at all informed Source: World Bank staff estimates based on 2010 P-LITS. Data for the 27 European Union member countries are from Europeans’ attitude towards climate change Special Eurobarometer 300, Wave 69.2, September 2008. 4. When presented with a list of several possible adverse impacts of climate change, “dangers posed by extreme hot/cold seasons that are harmful for health� were cited as their most important concern by the highest share of respondents (30 percent), followed by “increase in natural disasters� (25 percent), and “unpredictable/extreme weather that harms agricultural production� (20 percent). Potential impacts of climate change on health, natural disasters & agriculture are of greatest public concern 7 30 Extreme hot/cold seasons that are harmful for health 18 Increase in natural disasters (e.g. floods, fires, mudslides, etc.) Unpredictable and extreme weather that harms agricultural production Decline in fresh water availability for drinking Decline in fresh water availability for irrigation 20 25 Source: 2010 P-LITS. Percent of survey respondents. 5. The major health impacts of climate change in Tajikistan will likely be observed through the increased thermal stress, water-borne diseases and disaster effects. These pressures will exacerbate existing problems of the health sector, particularly high levels of water-borne diseases as well as the crumbling state of physical infrastructure—e.g. most rural facilities do not have access to piped water and communication, and only limited supply of electricity and heating. The poor are more likely than the non- poor to suffer from increased health risks associated with climate change (see the box for more details on the distributional aspects of climate change). 6. Tajikistan is highly prone to natural disasters, whose frequency is expected to rise with impending climate change. According to the UN Office for Coordination of Humanitarian Affairs, 85 percent of Tajikistan’s area is threatened by mudflows. Landslides are also common, with some 50,000 reported across the country during the 1990s. Furthermore, the occurrence of droughts has increased. In the past 60 years, the country has suffered eight major droughts; with the expected rise in aridity, the frequency and severity of droughts is forecasted to increase. The frequency of floods will also go up as warming temperatures will increase the rate of snow melting and raise the level of water in the rivers. Natural disasters are already resulting in significant human and financial losses. Tajikistan has the largest number of casualties associated with disasters in ECA, with the annual cost of disasters estimated at 1.6 percent of GDP. The biggest damage was caused by floods and mudflows in Padjakent, Qubodiyon, Rudaki, Varzob, and Hamadoni rayons, which suffered total damage estimated at about 25-28 million Somoni during 1997-2008. 7. The agricultural sector in Tajikistan is also highly vulnerable to climate change. This vulnerability stems from negative physical impacts as well as the significant environmental challenges the sector currently faces. The major physical impacts of impending climate change will be manifested through increased water scarcity, worsening of soil conditions and desertification, and outbreaks of pests. Any shocks in the agricultural sector will have significant impacts on welfare, given that almost half the country’s domestic labor force is employed in agriculture, and that food production and agricultural wages constitute about 48 percent of household incomes. Climate Change and Poverty in Tajikistan Transmission Channels: The primary impact of climate change on the livelihoods of people will be observed through 1) the reduced quantity and quality of water, which will affect agriculture and health (through the rise of water-borne diseases) as well as 2) the increased frequency and severity of disasters: mudflows, floods and droughts (2nd National communication of Tajikistan under UNFCC). These physical impacts can potentially deepen poverty and increase the possibility of permanent poverty traps. Poor people already struggle with a number of stresses. They have limited resources and the least capacity to adapt their livelihoods to changing conditions. Agriculture: There are three channels through which adverse climate conditions can affect people’s livelihoods from agriculture: (1) decline in agricultural productivity (yields), (2) reduction in agricultural wages and (3) increase in relative food prices. Simulations based on household data show that a 20 percent decline in agricultural productivity can increase the national poverty rate by 13 percent and poverty gap by 24 percent respectively. A similar increase of relative food prices can lead to a rise in poverty rate by 16 percent and poverty gap by 25 percent. A drop of income from agricultural wages will have a much smaller impact on poverty (a 20% drop in agricultural wages increases poverty by 2 percent and poverty gap by 7 percent.) as their share in the total income of most households is insignificant. All of these effects will have a stronger impact in rural than in urban areas. This is because rural areas have a much greater concentration of population around the poverty line, so that even a modest decline in income/purchasing power will have a significant impact on poverty. Health: The major health impacts of climate change in Tajikistan will be observed through the increased thermal stress, water-borne diseases and disaster effects. The poor are more likely to suffer from the increased health risks associated with climate change than the non-poor due to (1) inability to cover out-of- pocket expenditures for medical services, (2) higher prevalence of water-borne diseases among the poor than the non-poor and (3) weaker immune systems of the poor stemming from malnutrition and adverse living conditions. Analysis of the 2007 Tajikistan Living Standards Survey data shows that 46 percent in the poorest quintile of households found it impossible/very difficult to pay for health care, compared to 27 percent in the richest quintile. The incidence of diarrhea is 1.4 times higher among the poorest vs. richest quintile. There are also pronounced differences in calorie intake by welfare status and children from the poorest quintile are almost twice as likely to be severely underweight as those from the richest. Disasters: While there is no sufficient survey data in Tajikistan to quantify the impact of disasters by welfare status, evidence from global studies shows that the poor tend to be disproportionately affected by disasters as their housing is of inferior quality and often constructed in hazardous locations. They also cannot afford the costs of migration to less hazard-prone locations. Lastly, after disasters occur, it takes them longer to restore their livelihoods as the poor tend to have non-diversified incomes and little savings. For more information on climate change and poverty, see Chapter 1 of the report. PUBLIC PERCEPTIONS OF THE SERIOUSNESS OF THE CLIMATE CHANGE PROBLEM 8. How serious a problem do citizens of Tajikistan perceive climate change to be? The answer to this question depends upon how the issue is posed to them. Respondents in the P-LITS were asked a series of questions regarding the extent to which they thought climate change is a very serious problem. When presented a list of various issues and asked which they considered to be “very serious problems� facing the world, “spread of infectious diseases�, “poverty, lack of food and drinking water� and “international terrorism� received the highest share of votes (84, 76, and 47 percent respectively of respondents). At the same time, 41 percent of respondents also identified climate change to be a serious problem (table). Respondent Opinions about Major Problems Currently Facing the World Percentage of respondents in the country that consider the Issue: issue to be a very serious problem EU27 countries Kazakhstan Tajikistan Poverty, lack of food and drinking water 70 66 76 The spread of an infectious disease 24 70 84 International terrorism 55 50 47 Climate change 64 36 41 A major global economic downturn 25 47 38 Proliferation of nuclear weapons 24 33 29 Armed conflicts 39 53 28 The increasing world population 20 12 17 Source: World Bank staff estimates based on 2010 P-LITS 2; Special EU Barometer 300/wave 69.2 9. However, when asked to select the single-most serious problem confronting the world, only 7 percent of respondents in Tajikistan chose climate change, much lower than in European Union countries (31 percent). Instead, Tajik respondents ranked “spread of infectious diseases� and “poverty, lack of food and drinking water� as the two most important problems facing the world (figure). Respondents perceive poverty & infectious diseases to be the most serious problems facing the world 100% Other 80% A major global economic downturn 60% Climate change International terrorism 40% The spread of an infectious disease 20% Poverty, lack of food & drinking water 0% EU27 countries Kazakhstan Tajikistan Source: World Bank staff estimates based on P-LITS data; Special EU Barometer 300/wave 69.2 ADAPTATION TO CLIMATE CHANGE: A “NO-REGRETS� APPROACH 10. How should Tajikistan adapt to climate change, given the many other pressing development challenges that it faces? Are there trade-offs, or can long-term climate adaptation be reconciled with near term development priorities? The report argues that, far from being in conflict with each other, climate change adaptation strategies for Tajikistan are in fact in close conformance with its general poverty reduction and development objectives. In fact, development is an integral and most important tool for adaptation. Greater income diversification, improved health and education as well as better access to information, services, resources and infrastructure enhances the adaptation capacity of households, particularly for the poor. Adaptation planning in Tajikistan should start with the so-called “no regrets� policies—i.e. investment and policy decisions that will provide benefits under current climate conditions as well as strengthen resilience to future changes. 11. Tajikistan is not well adapted to its current climate let alone impending changes as evident in low agricultural productivity, water stress, and high losses incurred due to disasters. Furthermore, many current policies exacerbate rather than reduce vulnerability to climate change. This in particular relates to excessive emphasis on cotton cultivation,1 poor water management systems that do not create incentives for efficient water use, and insecure land tenures that do not provide farmers adequate property rights and hence incentives to properly develop land. Introducing reforms in these areas will help improve people’s livelihoods and facilitate economic growth irrespective of the climate change scenarios. 12. Along with much needed policy reforms, devising an effective adaptation strategy requires that adequate attention be directed towards two main areas (1) building resilience to strengthen the ability of households, communities as well as local and national governments to withstand any negative climate impacts and (2) improving the risk management capacity of households, particularly the poor, to cope with increased risks associated with climate change (figure). 1 Cotton has traditionally been favored by policy makers in Tajikistan because of its importance as a major foreign exchange earner, resulting in output being maintained at levels far above what is economically viable. Basic Elements of an Integrated Climate Change Adaptation Strategy Disaster Safety Nets & Agriculture & Economic Preparedness Insurance Rural Infrastructure Diversification Investments Risk Resilience Management Financial Services Preventive Healthcare INTEGRATED ADAPTATION Source: Adapted from L. Cord, C. Hull, C. Hennet, and G. van der Vink, (2008) cited earlier. Building greater resilience will require investments in agriculture and rural infrastructure, economic diversification and preventive healthcare. In agriculture, reforms should focus on removing constraints that tie farmers to cotton cultivation, creating incentives for efficient water management, and ensuring secure land titles. Furthermore, development of extension services will be necessary to promote sustainable land management, facilitate diversification towards crops using less water and increase agricultural productivity. Building greater resilience to climate change will entail not just reducing dependence on crops vulnerable to variability in climactic conditions, but also reducing dependence on agriculture. Creating conditions for development of more off-farm livelihoods opportunities to reduce dependence on climate sensitive activities in agriculture requires actions on several fronts—e.g. improvements in the prevailing investment climate to stimulate private investment and job-creation, skill building, better public infrastructure, etc. Lastly, health reforms should continue with an emphasis on preventive measures, improvement of hygiene and strengthening disaster preparedness of the health sector. It will also be important to increase access to clean drinking water to reduce the incidence of water-borne diseases. Strengthening risk management will require greater emphasis on measures to improve disaster management, enhance access to financial services (particularly in rural areas) and develop safety nets and insurance products. Improving early warning systems, strengthening public infrastructure (e.g. river bank protection), constructing shelters and working with communities to build their capacity to prevent and respond to disasters are good examples of disaster management activities that have already been undertaken in Tajikistan. Significant investment will be needed to scale-up such initiatives to all vulnerable locations. It is also important to improve the regulatory framework for the banking sector and provide support to development of microfinance institutions to help households and small businesses accumulate assets, diversify livelihoods/production and develop coping mechanisms that will make them less vulnerable to climate variability and extremes. Furthermore, it will be necessary to develop flexible safety net programs that address the needs of the chronic poor and can be scaled up in case of a disaster, which could help reduce poverty and increase resiliency to climate change. 13. Several development partners in Tajikistan have funded projects that contribute to climate change adaptation by promoting sustainable management of natural resources, improving community level governance, strengthening local infrastructure or improving health care, primarily at the local level using innovative community-driven approaches to improve management of natural resources and raise incomes. A supportive national regulatory framework will be imperative to allow for further development of these and other relevant initiatives and to enable faster climate change adaptation. 14. Priority sectors: When P-LITS respondents were asked to choose the single-most important priority for additional government spending related to climate change, (i) investing in increasing availability of electricity (22 percent), (ii) improving extension services and providing seeds more resilient to climate extremes (18 percent), and (iii) providing clean drinking water (14 percent) received the highest share of votes from respondents (figure); (iv) providing more help and relief after natural disasters occur (10 percent), (v) reforestation to prevent soil erosion (8 percent), (vi) providing more reliable weather forecasts (7 percent), and (vii) investing in health facilities and provision of health services (7 percent) got the next highest share of votes. In other words, the key priorities for adaptation areas emerging from the survey—agriculture, improvement of water management and infrastructure (mainly electricity supply and irrigation), disaster management and public health are the same four key areas that the country’s latest poverty reduction strategy identifies as being especially important from both a climate change and development perspective. Most Important Priority for Additional Government Spending on Climate Change Adaptation 4 3 Invest in increasing availability of electricity 5 22 Improve extension services and provide seeds more resilient to climate extremes 7 Provide clean drinking water Provide more help and relief after natural disasters occur Reforestation to prevent soil erosion 7 Provide more reliable weather forecasts Invest in health facilities and provision of health services 8 18 Invest in irrigation infrastructure Develop disaster early-warning systems Facilitate out-migration of people from areas prone to 10 14 high climate change risk Source: World Bank staff estimates based on P-LITS data. TARGETING PUBLIC INVESTMENTS: A REGIONAL VULNERABILITY INDEX 15. Which geographic locations in Tajikistan are most vulnerable to climate change? Household vulnerability to climate change depends on diverse factors—i.e. not just on likely physical impacts of climate change. This report analyzes vulnerability as a function of three main factors: (i) exposure to climate change and variability; (ii) sensitivity to impacts of that exposure; and (iii) ability to adapt to ongoing and future changes.  Exposure to climate change and variability is highest in Gorno-Badakhshan autonomous oblast (GBAO), as well as the South Khatlon lowlands because of their high frequency of extreme temperatures and broad range of intra-monthly temperature fluctuations.  Sensitivity is highest in the east mountain area Region of Republican Subordination (RRS) because of the area’s reliance on agriculture, high sensitivity to disasters, and widespread food insecurity. Sensitivity is also high in South Sughd, North-East Khatlon hills, Varzob-Zarafshan and GBAO.  Adaptive capacity varies substantially. It is highest in GBAO because of its high scores on education and income diversification; also good in the South-east Khatlon hills, the West RRS lowlands, and the South Khatlon area: areas characterized by above-average income levels and education. Vulnerability map for Tajikistan 0.7 Exposure Sensitivity 1-Adaptive capacity 0.6 0.5 0.4 0.3 0.2 0.1 0.0 Pedhzkent-Shakhristan- Tursunzade-Shakrinav- 9: East RRS mountains 8: NE Khatlon hills 11: Urban 6: South Khatlon 1: North Sughd lowlands 3: RRS-Sogd: Varzob- 5: West RRS hils, 10: GBAO 7: Southeast Khatlon Rudaki-Vakhdat 4: West RRS lowland, Zarafshan-Surkhob 2: South Sughd hills, lowlands Ganchi Gissar hills Source: World Bank staff estimates based on data from several sources. See main report for details 16. The report presents a regional index of vulnerability for Tajikistan which is constructed based on the simple average of the above exposure, sensitivity, and adaptive capacity sub-indices. Indicators of past climate variability and the frequency of disasters are used to assess exposure to climate change; health, livelihood, food security and demographic characteristics to determine sensitivity to climate impacts; while social, economic and institutional characteristics are used to assess adaptive capacity. The results show that vulnerability varies across different regions of Tajikistan according to socio-economic and institutional factors in ways that do not follow directly from exposure, geography, or elevation. To the extent that policy makers in the country wish to direct funding toward areas with the highest vulnerability to climate change, they should focus on rural areas, in particular eastern RRS mountains, Southern Sughd hills, and Khatlon hills and lowlands (see figure above). Although these zones are vulnerable for somewhat different reasons, they share a high degree of sensitivity to climate change, particular food insecurity, disaster sensitivity, and reliance on agriculture. They also have weak adaptive capacity, in part stemming from low income and education levels. Their exposure is only moderate but their high sensitivity and fairly moderate adaptive capacity render these areas vulnerable. By contrast, urban areas as a composite group have the lowest vulnerability, far lower than any of the rural zones, mainly because they have the lowest sensitivity, the second-highest adaptive capacity, and average exposure. Summary of Key Recommendations on Climate Change Adaptation in Tajikistan Facilitate economic diversification. Priority measures should include diversification of agricultural production, particularly towards crops that use less water, and promotion of off-farm livelihood opportunities to reduce dependence on climate-sensitive activities. The latter will require improvement of the business climate, skill building, enhancement of public infrastructure as well as development of banking and microfinance institutions (see paragraphs 2.4-2.16 for more information). Promote sustainable management of land resources and increase agricultural productivity. This will involve ensuring secure land ownership to provide incentives for sustainable resource use, removing constraints that tie farmers to cotton cultivation and educating farmers on modern crop and land management techniques (see paragraphs 2.28-2.31 and 2.36 for more information). Improve water management. Scale up existing initiatives aimed at decentralizing water governance, promote water saving irrigation technologies and create incentives for efficient water use, e.g. through introduction of individual meters and improving the collection rates for water provision (see paragraphs 2.28, 2.32, 2.33, 2.34). Implement health reforms with an emphasis on preventive measures, improvement of hygiene and enhancement of disaster preparedness of the health sector. Current government reforms aimed at strengthening primary health care should be continued with a particular attention to the needs of rural areas. Priority measures include raising qualifications of medical professionals in rural areas, rehabilitating the facilities and providing medical equipment, ensuring that vulnerable communities have stockpiles of essential medicine and access to transportation to take patients to urban areas in case of disasters as well as improvement of sanitation and hygiene (see paragraphs 2.17 – 2.27). Improve disaster prevention and response capacities. Scale up existing initiatives on conducting natural hazard risk assessments, improvement of early warning systems, strengthening protective infrastructure, construction of shelters and working with communities to improve their disaster response and prevention capacities (see paragraphs 2.38 – 2.44 for more information). Introduce flexible safety net programs that will address the needs of the chronic poor and could be expanded in case of a disaster or other shock. It will be best to limit the number of programs but ensure that they are well targeted and adequately financed (see paragraphs 2.53 – 2.60 for more information). Integrate climate risk into sectoral and national policy documents as well as budget frameworks . This will involve improving knowledge on climate change issues of the government officials, conducting sectoral vulnerability assessments, development of the National Adaptation Strategy as well as integrating climate risks into national and regional development plans to ensure that achievement of short-term goals (e.g. in the areas like infrastructure investments or the use of natural resources) does not increase the country’s vulnerability in the long-run (see paragraphs 2.65 and 2.68 for more information). Consider geographic targeting of adaptation investments. To the extent that policy makers wish to direct funding toward areas with the highest vulnerability to climate change, they should focus on rural areas, in particular eastern RRS mountains, Southern Sughd hills, and Khatlon hills and lowlands. These areas have the highest sensitivity to climate change impacts and the lowest adaptive capacity (see chapter 3 for more information about geographic variation in vulnerability).