Adaptation to Climate Change — Vulnerability Assessment and Economic Aspects Ministry of Foreign Affairs Government of the Netherlands Adaptation to Climate Change — Vulnerability Assessment and Economic Aspects PLURINATIONAL STATE OFThe World Bank Group1818 H Street, NWWashington, D.C. 20433 USA PLURINATIONAL STATE OF BOLIVIATel: 202 473 1000 BO LI V I AFax: 202 477 6391www.worldbank.org/eacc
ii ADAPTATION TO CLIMATE CHANGE: VULNERABILIT Y ASSESSMENT AND ECONOMIC ASPECTSEACC Publications and Reports1. Economics of Adaptation to Climate Change: Synthesis Report2. Economics of Adaptation to Climate Change: Social Synthesis Report3. The Cost to Developing Countries of Adapting to Climate Change: New Methods and EstimatesCountry Case Studies:1. Bangladesh: Economics of Adaptation to Climate Change2. Bolivia: Adaptation to Climate Change: Vulnerability Assessment and Economic Aspects3. Ethiopia : Economics of Adaptation to Climate Change4. Ghana: Economics of Adaptation to Climate Change5. Mozambique: Economics of Adaptation to Climate Change6. Samoa: Economics of Adaptation to Climate Change7. Vietnam: Economics of Adaptation to Climate ChangeDiscussion Papers:1. Economics of Adaptation to Extreme Weather Events in Developing Countries2. The Costs of Adapting to Climate Change for Infrastructure3. Adaptation of Forests to Climate Change4. Costs of Agriculture Adaptation to Climate Change5. Cost of Adapting Fisheries to Climate Change6. Costs of Adaptation Related to Industrial and Municipal Water Supply and Riverine Flood Protection7. Economics of Adaptation to Climate Change-Ecosystem Services8. Modeling the Impact of Climate Change on Global Hydrology and Water Availability9. Climate Change Scenarios and Climate Data10. Economics of Coastal Zone Adaptation to Climate Change11. Costs of Adapting to Climate Change for Human Health in Developing Countries12. Social Dimensions of Adaptation to Climate Change in Bangladesh13. Social Dimensions of Adaptation to Climate Change in Bolivia14. Social Dimensions of Adaptation to Climate Change in Ethiopia15. Social Dimensions of Adaptation to Climate Change in Ghana16. Social Dimensions of Adaptation to Climate Change in Mozambique17. Social Dimensions of Adaptation to Climate Change in Vietnam18. Participatory Scenario Development Approaches for Identifying Pro-Poor Adaptation Options19. Participatory Scenario Development Approaches for Pro-Poor Adaptation: Capacity Development Manual
P LU R I N AT I O N A L STAT E O F B O L I V I A CO U N T RY ST U DY iA Pilot Study of theEconomics of Adaptationto Climate ChangePLURINATIONAL STATE OFBO L IV IA Ministry of Foreign Affairs Government of the Netherlands
P LU R I N AT I O N A L STAT E O F B O L I V I A CO U N T RY ST U DY iiiContentsAcronyms ixAcknowledgments xiExecutive Summary xiii1. Motivation and Context of the Study 1Background 1Scope and Study Approach 22. Background on Bolivia’s Economy 5The Socioeconomic Context 5The Institutional Context 63. Vulnerability to Climate Variability and Climate Change 11Exposure to Extreme Events 12Coping Strategies and Current Climate Variability 14Assessment of Climate Change Impacts under Future Uncertainty 184. Sector Analysis: Agriculture 21Sector Description 21Impact and Vulnerability to Climate Change of the Agriculture Sector 22Adaptation Options for Crop Production 275. Sector Analysis: Water Resources 33Sector Description 33Vulnerability of Water Resources Infrastructure to Climate Change 35Adaptation Options: Rural Water Resources 36Adaptation Options: Irrigation Infrastructure 40Estimated Costs of Structural Adaptation Measures for Irrigation 42Water Supply and Sanitation in Urban Areas 46
iv ADAPTATION TO CLIMATE CHANGE: VULNERABILIT Y ASSESSMENT AND ECONOMIC ASPECTS6. Local-level Perspectives on Adaptation to Climate Change 53Past Adaptation and Coping Practices 547. Cost-benefit Analysis of Adaptation Investment Options 618. Methodology Investment Planning Tool (MIP)for the Selection of Adaptation Options under Future Climate Uncertainty 65Selection of Robust Strategies 65Model Analysis 69How Welfare is Lost 74How Welfare is Restored 74The Effect of Discounting 759. Overall Conclusions and Lessons Learned 81Social Dimensions of Climate Change 81Agriculture 82Water Resources 84Investment Planning Tool 87How to Move Forward? 8710. Works Cited 90Annexes (available on line at www.worldbank.org/eacc)AnnexesAnnex 1: Assessment of Climate Change Impact and Adaptation Actions for the Water Resources of BoliviaAnnex 2: Climate Change Impacts and Adaptation Measures Regarding Production of Four Crops of High Importance for the Bolivian Economy (in Spanish)Annex 3: National Irrigation Program, Mizque Basin, 2004–14-Viceminister of Water Management and Irrigation (in Spanish)Annex 4: Adaptation to Climate Change for the Water Resources Infrastructure and Irrigation Management (in Spanish)Annex 5: Social Perspectives of Climate Change and Adaptation in Bolivia (in Spanish)
P LU R I N AT I O N A L STAT E O F B O L I V I A CO U N T RY ST U DY vFigures1. Average Annual Precipitation in Bolivia 1951-2002 122: Most Vulnerable Municipalities Selected by Macro-region 133. Small and Poor Countries Financially Vulnerable to Extreme Weather Events 144. Annual Percentage Change of Agriculture GDP with the Effect of El Niño and La Niña Years 175. Projected Precipitation Changes to 2050 Under Different Climate Scenarios 196. Regional Distribution of Four Crop Cultivation 217. Estimated Changes in Annual Evapotranspiration Under Three Different 24 Climate Conditions for Ten Weather Stations Up to 2050 8. Relative Yield of Quinoa for Three Climate Scenarios and a Scenario 25 with No Precipitation in the Critical Phenological Period (Ratio of Simulated 2050 to Historical Yield) 9. Relative Yields of Three Potato Varieties for Three Climate Scenarios 26 and a Scenario with No Precipitation During the Critical Phenological Period (Ratio Simulated 2050 to Historical) 10. Relative Soy Yield for Three Climate Scenarios and a Scenario with No Precipitation 27 in the Critical Phenological Period (Ratio Simulated 2050 to Historical Yield) 11. Relative Maize Yield for Three Climate Scenarios (Ratio Simulated 2050 to Historical) 2712. Projected Water Availability Index by 2050: Current, Wet, and Dry Scenarios 3413. Water Demand by Sector at Year 2000 and 2050 3614. Adaptation Strategies Aand Measures 4315. Water Supply vs. Cost—Dams 4416. Socioeconomic Strata of Local Communities 5417. Past Responses to Climate Events 5418. Distribution of Calculated Internal Rates of Return (IRR) on 74 Irrigation 67 Pronar Projects 19. Tradeoff Between Social Benefits and Families Affected (Estimated Budget=$6 Million) 7020. Tradeoff Between Social Benefits and Families Affected (Budget=$4 Million) 7021. Tradeoff Between Social Benefits and Families Affected (Budget=$2 Million) 7122. Baseline Scenario (Current Climate in 2090) 7223. Future Climate in 2090 Under a Dry Scenario 7224. How Social Welfare is Restored (Centralized Management, 0% Discount Rate) 7325. Capacity Utilization of Projects 56 and 62 Under Dry Scenario 7426. Cash Flow of Investment Programs Having Equal Social Benefits 75 (Dry Scenario, 0% Discount Rate) 27. Restoring Welfare (Centralized Management, 6% Discount Rate) 7628. Cash Flow of Investment Programs Having Equal Social Benefits 7729. Strategic Components for Water Management 85
vi ADAPTATION TO CLIMATE CHANGE: VULNERABILIT Y ASSESSMENT AND ECONOMIC ASPECTSTablesEs-1. Cost-Benefit Analysis of Adaptation Measures in the Agriculture and Water Sectors xviii1. Direct and Indirect Effects of Drought on Local Populations 162. Economic Impact of the El Niño Events Since 1983 173. Summary of Main Climatic Characteristics of the Bolivia Wet and Dry Scenario 194. Vulnerability of Crops to the Main Climatic Stresses, Under Present and Future Conditions 235. Adaptation Strategy of the Contorno Calacoto Community 286. Economic, Social, and Environmental Costs for the Implementation of Adaptation Options in Four Crops 297. Economic, Social and Environmental Benefits for the Implementation of Adaptation Options in Four Crops 298. Social and Environmental Viability of Adaptation Options in Four Crops 309. Examples of Measures for Best Use of Existing Water Resources 3910. Examples of Rainwater Harvesting 3911. Examples of Improvement or Expansion of Existing Systems 4012. Seasonality in Irrigation Systems (Hectares) 4013. Summary of Infrastructure Costs 4414. Changes in Water Supply for Dry and Wet Climate Scenarios of 2050 4515. Projected Annual Irrigation Water Demand in 2050 4516. Total Accumulated Deficit of Water for Irrigation 4617. Total Estimated Costs for Water Infrastructure Needs to 2050 4618. Adaptation Cost for Climate Change Scenarios 4719. Key Climate Variables in Relation to the Urban Sector 4820. Number of Municipalities Studied for the Social Component, by Macro-Region 5321. Prioritized Adaptation Strategies (Planned and Autonomous) by Community in the Plains Region 5622. Prioritized Adaptation Measures by Community in the Altiplano Region 5723. Cost-Benefit Analysis of Adaptation Measures in the Agriculture 62 and Water Resources Sectors 24. The Effect of Climate Change on Social Benefits of the Pronar Investment Program 69 in the Mizque Watershed (6% Discount Rate, NPV in $ Millions) BoxesES-1. The Mizque Watershed Mixed Integer Programming Investment Model xx1. Access to International Funds for Adaptation: Pilot Program for Climate Resilience (PPCR) 82. Agriculture Insurance 313. Rio Los Negros, Bolivia –Beehives and Barbed Wire 384. Limitations of the Study 88
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P LU R I N AT I O N A L STAT E O F B O L I V I A CO U N T RY ST U DY ixAcronymsAAPS Auditing and Social Control Authority of Water Supply and SanitationANESAPA National Association of Water Supply and Sanitation UtilitiesCAF Andean Development CorporationCEPAL Economic Commission for Latin America and the CaribbeanCRU Climate Research Unit (University of East Anglia, U.K.)CSIRO Commonwealth Scientific and Industrial Research OrganizationEACC Economics of Adaptation to Climate ChangeENSO El Niño Southern OscillationGCM General Circulation ModelIHH Institute of Hydraulics and HydrologyINE National Institute of StatisticsIPCC Intergovernmental Panel on Climate ChangeIWRM Integrated Water Resources ManagementMNACC National Mechanism for Adaptation to Climate ChangePNC National Watershed PlanPNCC National Program for Climate ChangePNRR National Rehabilitation and Reconstruction PlanPNSB National Basic Sanitation PlanSENAMHI National Meteorological and Hydraulics ServiceSRES Special Report on Emissions ScenariosSWAT Soil and Water Assessment ToolUDAPE Social and Economic Policy Analysis UnitVIDECICODE Vice Ministry of Civil Defense and Cooperation for DevelopmentWFP World Food ProgramNote: Unless otherwise noted, all dollars are U.S. dollars.
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P LU R I N AT I O N A L STAT E O F B O L I V I A CO U N T RY ST U DY xiAcknowledgmentsThis study was undertaken by a World Bank core Policy Analysis (UDAPE-spanish acronyms) for theteam that included Ana Bucher (country coordina- provision of data, local information, guidance, andtor), Carina Bachofen, Robert Schneider, Laurent support in the development of the report.Cretegny, David Corderi, Morten Blomqvist, andRuth Llanos. This synthesis report was written and The team is grateful to the following people for vitaledited by Ana Bucher and Carina Bachofen. The inputs, reviews, and criticisms of the project: Viceoverall EACC study was coordinated by Sergio Minister of Environment, Biodiversity, and ClimateMargulis (Task Team Leader). Change Juan Pablo Ramos, Ing. Jaime Villanueva (Director PNCC), Lic. Ivy Beltran (PNCC), Ing. JoseThe report draws on the work of many local part- Gutierrez (PNCC), Lic. Daniel Vargas (VDP), Har-ners and individuals who prepared separate sector ley Rodriguez (VIPFE), and Lic. Fernando Carrascochapters. The agriculture chapter was developed by (VIPFE). In addition, strong support was provided bya team including Dr. Magali García Cárdenas (team the local donor community, which is represented byleader, Facultad de Agronomia, Universidad Mayor Mr. Fernando Mendez (British Embassy-DFID), Mr.de San Andres (UMSA)), Ing. Jorge Cusicanqui Eugster Sebastian (Swiss Cooperation-COSUDE),(Facultad de Agronomía, UMSA), Dr. Bruno Con- and Mr. Rob van den Boom (The Netherlandsdori Alí (Fundación PROINPA), Victoria Parra Goi- Embassy).tia (UMSA), Ing. Gladys Tesoro Michel (UMSA),Ing. Claudia Saavedra (UMSA), Dr. Carmen Rosa The EACC team is extremely grateful to all theDel Castillo Gutierrez (UMSA), Ing. Consuelo members of the World Bank Latin America andLuna (UMSA), Ing. Claudia Canedo (UMSA), and Caribbean region and the Bolivia Office for its con-Ing. Carlos Cabrera (UMSA). The water resources tinued support in the development of the study. Inchapter was prepared by Dr. Victor Vazquez and particular, we would like to express our gratitudeIng. Alvaro Lambert. The social studies chapter to Oscar Avalle (Country Manager), Maria Elenawas prepared by Lic. Miguel Morales. Cost-benefit Soria, Ruth Llanos, and Morten Blomqvist, for theiranalysis was written by Dr. Fernando Cossio and extensive contributions to the development andLic. Valeria Sanchez (Institución Internacional de review of the report. We could not have completedEconomía y Empresa, IIDEE). The author of the this work without the continuous logistical supportmodeling work for the planning investment tool was provided by Monica Torrelio, Rosario Monroy, andErwin Kalvelagen. Monica Claros (Bolivia country office), Hawanty Page (ENV), and Grace Aguilar (ENV).The study team would also like to thank the gov-ernment of the Plurinational State of Bolivia and The report has benefited greatly from peer reviewin particular, the Vice Ministry of Environment, comments and other feedback from World BankBiodiversity, and Climate Change, the National staff, including Maximiliam Ashwill (LCSSO),Program for Climate Change (PNCC-spanish acro- Dilma Flores (ETWAN) Jorge Treviño (LCSAR),nyms), the Vice Ministry of Planning and External and Erwin de Nys (LCSEN), as well as from externalFinance (VIPFE), Vice Ministry of Development peer reviewers, including Joel Smith (Stratus Con-and Planning (VDP), and Unit for Socioeconomic sulting) and Gordon Hughes (consultant).
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P LU R I N AT I O N A L STAT E O F B O L I V I A CO U N T RY ST U DY xiiiExecutive SummaryContext efforts to adapt to climate variability and change. For example:The Economics of Adaptation to Climate Change(EACC) study estimates that it will cost $75 – $100 ■■ The Bolivian population has always beenbillion each year for developing countries to adapt exposed to hydrometeorological extremes andto climate change from 2010 to 2050 (World Bank climate variability, particularly because of2009a). The study —funded by the governments the influence of the El Niño Southern Oscil-of the Netherlands, United Kingdom, and Swit- lation (ENSO), which—regardless of climatezerland—has two specific objectives. The first is change—occurs periodically in different areasto develop a “global” estimate of adaptation costs across the country.to inform the international community’s efforts onhow to tailor adequate and sustainable support ■■ Floods, landslides, and droughts, all of whichregarding new and additional resources to help have serious implications for food securityvulnerable developing countries meet adaptation and water supply, are common climate-costs. The second objective is to support decision related events.makers in developing countries to better evaluateand assess the risks posed by climate change and to ■■ Its economic mainstays—mining and hydro-better design strategies to adapt to climate change. carbon extraction—suggest it is relatively insensitive to climate change, yet most ofThe EACC study includes a global track to meet its people are engaged in small-scale agri-the first study objective and a case study track culture and are quite vulnerable to changesto meet the second objective. The country track in climate.comprises seven countries: Ethiopia, Mozam-bique, Ghana, Bangladesh, Vietnam, The Pluri- ■■ Climate projections suggest changes in mostnational State of Bolivia, and Samoa. precipitation patterns with a possible extended dry season, weakened early onset of rains, andScope and Background more intense rainy seasons. However, vari- ability in precipitation estimates across climateBolivia—known formally as the Plurinational models is still very large and with limited vali-State of Bolivia—faces a complex challenge in its dation with local data.
xiv ADAPTATION TO CLIMATE CHANGE: VULNERABILIT Y ASSESSMENT AND ECONOMIC ASPECTSThese characteristics were important factors in Based on the government’s recommendation andthe design and development of the study, whose adjustment to the Bolivian context, the study pro-objective was to support existing efforts for the vides new insights on models and tools that canimplementation of a national adaptation strat- help estimate potential climate impacts and theegy in the country. For this purpose, the study cost of adaptation options. Further, new meth-evaluated a range of adaptation options for two odologies are tested and recommendations pre-of the most vulnerable sectors in Bolivia: agri- sented regarding areas where additional research,culture (crop production of potato, quinoa, soy, data, and capacity is needed to enhance adap-and maize) and water (irrigation infrastructure tation action plans. Finally, the study highlightsand urban sanitation). In addition, a social com- robust climate actions that could be implementedponent complemented the analysis and shed under any future scenarios despite uncertainties.light on the distributional implications of differ- Given the worldwide political importance ofent adaptation options on poor and vulnerable climate change, the findings of this study havegroups. A new development planning tool and great interest and relevance for policy making.climate change—based on a series of environ- The report, therefore, is aimed at a very broadmental, social and economic inputs— provides a audience, although it is primarily written havingnew resource for decision makers to sequence and policy-makers in mind.prioritize identified adaptation options. The studydemonstrates the use of the tool by evaluating, at Key conclusions may contribute to the deploy-a watershed level, the feasibility and robustness ment of new methodologies and actions inof planned investments under projected climate relation to a climate resilient growth in Bolivia.change scenarios. However, the findings and results of the study do not necessarily reflect the opinion or views of theThe study’s authors have engaged and main- government of Bolivia and are solely based ontained a dialogue with the local government to scientific results.assure alignment with the local needs and inter-ests. This process meant an expansion of the Bolivia’s vulnerability tosocial vulnerability study, a reduction of the eval- climate changeuation of adaptation costs and a modification ofthe scale of analysis for the socioeconomic invest- Insufficient national meteorological data and pro-ment planning tool. Further, although national found differences between different global hydro-aggregated costs of adaptation actions were ini- meteorological models make climate adaptationtially defined as one of the study’s main objec- uncertain. At present, climate science does nottives, the Bolivian government did not consider provide sufficiently reliable ways of determiningthese estimates very useful at this time, in part whether dry or wet scenarios are more likely, so thebecause of existing data limitations and difficul- fundamental goal of adaptation must be to investties in capturing the ecological and cultural diver- in building resilience to manage risk under a rangesity of the country, thus resulting in too many of possible outcomes. Resilience to weather shocksuncertainties in the quality and aggregation of is a high priority irrespective of climate change.sector data. The Government’s interest focusedpredominantly on the new knowledge the study Within the last few decades, climate analysis fromgenerated about adaptation measures in the agri- El Niño and La Niña events suggests increas-culture, social, and water sectors, as well as on ing trends in the occurrence and intensity ofthe formulation of development planning tools these events. In Bolivia, the accumulation ofthat integrate adaptation options. these events within shorter time frames can easily
P LU R I N AT I O N A L STAT E O F B O L I V I A CO U N T RY ST U DY xvthreaten development-as-usual patterns, given the 2.41˚C and a decrease in precipitation of -19 per-public sector’s serious financial limitations. This cent averaged across the Bolivian territory. Highervulnerability underscores the need for developing temperatures and fewer frosts will probably stimu-adaptation strategies that increase Bolivia’s resil- late agricultural production in the Altiplano andience against future climate disasters and promote the valleys. The key uncertainties concern the totalsustainable development (World Development amount, timing, and intensity of precipitation. IfReport, World Bank 2010). The understanding the dry scenarios are correct, then the benefits ofof local vulnerability can present new information higher temperatures will be more than offset byregarding additional costs of adaptation actions more frequent and severe periods of low rainfall –and the needs for adequate and sustainable sup- especially in the southwest, together with an uncer-port (from international as well as national sources) tain effect in the north. On the other hand, if theto facilitate implementation of robust adaptation wet scenarios are correct, then agricultural yieldsinterventions and increase climate resilience. should increase throughout much of the country, but this would require upgrades in infrastruc-Though Bolivia’s overall economy appears to be ture (flood control, water storage, and irrigation)relatively climate resilient due to the high impor- together with improved agricultural practices.tance of hydrocarbon and mineral extraction inthe economy, a relatively small percentage of the Finally, climate change will not only affect ruraltotal population is engaged in this sector. A large areas. Several major cities located in the upperportion of the country’s population is extremely watersheds in the Altiplano and valley regions—vulnerable to the effects of climate change, as such as La Paz-El Alto, Sucre, Potosí and Cocha-it relies on subsistence agricultural production. bamba—are significantly vulnerable to climateApproximately 30 percent of Bolivia’s rural popu- variability and water scarcity. These cities arelation resides in the valleys and high plateau areas, highly exposed to decreasing rainfall trends,where water availability is already problematic. In unexpected changes in seasonality, and prolongedaddition, these communities have limited means to droughts. The case of La Paz-El Alto is partic-cover the costs of adaptation. For the majority of ularly alarming due to the melting of the Cha-the population, the impact of climate change on caltaya and Tuni-Condoriri glacier, which willBolivia’s development and welfare is thus highly reduce natural water supply, adding more stressuncertain. Under most scenarios, subsistence to a system where demand has already matchedfarmers and other poor households are likely to be supply. The water supply system of La Paz-El Altomost affected by changes in weather variability and suffered a scarcity alert in the wet season of 2008water availability associated with climate change. that was repeated in the fall of 2009. EmergencyUncertainty is greatest for the particularly vulner- measures, such as drilling wells were implementedable rural populations in the Altiplano. to be able to meet demand levels in those periods. However, there is no information on groundwaterThe study considers two extreme climate scenarios resources and recharging capacity of the aquifers.in terms of water availability in order to simulate Water shortages have already incited social con-the range of worst-case scenarios, assuming that flicts in Cochabamba, Sucre, and Tarija.any possible changes in the Bolivian climate arelikely to occur somewhere between these two. The Potential to adapt – strategies forwet scenario for Bolivia forecasts an average tem- the water and agriculture sectorsperature increase of 1.55˚C and an annual meanprecipitation increase of +22 percent, whereas The study in Bolivia primarily looked at the agri-the dry scenario shows a temperature increase of cultural and water sectors. Even though the focus
xvi ADAPTATION TO CLIMATE CHANGE: VULNERABILIT Y ASSESSMENT AND ECONOMIC ASPECTSis mainly economic, political and institutional Under the wet scenarios, there will be an increaseissues play a central role in understanding and in flooding, especially in the valleys and the east-identifying solutions to some of the major adap- ern lowlands. Reforestation, development of sys-tation challenges. Without fundamental improve- tems for flood warnings, and disaster preventionments in the policies and institutions that finance, can all reduce the economic and social costs ofmaintain, and invest in the water and agriculture flooding in lowland areas.sectors, additional resources aimed at buildingresilience are not likely to be effective in the long The causes of current urban water shortages inrun. Adaptation in Bolivia must go hand-in-hand Bolivia, a major social and economic problem,with development. are complex, involving serious problems of insti- tutional instability, under-financing, and poorWater management and irrigation demand management. Climate change exacer-Investment in better water management will bates this scenario. As discussed in the urban waterenhance the resilience of Bolivian farmers both section, the main adaptation need for rural andto systematic changes associated with annual peri-urban populations concerns their need forlevels of rainfall, as well as greater year-to-year increased access to water and sanitation services.1volatility in the rainfall patterns. Improved water A priority measure will be to extend existing urbanmanagement practices are conducive to smart networks to the peri-urban areas with no accessdevelopment even in the absence of climate to water and sanitation services. Rapid growthchange; thus, this type of no-regrets investment of these areas needs to be planned in advance towill make sense given the prevailing uncertainty ensure adequate service (qualitative classificationabout future climate change. Yet the level and of each adaptation measure mentioned above islocation of investment must take account of further described in Annex 1: Climate Changeongoing changes in agricultural productivity Impacts and Adaptation on Water Resources).within the country, so investments are allocated The guiding principle to adaptation in the urbanto meet future patterns of production rather areas should be, as for rural areas, to develop at athan based on historical patterns. faster rate and enhance proactive measures such as increased maintenance of infrastructure and lessWater storage and harvesting is crucial to increase restoration needs. In addition, it would be advisableirrigation coverage in the agricultural sector. Irri- to consider the integration of “economics aspectsgation is the major source of water consumption of climate change” within new terms of reference(84 percent of all water resources) and is supposed for development plans (i.e. modification of the fiveto increase in the future due to current agriculture master plans for urban sanitation in Bolivia). Thisexpansion plans. However, the efficiency of tra- calls not only for increased investments but alsoditional irrigation systems is relatively low. While institutional capacity and governance in order towater resources are abundant for the whole coun- speed up investments based on solid data, investi-try, improving storage efficiency in wet periods gation, and planning.to meet irrigation demand in deficit areas—suchas the south of the Altiplano and El Chaco—is Agricultureessential. Improvements in irrigation need to be The crops analyzed were quinoa, potato, maize andaccompanied by better overall management of soy. These crops are cultivated from the Altiplanowater resources, including improved integrated to regions at lower elevations. All four crops, espe-watershed management in deficit watersheds, cially maize and potatoes are important sources ofwhere resource competition between rural andurban populations is likely to increase. 1 See urban water section of Annex 1.
P LU R I N AT I O N A L STAT E O F B O L I V I A CO U N T RY ST U DY xviicalories in the diet of an average family. Soy is, of methods of growing existing crops—with agri-course, a major export crop and consequently fun- cultural extension and education to disseminatedamental to the economy of Santa Cruz, as soy and facilitate the adoption of new technologies.exports accounts for 30 percent of Bolivia’s GDP. Again, a substantial commitment to agriculturalAnalysis of the potential effect of climate change R&D and extension would form an importanton crop yields revealed mixed results. The study component of any development strategy focus-estimates that Bolivia’s agriculture sector under ing on the needs of rural communities withouta wet climate scenario would benefit significantly any consideration of climate change. The keyfrom a warmer and wetter climate. Under such requirement may be to ensure that the focus ofa scenario, yields for maize and soybeans, would R&D and extension is on reinforcing the capac-increase 40 to 45 percent, and potatoes and qui- ity of farmers to respond to climate variability innoa yields would increase 60 to 90 percent. How- the short and longer term, as well as to be pre-ever, water availability at the early planting stages pared for the requirements of climate conditionsremains the key limiting factor. The expected crop in 2050, rather than those of 2000.yield losses from a drier climate are lower that thegains from a wetter and hotter climate. Economic aspects of adapting to climate changeOn the other hand, the dry scenarios would leadto a reduction in agricultural yields in the Alti- Based on the identified needs in the agriculturalplano, the valleys, and the El Chaco regions. The and water sector to improve access to irrigationeffects of less rainfall and higher evaporation and decrease water shortage as key adaptationcould only be offset by (a) a substantial investment interventions, three different economic assess-in water storage and irrigation infrastructure, and ments were made regarding the costs, benefits(b) the adoption of more drought-resistant vari- and sequencing of alternative adaptation mea-eties and crops in the lowlands. Potential losses sures at different levels.under a dry climate scenario are projected to beapproximately 25 percent for maize and 10–15 The first exercise assessed the robustness of plan-percent for soybeans, potatoes, and quinoa. These ning investments in the water sector by evaluatingresults are driven by the agricultural benefits of costs and benefits of Government selected projectsa warmer, more frost-free climate. They suggest that reflect types of adaptation measures for agri-that rapid and timely implementation of irriga- culture and water resources previously identifiedtion (at least at the initial phases of crop devel- under the National Adaptation Plan for Bolivia.opment) would be even more attractive under a Projects were selected primarily based on the avail-scenario of warmer climate. In both a wet and ability of data and regional distribution. Waterdry climate scenario, access to irrigation is a key projects included water supply and water man-adaptation intervention to reduce the vulnerabil- agement, and the agricultural consisted primarilyity to the increased climate variability, including a of irrigation projects. The analysis was made inshorter rainy season, droughts, and expected dry terms of financial (market) values and in socio-spells during the rainy season. economic terms (shadow prices), and integrated climate change variables (temperature and precipi-Another important area of adaptation concerns tation) under a dry (worst case) and a no changethe combination of agricultural R&D and imple- climate scenario in 2050.2 The objective was notmentation and transfer of new technologies— to evaluate the projects themselves, but rather theirparticularly the development of new crops andvarieties as well as the validation of improved 2 A wet scenario was not available at the time of the analysis
xviii ADAPTATION TO CLIMATE CHANGE: VULNERABILIT Y ASSESSMENT AND ECONOMIC ASPECTS Table ES-1 Cost-benefit analysis of adaptation measures in the agriculture and water sectors Investment Project Costs (000) Beneficiaries NPV1 (000) IRR (%) NPV1 (000) IRR (%) Baseline Dry scenario WATER Distribution in Sapecho 3,440 2,199 persons 3,428 24 3,331 24 Potable water S.P. Cogotay 408 140 persons 8 13 3 13 Well drills Chapicollo 317 50 families 187 17 151 17 Flood Control Caranavi 4,052 528 houses 2,658 22 2,658 22 AGRICULTURE Irrigation dam S.P.Aiquile 11,476 147 ha 2,583 16 4,195 18 Dam restoration Tacagua 313,623 907 ha (184,275) 3 (171,580) 3 Wall elevation Tacagua dam 120,457 907 ha 9,705 14 21,563 16 Irrigation B.Retiro S Paraisito 3,686 178 ha 17,260 71 14,874 63 Catchment Atajados/Aiquile 1,951 32 ha 115 14 347 16 1 NPV = Net present value Note: parenthesis values indicate a negative NPV, suggesting that the dam restoration project is not economically feasible in this location.economic feasibility and robustness as appropri- However, the selection of projects is limited toate adaptation measures to climate variability in rural areas due to data availability at the time ofBolivia (Table ES-1). this analysis. It excludes the larger infrastructure projects in urban areas as these projects are usu-Under a dry scenario, the results suggest that the ally excluded from national budgets and mostlyAltiplano will be favored by increased tempera- financed by international cooperation.tures, while the oriental and Chaco zones will benegatively affected by increased temperatures and The second exercise considered the possible effectreduced precipitation. These results are in accor- of climate change on a planned long-term irri-dance with the spatial distribution of the projects gation program at the watershed level (Nationalwhere, depending on the area, the Internal Rate Watershed Program—the Spanish acronym isof Return (IRR) is reduced due to these regional PNC). The exercise evaluated the cost of providingimpacts. The agriculture projects show a slight the required level of additional water storage infra-increase of the IRR under the climate change sce- structure to meet PNC’s planned irrigation expan-nario in the highland zones (except the B.R. Parais- sion to 2011 and estimated up to 2050. This wasito project). This suggests that current planned based on an analysis of water deficit and water sur-investment in agriculture and water resources con- plus months, and therefore the necessity and poten-tinue to be robust to climate change at least under tial to reallocate additional water through storageextreme conditions. Thus, current adaptation mea- under a wet and a dry extreme climate scenario.sures in Bolivia represent primarily good develop- The estimated cost of the additional waterment strategies under climate variability. storage required to match future monthly water deficits due to climate change, wouldThe cost benefit analysis illustrates the use of an be of additional $12 million to the pro-economic tool for the evaluation of robustness jected baseline (no climate change) of irri-of investment projects under a changing climate. gation needs by 2050 under the wet climate
P LU R I N AT I O N A L STAT E O F B O L I V I A CO U N T RY ST U DY xixscenario, and an additional $60 million proved unfeasible. The challenge to use similarunder the dry climate scenario. approaches to determine the optimal timing of adaptation projects in all sector remains.The third exercise explored the effect of climatechange on PNC’s planned investment program Local-level perspectives onfor the Mizque watershed through the application adaptation to climate changeof a mixed integer mathematical programmingmodel (MIP). The Mizque watershed PNC study The populations most vulnerable to climate changeinvestigated climate change, climate uncertainty, are the poorest, who generally reside in dry zonesand decentralization budget policy on the poten- (central and southern Altiplano, valleys and plains),tial benefits of the PMIC-Mizque. This is a water- and along riverbeds in lowland areas. Their liveli-shed that has been identified as being particularly hoods are based on rainfed agriculture, extensivesusceptible to climate effects by impact analysis. livestock farming, forest harvesting, hunting, and fishing. The livelihood of these local communitiesWithin the assessment, allowing for climate depends on the climate. They have few alterna-change impacts appears to modify the original tives to diversify their income, and no economicdevelopment plan and implies a significant reduc- resources to invest in adaptation preventive actionstion in the return on the program under at least and infrastructure. Results from the social compo-one scenario. The investment model tool identi- nent reveals that communities perceive the climatefied the most vulnerable population, and how to is getting hotter, the weather is more unpredictable,restore watershed-level benefits to their baseline and almost everyone emphasizes that rainy seasonslevels through accelerated investment. However, are shorter than previous decades. In other words,ensuring that additional watershed benefits reach the communities did not see climate change as athose suffering directly from water shortages is future scenario but as already occurring.more difficult. This type of planning model per-mits a detailed comparison of investment alterna- Rural and indigenous communities have a longtives and the potential effect of climate change on and rich history of systematic observation of thethem—and it does so within a planning frame- climate; indeed, their survival depends on thiswork that is consistent over time. The approach capacity. Climate change and increasing climatealso facilitates investigation of the robustness of variability mean that many of the climatic indi-alternative investment strategies to possible cli- cators (i.e. shift in crop calendars) used by thesemate outcomes, something that is particularly communities are becoming less effective, so thatimportant in view of the uncertainty over possible people are in need of new indicators (access toclimate outcomes (Box ES-1). historical climate trends and projections) to diag- nose and predict future variability.Lastly, it is important to note that the originalintent was to use the Bolivia study to do a much The social component of the EACC Bolivia studymore ambitious exercise—to use the same math- aimed to (a) identify how the impacts of climateematical modeling to identify the economically change will affect the poorest and most vulner-optimal timing of different adaptation projects, in able populations in Bolivia; (b) better understanddifferent sectors, all competing for resources from how the most vulnerable communities perceivea constrained budget. As this more ambitious climate change and what, in their view, wouldexercise started, the team immediately was con- be the most appropriate adaptation measures tofronted with an immense requirement for data, strengthen the resilience of these populations;including the costs of a range of projects, and this and (c) understand what types of public policies
xx ADAPTATION TO CLIMATE CHANGE: VULNERABILIT Y ASSESSMENT AND ECONOMIC ASPECTS Box ES-1 The Mizque Watershed Mixed Integer Programming Investment ModelThrough the application of a mixed integer mathematical programming model (MIP), the Mizque watershedstudy evaluates the effect of climate change on the government’s potential investment program as identifiedby the PMIC-Mizque study. Seventy-four investment projects in 22 sub-basins were considered, each having aninitial investment cost-- Operation & Maintenance assumed at 1 percent per year of initial investment-- and netfarmer revenue based on sub-basin cropping patterns. New projects and rehabilitation of existing projects com-pete for budgetary resources, each requiring a quantity of irrigation water determined by the cropping pattern.Existing projects include competing needs between irrigation projects, potable water, and livestock. Availablewater is adjusted for climate change under three scenarios: a baseline scenario that maps out current climateand water availability, a “dry” scenario, and a “wet” scenario. In optimizing the sequencing of investmentthrough time, projects can be built or rehabilitated any time up to 2050. Projects can also be built and not usedto full capacity if, for example, water becomes constraining toward the end of the 40-year investment horizon.This study is now available for government’s use and adaptation to other circumstances. Importantly, the studymethodology is completely transparent and is a straightforward extension of the work already undertaken bygovernment and donors. The model permits analysis of the effect of (a) discount rates (or benefit/cost cut-offrates); (b) centralized vs decentralized budget management, and (c) climate change. In its current form, themodel exercise can investigate either maximizing net social benefits or the number of families benefited. Themain findings of the model are:n Effect of climate change effect on the investment plan. Relative to the current climate, the effect of a “dry” future climate scenario would be to reduce the potential social benefits of the PMIC-Mizque irrigation pro- gram by 3–5 percent. The effect of the “wet” future scenario would be to increase benefits by 1–3 percent, as more water would be available for irrigation. These results vary somewhat at different levels of the budget constraint and between a decentralized versus a centralized management policy.n Effect of decentralized budget management effect on investment plan. In the Mizque watershed, decen- tralized budgets to the sub-basin level could reduce potential benefits significantly if no overall coordination and planning is established at the watershed level. This is the case whether the objective of the model is to maximize national social benefits or to maximize the number of families benefiting. The MIP model estimates that decentralized budgeting reduces social benefits and/or the number of families directly benefiting from the projects by between 2 percent and 30 percent. Under a tight budget and a policy to maximize employ- ment (instead of maximizing social benefits), decentralized management within sub-watersheds reduces the number of families receiving irrigation by nearly 20 percent. In the budgetary decentralized modeled scenarios, per capita investment was held constant across sub-watersheds and the model picked the best projects in each sub-watershed. In the centralized scenarios, the best projects were chosen regardless of where they were located in the watershed. Imposing a cost-benefit limit on projects significantly reduced the difference between the centralized and decentralized simulations. Coordination among decentralized and centralized budgetary policies is needed to ensure best use of resources and diminish potential competition for water resources.n Effect of uncertainty of climate change effect on investment plan. This study found that most of the poten- tial irrigation investment in the Mizque river watershed is robust to most climate outcomes, and that farther downstream in the watershed annual rainfall would remain sufficient for nearly all the irrigation projects identified in the PMIC-Mizque study, assuming sufficient storage was built as part of the program.
P LU R I N AT I O N A L STAT E O F B O L I V I A CO U N T RY ST U DY xxiand political process would be best-suited to sup- The study has emphasized the need to accelerateport preferred adaptation strategies. the development agenda, as in most cases, good development policies are the most robust adapta-Communities in the Altiplano and valleys gave tion policies.priority to adaptation measures related to watermanagement, followed by improved agricultural ■■ Selected adaptation strategies and actions should beand livestock practices. They view drought as the robust under both wet and dry conditions. In par-principle threat to their livelihoods. In contrast, ticular, expanded water storage, watershedcommunities from the Chaco and plains regions management in increasingly dry areas, andasserted that improved agricultural practices were improved access to irrigation have been high-a priority, and considered water management lighted as key adaptation options that increasemeasures to be of secondary importance. resilience to current and future climate vari- ability and trends.Complementary investments in both hard (newinfrastructure) and soft (safety nets, capacity build- ■■ Strengthen integrated rural water management anding, knowledge sharing) adaptation options will improve water storage capacity. Strong integratedbe vital to meet the needs of the most vulner- management at the watershed level is neededable. Improving extension services and increasing to allow for increased water storage capacityaccess to markets, for example, will be needed to (including building of new infrastructure) andcomplement the development of hard adaptation avoid conflicts over competing needs. Cur-measures such as the construction of infrastruc- rent storage infrastructure needs to be revised,ture. Although soft adaptation measures require upgraded, and increased. Water storage andsignificant investments up front, they offer more harvesting is necessary to increase irrigationsocially and environmentally sustainable benefits coverage in the agricultural sector.in the longer term. Also, given Bolivia’s rich cul-tural diversity it will be important to combine tra- ■■ Improve urban water sanitation and water supply,ditional adaptation knowledge with new methods including fundamental improvements in theto identify priorities. Local authorities tend to favor institutions that finance, maintains, and investinvestment in discrete, hard measures, while com- in water supply to effectively adapt to themunity members tend to favor more comprehen- fluctuating changes in supply and demand ofsive strategies that support more profound changes resources due to climate variability.to livelihood systems threatened by climate change.Planning across scales of governance, respecting ■■ Improve access to irrigation. Under both wet andexisting community decision-making structures, dry climate scenarios, improved access to irri-and aligning interests to ensure policy cohesion will gation is essential to manage shorter rainy sea-be necessary for effective adaptation, particularly sons, droughts, and expected dry spells. Evengiven Bolivia’s unique system of decentralization. in the more optimistic scenario of future wetter conditions, agricultural productivity can onlyRecommendations for an increase if the capacity to store and use theAction Agenda needed additional water is available for farm- ers during critical growing periods. IncreasedThe following recommendations are the outcome research and use of new technology is crucialof a learning process during the development of to ensure climate resilience in agricultural pro-the study, as well as part of the final conclusions duction for both subsistence farming and cashfrom the specific models and sectoral research. crop production. Higher temperatures can
xxii ADAPTATION TO CLIMATE CHANGE: VULNERABILIT Y ASSESSMENT AND ECONOMIC ASPECTS improve agricultural production if water con- implementing capacity of identified govern- cerns are addressed. ment institutions.Strengthen people-centered development ■■ Identify and divide clear responsibilities among institutions.and carefully consider the distributional New legislation should identify clear responsibil-implications of policy actions. ities and roles among different institutions.■■ Devote increased financial resources to promote resil- ■■ Improved coordination and dialogue among national, iency and the fast implementation of selected soft and departmental, and municipal governments. Improved hard adaptation actions that are carefully ordered, coordination among different levels of govern- prioritized across time, and integrated into ment is crucial in order to optimize limited development planning. economic resources and make water storage investments sustainable.■■ Incorporate existing local perspectives and experience in dealing with climate issues and locally specific develop- Over the long term, protect the most vul- ment practices. Processes that underpin the devel- nerable populations and strengthen disas- opment of adaptation policies should respect ter risk management practices. existing community practices, which guide the prioritization of investments. Combining ■■ In the period until 2050 and beyond, ensure that the traditional knowledge with new methods and most vulnerable populations are protected from the technology is essential. Past coping strategies current and (more extreme) future climate and adaptation practices to climate variability risks and water shortages, and that the needed and extreme events hold valuable lessons for institutional and infrastructure conditions are future adaptation planning. in place to support these people and to make the agricultural sector more climate resilient.■■ Strengthen people-centered development. The study By 2050, the country is expected to have a identified that the most vulnerable groups much higher level of infrastructure and physi- are the poorest of the poor, who do not have cal assets increasing its potential vulnerability, reserves or production capital for investment in but at the same time will likely have a much adaptation processes. These individuals gener- greater capacity to deal with climate shocks. ally reside in relatively dry zones—such as cen- Transfer and access to different technologies to tral and southern Altiplano, the valleys, and improve resiliency to climate change is impor- the Chaco,—where the poorest groups often tant for vulnerable populations. depend on rainfed agriculture. Families that reside along riverbeds in lowland areas also are ■■ Disaster risk management practices must be part of vulnerable to flooding. long-term development planning. The focus should be on preventive actions. Disaster risk reduc-Institutional capacity should be improved tion needs to be part of long-term planningto accelerate implementation and clear at all levels of government, across all indus-identification of responsibilities. tries, and particularly at the departmental and■■ Improve implementing capacity of key institutions. In municipal level. This also includes improve- order to scale up implementation of climate- ments in disaster preparedness capacity. robust development activities—such as water storage, irrigation, research, and climate New methodologies and improved data modeling—it will be important to improve the availability and analysis are important
P LU R I N AT I O N A L STAT E O F B O L I V I A CO U N T RY ST U DY xxiiito improve the basis for climate-robust ■■ New flexible methodologies are needed to integrate cli-decisions. mate change into national and regional planning. The study has provided and tested several mod-■■ Considerable gaps in the hydrometeorological data els and methodologies at different scales of increase uncertainties in climate models and lacks in analysis (i.e. macro and micro watershed level, the implementation of specific adaptation actions. department level, etc), which can serve as The study has identified many data gaps that inspiration to integrate climate change in over- should be improved, but also succeeded in col- all development strategies. The development lecting and systematizing hydrometeorological of indicators of climate change vulnerability data that can be useful in future adaptation at the river basin level and for urban areas are strategies and actions. examples of new components available to sup- port further analysis as improved climate pro- jections become available for Bolivia. Study Limitations This study should be valued for the contributions it makes from the methodological point of view, rather than the numerical results it offers under each specific sector. Data sources used are still lim- ited and the level of accuracy is low within all sectors. The results in each sector analyzed should not be taken as absolute true, but rather as clues to deepen the level of analysis in the areas revealed as critical by this analysis. The integration and flow of sector analysis data within different components was limited due to dif- ferent timeframes allocated for the collection of baseline data and the analysis by local consultants. For example, the Social component originally intended to use inputs from the water and agriculture sector to inform workshop discussions and help draw links between different sectors. However, tim- ing of the study resulted in the sector analyses to be conducted in parallel which led to difficulties for integrating the social study components overall. The water resource analysis does not extend to all the water sub-sectors. That is, it does not analyze water for hydro-power generation, water for navigation purposes and neither water quality or transboundary issues. The analysis on future changes in water available, only takes into account the effect on climate change on the natural supply of water, assuming that future changes in the demand respond only to development and growth. Population and growth projections were estimated based on national statistics data (constant trend up to 2050). All of these gaps may be closed as more reliable and accurate data is available, both from a tem- poral and geographic perspective. The report is by no means comprehensive and there are several limitations to the outcomes. The study should thus be considered a first step toward an integrated analysis that identifies areas and populations most vulnerable to climate change effects and evalu- ates robust adaptation practices to be implemented up to 2050.
xxiv O NE ADAPTATION TO CLIMATE CHANGE: VULNERABILIT Y ASSESSMENT AND ECONOMIC ASPECTS
P LU R I N AT I O N A L STAT E O F B O L I V I A CO U N T RY ST U DY 1Motivation andContext for StudyThe Economics of Adaptation to Climate Change major economic sectors using country-level data(EACC) study estimates that it will cost $75 — sets that have global coverage. Sectors covered$100 billion each year for developing countries are agriculture, forestry, fisheries, infrastructure,to adapt to climate change from 2010 to 2050 water resources, coastal zones, health, and eco-(World Bank 2009a). The study—funded by the system services. Cost implications of changes ingovernments of the Netherlands, United King- the frequency of extreme weather events are alsodom, and Switzerland—has two specific objec- considered, including the implications for socialtives. The first is to develop a “global” estimate of protection programs. Under the country track,adaptation costs to inform the international com- impacts of climate change and adaptation costsmunity’s efforts on how to tailor adequate and are being established by sector, but only for thesustainable support regarding new and additional major economic sectors in each case study coun-resources to help vulnerable developing countries try. In contrast to the global analysis, vulnerabilitymeet adaptation costs. The second objective is to assessments and participatory scenario workshopssupport decision makers in developing countries are being used to highlight the impact of climateto better evaluate and assess the risks posed by change on vulnerable groups and to identifyclimate change and to better design strategies adaptation strategies that can benefit these groupsto adapt to climate change. This objective com- from a bottom up and top-down approach.prised the identification of adaptation optionsthat incorporate strategies dealing with highuncertainty, potentially high future damages, and Backgroundcompeting needs for investments in social andeconomic development up to 2050. The purpose of this study was to assist the gov- ernment of the Plurinational State of BoliviaThe EACC study includes a global track to meet (hereafter referred to as Bolivia) in their effortsthe first study objective and a case study track to evaluate the potential economic impacts ofto meet the second objective. The country track climate change and to support their efforts tocomprises seven countries: Ethiopia, Mozam- develop robust climate policies and investmentsbique, Ghana, Bangladesh, Vietnam, Bolivia in response to these potential impacts. The focusand Samoa. Under the global track, adaptation of the Bolivia case study was defined through ancosts for all developing countries are estimated by ongoing dialogue with the relevant government
2 ADAPTATION TO CLIMATE CHANGE: VULNERABILIT Y ASSESSMENT AND ECONOMIC ASPECTSinstitutions in Bolivia to ensure coverage of local Scope and Study Approachpriorities, needs and overall country buy-in. Thegovernment’s interest resided predominantly in The study evaluated a range of adaptation optionsthe new knowledge that would be generated about for two sectors: agriculture (production of crops)adaptation measures in the agriculture, social and water (irrigation infrastructure and urbanand water sectors, as well as in the formulation of sanitation). The agriculture component evaluatedadaptation planning tools to help evaluate, sequence, crop production under different climate scenariosand prioritize adaptation options. Consequently, and identified robust adaptation options for fourthe Bolivian government did not consider the major crop systems. The water sector focused inestimation of adaptation costs at a national or the evaluation of irrigation in rural areas andsector level useful at this time, due to the many general aspects of urban needs under differentuncertainties in the quality and aggregation of climate scenarios. Identified options were con-local data as well as the limitations inherent in trasted with options previously identified by thea sector-specific approach. The dialogue process National Program of Climate Change (PNCC).meant an expansion of the social vulnerabilitystudy, a reduction in the evaluation of adap- The study was designed to improve knowledgetation costs and a modification in the scale of on the economics of adaptation, presenting eco-analysis for the socioeconomic investment plan- nomic aspects of different adaptation options asning tool. Consequently, the study approach for potential development resources under a chang-Bolivia differs substantially from other EACC ing climate. The focus of the work was on gov-pilot countries. ernment-led, or planned adaptation, including:
P LU R I N AT I O N A L STAT E O F B O L I V I A CO U N T RY ST U DY 3public infrastructure investments, agricultural some light on the distributional implications ofresearch and extension services, community- different adaptation options on poor and vulner-based disaster preparedness, and implementation able groups.of regulations that enable private adaptation tohelp the vulnerable cope when planned adapta- The report is organized into eight sections. Sec-tion measures are insufficient. A cost benefit anal- tion 1 provides a short context and motivation ofysis to assess robustness was performed on stylized the study. Section 2 provides selective backgroundadaptation options previously identified by the information on the Bolivian economy and itsNational Mechanism of Adaptation to Climate climate vulnerability. Sector 3 outlines countryChange (PNCC, 2007) for the Agriculture and historical and current vulnerability to climateWater Resource sectors. The adaptation options variability. Section 4 and 5 outline the sector mod-identified in the National Adaptation Mechanism eling work in the agriculture and water resourcewere validated and/or improved by each sector sectors, respectively, and evaluate and identifywhen contrasted with new climate change impact robust adaptation options in relation to currentand vulnerability analysis for the agriculture (crop and future vulnerabilities to climate change. Sec-production) and the water infrastructure sec- tion 6 addresses the view and needs of the mosttors (water storage and irrigation needs). As the vulnerable communities to climate change andgreat majority of adaptation options identified contrast sector adaptation strategies to currentby the water, agriculture, and social components climate variability and potential changes. Sectionconverged on the need of more efficient water 7 describes the development of a cost and ben-management, most of the analysis were based efit methodology for the evaluation of adaptationon water infrastructure needs to meet new and options by integrating climate change into its esti-additional demands. mates. The analysis of stylized planned adapta- tion options identified by the government is usedA new development planning tool, based on to exemplify the methodology. Section 8 detailssocioeconomic analysis, was developed to the application of a development modeling tool atimprove development plans for water consump- a watershed level to characterize the sequencingtion at a vulnerable watershed level under pro- and prioritization of adaptation options. Finally,jected climate change. The tool was developed section 9 draws tentative conclusions and recom-to aid policymakers to sequence and prioritize mended actions based on all preliminary findings.identified adaptation options. Finally, a social Main limitations of the study are summarized incomponent complemented the analysis and shed Box 3.
4 T WO ADAPTATION TO CLIMATE CHANGE: VULNERABILIT Y ASSESSMENT AND ECONOMIC ASPECTS
P LU R I N AT I O N A L STAT E O F B O L I V I A CO U N T RY ST U DY 5Background onBolivia’s EconomyThe Socioeconomic Context the world where the majority of the population identify themselves as indigenous. Annual GDP isBolivia is a large country that encompasses several $1,363 per capita (INE, 2007) making Bolivia onedistinct climate zones. It has a modest population of the poorest countries in South America. Theof approximately 10.4 million people and an share of agriculture in GDP was about 14 percentannual growth rate of 3.4 percent (INE, 2007).3 in 2005 (INE, 2005); based on historical develop-Within this vast territory, population density hov- ment trends, this is likely to fall in the range 6-8ers at an average of 10 people per square kilome- percent by 2050. According to the 2002 censuster – the lowest in the American continent – with about 65 percent of the population fell below thearound 40 percent of the population living in rural national poverty line including about 84 percentareas. By 2050, population is expected to grow to of the rural population. These high levels of pov-15 million (EACC global report estimates). erty are associated with a very unequal distribu- tion of income.According to the 2002 census, nearly two thirdsof the population live in conditions of poverty Bolivia’s economy is relatively insensitive toand an estimated one third live in extreme pov- changes in climate. The economy is based onerty. Approximately 30 percent of Bolivia’s rural mineral and hydrocarbon extraction and apopulation resides in the valleys and high plateau strong soybean economy in the Eastern Low-areas, where water availability is significantly less land; according to most climate projections, thisthan the country average4 and poverty levels are economy is expected to suffer relatively little fromhighest. The share of the population living in climate change. The industrial sector is small, andurban areas is expected to grow to 82 percent by most internal demand is satisfied through imports.2050.5 In addition, Bolivia has one of the larg- Nonetheless, a large portion of Bolivia’s populationest indigenous population in South America; with is extremely vulnerable to the effects of climate change as36 ethnic groups it is one of the few countries in these people rely on agricultural production for subsistence. For this segment of the population adaptation to3 National Institute of Statistics (INE) and Ministry of Economy climate change must be an essential component and Public Finance, Fiscal Analysis Framework (RAF). of any strategy for poverty alleviation and the4 See table 3, Water Resources Annex for data on water available per capita per sub-basin enhancement of economic opportunities.5 EACC Global report , 2009
6 ADAPTATION TO CLIMATE CHANGE: VULNERABILIT Y ASSESSMENT AND ECONOMIC ASPECTSThe Institutional Context should be able to enhance transparency and pro- vide access to public finances by the local com- munities. However, lack of efficiency, technicalBolivia’s decentralized capacity, and poor financial administration pres-governance structure ents a challenge for many municipalities, which has resulted in low rates of implementation.Recent changes to the Constitution establishindigenous and regional autonomy within depart- Enhanced coordination will be a key issue tomental limits.6 Indigenous autonomies will thus implement coherent and efficient climate adap-enjoy exclusive rights over territorial management tation strategies and actions. This is also under-and development of their farming and livestock scored in the results of the investment planningsector; territorial autonomies will have rights over tool (section 8). The significant fiscal resourcestheir territories. These structural changes aim administrated autonomously by departmentalto provide space for greater social and political and municipal governments might make it com-inclusion for indigenous and peasant groups and plex to implement regional projects across politi-establish a framework for a more decentralized cal boundaries and ensure financial contributionsgovernment structure that is more responsive to to such projects.Bolivia’s cultural diversity. It is possible that onceregional and indigenous autonomies are formed, It will therefore be important in the develop-they will follow the participatory planning struc- ment of national and regional climate adaptionture already established at the municipal level, strategies to inform and capacity build local gov-whereby investments are identified and prioritized ernments as well as ensure their participation inin community and municipal workshops in which elaboration of strategies and actions.civil society directly makes decisions. However,according to the National Program for Climate Current adaptation andChange, climate adaptation strategies will prob- development initiativesably be implemented only at the local level whenperceived relevant by local institutions and civil The formulation of national climate change policysociety. It is therefore important to also ensure currently falls under the realm of the Ministry ofcoordination among different adaptation plans Environment and Water. Within this ministry, theto improve implementation of actions at all levels institutions most closely related to climate change(PNCC, 2002). are the Vice Ministry of Water Resources and Irrigation and the Vice Ministry of Environment,In 1994, the Bolivian Government passed a Biodiversity, Climate Change and Forestry Man-new decentralization law (Law 1551). The law agement and Development. The National Pro-is known as Law of Popular Participation and aims gram for Climate Change (PNCC–in Spanish),to: move decision-making process closer to the housed in the Vice Ministry of Environment, Bio-local population, enhance local participation, diversity and Climate Change, is the body directlyand ensure a more cost-efficient delivery of ser- responsible for designing and implementing miti-vices by decentralization of financial resources gation and adaptation actions across sectors.to the municipalities. The decentralization policy In the past years, the PNCC has developed a6 As such, indigenous autonomies will enjoy exclusive rights over National Mechanism of Adaptation to Climate Change territorial management and development of their farming and (2007). This mechanism is both a long-term strat- livestock sector; territorial autonomies will have rights over their territories. egy aimed at promoting national development
P LU R I N AT I O N A L STAT E O F B O L I V I A CO U N T RY ST U DY 7as well as a tool to develop a cross-cutting struc- specifically, it proposes implementation strategiestural response to climate change adaptation. that generally promote inter-institutional activ-The mechanism consists of a set of adaptation ity consistent with the National Developmentprograms in five sectors: food security; sanita- Program’s institutional framework. However,tion; water resources; ecosystems; and human implementation of the National Mechanism hassettlements and risk management. In addition, been quite slow.the mechanism addresses three cross-sectoralareas relevant to climate change adaptation: A new National Development Plan 2010-2015 isscientific investigation, education (research and being developed that includes additional mea-capacity building), and anthropologic and ances- sures to protect the agricultural sector fromtral knowledge as related to climate change. The climate-related damages. As part of incentivemechanism links directly to the National Develop- policies for production and food security andment Program 2006-2010, which aims to guarantee sovereignty, the Bolivian government proposesadequate and early response to the impacts of to implement a range of tools and mechanismsclimate change across a range of sectors. More to improve access, achieve financial stabilization,
8 ADAPTATION TO CLIMATE CHANGE: VULNERABILIT Y ASSESSMENT AND ECONOMIC ASPECTS Box 1 Access to International Funds for Adaptation: Pilot Program for Climate Resilience (PPCR) Bolivia has recently confirmed participation in the Pilot Program for Climate Resilience, a program developed under the Climate Investment Funds. The PPCR is a country-led initiative that seeks to (a) strengthen capacities to integrate climate resilience into national and sectoral development plans; (b) foster development strategies that take into account climate resilience; (c) raise awareness among public, private, and civil society actors on the potential impacts and vulnerabilities posed by climate change; (d) help scale up climate-resilient investments; and (e) improve coordination between key actors in implementing climate-resilient programs. The EACC study, in collaboration with complementary ongoing World Bank initiatives, could be used to fill some of the knowledge gaps required for Phase 1 of the PPCR. Phase 2 of the PPCR may provide additional financial resources to help fund basic public and private sector investments—identified by the country in their climate-resilient development plans—developed during Phase 1 investments.and support sustained agricultural productivity. programs. This includes the greater integrationMoreover, the plan aims to reduce risks asso- of the water resource management strategy andciated with the production and marketing of disaster risk prevention of meteorological eventsagricultural products. The first climate change under sector programs for food security andadaptation strategy at the municipal level (six human settlements. At a minimum, it should bemunicipalities in the Lake Titicaca) was also possible to ensure that any reconstruction afterissued in 2007. The strategy identified the fol- current or future extreme events should be basedlowing priority action areas: territorial planning, on explicit assumptions about the frequency ofwater security, climate-proofing of productive recurrence of similar or worse events in the nextsystems, and capacity building and training as 10, 20, or 50 years.related to adaptation. An improved understanding of climate changeInstitutional challenges to is needed to improve coordination and coopera-integrating adaptation into tion. Access to climate information, historicaldevelopment planning trends and potential future projections should be made more accessible to all vulnerable sectors.Current adaptation practices disproportionately This should be accompanied by a better integra-focus on post-event emergency action than on tion and interpretation of hydrometeorologicalprevention. With limited human and financial information—that is, development of robustresources, it may be inevitable that the pressure early warning systems— in decision-making pro-to respond to an immediate crisis overwhelms cesses and the formulation of strategies withingood intentions to prepare and implement all levels of society. At present, proper invest-longer term programs to limit the damage ment mechanisms rarely reach lower adminis-caused by future events. Nonetheless, a shift in trative levels, further weakening municipalities’focus is essential to enhance linkages between planning and implementation capacity. Resultsthe National Mechanism’s different sector from the social dimensions component reinforce
P LU R I N AT I O N A L STAT E O F B O L I V I A CO U N T RY ST U DY 9this finding. In all municipalities studied, nei- Several actions to address many of these issuesther communities nor municipal governments and to implement the National Mechanism ofprioritize short- or long-term multi-communal Adaptation are already included in the formula-adaptation strategies. Notably, community rep- tion of the country proposal for the first phase ofresentatives and local authorities only considered the Pilot Program for Climate Resiliency (Box 1).adaptation measures within a ten-to-fifteen-year The Bolivia study hopes to contribute further totime horizon. A long-term vision for dealing with the PPCR initiative by filling local gaps on adap-the impacts of climate change is too abstract for tation information and needs, as well as on themany rural communities. decision-making process under high uncertainty.
10 TH REE ADAPTATION TO CLIMATE CHANGE: VULNERABILIT Y ASSESSMENT AND ECONOMIC ASPECTS
P LU R I N AT I O N A L STAT E O F B O L I V I A CO U N T RY ST U DY 11Vulnerability toClimate Variability andClimate ChangeBolivia is an extremely diverse territory stretching climate models requires local validation to improvefrom the Andes to the Amazon. The country has possible scenarios. Based on Bolivia’s socio-geo-been classified as one of the most important eco- graphic characteristics, four macro-regions wereregions in the world. The national territory var- used for this study:ies considerably in elevation (from 6500 and 300meters above sea level), vegetation (including for- Highlands (the Altiplano) have an altitudeests, savannas, plains, semi-arid forests), and climate. higher than 3500 meters above sea level (masl).Although Bolivia lies within tropical latitudes, tem- The climate is dry and cold, with very sharp dif-peratures are dependent on elevation and show little ferences in daily temperature and precipitationseasonal oscillation. In most cases, rainfall is most amounts. The southern part of the region is moreabundant during the southern summer, and tends humid than the north. The diurnal amplitude isto decrease from north to south (Figure 1). Bolivia very high and in the evening temperatures areis located in an area of intense climate variability, around 0° degree Centigrade. In the highlands,periodically disrupted by El Niño (ENSO).7 The rainfall is generally low, but the mountains intro-Andes Mountains, which cover much of Bolivia’s duce very important variations.territory, determines the occurrence of heavy con-vective processes that are inadequately captured by Valleys are found at the foothills of the orientalcurrent general climate models (GCM). As a result, mountain range, with average altitude rangingthe regional or large-scale information provided by from 1,000 to 3,500 masl. The climate is temper- ate and includes two sub-regions: dry valleys and7 The effects associated to both Niño and Niña years are quite the hot yungas region. unpredictable and impacts are similar meaning abnormal precipitation and positive or negative anomalies in the Altiplano and other regions, and higher incidence of other phenomena El Chaco is located in the south of Bolivia with like hails and frosts in the Western arid areas. An increase in frequency and intensity of extreme events has been observed an average altitude lower than 1000 masl. The in Bolivia in the last decades (Impacts of ENSO phenomena. climate is warm and dry. The departments of Beltrán and Gutiérrez, PNCC (forthcoming)). The strong or very strong ENSO events of 1997 and 1982 respectively, have caused Tarija, Chuquisaca and Santa Cruz are found in major impacts due to the increase in population vulnerability to this macro-region. climate events. Despite the periodic recurrence of ENSO years, it is not easy to find clear patterns to help forecast their hydro- meteorological effects better. However, climate analysis from El Plains are found in the northeastern region of Nino events suggests an increasing trend on the intensity of these events within the last decades. Bolivia, with an average altitude lower than 1,000