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FEATURE: Costing of climate impacts helps Uganda prepare for climate finance

Undertaking an economic impact of climate change on key sectors is Uganda’s first step in making the case for more climate-resilient investments. Mairi Dupar, CDKN’s Global Public Affairs Coordinator, reports on progress to date.

Uganda finds itself increasingly at the mercy of climate and weather extremes.  A new CDKN-supported project to assess the economic value of climate change impacts is helping the Ugandan government on the first steps to attracting international adaptation funding and investing systematically in adaptation measures.

At a side event of the UNFCCC’s COP20 in Lima, Chebet Maikut, Commissioner of Uganda’s Department of Climate Change, Ministry of Water and Environment, described how rainfall and freshwater management loom large in the country’s present and future.

“Uganda has experienced significant evidence of warming from the 1960s,” he said, with an average temperature increase and wide variability between episodes of “wet and very wet” years and decades. Most climate models project an increase in rainfall variability across Uganda. Policy-makers’ chief challenge will be to manage to droughts and floods in the years ahead.

This means “agriculture, food security, land use, forest, health water, fisheries, biodiversity and tourism are particularly vulnerable and require special attention,” he said – as are the millions of Ugandans whose wellbeing depends directly on these sectors.

Putting a value on climate change impacts  

The new study of economic impacts of climate change in Uganda’s key sectors  is being undertaken by the Baastel consortium with support from CDKN. Headlines of the year-long study include:

  • Climate and socioeconomic change will lead to deficits in water supply without adaptation, a conservative estimate puts losses at US$5.5 billion and could be as high as US$50.3 billion if income elasticity is taken into account.
  • Most crops show reductions in total production under almost all climate scenarios, e.g., yields of staple crops such as sweet potato and cassava could reduce by 40% by mid-century.
  • On Uganda’s foreign exchange balance sheet, the impact of climate change on its principal export crops, tea and coffee, provides the greatest cause for concern: these represented about 50% of Uganda’s export values in 2013; the climate envelope for these crops is due to shift which could lead to reductions in yields of 50-75% by mid-century.
  • In the energy sector, most energy is currently provided by biomass in unsustainable ways through deforestation (the deforestation rate is 1.8% per year). Without action, there will be a “huge” deficit of biomass over period 2010-2050 due to surplus demand – not to mention that climate change itself will reduce the availability of biomass. These losses, together with reduced water available for hydropower, mean that Uganda must transition rapidly to obtain more power from low-carbon forms of energy, including renewable electrical power.

Adaptation offers ‘bankable’ investments

Strong rates of return on adaptation activities mean that these offer very ‘bankable’ investments, according to Dr Anil Markandya, one of the study’s lead authors. “If the programmes can reduce damages by even 7% then the rate of return will be 10% so they are bankable projects,” he said. For example, an existing Government of Uganda programme to increase the efficiency of water use by households – which simultaneously increases clean water access to households that have lacked it – shows excellent economic returns. “It would be worthwhile for the government to invest more in this type of activity,” Dr Markandya said.

Now with these costs in hand, said Mr Maikut, “I can go to the Ministry of Finance and make the case for programmes with genuine benefits. That is why it’s important to do these studies. Of course the numbers are not certain but they are not certain for many areas of policy.”

Revocatus Twinomuhangi CDKN’s country advisor for Uganda, noted, “the Government is very interested in using these facts – on what the costs of climate change would be under different scenarios — to discuss with the Minister of Finance for resource allocation across different sectors –  to address and prepare for the different impacts of climate change.”

“Until now, it has been the issue that when we talk about financing climate change, the planners and decision-makers would ask for figures, how much does it cost? Already, the Government of Uganda has taken a step to integrate climate change in its second National Development Plan for 2015/16-2019/20. It will be launched next year and climate change has been well integrated. The same figures can be used to approach the different bilateral and multilateral partners to access climate finance.”

Download Anil Markandya’s presentation showing the key findings of the economic assessment of climate change impacts on Uganda’s water, energy, infrastructure and energy sectors; and information about the related case studies underway on urban areas and coffee cultivation: Economic assessment findings (powerpoint – 884kb).

Read the fact sheets on Uganda’s Economic assessment findings:

Uganda fact sheet on Energy

Uganda factsheet on Agriculture

Uganda factsheet on Infrastructure

Uganda factsheet on Water

 Image: Ugandan farmers, courtesy Bread for the World.


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