CLIMATE RISK MANAGEMENTIN ADB PROJECTS
Resources Available to Support the Implementation of the Climate Risk Management Framework in ADB Projects
ADB has made available technical and financial resources to support this framework:
• TechnicalresourcesareavailabletosupportclimateriskscreeningandassessmentintheEnvironmentandSafeguardsDivisionoftheRegionaland Sustainable Development Department, which is ADB’s adaptation focal point.
• Financialresourcesintherangeof$4millionweremadeavailablethroughADB’sClimateChangeFundatthebeginningof2014tomeetthecostofcarryingoutclimateriskandvulnerabilityassessmentsinprojectscategorizedasmediumorhighriskduringinitialscreening.
• Tosupportclimatechangeadaptationinvestments,ADBhasestablisheddedicated trust funds in partnership with other development institutions. Forexample,theUrbanClimateChangeResilienceTrustFundwasestablishedwithsupportfromtheUnitedKingdom’sDepartmentforInternationalDevelopment,theRockefellerFoundation,andtheUnitedStatesAgencyforInternationalDevelopment.Thefundisa$150millionmulti-donor trust fund administered by ADB to scale up urban climate resilienceacross25medium-sizedcitiesinAsia.ADBisalsoleveragingfinance from adaptation funds administered by the Global Environment
FacilityandtheClimateInvestmentFunds.IthasmobilizedbilateralsourcessuchasthosefromtheNordicDevelopmentFund,andthegovernmentsofAustralia,Canada,andJapan.ADBremainsengagedtohelpcountriesaccesstheGreenClimateFund,whichisexpectedtocomeonstreamin2015.
• ADBhasdevelopedtools,includingtheonlinetoolAWAREforProjects,forconsistentandsystematicscreeningofclimaterisks.Technicalguidancematerialsareavailabletohelpprojectteamsanddevelopingmembercountriesmanageclimaterisksthroughouttheprojectcycle,includingclimate-proofingguidanceforthetransport,agriculture,andenergysectors.TheseareaccessiblethroughtheADBwebsite
(http://www.adb.org/publications/building-resilience-climate-change -adaptation-technical-resources ).
Formoreinformation,pleasecontact:CinziaLosenno,
ClimateChangeAdaptationFocalPointAsian Development Bank
Tel:(632)6324996E-mail:[email protected]
4. Identification of Adaptation Options
Themostviableadaptationoptionsorclimate-proofingmeasuresareidentifiedinconsultationwiththeexecutingagenciesorprojectsponsors,andareintegratedintheprojectdesign.Thereisnostandardizedapproachtoclimateproofing.Insomecases,climateproofingisessentialtoensuretheprojectisnotnegativelyaffectedbyclimatechange.Inothercases,thelifetimeoftheprojectissuchthatclimateproofingisnotaviableoptionorclimatereadinessisamoreappropriateapproach.Climateproofingmayinvolveadjustingengineeringdesignsuchasincreasingdrainagecapacityofwatersupplysystems,elevatingroadsinareasparticularlyatriskfromflooding,orecosystem-based adaptation measures such as revegetationofunstableslopes.
5. Monitoring and Reporting
Thelevelofriskidentifiedduringprojectconceptdevelopmentandthefindingsofclimateriskandvulnerabilityassessmentcarriedoutduringprojectpreparation are documented in the ADB board documents.Asupplementarydocumentdescribing
the assessment and adaptation measures incorporated intheprojectdesignandassociatedcostscanalsobeattachedtotheADBboarddocuments.ThelevelofriskassignedtotheprojectandthebudgetallocatedtoadaptationmeasuresarerecordedintheADBprojectclassificationsystemformonitoringandreportingpurposes.
© Asian Development BankPublication Stock No. ARM146926-2 November 2014
ADB’s Climate Risk Management Framework
The climate risk management approach of the Asian Development Bank (ADB) aims to reduce risks resulting from climate change to investment projects in Asia and the Pacific. ADB’s framework identifies climate change risks to project performance in the early stages of project development, and incorporates adaptation measures in the design of projects at risk. ADB climate risk management framework comprises the following steps:
(i) context-sensitive climate risk screening at the concept development stage to identify projects that may be at medium or high risk;
(ii) climate change risk and vulnerability assessment during preparation of projects at risk;
(iii) technical and economic evaluation of adaptation options;
(iv) identification of adaptation options in project design; and
(v) monitoring and reporting of the level of risk and climate-proofing measures.
Flow Chart for Climate Risk Management of Investment Projects
Checklist
Project Concept Phase
No or low risk Medium or high risk
Screening Report
Project Preparation Phase
Project Implementation Phase
Preliminary screening(checklist)
Expert judgmentEnd OR
No or low risk Medium or high risk
Detailed screening(Aware™ for projects or other detailed screening tool)
Expert judgmentEnd OR Climate Risk and Vulnerability
Assessement (CRVA)
Evaluation and selection of climate resilience measures to include in project design;
co-financing arrangements
Implementation and monitoring of selected climate resilience measure(s)
CRVA Report
AWARE for ProjectsAWAREforProjectsisanonlinetoolusedbyADBprojectteamstoscreenprojectsforclimaterisks.Thetoolusesdatafrom16generalcirculationmodels, as well as databases on temperature increase, wildfire, permafrost, seaice,wateravailability,precipitationchange,flooding,snowloading,tropicalstorms,andlandslides.Foreachprojectscreened,thetoolgeneratesanoverallclimateriskrankingoflow,medium,orhigh;keyriskareas;andnarrativesonpotentialimpactsandadaptivemeasurestoguidesubsequent activities.
Thisassessmentisusuallyconductedbyexpertswithbackgroundinclimatemodeling,impactassessment,andeconomicsofclimatechangewhoworktogetherwiththeADBsectorspecialists,theexecutingagencies,theprojectsponsors,andotherstakeholderstoformulateadaptationsolutionsfortheproject.
1. Climate Risk Screening
AllADBprojectsarescreenedforclimaterisks.Aninitialscreeningiscarriedoutbytheprojectteamsbyfillinginachecklist.Projectsidentifiedtobeatmediumorhighriskundergoafurtherscreeningthroughdedicatedscreeningtools,suchastheonlinetoolAWAREforProjects.Risksconsideredarethoseresultingfromtemperatureincrease,precipitationchange,windspeedchange,sealevelrise,solarradiationchange,wateravailability,flooding,tropicalstorms,wildfire,permafrost,seaice,snowloading,andlandslide.
2. Climate Risk and Vulnerability Assessment
A detailed climate risk and vulnerability assessment is carriedoutforprojectsclassifiedasmediumorhighriskduringprojectpreparation.Theassessmentaimsto quantify risks and identify adaptation options that canbeintegratedintotheprojectdesign.Theleveloftechnicalrigoroftheassessmentdependsontheprojectcomplexityandavailabilityofclimatedataandinformationfortheprojectarea.Itcanrangefromasimpledeskanalysistoacomplexassessmentbasedoncustomclimateprojectionstoenableamoredetailedassessment.
ADB’s Climate Risk Management Framework
TheclimateriskmanagementapproachoftheAsianDevelopment Bank (ADB) aims to reduce risks resultingfromclimatechangetoinvestmentprojectsinAsiaandthePacific.ADB’sframeworkidentifiesclimatechangeriskstoprojectperformanceintheearlystagesofprojectdevelopment,andincorporatesadaptationmeasuresinthedesignofprojectsatrisk.ADBclimateriskmanagementframeworkcomprisesthefollowingsteps:
(i) context-sensitiveclimateriskscreeningattheconceptdevelopmentstagetoidentifyprojectsthatmaybeatmediumorhighrisk;
(ii) climatechangeriskandvulnerabilityassessmentduringpreparationofprojectsatrisk;
(iii) technical and economic evaluation of adaptationoptions;
(iv)identificationofadaptationoptionsinprojectdesign;and
(v)monitoringandreportingofthelevelofriskandclimate-proofingmeasures.
Climate Risk and Vulnerability Assessment for Central Mekong Delta Region Connectivity Project
Theprojectconsistsoftwobridgesandaninterconnectingroadthatformpartofastrategictransportationlinkconnectingtheprovinces of southern Viet Nam and Ho Chi Minh City. Given the estimatedhighexposureoftheMekongDeltatoprojectedfutureflooding,aclimateriskandvulnerability assessment was conductedfortheproject.Thestudy found that the embankments oftheconnectingroadwere
vulnerabletotheimpactsofprojectedincreasesinthefrequencyandintensityofupstreamflooding.Projectedimpactsincluded(i)erosionofroadembankmentsandscouringofroadfoundations,(ii)waterloggingofroadfoundationsleadingtoroadsubsidence, (iii) reduced stability of infrastructure, and(iv) increased maintenance effort. As a result, a phased approach toclimatechangeadaptationwasadopted.Duringthefirstphase,theprojectdesignwasadjustedbyaddinga0.3-meterclimatechangefactoronroadembankmentstoallowforexpectedhigherfloods.Forthesecondphase,adaptationwillbeconsideredaspartoffurthermaintenanceandroadupgradesandexpansion.(Availableathttp://www.adb.org/publications/central-mekong-delta-region-connectivity-project-rapid-climate-change-threat-vulnerability-assessment )
3. Technical and Economic Evaluationof Adaptation Options
Based on the climate risk and vulnerabilities assessed, adaptation options are identified and evaluated on the basis of their technical feasibility and economic viability.Technicalfeasibilityevaluateswhetherproposedengineeringandnonengineeringmeasurescanbeimplementedwithavailableskills;equipment;andotherlocalfactorssuchasgeography,governance,andcapacity.Theeconomicanalysisinvolvesestimatingandcomparingthecostandbenefitsoftheprojectbasedontwodifferentscenarios:(i)theprojectunderclimatechangewithoutadaptationmeasures,and(ii)theprojectunderclimatechangewithadaptationmeasures. It aims to identify which adaptation option yieldsthehighestnetbenefit.Recognizingthatinvestingin adaptation measures may be costly and that future benefits may be uncertain, the economic analysis can alsopointtothebesttimingforinvestinginadaptation.
Flowchart for Assessing Climate Risk of Projects
Expert judgmentEnd OR
Checklist
No or low risk Medium or high risk
Preliminary screening(Rapid Environmental Assessment)
Project Concept Phase
Expert judgmentEnd OR
Screening Report
CRVA Report
Evaluation of adaptation options;
Integration of climate risk reduction measures in project design
Climate Risk and Vulnerability Assessment
No or low risk Medium or high risk
Project Preparation Phase
Project Implementation Phase
Detailed screening(AWARE for Projects or other tool)
X
AWARE for ProjectsAWAREforProjectsisanonlinetoolusedbyADBprojectteamstoscreenprojectsforclimaterisks.Thetoolusesdatafrom16generalcirculationmodels, as well as databases on temperature increase, wildfire, permafrost, seaice,wateravailability,precipitationchange,flooding,snowloading,tropicalstorms,andlandslides.Foreachprojectscreened,thetoolgeneratesanoverallclimateriskrankingoflow,medium,orhigh;keyriskareas;andnarrativesonpotentialimpactsandadaptivemeasurestoguidesubsequent activities.
Thisassessmentisusuallyconductedbyexpertswithbackgroundinclimatemodeling,impactassessment,andeconomicsofclimatechangewhoworktogetherwiththeADBsectorspecialists,theexecutingagencies,theprojectsponsors,andotherstakeholderstoformulateadaptationsolutionsfortheproject.
1. Climate Risk Screening
AllADBprojectsarescreenedforclimaterisks.Aninitialscreeningiscarriedoutbytheprojectteamsbyfillinginachecklist.Projectsidentifiedtobeatmediumorhighriskundergoafurtherscreeningthroughdedicatedscreeningtools,suchastheonlinetoolAWAREforProjects.Risksconsideredarethoseresultingfromtemperatureincrease,precipitationchange,windspeedchange,sealevelrise,solarradiationchange,wateravailability,flooding,tropicalstorms,wildfire,permafrost,seaice,snowloading,andlandslide.
2. Climate Risk and Vulnerability Assessment
A detailed climate risk and vulnerability assessment is carriedoutforprojectsclassifiedasmediumorhighriskduringprojectpreparation.Theassessmentaimsto quantify risks and identify adaptation options that canbeintegratedintotheprojectdesign.Theleveloftechnicalrigoroftheassessmentdependsontheprojectcomplexityandavailabilityofclimatedataandinformationfortheprojectarea.Itcanrangefromasimpledeskanalysistoacomplexassessmentbasedoncustomclimateprojectionstoenableamoredetailedassessment.
ADB’s Climate Risk Management Framework
TheclimateriskmanagementapproachoftheAsianDevelopment Bank (ADB) aims to reduce risks resultingfromclimatechangetoinvestmentprojectsinAsiaandthePacific.ADB’sframeworkidentifiesclimatechangeriskstoprojectperformanceintheearlystagesofprojectdevelopment,andincorporatesadaptationmeasuresinthedesignofprojectsatrisk.ADBclimateriskmanagementframeworkcomprisesthefollowingsteps:
(i) context-sensitiveclimateriskscreeningattheconceptdevelopmentstagetoidentifyprojectsthatmaybeatmediumorhighrisk;
(ii) climatechangeriskandvulnerabilityassessmentduringpreparationofprojectsatrisk;
(iii) technical and economic evaluation of adaptationoptions;
(iv)identificationofadaptationoptionsinprojectdesign;and
(v)monitoringandreportingofthelevelofriskandclimate-proofingmeasures.
Climate Risk and Vulnerability Assessment for Central Mekong Delta Region Connectivity Project
Theprojectconsistsoftwobridgesandaninterconnectingroadthatformpartofastrategictransportationlinkconnectingtheprovinces of southern Viet Nam and Ho Chi Minh City. Given the estimatedhighexposureoftheMekongDeltatoprojectedfutureflooding,aclimateriskandvulnerability assessment was conductedfortheproject.Thestudy found that the embankments oftheconnectingroadwere
vulnerabletotheimpactsofprojectedincreasesinthefrequencyandintensityofupstreamflooding.Projectedimpactsincluded(i)erosionofroadembankmentsandscouringofroadfoundations,(ii)waterloggingofroadfoundationsleadingtoroadsubsidence, (iii) reduced stability of infrastructure, and(iv) increased maintenance effort. As a result, a phased approach toclimatechangeadaptationwasadopted.Duringthefirstphase,theprojectdesignwasadjustedbyaddinga0.3-meterclimatechangefactoronroadembankmentstoallowforexpectedhigherfloods.Forthesecondphase,adaptationwillbeconsideredaspartoffurthermaintenanceandroadupgradesandexpansion.(Availableathttp://www.adb.org/publications/central-mekong-delta-region-connectivity-project-rapid-climate-change-threat-vulnerability-assessment )
3. Technical and Economic Evaluationof Adaptation Options
Based on the climate risk and vulnerabilities assessed, adaptation options are identified and evaluated on the basis of their technical feasibility and economic viability.Technicalfeasibilityevaluateswhetherproposedengineeringandnonengineeringmeasurescanbeimplementedwithavailableskills;equipment;andotherlocalfactorssuchasgeography,governance,andcapacity.Theeconomicanalysisinvolvesestimatingandcomparingthecostandbenefitsoftheprojectbasedontwodifferentscenarios:(i)theprojectunderclimatechangewithoutadaptationmeasures,and(ii)theprojectunderclimatechangewithadaptationmeasures.Itaimstoidentifywhichadaptationoptionyieldsthehighestnetbenefit.Italso aims to estimate the incremental cost of adaptation asthecostofprojectactivitiesaimedataddressingspecificclimatevulnerabilities.Recognizingthatinvestingin adaptation measures may be costly and that future benefits may be uncertain, the economic analysis can also pointtothebesttimingforinvestinginadaptation.
Flowchart for Assessing Climate Risk of Projects
Expert judgmentEnd OR
Checklist
No or low risk Medium or high risk
Preliminary screening(Rapid Environmental Assessment)
Project Concept Phase
Expert judgmentEnd OR
Screening Report
CRVA Report
Evaluation of adaptation options;
Integration of climate risk reduction measures in project design
Climate Risk and Vulnerability Assessment
No or low risk Medium or high risk
Project Preparation Phase
Project Implementation Phase
Detailed screening(AWARE for Projects or other tool)
Final project risk ratings
High Risk
Breakdown of risk topic ratings A) Temperature increase
B) Wildfire
C) Permafrost
D) Sea ice
E) Precipitationi ncrease
F) Flood
G) Snow loading
H) Landslide
I) Precipitation decrease
J) Watera vailability
K) Wind speed increase
L) Onshore Category 1 storms
M) Offshore Category 1 storms
N) Wind speed decrease
O) Seal evel rise
P) Solar radiation change
CLIMATE RISK MANAGEMENTIN ADB PROJECTS
Resources Available to Support the Implementation of the Climate Risk Management Framework in ADB Projects
ADB has made available technical and financial resources to support this framework:
• TechnicalresourcesareavailabletosupportclimateriskscreeningandassessmentintheEnvironmentandSafeguardsDivisionoftheRegionaland Sustainable Development Department, which is ADB’s adaptation focal point.
• Financialresourcesintherangeof$4millionweremadeavailablethroughADB’sClimateChangeFundatthebeginningof2014tomeetthecostofcarryingoutclimateriskandvulnerabilityassessmentsinprojectscategorizedasmediumorhighriskduringinitialscreening.
• Tosupportclimatechangeadaptationinvestments,ADBhasestablisheddedicated trust funds in partnership with other development institutions. Forexample,theUrbanClimateChangeResilienceTrustFundwasestablishedwithsupportfromtheUnitedKingdom’sDepartmentforInternationalDevelopment,theRockefellerFoundation,andtheUnitedStatesAgencyforInternationalDevelopment.Thefundisa$150millionmulti-donor trust fund administered by ADB to scale up urban climate resilienceacross25medium-sizedcitiesinAsia.ADBisalsoleveragingfinance from adaptation funds administered by the Global Environment
FacilityandtheClimateInvestmentFunds.IthasmobilizedbilateralsourcessuchasthosefromtheNordicDevelopmentFund,andthegovernmentsofAustralia,Canada,andJapan.ADBremainsengagedtohelpcountriesaccesstheGreenClimateFund,whichisexpectedtocomeonstreamin2015.
• ADBhasdevelopedtools,includingtheonlinetoolAWAREforProjects,forconsistentandsystematicscreeningofclimaterisks.Technicalguidancematerialsareavailabletohelpprojectteamsanddevelopingmembercountriesmanageclimaterisksthroughouttheprojectcycle,includingclimate-proofingguidanceforthetransport,agriculture,andenergysectors.TheseareaccessiblethroughtheADBwebsite
(http://www.adb.org/publications/building-resilience-climate-change -adaptation-technical-resources ).
Formoreinformation,pleasecontact:CinziaLosenno,
ClimateChangeAdaptationFocalPointAsian Development Bank
Tel:(632)6324996E-mail:[email protected]
4. Identification of Adaptation Options
Themostviableadaptationoptionsorclimate-proofingmeasuresareidentifiedinconsultationwiththeexecutingagenciesorprojectsponsors,andareintegratedintheprojectdesign.Thereisnostandardizedapproachtoclimateproofing.Insomecases,climateproofingisessentialtoensuretheprojectisnotnegativelyaffectedbyclimatechange.Inothercases,thelifetimeoftheprojectissuchthatclimateproofingisnotaviableoptionorclimatereadinessisamoreappropriateapproach.Climateproofingmayinvolveadjustingengineeringdesignsuchasincreasingdrainagecapacityofwatersupplysystems,elevatingroadsinareasparticularlyatriskfromflooding,orecosystem-based adaptation measures such as revegetationofunstableslopes.
5. Monitoring and Reporting
Thelevelofriskidentifiedduringprojectconceptdevelopmentandthefindingsofclimateriskandvulnerabilityassessmentcarriedoutduringprojectpreparation are documented in the ADB board documents.Asupplementarydocumentdescribing
the assessment and adaptation measures incorporated intheprojectdesignandassociatedcostscanalsobeattachedtotheADBboarddocuments.Thelevelofriskassignedtotheprojectandthebudgetallocatedtothe incremental cost of adaptation are recorded in the ADBprojectclassificationsystemformonitoringandreportingpurposes.
© Asian Development BankPublication Stock No. ARM146926-2 November 2014
CLIMATE RISK MANAGEMENTIN ADB PROJECTS
Resources Available to Support the Implementation of the Climate Risk Management Framework in ADB Projects
ADB has made available technical and financial resources to support this framework:
• TechnicalresourcesareavailabletosupportclimateriskscreeningandassessmentintheEnvironmentandSafeguardsDivisionoftheRegionaland Sustainable Development Department, which is ADB’s adaptation focal point.
• Financialresourcesintherangeof$4millionweremadeavailablethroughADB’sClimateChangeFundatthebeginningof2014tomeetthecostofcarryingoutclimateriskandvulnerabilityassessmentsinprojectscategorizedasmediumorhighriskduringinitialscreening.
• Tosupportclimatechangeadaptationinvestments,ADBhasestablisheddedicated trust funds in partnership with other development institutions. Forexample,theUrbanClimateChangeResilienceTrustFundwasestablishedwithsupportfromtheUnitedKingdom’sDepartmentforInternationalDevelopment,theRockefellerFoundation,andtheUnitedStatesAgencyforInternationalDevelopment.Thefundisa$150millionmulti-donor trust fund administered by ADB to scale up urban climate resilienceacross25medium-sizedcitiesinAsia.ADBisalsoleveragingfinance from adaptation funds administered by the Global Environment
FacilityandtheClimateInvestmentFunds.IthasmobilizedbilateralsourcessuchasthosefromtheNordicDevelopmentFund,andthegovernmentsofAustralia,Canada,andJapan.ADBremainsengagedtohelpcountriesaccesstheGreenClimateFund,whichisexpectedtocomeonstreamin2015.
• ADBhasdevelopedtools,includingtheonlinetoolAWAREforProjects,forconsistentandsystematicscreeningofclimaterisks.Technicalguidancematerialsareavailabletohelpprojectteamsanddevelopingmembercountriesmanageclimaterisksthroughouttheprojectcycle,includingclimate-proofingguidanceforthetransport,agriculture,andenergysectors.TheseareaccessiblethroughtheADBwebsite
(http://www.adb.org/publications/building-resilience-climate-change -adaptation-technical-resources ).
Formoreinformation,pleasecontact:CinziaLosenno,
ClimateChangeAdaptationFocalPointAsian Development Bank
Tel:(632)6324996E-mail:[email protected]
4. Identification of Adaptation Options
Themostviableadaptationoptionsorclimate-proofingmeasuresareidentifiedinconsultationwiththeexecutingagenciesorprojectsponsors,andareintegratedintheprojectdesign.Thereisnostandardizedapproachtoclimateproofing.Insomecases,climateproofingisessentialtoensuretheprojectisnotnegativelyaffectedbyclimatechange.Inothercases,thelifetimeoftheprojectissuchthatclimateproofingisnotaviableoptionorclimatereadinessisamoreappropriateapproach.Climateproofingmayinvolveadjustingengineeringdesignsuchasincreasingdrainagecapacityofwatersupplysystems,elevatingroadsinareasparticularlyatriskfromflooding,orecosystem-based adaptation measures such as revegetationofunstableslopes.
5. Monitoring and Reporting
Thelevelofriskidentifiedduringprojectconceptdevelopmentandthefindingsofclimateriskandvulnerabilityassessmentcarriedoutduringprojectpreparation are documented in the ADB board documents.Asupplementarydocumentdescribing
the assessment and adaptation measures incorporated intheprojectdesignandassociatedcostscanalsobeattachedtotheADBboarddocuments.ThelevelofriskassignedtotheprojectandthebudgetallocatedtoadaptationmeasuresarerecordedintheADBprojectclassificationsystemformonitoringandreportingpurposes.
© Asian Development BankPublication Stock No. ARM146926-2 November 2014