ECONOMIC FEASIBILITY ANALYSIS TRAINING WORKSHOP REPORT

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NATIONAL ADAPTATION PLAN OF ACTION ON CLIMATE CHANGE

Project No. LDL 2328 2724 4699

ECONOMIC FEASIBILITY ANALYSIS TRAINING WORKSHOP REPORT

040 001

December 2005

Blue Gold Solut ons

NATIONAL ADAPTATION PLAN OF ACTION ON CLIMATE CHANGE

Project No. LDL 2328 2724 4699

ECONOMIC FEASIBILITY ANALYSIS TRAINING WORKSHOP REPORT

040 001

December 2005

Economic Feasibility Analysis Training Workshop Report

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Contents Part I: Main Report

Background and Objectives 2

Approach 2

Training Support 3

Training Workshop 3

Conclusions and Recommendations 4

Part II: Appendices

Appendix 1 – Training Needs Assessment 6

Appendix 2 – Training Material 14

Appendix 3 – Workshop Programme 27

Appendix 4 – Evaluation of Training 31

Appendix 5 – List of participants 34

Appendix 6 – Motivating Examples 36


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Part I: Main Report

Main Report


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TRAINING WORKSHOP ON ECONOMIC FEASIBILITY ANALYSIS

Senegambia Beach Hotel, Kololi, 8 – 10 November 2005 BACKGROUND AND OBJECTIVES

he GOTG NAPA Project (Identification number LDL 2328 2724 4699), implemented

with financial and technical support from UNEP and the Global Environment Facility (GEF), belongs to a set of projects implemented within the context of United Nations Framework Convention on Climate Change (UNFCCC). Article 4.1 of this convention urges developing countries to incorporate climate change into their development planning, and all parties to the convention to cooperate on issues of global interests. Articles 4.5 and 4.8 commit developed countries to assist developing and most vulnerable countries to meet the cost of adaptation to adverse climate change. Decision 7/CP.7 sets out the mechanism for funding adaptation under the UNFCCC, whilst 27/CP.7 establishes guidelines for operating the LDC fund; a trust fund dedicated to meeting the cost of adaptation in Least Developed Countries (LDCs). A major output of LDL 2328 2724 4699 is a comprehensive, easy-to-read document, referred to as the “NAPA document”, that reflects the Gambia’s most urgent climate change adaptation needs. Translated into projects that have been screened for economic efficiency, it is hoped, that these will be funded from the LDC or similar trust funds. To this end, Blue Gold Solutions® (BGS) was identified and approached by the NAPA Project Management (NAPA-PM) to:

(i) Review NAPA thematic studies already conducted in order to pin down methodological gaps, in particular authors’ training needs on Economic Feasibility Analysis (EFA); (ii) Prepare EFA training material relevant to Climate Change Adaptation;

(iii) Conduct training for nominated members of the Gambia’s National Climate Committee – NCC (who happen to be authors or co-authors of sectoral reports); and (iv) Document the whole process in a report and submit this to the Client (NAPA-PM).

Following successful negotiations between BGS and NAPA-PM on the scope of services and terms of contract, BGS (the Consultant) commenced work on its assignment on October 17, 2005. This report responds to point (iv) above, but out of logical necessity treats issues related to points (i), (ii), and (iii). Supplementary material of interest to the Client is presented in appendices at the end of the report. APPROACH

n conformity with the terms agreed with the Client, BGS undertook the activities highlighted

below:

(1) Training Needs Assessment (TNA): This was done through expert review of NAPA sectoral reports/studies with special emphasis on the methodology and quality of Economic Feasibility Analyses in these reports/studies (see Appendix 1). (2) Planning of a Training Activity as a follow-on to TNA: The thrust and level of training material developed (see Appendix 2) is directly tributary to the TNA. Prior to the training event/workshop, a three-day training programme developed by BGS was discussed and agreed with the Client. (3) Implementation of Training Activity in accordance with workshop programme (see Appendix 3) (4) Evaluation of Training Activity through feedback from workshop participants/trainees. A sample evaluation form is included as Appendix 4

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TRAINING SUPPORT s implied in the service contract between the Client and Consultant, the main objective of

activities enumerated above is the strengthening of the Client’s (including nominated participants’) capacity to ensure sustainability of learning outcomes. One BGS trainer with solid experience in training and curriculum development, and proven expertise in adaptation science and economic analysis, was put in charge of providing training support to the Client. Strategy On this assignment, training methods considered most appropriate are rooted in maieutics. Participants are ushered through different stages of understanding and skills development using a combination of lectures, interactive Q&A sessions, and guided examples and supervised group work. Lectures are used by the trainer as an entry point to the transfer of practical skills, whilst Q&A slots are used (i) to clarify/elaborate key concepts, and (ii) to test participants’ memory and to stimulate their thinking/learning. Supervised group work capitalises on the participation of professionals with different backgrounds to introduce Delphi methods as used in EFA. Taken together, worked examples and supervised group work translate newly learnt concepts into useful results. Scope The scope of services provided by BGS is circumscribed in the agreement struck with the Client (NAPA-PM). In effect, the scope of training provided is set by results of the Training Needs Assessment insofar as these are consistent with the Client’s expectations. The training material developed is presented in Appendix 2.

Duration Fifteen hours of lectures/tutorials, spread over three consecutive days was considered the optimum for generating participants’ interest, keeping participants motivated, and passing on practical and useful knowledge and skills (see Appendix 3). TRAINING WORKSHOP

n Economic Feasibility Analysis Training Workshop stipulated under point 3 of the

service contract between BGS and NAPA-PM was organised by mutual agreement of parties from 8 – 10 November 2005 (both dates inclusive). The venue chosen at the Client’s discretion was the Senegambia Beach hotel in Kololi. The workshop did not attract media attention, but registered strong participation from 17 authors and co-authors of NAPA thematic studies, and 2 representatives of the Client, participating in multiple roles of trainee, moderator, and quality assessor (see Appendix 5 for names and affiliation of participants). Proceedings After a brief opening and welcome statement from Mr. Bernard E. Gomez, the NAPA Project Coordinator, participants were invited to introduce themselves to the group, and to state in a few words their interest in, and expectations of the workshop. The Trainer, Dr. Momodou Njie, presented an overview of the training programme (contents and time schedule), and expected outcomes. The programme proposed (and previously agreed with Client) consisted of morning and afternoon training sessions with a 15-minute tea/coffee break each, and a 90-minute lunch break at 1 p.m. (see Appendix 3). This initial work programme was subsequently modified, after consultation between the Trainer and NAPA Project Coordinator, to allow additional time for more practice, progress on group work, and discussions. At the start of second and third days of the training event/workshop, the Trainer gave a summary of progress made on the previous day, and took questions from participants.

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Highlights During the three-day training event, value was added to PowerPoint® presentations of condensed lecture notes (handed out to participants at start of the training event), through worked examples, oral explanations, and mathematical derivation/demonstration of certain formulae on flip chart. The best moments of day 1 came with the Trainer working through examples of Net Present Value (NPV) and Internal Rate of Return (IRR) computations, and showing how the timing of benefits and costs, and discount/interest rates influence EFA results. The demonstration of IRR computation with Excel® in-built root finding algorithms, in particular, generated a lot of excitement among participants. On the second day of training, participants received a step-by-step tutorial of computing NPV using Excel®, and manually, using an ordinary calculator. Participants’ skills on Excel® graphics was also enhanced as part of the IRR computation exercise on the day. An absorbing interactive step-by-step specification of benefit and cost streams for semi-intensive cattle ranching, proposed as an adaptation option to combined climate and non-climate stressors on rangeland productivity, rounded off the day. A negative NPV in millions of Dalasis showed why Gambian cattle owners practise open grazing, and also provided some illumination on the issue of subsidies paid out to cattle farmers by governments in developed countries. Participants confirmed their interest beyond any doubt by volunteering to close later than scheduled. On the second and third days in

particular, training sessions went 60 and 90 minutes into overtime. Active participation of trainees in group work, their enthusiasm and palpable growth in confidence, supported by well reasoned/and articulated proposals, were the most noteworthy points of observation on the last day of training. The trainer’s presentation on adaptation in the agricultural sector underscored the importance of establishing a base case (i.e. reference case), and comparing proposed adaptation option(s) with alternatives. CONCLUSIONS AND RECOMMENDATIONS

rom feedback received from participants, BGS, which is fully committed to meeting

ISO 9001:2000 standards, takes satisfaction in the fact that training objectives and participants’ expectations have been met. On its part, BGS urges NAPA-PM to organise an internal scientific meeting of the National Climate Committee (NCC) to develop/specify a coherent and consistent reference situation (i.e. situation under a changing/changed climate in the absence of planned adaptation measures) for individual sectors and ecosystems of interest. Failure to do so would inevitably lead to erroneous evaluation of the performance of proposed adaptation options. Acknowledgements BGS wishes to compliment workshop participants for their dedication and valuable contributions. BGS also expresses deep appreciation to the NAPA-PM for impeccable logistic arrangements

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Part II: Appendices

Appendix 1


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Appendix 1 Training Needs Assessment

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TRAINING NEEDS ASSESSMENT INTRODUCTION

nder the terms of the agreement struck between Blue Gold Solutions – BGS

(the Consultant) and the GOTG NAPA Project (the Client), viz.,

(i) Review NAPA sectoral reports in order to identify methodological gaps and specific training needs; (ii) Prepare a training package on Economic Feasibility Analysis (EFA) relevant to Climate Change Adaptation; (iii) Conduct hands-on training for nominated members of the Gambia’s National Climate Committee – NCC (who happen to be authors or co-authors of NAPA sectoral/thematic reports); and (iv) Document the whole process in a report to be submitted to the Client (NAPA-PM),

the Consultant is, most importantly, expected to introduce nominated members of the National Climate Committee (i.e. trainees) to fundamental concepts of Economic Feasibility Analysis (EFA), and help trainees develop core skills on the subject. It is only logical therefore that the point of departure for this assignment should be a Training Needs Assessment (TNA). A TNA is conducted by reviewing relevant sections/chapters of NAPA sectoral reports to gauge authors’ knowledge on the subject, and therefrom, to identify critical and other important knowledge gaps. These gaps are mapped to knowledge and skills trainees must and should acquire in order to carry out and/or appreciate EFAs. Seven (7) reports on the following themes were reviewed:

• Agriculture • Coastal and Marine Environment • Fisheries • Forest and Woodlands • Health • Rangelands and Livestock • Water Resources

An eighth report on the Gambian Energy Sector, which was not delivered to the Consultant, did not form part of the review. BGS EXPERT OPINION

strict interpretation of the Consultant’s terms of contract limits his opinion to

issues in the thematic studies crucial to an EFA Training Needs Assessment. Considering however that the validity of EFA results is not independent of impact assessment methods and procedures, the Consultant deems it worthwhile to flag what he considers EFA-related methodological gaps/dissonances in the studies reviewed. It is important to point out that BGS’ observations, which have a different focus from those coming from domain experts earlier contracted by the Client to review the NAPA reports, are not a substitute for the latter. General The thematic studies reviewed did not make adequate use of impact models, spatial/temporal analogues, or graphs/maps to show/illustrate values at risk and expected trends. The notion of a “Base” or “Reference” Case and associated concepts of residual climate change damages, and incremental costs and benefits of adaptation are missing from studies. Some reports that propose multi-criteria decision analysis (MCDA) as a way of evaluating/ranking proposed options fail to go far enough. Criteria are not quantitatively assessed or assigned weights. Authors do not recognise either that some noneconomic evaluation criteria can be adequately captured by EFA metrics. Impacts and Adaptation Options Authors take a limited/sectoral view of adaptation options, which, although understandable, has several disadvantages. BGS, a proponent of integrated problem analysis and modelling, consider integration and synthesis of proposed options highly advantageous. In addition to highlighting

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sectoral/system interdependence, generic adaptation options help the analyst identify alternatives to a main/proposed option. Sample tables taking an integrated/broad outlook of problem at hand, and systematic approach to identification and economic evaluation of adaptation options are given in Tables A1.2 and A1.3. Evaluation Criteria Most NAPA sectoral/thematic studies give an impressive list of evaluation criteria including, but not limited to: (1) cost-effectiveness; (2) sustainability; (3) implementation time span; (4) technical/financial Feasibility (5) social/political acceptability. With the exception of one or two however, the studies in general do not attempt an EFA or MCDA. Regarding EFA, which was a major requirement of the studies, authors, in the few cases where attempts were made, failed to (a) describe their methodology; (b) justify EFA metrics used, (c) define a CC baseline that incorporates autonomous adaptation, and/or (d) specify alternatives to the main/preferred adaptation option. Table A1.1 gives a synopsis of BGS observations on a sector-by-sector basis. RECOMMENDATIONS Training

rom the foregoing, BGS holds the opinion that prospective trainees need a theoretical

grounding on (1) fundamental concepts of EFA; (2) the applications and applicability of EFA; and (3) EFA metrics. Trainees also need practical, hands-on, and supervised exercises to enhance learning, retention, and skills development. Didactic material that lays the foundation for such training is given in Appendix 2. This also incorporates EFA-related issues with a potential for improving the quality of thematic reports. Examples of the latter are “reference case” or scenario development, specification of alternatives, and externalities (e.g. water harvesting on wetlands ecology, cattle ranching on climate).

Bibliography Bobb, M. T, Touray, O., Dampha, A., 2005.

Assessment of vulnerability to climate change in the rangelands and livestock sector and adaptation measures In the Gambia. Consultancy Report Prepared for NAPA Project LDL 2328 2724 4699. Banjul, 45p.

Bojang, L., Jallow, A.O., Mbye, B., Loum, M.K.,. 2005. Country study on assessment of vulnerability to climate change in the forest and woodlands ecosystem and to propose adaptation options Consultancy Report Prepared for NAPA Project LDL 2328 2724 4699. Banjul, 21p.

Cole, A., Sanyang, K., Marong, A.J., Jadama, F., 2005. Vulnerability and adaptation assessment of the agricultural sector of the Gmabia to climate change. Consultancy Report Prepared for NAPA Project LDL 2328 2724 4699. Banjul, 36p.

Conteh, A.S., Njai, S.B.M, Phall, M, Drammeh, M. 2005. Vulnerability and adaptation assessment report of the health sector of the Gambia to climate chnage. Consultancy Report Prepared for NAPA Project LDL 2328 2724 4699. Banjul, 54p.

Darboe, F, and Bojang, L., 2005. Country study on assessment of vulnerability to climate change in fisheries and adaptation options. Consultancy Report Prepared for NAPA Project LDL 2328 2724 4699. Banjul, 22p.

DWR, 2005. Vulnerability and adaptation assessment to climate change on water resources. Consultancy Report Prepared for NAPA Project LDL 2328 2724 4699. Banjul, 65p.

Njai, S.B.M., Jallow, A.O., Jammeh, K., Sonko, K., Bojang, L.L., Chune, S., 2005. Coastal and marine environment: Final report. Consultancy Report Prepared for NAPA Project LDL 2328 2724 4699. Banjul, 32p.

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Table A1.1: Evaluation of EFA component of NAPA sectoral/thematic studies

Sector

Adverse CC impacts

Adaptation

BGS evaluation

Methodological Deficits

Fisheries (Darboe and Bojang, 2005)

loss of habitat, decline in primary productivity

aquaculture Loose typology/classification of costs liable to omissions (e.g. marketing) Costs conceptualised as problem of start-up capital mobilisation (i.e. initial investment) Adaptation conceptualised as one-off activity (t =1yr, stock management issues sidelined, notion of discounting totally absent) Estimates of benefits missing Alternative(s) missing (e.g. IPCC Recommendations 2,4,5)

Enterprise/Project/Adaptation conceptualisation Evaluation of Direct/Indirect Cost/Benefits, Intangibles

Forest and Woodlands Ecosystem ( Bojang et al., 2005)

spatio-temporal disequilibria, over-exploitation, biodiversity loss

sustainable forest management (agro-forestry, alternative energy, natural forest management)

Insurmountable valuation hurdles Problem conceptualisation/articulation Use of proxies/surrogates Evaluation of Direct/Indirect Cost/Benefits, Intangibles

Water Resources (DWR, 2005)

multi-faceted (food prices, nutrition, disease, etc), structural damage, displacement

dyke construction, supply augmentation (flow regulation, artificial recharge)

B/C computations do not provide minimum acceptable level of detail Underestimated project life has major impact on economic performance

Identification of Costs and Benefits Valuation of Costs and Benefits B/C framework (assumptions, parameters, etc.)

Livestock (Bobb et al., 2005)

Increase/decrease in productivity of different grass species

poultry-farming, sheep fattening, wildlife breeding

Good inventory of costs and benefits Some costs missing (e.g. land/shelter, marketing.) Stock management issues sidelined, notion of discounting totally absent

Confusion over CEA and MCA (includes BCA and other criteria, weighting/preferences etc.)

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Table A1.1: Evaluation of EFA component of NAPA sectoral/thematic studies (cont’d)

Sector

Adverse CC impacts

Adaptation

BGS evaluation


Agriculture (Cole et al., 2005)

decrease in grain/cereal crop production contraction of arable are (esp. lowlands), loss of soil fertility

dissemination of climate information, introduction of new cultivars and technologies, small-scale water control

Description instead of quantification of benefits Unit costs absent (Authors complain about lack of data ???consultations, survey, internet, literature search)

Application of BCA methodology

Coastal and Marine Environment (Njai et al., 2005)

Coastal erosion, loss of wetland habitats

Beach nourishment, wave energy dissipation, littoral drift control, community wetlands management, buffer zones

Self-defeating assumptions about BCA applicability (f.i page 25, paragraph 1)

Scenario development (e.g. population projections) Application of BCA methodology including uncertainty analysis

Public Health (Conteh et al., 2005)

Increased exposure to disease vectors, expanded range/breeding area of mosquitoes, accelerated rural-urban migration

Vector control (surveillance, research, intervention) Institutional strengthening (training, policies, tools) Vaccination Nutritional support Public health education

pp28, 36 – 40 more on developed countries Correctly identifies some limitations of BCA, but does not explore its possibilities (e.g. vector control, health infrastructure, vaccination, CEA of preventive vs. curative strategies) Failure to consolidate and integrate some strategies

Application of BCA methodology Optimal combination of treatment and preventive measures

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Table A1.1: Evaluation of EFA component of NAPA sectoral/thematic studies (cont’d)

Sector

Adverse CC impacts

Adaptation

BGS evaluation


General Authors not familiar with economic feasibility analysis

Financial/Economic Analysis Definitions, use and computation of standard metrics (NPV, B/C, IRR), non- standard metrics (PBP, RRI) Monetisation of non-market benefits Specification of Base/Reference case Uncertainty Analysis Assessment of alternative options missing Allocation of costs/benefits (under integrated/multi-purpose interventions) Externalities (spillovers, positive/adverse impacts on other sectors/ecosystems, sub-sectors) not considered

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Table A1.2: Example of generic adaptation measures/strategies

Climate Change Impact

Adaptation measures/strategies

Sector/System

Integrated land and water management policies/regulations, and practices

Community forest management Forests and Woodlands Water quality management, flow regulation Water Resources Beach nourishment Coastal and Marine Environment Closed seasons, technological controls, aquaculture Fisheries Soil fertilisation Agriculture

Impairment of production/economic, regulation/environmental, information, aesthetic functions (as result of degradation, overexploitation, etc.)

Community wetlands management, buffer zones Wildlife

Ex-situ/In-situ conservation Wildlife Extinction/Migration of species Control of alien/invasive species Health, Wildlife, Agriculture

Reduction of exposure Health, Water Resources, Livestock Chemotherapy Health Public health education Health

Increasing morbidity and mortality (epizoonotic agents, malnutrition, etc.)

Nutritional support, improved food production techniques Health, Agriculture, Fisheries, Livestock

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Table A1.3: Linking climate risks, impacts and adaptation measures/strategies (an example)

Sector/System

Climate Risk

Impacts

Area/People affected

Adaptation measures/strategies

Coastal erosion, shoreline retreat Beaches, intertidal zones, estuary, (several thousand) people whose livelihoods linked with coastal area

Beach nourishment, breakwaters, setback zones

Property and infrastructural damage

Tourism Development area Setback zones

sea level rise

Inundation of wetlands Salt marshes/wetlands Barriers/dykes, water control milder winter in source countries (tourist minimise their travel cost by staying closer to home)

Entire country, stakeholders in tourism and catering industry (hotel/restaurant owners, small entrepreneurs, travel/airline industry)

Develop new attractions/products (e.g. cultural and heritage tourism)

Tourism

global warming

disruption of bird migration patterns (ornithological attractions lose value)

Winter breeding spots/habitats Strengthening protection of local bird species Public education (on poaching and trade in rare birds)

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Appendix 2 Training Material

Appendix 2


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A Primer on Economic Feasibility Analysis

Short Lecture Notes for Training of Nominated Members of the National Climate Change Committee (The Gambia)

by

Momodou Njie

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Appendix 3


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Appendix 3 Workshop Programme

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Economic Feasibility Analysis Training Workshop

Senegambia Beach Hotel, 8 – 10 November 2005

Draft Workshop Programme Day 1: 8 November 2005 0900 – 0930 Introduction 0930 – 1030 Presentation/Lectures 1030 – 1045 Tea/Coffee Break 1045 – 1300 Presentation/Lectures 1300 – 1430 Lunch Break 1430 – 1530 Presentation/Lectures 1530 – 1545 Tea/Coffee Break 1545 – 1630 Presentation/Lectures Day 2: 9 November 2005 0900 – 1030 Presentation/Lectures, Q&A 1030 – 1045 Tea/Coffee Break 1045 – 1300 Instructor-led exercises 1300 – 1430 Lunch Break 1430 – 1530 Instructor-led exercises 1530 – 1545 Tea/Coffee Break 1545 – 1630 Instructor-led exercises Day 3: 10 November 2005 0900 – 1030 (Instructor-supervised) Group work 1030 – 1045 Tea/Coffee Break 1045 – 1200 (Instructor-supervised) Group work 1200 – 1300 Presentation and discussion of group work 1300 – 1430 Lunch Break 1430 – 1530 Presentation and discussion of group work 1530 – 1545 Tea/Coffee Break 1545 – 1615 Wrap-up Sponsor: National Adaptation Plan of Action on Climate Change Project

(LDL 2328 2724 4699), Department of Water Resources, 7 Marina Parade, Banjul, The Gambia.

Trainer: Blue Gold Solutions, 67 Ousman Jeng Street, Banjul, The Gambia.

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Economic Feasibility Analysis Training Senegambia Beach Hotel, 8 – 10 November 2005

Final Workshop Programme

Day 1: 8 November 2005 0900 – 0930 Introduction 0930 – 1030 Course Outline

Definitions Economic Feasibility Analysis (EFA) Applications EFA Methodology

1030 – 1045 Tea/Coffee Break 1045 – 1300 Benefit Cost Analysis

• Standard metrics • Major conceptual issues

1300 – 1430 Lunch Break 1430 – 1530 Benefit Cost Analysis (cont’d)

• Limitations 1530 – 1545 Tea/Coffee Break 1545 – 1630 Benefit Cost Analysis (cont’d)

• Extension of method Day 2: 9 November 2005 0900 – 1030 Recapitulation of Day 1 Lectures

Q&A Session Demonstrations

1030 – 1045 Tea/Coffee Break 1045 – 1300 Instructor-led BCA in Excel ® environment

Further Demonstrations 1300 – 1430 Lunch Break 1430 – 1530 Instructor-led BCA in Excel ® environment (cont’d)

Economic Feasibility Analysis • Summary

1530 – 1545 Tea/Coffee Break 1545 – 1730 Instructor-led exercises

• LULUC Scenario (Development and discussions) • Adaptation in the livestock sector

Sponsor: National Adaptation Plan of Action on Climate Change Project



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Day 3: 10 November 2005 0900 – 1000 Instructor-led exercises

• Adaptation in the livestock sector (cont’d) 1000 – 1015 Tea/Coffee Break 1015 – 1300 Group work

• Adaptation in the health sector • Adaptation in the forestry sector • Adaptation in the coastal zone

1300 – 1430 Lunch Break 1430 – 1700 Group work (cont’d) 700 – 1715 Tea/Coffee Break 1715 – 1745 Short presentations and discussion of

• Group work • Adaptation in the agriculture sector (by Instructor)

1745 – 1800 Wrap-up

Sponsor: National Adaptation Plan of Action on Climate Change Project



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Appendix 4 Evaluation of Training

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Economic Feasibility Analysis Training Workshop Senegambia Beach Hotel, Kololi, 8 – 10 November 2005

Training Evaluation1

Date: ………………………………… Agree Disagree Strongly Not

Disagree Applicable The session Well prepared ………………………………………………………………………………………………… Session/Workshop related to group’s needs/experience ……………………………………………………… Objectives clearly stated ……………………………………………………………………………………… Objectives of the workshop achieved ………………………………………………………………………… Content Covered key points …………………………………………………………………………………………… Practical and useful …………………………………………………………………………………………… Gave practical examples or illustrations ……………………………………………………………………… Did not try to teach “too much” information …………………………………………………………………. Method Lectured or talked too much ………………………………………………………………………………… Encouraged questions from the group ……………………………………………………………………….. Encouraged discussion ……………………………………………………………………………………….. Helped participants apply materials or skills …………………………………………………………………. Allowed time to practice ……………………………………………………………………………………… Summarised during session, and at end …………………………………………………………………….. Communication Speech clear and easy to listen to …………………………………………………………………………….. Mannerisms wer not distracting/annoying ……………………………………………………………………. Clarified points when participants not clear …………………………………………………………………. Presented points /explanations logically ……………………………………………………………………… Use of Aids Use of board/flipchart ………………………………………………………………………………………… Handouts/notes ………………………………………………………………………………………………. Overhead projector/slides …………………………………………………………………………………….. Overall rating Excellent very Good Good OK Needs Practice …………………………………………………………………………………………………….. Suggestions What would have madw the presentation more effective …………………………………………………….

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1 Feedback and Suggestion Sheet (adapted from “Effective on-the-job training in hydrology”, R. Allaburton, 1991. UNESCO Reference SC-91/WS - 6) for SPONSOR’s USE

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Economic Feasibility Analysis Training Workshop Senegambia Beach Hotel, Kololi, 8 – 10 November 2005

Training Evaluation*

Date: ………………………………… Agree Disagree Strongly Not

Disagree Applicable The session Well prepared ………………………………………………………………………………………………… Session/Workshop related to group’s needs/experience ……………………………………………………… Objectives clearly stated ……………………………………………………………………………………… Objectives of the workshop achieved ………………………………………………………………………… Content Covered key points …………………………………………………………………………………………… Practical and useful …………………………………………………………………………………………… Gave practical examples or illustrations ……………………………………………………………………… Did not try to teach “too much” information …………………………………………………………………. Method Lectured or talked too much ………………………………………………………………………………… Encouraged questions from the group ……………………………………………………………………….. Encouraged discussion ……………………………………………………………………………………….. Helped participants apply materials or skills …………………………………………………………………. Allowed time to practice ……………………………………………………………………………………… Summarised during session, and at end ……………………………………………………………………….. Communication Speech clear and easy to listen to …………………………………………………………………………….. Mannerisms wer not distracting/annoying ……………………………………………………………………. Clarified points when participants not clear …………………………………………………………………. Presented points /explanations logically ……………………………………………………………………… Use of Aids Use of board/flipchart ………………………………………………………………………………………… Handouts/notes ………………………………………………………………………………………………. Overhead projector/slides …………………………………………………………………………………….. Suggestions What would have made the presentation more effective …………………………………………………….

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* Feedback and Suggestion Sheet (adapted from “Effective on-the-job training in hydrology”, R. Allaburton, 1991. UNESCO Reference SC-91/WS - 6) ) for SPONSOR’s USE

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Appendix 5 List of Participants

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Table A5.1: List of Participants

Participant Affiliation Telephone Institution NAPA Study

Mrs. Amie Jarra DWR Water Resources 9903920

Mr. Ousainou Touray DWPM/ICAM Livestock 9817559

Mr. Mohammad Tamsir Bobb DLS Livestock 9982744

Mr. Kawsu Jammeh DWPM Coastal Zone 4375888

Ms. Fatou Gaye DLS Livestock 4391323

Mrs. Anna Mbenga-Cham Fisheries Fisheries 4223373

Mrs. Aja Binta Kinteh NEA Coastal Zone 4228056

Mr. Papa Secka NEA Health 9983292

Mr. Sulayman Chune NEA Coastal and Marine Environment 9902827

Mr. Musa Drammeh DoSH Health 9921483

Mrs. Mariatou Kassim-Loum WISDOM Forestry and Woodlands 9806136

Mr. Asheme M. Cole DAS Agriculture 7783662

Mr. Foday Jadama DAS Agriculture 9980225

Mr. Almami Dampha Forestry Forestry and Woodlands 9936841

Mr. Momodou S. Jallow DWR Water Resources 9913802

Mr. Musa Samura Energy Dept (OP) Energy 9980795

Mr. Bah Saho Energy Dept (OP) Energy 9919585

Mr. Pa Abdoulie Manneh* DoSFEA 9909603

Mr. Bernard E Gomez* DWR 4224122

* Representing NAPA Project Management (NAPA-PM) at Training Workshop

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Appendix 6 Motivating Examples

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Example # 1 Economic Feasibility Analysis of Climate Change Adaptation

Sector Livestock

Climate Change Impact Decrease in natural pasture productivity

Strategy Semi-intensive cattle ranching

Description Cattle raising is currently based on open grazing of communal rangelands and fallow land, which have limited productivity. The challenge of providing adequate feed for animals often results in farmer-herder conflicts with encroachment and priority of use/land rights at issue. To offset productivity constraints imposed by reduced rangeland biomass under adverse climate change, semi-intensive cattle ranching, characterised by stall-feeding and controlled grazing is proposed. We allow for an increase of the traditional herd size of 55 animals to a maximum of 75 Tropical Livestock Units (TLU). Young animals may be sold off to stay within this limit, but only when they have reached 3 years. Older animals in breeding pool are placed with new stock to add to genetic diversity, or when male animals in herd not sufficiently mature, but old bulls have to be replaced. .

Entry Point Reduce sensitivity Increase resilience and adaptive capacity

Implementation

Communication of information by government extension services to targeted groups.

Benefit-Cost Analysis

Assumptions Herd dynamics Calving rate: 0.8 Mortality: 0% Sex ratio at birth: 1:1 Maturity of animals: 4 years (Cows) and 6 years (Bulls) TLU computation: Male calves/young bulls(all cohorts) equivalent to 0.67 Adult Animal, female calves/young cows (all cohorts) equivalent to 0.6 Adult Animal TLU computation: Male calves/young bulls(all cohorts) equivalent to 0.67 Adult Animal, female calves/young cows (all cohorts) equivalent to 0.6 Adult Animal Market Prices Adult animals: GMD15,000 Young animals: GMD5,000 Milk: GDM15/litre CO2: USD8/mt

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Detailed Benefit-Cost Evaluation of semi-intensive livestock ranching (Monetary values expressed in thousands of dalasis) Year 1 2 3 4 5 6 7 8 9 10 TLU 20 31 41 51 60 62 71 68 70 69 Animals 20 36 52 68 82 82 94 90 88 89 COSTS Studies 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 sub-total 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Shelter Construction 315 315.0 -600.0 Solar panels 50.0 25.0 -50.0 sub-total 365.0 0.0 25.0 0.0 0.0 0.0 0.0 0.0 0.0 -650.0 Stock 20.0 sub-total 0.0 0.0 0.0 0.0 20.0 0.0 0.0 0.0 0.0 0.0 Operations Energy 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 1.0 Feed 1,095.0 1,697.3 2,244.8 2,792.3 3,285.0 3,394.5 3,887.3 3,723.0 3,832.5 3,777.8 Water 5.5 8.5 11.2 14.0 16.4 17.0 19.4 18.6 19.2 18.9 Drugs 8.8 13.6 18.0 22.4 26.4 27.3 31.2 29.9 30.8 30.4 Labour 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 9.1 Administration 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 6.0 sub-total 1,125.4 1,735.5 2,290.1 2,844.8 3,344.0 3,454.9 3,954.1 3,787.7 3,898.6 3,843.1 Equipment Weighing scales 15.0 Miscel. 15.0 sub-total 30.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Insurance 6.0 6.0 9.3 12.3 15.3 18.0 18.6 21.3 20.4 21.0

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sub-total 6.0 9.3 12.3 15.3 18.0 18.6 21.3 20.4 21.0 20.7 Taxes 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 sub-total 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 Land Lease 3.0 3.0 sub-total 3.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Adverse Effects Climate 21.1 32.7 43.3 53.9 63.4 65.5 75.0 71.8 73.9 72.9 sub-total 21.1 32.7 43.3 53.9 63.4 65.5 75.0 71.8 73.9 72.9

BENEFITS Production Milk 0.0 140.0 140.0 140.0 140.0 202.2 217.7 186.6 248.8 248.8 Live Animals 0.0 0.0 0.0 0.0 40.0 230.0 180.0 80.0 140.0 55.0 sub-total 0.0 140.0 140.0 140.0 180.0 432.2 397.7 266.6 388.8 303.8 Beneficial Effects Agriculture 2.0 3.1 4.1 5.1 6.0 6.2 7.1 6.8 7.0 6.9 Wildlife 10.0 15.5 20.5 25.5 30.0 31.0 35.5 34.0 35.0 34.5 Climate sub-total 12.0 18.6 24.6 30.6 36.0 37.2 42.6 40.8 42.0 41.4 Government support 1056.46 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 sub-total 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Total Costs 1,550.7 1,777.7 2,370.9 2,914.1 3,445.5 3,539.1 4,050.5 3,880.1 3,993.7 3,286.9 Total Benefits 12.0 158.6 164.6 170.6 216.0 469.4 440.3 307.4 430.8 345.2 w(t) 0.9 0.8 0.8 0.7 0.6 0.6 0.5 0.5 0.4 0.4

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Discounted Costs 1,409.7 1,469.2 1,781.3 1,990.4 2,139.4 1,997.8 2,078.6 1,810.1 1,693.7 1,267.2 Discounted Benefits 10.9 131.0 123.6 116.5 134.1 265.0 226.0 143.4 182.7 133.1 NPV Difference -1,398.8 -1,338.2 -1,657.7 -1,873.9 -2,005.3 -1,732.8 -1,852.6 -1,666.7 -1,511.0 -1,134.1 -16,171.1

Under the assumptions highlighted above, the Net Present Value (NPV) for cattle ranching stands at – GMD16,171,100. Starting from the profit function,

Y = PQ – C, where Y is net profit, Q is production, P is price of unit production, and C production and marketing costs, a number of variables are adjusted in an attempt to transform the negative NPV into a positive value. This happens to be a tall order because animal feed accounts for approximately 98% of total costs. Taking the case whereby farm support/ government incentives is available to farmers, a minimum subsidy of USD1,921/Animal is

required. Although small by comparison to subsidies paid out to farmers in developed countries, this would put the level of support at 730 t0 1550% of farm income. Assuming farmers practice open grazing (i.e. feed has zero marginal cost), the net present value is GMD590,000, providing evidence for the entrenchment of this widespread practice. If however, there are constraints to open grazing under less favourable climatic conditions, the question which arises is what level of farm support (to purchase feed grain/concentrates, or to cultivate fodder crops) required to make farmer break even? We calculate this value to be USD70/Animal, which represents 28 to 57% of farm income. Additional research/computations is/are needed to ascertain whether an annual subsidy

of USD70/Animal per annum is sufficient to provide grain feed for one adult animal? Additionally, what impact would such a subsidy have on productivity and quality of animal products? At some point in the analysis, an attempt should be mad to compare livestock ranching with poultry farming, sheep framing, and aquaculture, fin terms of cost-effectiveness. We draw the reader’s attention to pitfalls in promoting cost-effectiveness over every other consideration, in particular, consumer preferences.

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Sector Public Health

Climate Change Impact Increased malarial disease burden

Strategy Vector Control

Description Malaria, killing millions worldwide, and hundreds in the Gambia every year is an endemic disease spread by mosquitoes (Anopheles spp.). Malarial endemicity is tributary to poor environmental sanitation/drainage, which is exacerbated by high temperatures and rainfall during the rainy season in the Gambia. Currently, the whole population is at risk, and the probability of falling ill from malaria is projected to increase with increased aggregate surface area and duration of stagnating water, under climate change scenarios. From a public health perspective, we propose a vector control programme as the key to overcoming the ravages of malaria. In doing so, we also investigate the validity of the claim ‘Prevention is better than Cure’.

Entry Point Reduction of exposure

Implementation Direct action by public authority


Assumptions Population growth rate: 2.8% p.a. Economically active population: 35% Treatment cost: GMD15 Average daily wage: GMD25 Probability of falling ill in Year 1: 0.10 Decrease of probability of sickness: 8 % p.a. Disability: 8 days p.a. Public education and larviciding costs remain constant for first three years, decreasing linearly to 10% of their respective Year 1 values in the final year of project

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Detailed Benefit-Cost Evaluation of Malarial Vector Control (Monetary values expressed in thousands of dalasis) Pop. 1.54 1.59 1.63 1.68 1.72 1.77 1.82 1.87 1.92 1.98 million

Year 1 2 3 4 5 6 7 8 9 10 COSTS

Studies 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Sub total 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Equipment

Larviciding 1,500.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 90.0 Protective clothing 400.0 0.0 400.0 0.0 400.0 0.0 400.0 0.0 400.0 0.0

Monitoring 961.2 72.0 72.0 72.0 72.0 72.0 72.0 72.0 72.0 72.0 Sub total 2,861.2 162.0 562.0 162.0 562.0 162.0 562.0 162.0 562.0 162.0

Operations

Public education 1,063.5 1,063.5 1,063.5 926.8 790.0 653.3 516.6 379.8 243.1 106.4 Larviciding/Spraying 2,352.0 2,352.0 2,352.0 2,049.6 1,747.2 1,444.8 1,142.4 840.0 537.6 235.2

Environmental Sanitation 2,352.0 2,469.6 2,593.1 2,722.7 2,858.9 3,001.8 3,151.9 3,309.5 3,475.0 3,648.7 Drainage 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

M&E 408.0 408.0 408.0 408.0 408.0 408.0 408.0 408.0 408.0 408.0 Sub total 6,175.5 6,293.1 6,416.6 6,107.1 5,804.1 5,507.9 5,218.9 4,937.3 4,663.7 4,398.3

Insurance

Health insurance 150.0 146.0 146.0 146.0 146.0 146.0 146.0 146.0 146.0 146.0 Sub total 150.0 146.0 146.0 146.0 146.0 146.0 146.0 146.0 146.0 146.0

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Adverse Effects

Water Resources 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Wildlife & Fisheries 117.6 117.6 117.6 102.5 87.4 72.2 57.1 42.0 26.9 11.8

Sub total 117.6 117.6 117.6 102.5 87.4 72.2 57.1 42.0 26.9 11.8

BENEFITS Treatment cost

savings 2,128.0 1,997.3 1,857.7 1,708.7 1,549.9 1,380.8 1,201.1 1,010.3 807.8 593.1 Wage earnings 9,576.8 8,988.9 8,360.5 7,689.9 6,975.2 6,214.4 5,405.6 4,546.6 3,635.3 2,669.3

Sub total 11,704.8 10,986.2 10,218.2 9,398.6 8,525.1 7,595.3 6,606.7 5,556.9 4,443.0 3,262.4

Beneficial Effects

Water Resources 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Sub total 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0

Total Costs 9,304.3 6,718.7 7,242.2 6,517.6 6,599.5 5,888.1 5,984.0 5,287.3 5,398.5 4,718.0 Total Benefits 11,704.8 10,986.2 10,218.2 9,398.6 8,525.1 7,595.3 6,606.7 5,556.9 4,443.0 3,262.4

w(t) 0.90909 0.82645 0.7513148 0.68301 0.62092 0.56447 0.51316 0.46651 0.4241 0.38554

Discounted Costs 8,458.5 5,552.6 5,441.2 4,451.6 4,097.7 3,323.7 3,070.7 2,466.6 2,289.5 1,819.0 Discounted Benefits 10,640.7 9,079.5 7,677.1 6,419.4 5,293.4 4,287.3 3,390.3 2,592.3 1,884.3 1,257.8

NPV

Difference 2,182.2 3,526.8 2,235.9 1,967.8 1,195.7 963.6 319.6 125.7 -405.2 -561.2 11,550.9

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Under the assumptions stated above, prescribed and/or computed benefit and cost streams give a positive NPV which result suggests that vector control is an economically viable malarial control strategy. Attention is drawn however to negative net benefits towards the end of the project/programme. Perhaps a matter of chance, this aspect of the benefit stream raises the question of sustainability of the intervention. An astute project/programme analyst could cut budget allocations to M&E and public education to fix the arithmetic, but it is better to look at ways of reducing environmental sanitation costs, a major element form year 4 onwards. Raising the average level of wages to GMD38/day, whilst keeping other variables constant and assumptions unchanged, would equally reduce the question of sustainability to a non-issue. The analyst should however pay due care to consistency. Unless the analyst can quote a credible source, an average wage is best estimated from macro-economic indicators of the country. Staying with the issue of consistency and coherence, notice that NPV depends on the probability of falling ill from malaria, and effectiveness of the vector control programme. Assuming a constant probability of falling ill from malaria over time gives the highest NPV, but such an assumption defies the logic of having the vector control programme in the first place. The analyst therefore should not allow himself/herself to be mesmerised by absolute NPV values. Remember that pain, happiness, distress, etc. which are not monetised, but certainly important, are not included in the analysis. Investigating the behaviour of NPV if the programme/project is implemented immediately, in 5, or 10 years from now, one is amazed to find out that NPV steadily increases from 11.5 to 28.3 million dalasis, without counting the pain, despair, etc. highlighted in previous paragraph. Similar to complex problems with multiple objectives, these simple analyses show that multiple criteria should be used, whenever possible, to assess a decision/policy/planned action.

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Sector Agriculture

Climate Change Impact High inter-annual variability of crop yields

Strategy Crop fertilisation Irrigation

Description Agriculture in the Gambia is essentially rain-fed agriculture. Out of season crops grown in favourable microenvironments or irrigated conditions account for less than 2% of the Gambia’s requirements in staple foods. Historically, production deficits years have been met by imports from Asian countries. Under a changing climate however, trade in essential commodities may be distorted by political desiderata. Considering that land, labour, and water do not constitute limiting constraints to coarse grain cultivation, we propose the dedicated and targeted use of fertilisers and irrigation as a means of reducing the country’s food deficit.

Entry Point Reduction of sectoral sensitivity to climate change

Implementation Communication of information by government extension services to targeted groups.

Benefit-Cost Analysis1

Assumptions Cultivated area of coarse cereals increases proportionally with population growth, subject to a 0.15 ha/capita limit Irrigated area of coarse cereals increases linearly with time, from its current value of 2% to 20% by end of the 21st century Rice irrigation from surface water is accelerated after commissioning of Sambangalou dam Rice yields increases to 4 tonne/ha under controlled irrigation Coarse grains and rice are harvested twice a year (with irrigation); Fertiliser is applied to 100% of coarse grain cultivated area at rate of 100 kg/ha Food imports/aid is triggered by buffer stocks falling below a critical stock-to-utilisation ratio Food import/aid costs are expressed in constant dollar values. Economic agents with a central role in climate change adaptation, respond to market signals in a rational way

1 Njie et al. 2005. Adaptation to Climate Change for Agriculture in The Gambia: an explorative study on adaptation strategies for millet (Submitted for review).

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Economic evaluation of adaptation strategies (An excerpt from Njie et al. 2005 Adaptation to Climate Change for Agriculture in The Gambia: an explorative study on adaptation strategies for millet.)2

Cognisant of the theoretical difficulties, and uncertainties surrounding backward linkages of adaptation projects with the Gambian economy, the economic analysis presented in this paper uses costs and benefits of adaptation strategies within a national cereal self-sufficiency/import substitution framework. For the reader’s benefit, millet is the substitute cereal for rice, the main cereal consumed locally. It may be of interest to note also that production deficits in the last 30 years have been met by imports from Asian countries. In a liberal trade regime, and under high uncertainty, one may in the future be tempted to build up strategic reserves, but at cost? This interesting question, and the impact of nutritional policy variables on economic efficiency of adaptation strategies are therefore also investigated.

Two responses to climate change are evaluated:

M0 : Business as Usual M1: Adaptation using irrigation. and, alternatively, fertilisation

Benefit-cost analyses undertaken

consist of subjecting the selected adaptation strategies to economic efficiency tests. Socio-economic projections by Njie (2002), and Verkerk and Van Rens (2005) indicate that water, land, and/or labour do not constitute limiting constraints to agricultural production.

The analytical framework is expressed

by equations 1 through 5b below:

2211 iiiii AxAxG += (1a)

ii heE ⋅= (1b)

2 Tables and equations numbers starting from 1 are different from those in original research paper.

11 −+

= −

i

iii E

GSu (1c)

��

��

�

+

≥=

otherwiseEuu

uuwhenQ

ii

i

i,||)1(

,0

*

*

(1d)

iiiii QEGSS +−+= − )(1 (1e) in which 1ix is millet yield (tonnes ha– 1) from

SWAP-WOFOST simulations for year i, 2ix is

rain-fed/irrigated rice yield (tonnes ha– 1), 1iA

and 2iA are corresponding areas under cultivation (ha), is cereal production (tonnes), e is per capita consumption of cereal (tonnes person–1), ih is population size (persons), iE is

national cereal consumption (tonnes), iQ is

food aid and/or cereal imports (tonnes), 1−iS is

cereal stock (tonnes) at end of year i – 1, *u is a stock-to-utilisation ratio threshold for food imports as defined by national food security policy, iu is the running stock-to-utilization

ratio, and iS is cereal stock (tonnes) at end of year i.

Climate Change damages, interpreted as net cost to society of climate change, if the climate changes and no adaptation takes place (i.e., Business-as-Usual) is computed as

0

01

1

M

n

iiiM

QPnB �=

−= (2)

in which iP is the world market price of cereals (USD/tonne).

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Adaptation Benefits defined as climate change damages avoided by adaptation actions is derived from the expression:

1

11

1

M

n

iiiM

QPnB �=

−= (3)

Adaptation costs are a reflection of the

value of real resources society gives up to create adaptation benefits. Thus,

1

11

1

M

n

iiiM

AancC �=

−⋅= (4)

in which ia is the fraction of cultivated area under treatment, c is the unit cost of implementing adaptation options (USD/ha).

Two efficiency criteria are used, (1) Net Adaptation Benefits (NAB), and (2) Imposed Climate Change Cost (ICCC), evaluated as:

1)(

MCBNAB −= (5a)

10)(

MMCBBICCC −−= (5b)

Mutatis mutandis, high unit costs of irrigation make investments in coarse grain production, the near future, a losing proposition, compared in particular to the business-as-usual response of food importation. The significance and consequences of unit costs is quite telling in the case of crop fertilisation that carries development costs per hectare less than 2% of corresponding costs for irrigation. Relative economic performance of irrigation only improves when water becomes a limiting crop production factor (HadCM3 – distant future scenario).

References Njie, M., 2002. Second Assessment Report of Climate

Change induced Vulnerability of Gambian water resources sector, and daptation strategies. Report prepared for the Gambia’s National Climate Committee, Banjul, 71p.

Verkerk, M.O., and van Rens C.P.M., 2005. Saline

intrusion in Gambia river after dam consytruction: Solutions to control saline intrusion while accounting for irrigation development and climate chnage. Research Report, University of Twente, The Netherlnads, 64p.

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Table 1: Cost and benefits of irrigation as an adaptation option to climate change for two values of STU. All values relayed to average calendar year (modified for

purpose of this exercise) STU 10% 20% 2010-2039 Climate Change Damages (USD) 155,085,257 151,858,775 Adaptation Benefits (USD) 43,318,700 36,462,950 Adaptation costs (USD) 124,486,314 124,486,314 Net Adaptation Benefits (USD) -81,167,620 -88,023,370 Imposed Climate Change Damages (USD) 236,252,880 239,882,150 Incremental Benefit Cost Ratio 0.35 0.29

Table 2: Cost and benefits of fertilisation as an adaptation option to climate change for two values of STU (modified for purpose of this exercise)

STU 10% 20% 2010-2039 Climate Change Damages (USD) 155,085,257 151,858,775 Adaptation Benefits (USD) 37,880,060 28,635,720 Adaptation costs (USD) 6,287,188 6,287,188 Net Adaptation Benefits (USD) 31,592,880 22,348,540 Imposed Climate Change Damages (USD) 123,492,380 129,510,240 Incremental Benefit Cost Ratio 6.02 4.55

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Sector Coastal Zone

Climate Change Impact Shoreline retreat

Strategy Beach nourishment

Description Prior to 2004, signs of severe erosion could be seen right along the Atlantic seaboard of the Gambian coastline. Damage to property, amenity, cultural sites, has only been brought to heel through massive coastal protection works including beach nourishment. Rapid erosion of nourished beaches however, linked to high tides and storm waves, point out the need for periodic recharge to replace sediments lost from affected beaches. Under projected sea level rise and associated shoreline retreat, recharge operations may even become a necessity. It goes without saying that the survival of resort tourism in the Gambia depends on the state of its beaches. Dredging of offshore sediment and recycling of inshore stocks, and their emplacement could be carried out during the year with least disruption of shoreline activities. Negative environmental impacts are location and time-specific, but could be avoided by careful selection of dredging areas, and/or re-use of dredged material from harbour/port if the latter are certified free of contaminants.

Entry Point Reduce sensitivity Increase resilience and adaptive capacity

Implementation

Direct action by public authority


Assumptions Offshore source of sediment unpolluted Sediments mined from harbour/shipping channel has negligible impact on benthic flora and fauna Critical beach level commensurate rate of sea level rise (SLR) Beach nourishment once every five years Benefit-Cost computations for 1 km shoreline (i.e., social acceptability of a crenulated beach formation) Visitor numbers decrease by 1% every year without beach nourishment Average tourist spending: USD33/day Length of stay: 14days Favourable geopolitical environment for growth of tourism sector Land prices in Tourism Development Area: GMD45,000/m2 Shoreline retreat: 0 to 100 m for 50cm SLR in next 50 years Average earnings in sector stand at GDM39/day increasing at same rate as projected arrivals Annual revenue in sector less corresponding low season value represents earnings directed related to tourism (hotels and restaurants, taxis, recreation, handicraft) Employees per unit shoreline: 200 employees/km

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Detailed Benefit-Cost Evaluation of Beach Nourishment (Monetary values expressed in thousands of dalasis)

Average

Spending ( ' 000) 12.7 14.0 15.4 16.9 18.6 Tourist numbers 20,000 24,000 28,000 24,000 20,000 Visitor increase 200 4,400 8,600 4,800 1,000 Year 1 2 3 4 5 COSTS Studies

Topographic studies 75.0 0.0 0.0 0.0 75.0 Bathy metric studies 150.0 0.0 0.0 0.0 150.0

Quantification of eroded sandy volumes 100.0 0.0 0.0 0.0 0.0 QA & QC Independent Consultancy 70.0 0.0 0.0 0.0 0.0

sub total 395.0 0.0 0.0 0.0 225.0 Hire of equipment and machinery

Dredgers 30,600.0 0.0 0.0 0.0 0.0 Bulldozers/Rollers 160.0 0.0 0.0 0.0 0.0

Trucks 1,680.0 0.0 0.0 0.0 0.0 Dumpers 560.0 0.0 0.0 0.0 0.0

Miscel. 350.0 0.0 0.0 0.0 0.0 sub total 33,350.0 0.0 0.0 0.0 0.0

Operations

Dredging 3,500.0 0.0 0.0 0.0 0.0 Transportation 0.0 0.0 0.0 0.0 0.0

Emplacement of sediments 280.0 0.0 0.0 0.0 0.0 Maintenance 24.0 0.0 0.0 0.0 0.0

M&E 140.0 140.0 140.0 140.0 0.0 sub total 3,944.0 140.0 140.0 140.0 0.0

Insurance

Personnel 100.0 110.0 0.0 0.0 9.0 sub total 100.0 110.0 0.0 0.0 9.0

Adverse Effects

Fisheries 0.0 0.0 0.0 0.0 0.0 Wildlife 0.0 0.0 0.0 0.0 0.0

sub total 0.0 0.0 0.0 0.0 0.0

BENEFITS Tourism

Revenue 508.2 12,298.4 26,441.6 16,233.9 3,720.3 sub total 508.2 12,298.4 26,441.6 16,233.9 3,720.3

Beneficial Effects

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Real estate 1,800.0 2,160.0 2,592.0 3,110.4 3,732.5 Civil infrastructure 400 320 240 160 80

Employment 1,462.5 1,755.0 2,047.5 1,755.0 1,462.5 Wildlife 0.0 0.0 0.0 0.0 0.0

Cultural/National heritage 0.0 0.0 0.0 0.0 0.0 sub total 3,662.5 4,235.0 4,879.5 5,025.4 5,275.0

Total Costs 37,789.0 250.0 140.0 140.0 234.0 Total Benefits 4,170.7 16,533.4 31,321.1 21,259.3 8,995.3

w(t) 0.909 0.826 0.751 0.683 0.621

Discounted Costs 34,353.6 206.6 105.2 95.6 145.3

Discounted Benefits 3,791.5 13,664.0 23,532.0 14,520.4 5,585.3 NPV

Difference -30,562.1 13,457.4 23,426.9 14,424.8 5,440.1 26,187.0 Unlike some of the other examples, economic efficiency of beach nourishment is evaluated over a 5-year life cycle, in explicit recognition of the need to repeat the process of beach nourishment periodically in order to maintain a minimum beach level. Under assumptions articulated above, a Net Present Value (NPV) of GMD26 million is obtained for the proposed adaptation option. We remind the reader however that the analysis is done for an average sea frontage 1 km long. Obviously, some costs and benefits are location- specific and should be investigated in detail when the purpose of the exercise is practical rather than didactic. Notwithstanding, tourism stands out as a major beneficiary of beach nourishment. To answer the question whether or not this is an artefact arising from the pull factor of 0.2 assigned to beach amenity, this is decreased by 50% to 0.1. This results in an 80% drop in the NPV, but which somehow stays positive. NPV Under ceteris paribus assumptions, NPV only becomes negative when the pull factor attributable to the state of Gambian beaches drops below 0.08 (Observe that a market survey should lead to a better estimate of pull factors). Negative impacts on fisheries and wildlife that may be non negligible in some specific locations, or in time, are considered nil in the

analysis under the assumption that sediment source area areas are close to shipping/navigational channels, which, under normal circumstances are not suitable feeding, breeding, or sheltering grounds for aquafauna. To further illuminate the robustness/strength of this adaptation option, the benefits of real estate protection are set to zero, as may be the case in areas with stable beaches. Even this severe test is not sufficient to change of the NPV, evaluated at GMD10 million. The reason for such robustness lies in (1) the concentration of costs in first year of project, or first year of cycle of beach recharge; (2) significant and wide scope of benefits, especially those accruing to tourism and tourism-related employment. Further refined benefit-cost analysis may provide answers to critics and sceptics who think that supporting a 5-year life cycle is like throwing money into the sea.

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ECONOMIC FEASIBILITY ANALYSIS TRAINING WORKSHOP REPORT

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