THE MANY DIMENSIONS OF INFRASTRUCTURE ADAPTATION AND ITS COSTS. Mohammed H. I. Dore Climate Change Lab, Brock University

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1 THE MANY DIMENSIONS OF INFRASTRUCTURE ADAPTATION AND ITS COSTS Mohammed H. I. Dore Climate Change Lab, Brock University Expert Workshop on Economic Aspects of Adaptation, OECD, Paris April 7-8, 2008

2 Outline Section 1: Concepts Section 2: Hydrometeorological (HD) Extreme events Section 3: Other adaptations Section 4: Societal values & where adaptation is critical Section 5: Uncertainties & limitations

3 Relevant Concepts Baseline adaptation to current climate But due to climate change, need to define socially necessary adaptation, which is higher than baseline Optimal level of adaptation When developing countries face resource constraints To be integrated with development projects Should be phased in progressively, and reach the socially necessary level

4 Baseline adaptation Six necessary conditions for baseline adaptation: technical know-how, protection from normal variability, access to technology & capital markets, risk sharing, adequate insurance markets, adequate emergency response & preparedness. These conditions help define adaptive capacity.

5 Climate Change impacts Losses reveal the need to adapt to a higher level than baseline To adapt to socially necessary adaptation. High-income countries have the means, but the will is often lacking; progress in OECD countries is slow In non-annex 1 countries, adaptation generally happens only with foreign assistance. Need to develop an ordinal or cardinal index to measure level of adaptation, using the six necessary conditions, and assess degree of baseline adaptation

6 Then damage attributable to climate change can be measured, and assistance rendered, in accordance with Kyoto Protocol, articles, 3.14 & 4.4. All development projects must include adaptation, and assistance can be made conditional on that. What is socially optimal adaptation can be determined by each developing country, with priority given to public infrastructure (roads, schools, hospitals, water & electricity supply, airports & ports, public buildings).

7 HD Events in Developing Countries

8 Global HD Events

9 HD Events in Europe,

10 Location-Specific Adaptation of Infrastructure Example: Effect of Climate Change on Remaining Life of a 20-year Water Facility

11 Adaptation According to an Alaska study, climate change could add 10% to 20% to infrastructure costs by 2030 and 10% to 12% by 2080, under different climate projections and taking design adaptations into account. Adaptation could help save percent of costs to the year 2030, and between 10 and 45 percent to 2080.

12 Social Values and What and Where Adaptation is Critical If one accepts a priority to protect the most vulnerable, then this value also dictates avoiding a utilitarian calculus in costing adaptation. An alternative is portfolio choice theory Better to regard adaptation as an investment that preserves the future benefits of infrastructure.

13 Critical Adaptation Required by the Evidence on Impacts We identify the following priorities: 1. Improve emergency prep to save lives, especially in Africa 2. HD extreme events: determine average cost per HD and forecast the contingent probability of occurrence (Dore, 2003) to decide on the order of priority for HD adaptation in each country 3. Proactively adapt public infrastructure to slow-acting impacts.

14 Limitations & Uncertainties There continue to be uncertainties about : Impacts- long & variable return periods of HDs. How the global economy will evolve over time. Which of the SRES scenarios is closer to the truth We have only Bayesian probabilities (from IPCC) Technological uncertainties (e.g. carbon capture) Climate and climate change are governed by nonlinear dynamics expect emergent behaviour Adaptation expenditures: subject to type II error? Based on large body of evidence, unlikely. At worst, it is the cost of the precautionary principle.

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