Contrary to the general perception, the Europe and Central Asia (ECA) region is very vulnerable to impacts from climate change, and therefore, climate change has become one of the three core strategic pillars for the World Bank's work in the region.

• Context
• Strategy
• Results

Countries in the region are already facing primarily negative consequences from recent climate variability, with increasing frequency and cost of natural disasters. In the coming decades these countries will face warmer temperatures, a changing hydrology and even more extremes—droughts, floods, heat waves, windstorms, and forest fires.

The World Bank’s response to climate change in the ECA region addresses both the adaptation and mitigation paths. Reduction in greenhouse gas emissions from large emitters in ECA can help with meeting global targets, and energy efficiency improvements have already proven to be cost effective investments. The World Bank is also supporting partner countries in building their knowledge base on climate science, assessing consequences and adaptation approaches, and is strengthening the climate resilience of its portfolio of investments.

Context

Average temperatures across ECA have already increased by 0.5°C in the south to 1.6°C in the north (Siberia), and overall increases of 1.6 to 2.6°C are expected by the middle of the century. This translates to accelerated melting of the region's glaciers and a decrease in winter snows, with subsequent impacts on water resources. Many countries are already suffering from more frequent and severe floods along with summer droughts—with both Southeastern Europe and Central Asia at risk for severe water shortages. Summer heat waves are expected to claim more lives than will be saved by warmer winters.

Socioeconomic dimension. ECA's vulnerability is also being influenced by its development legacy which exacerbates the severity of climate impacts. In fact, ECA already suffers from a serious adaptation deficit even to its current climate. Vulnerability over the next ten to twenty years will be dominated by socioeconomic factors and legacy issues—notably the dire environmental situation and the poor state of infrastructure—rather than by the changing climate itself. The region bears the burden of poorly constructed, badly maintained, and aging infrastructure and housing. This infrastructure is ill-suited to cope with storms, heat waves, or floods, let alone protect populations from the impacts of such extreme events.

Effects on agriculture. Many have noted that warmer climate and abundant precipitation in the northeastern part of ECA (Kazakhstan, Russia, and Ukraine) could open up new opportunities for agriculture. However, these potential benefits will not materialize until the region's relative inefficiency and low productivity is addressed. While world grain yields have been growing on average by about 1.5 percent per year, they have been falling or stagnant in these three countries, with productivity far below that of Western Europe or the US.

Co-benefits. While some impacts of climate change are already being felt, they will likely remain manageable over the next decade. Nevertheless, ECA countries will gain a lot by improving its water resource management systems, fixing its serious environmental legacies, upgrading neglected infrastructure and housing, and strengthening disaster management, regardless of climate change. And the region must also develop strategies to reduce vulnerability to future changes—focusing on infrastructure, and on capacity building and stronger institutions to support adaptation. Much of the adaptation needed to make ECA more resistant to climate change will have substantial co-benefits. Improved water resource management, better performing water utilities and energy systems, and upgraded housing and transport infrastructure are crucially needed independent of climate change. The gains from improved agricultural practices are much more significant than the changes expected from climate change. In any case, the region must clean up environmental hotspots, accelerate disaster management, and expand hydro-meteorology services. These forward-looking decisions today will help countries break out of unsustainable patterns of development.

Mitigation. Reducing the impacts of Greenhouse Gas Emissions (GHG) on global climate is important for many ECA countries to meet their international obligations, and for EU member states, community-wide policy goals. Looking at the group of 25 largest carbon dioxide emitters globally, one finds the Russian Federation at number three (behind the U.S. and China) with Ukraine, Poland, Turkey, and Kazakhstan holding positions as numbers 20, 21, 24 and 25, respectively.

Health, social and livelihood issues also arise with climate change in ECA. A more stressed agriculture sector will translate into higher rates of malnutrition and increased susceptibility to disease. Families dependent on rain-fed agriculture will be adversely affected by shifts in precipitation and over time may choose to migrate to seek improved livelihoods, increasing the numbers of people underserved by local health systems. Water degradation from a variety of sources will expose more people to dengue fever and diarrheal diseases. Droughts and the consequences of heat-waves are of particular concern. A number of diseases associated with warmer weather are likely to become more prevalent in ECA, and some have already surfaced. A major concern is malaria. Largely eradicated from Europe, malaria has returned to the Caucasus and Central Asia, with weather-related events raising disease levels.

Strategy

The ECA Region has been at the forefront in the use of carbon finance as an incentive for GHG reduction, beginning in the energy sector, expanding to forestry, and in the future with a new emphasis on transport and urban development. Bank partner experience helped set the stage for the European Trading Scheme, the world's largest carbon market. The Bank is adding to the investment mix new Climate Investment Funds (CIFs); in particular the Clean Technology Fund (CTF) and Pilot Program for Climate Resilience (PPCR).

ECA partner countries in Southeastern Europe, Turkey, the Caucasus and Central Asia will be particularly hard hit by climate change in the coming decades and the Bank is responding with a mix of "no-regrets" investments and non-lending support. To advance our understanding of climate resilient development, a series of pilot projects are underway to shape adaptation options in sensitive sub-sectors and sub-regions. Given increasing partner attention on climate issues, the Bank's increasing tool kit of responses, and the new CIFs, the ECA region is preparing an ECA Green Growth plan during FY11, initiating a series of targeted analytical efforts through FY12.

Results

Innovation highlights for the ECA region on climate include:

• Turkey Private Sector Renewable Energy and Energy Efficiency Project with the Bank's first Clean Technology Fund financing ($100 million) combined with IBRD financing ($500 million).
• Rosneft gas flaring reduction project in Russia, which will eliminate 6.65 million tons of carbon dioxide-equivalent over the first Kyoto Protocol commitment period (2009-2011).
• A series of adaptation investments and capacity-building projects for Tajikistan under the Pilot Program for Climate Resilience. ECA led a consortium of three Multilateral Development Banks (including the European Bank for Reconstruction and Development and the Asian Development Bank) in cooperation with multiple donors and stakeholders.
• Launch of ECA Flagship Reports on energy and adaptation.
• Initiation of adaptation pilot projects on the vulnerability of energy systems (Albania and Uzbekistan), agriculture (Albania, FYR Macedonia, Moldova, and Uzbekistan) and water in Southeastern Europe (with a focus on the Sava River Basin). New starts on sustainable cities and social development, as well as joint efforts with the European Commission are being further developed throughout FY11 and 12.
• Initiation of adaptation pilot projects on the vulnerability of energy systems (Albania and Uzbekistan), agriculture (Albania, FYR Macedonia, Moldova, and Uzbekistan) and water in Southeastern Europe (with a focus on the Sava River Basin) and Central Asia (Amu Darya basin). New starts on sustainable cities and social development, as well as joint efforts with the European Commission will be further developed in FY11 and 12.
• A multiple track low carbon development assessment for Poland was completed in FY11, along new starts in green growth assessments for Macedonia and Bulgaria.