Economics of Climate Change in East Africa

The study engaged national steering committees, regional experts and policymakers.  In Kenya and Rwanda, the study team supported planning processes for ongoing national adaptation and low carbon growth strategies.

In March, 2010, a workshop was held in Nairobi to discuss regional-level issues and strategies, in the context of national study results, and presentations by national and regional policymakers, development partners and experts.

Key findings of the DFID study include:

• Existing current climate variability has significant economic costs in East Africa. Periodic floods and droughts (extreme events) cause major macro-economic costs and reductions in economic growth.
• Future climate change will lead to additional and potentially very large economic costs. These are uncertain, but aggregate models indicate additional net economic costs that are equivalent to a loss of 1- 3% of GDP each year by 2030 in the region.  These arise from potential threats to coastal zones, health, energy, infrastructure, water resources, agriculture and ecosystem services.
• Adaptation can reduce these impacts but it has a cost.  The immediate needs (for 2012) for building adaptive capacity and immediate priorities to enhance resilience are estimated at $250 million/year for East Africa.  However, a much higher value of $1 to 2 billion/year (or more) is needed to address current climate variability.  The cost of adaptation to address future climate change will rise by 2030: an upper estimate of the cost is likely to be in the range of $1 to 2 billion/year.
• The study has considered future emissions, consistent with planned development.  This shows emissions of greenhouse gases (GHG) will increase significantly in the region.

Moreover, some plans across the regional economy could ‘lock’ the region into a higher emission pathway.  The study has investigated low carbon alternative pathways and found a large number of ‘no regrets’ options that would enhance economic growth, provide access to international carbon credits and provide wider economic benefits from energy security, lower fossil imports, reduced air pollution, etc.