Critical Face of Climate Change

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The Critical Face of Climate Change—Water iii

Contents

Acknowledgments v

Abbreviations vi

Key Messages vii

1 Droughts, Storms, Floods, and Changing Water Supplies 1

Uneven Impacts Across ime and Space 2

More Frequent Natural Disasters 5

Impacts on Groundwater 6

An Uncertain Future 6

Notes 7

2 A Brake on Prosperity and Progress? 9

Growing Populations, Growing Economies, and Growing Water Needs 9

Water Scarcity and Stress Under Climate Change 10Economic Impacts o Extreme Events 14

Te Tirsty Origins o Conflict 14

Te Way Forward 15

Notes 17

3 Changing Cities and Changing Climate 18

Impacts—Slow and Rapid 19

Hydrological Change Meets Urban Change 20

Te Way Forward 21

Notes 22

4 Taming the Tempestuous: Managing Transboundary Rivers 24

Cooperation—More Urgent and More Difficult 25

Te Challenges o Reaching Agreements 27

Te Way Forward 29

Notes 32

5 Concluding Comments: Solving the Seemingly Insoluble 33

Te Cost o Inaction Is Significant 33

Opportunities or Adaptation Exist but Require Action 34

Te Way Forward 35

References 36

Boxes

1.1 Agriculture Climate Change and Water 3

1.2 Energy Needs Water—and Water Needs Energy 4

1.3 Decision Making Under Uncertainty 7

2.1 Climate Change and the Economic Effects o Water Deficits 11

3.1 Jakarta Faces Multiple Urban Water Challenges 20

3.2 Urban Adaptation Strategies Can Be Economically Beneficial 22


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iv The Critical Face of Climate Change—Water

4.1 Inormation Sharing and Pakistan’s Planning Capacity

in the Indus River Basin 27

4.2 Cooperating Along the Niger River: An Economic Mainstay

or ens o Millions 31

FiguresB1.2 Many o the Cleanest Energy Sources Are Highly Water-Intensive 4

B2.1 Global Water Withdrawals 11

2.1 Climate-Related Impacts on GDP in 2050 13

Maps

K.1 Te Estimated Effects o Water Scarcity on GDP in Year 2050,

Under wo Policy Regimes ix

1.1 Te Spatial Distribution in Runoff Will Become More

Uneven to 2050 2

3.1 Yearly Urban Flood Damage by 2080, Billion USD 194.1 Te World’s Largest River Basins and the Populations Tey Support 25

4.2 Change in Seasonal Variability o Flows, 2010 to 2040 26


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The Critical Face of Climate Change—Water v

Acknowledgments

Tis report was prepared by a World Bank team led by Richard Damania and

comprising Stephane Dahan, Lia Nitake, and Jason Russ. Bruce Ross-Larson

was the principal editor. Te report has benefited greatly rom the strategicguidance and general direction o Junaid Ahmad (Senior Director, World

Bank). Te advice o Laura uck (Vice President, Sustainable Development

Practice Group, World Bank) is also grateully acknowledged.

Te report draws on background papers and notes prepared by the ollow-

ing: Global Change Assessment Model (GCAM) modelling and analysis was

provided by a team comprising Leon Clarke (JGCRI, Pacific Northwest

National Laboratory and University o Maryland),Kelly Gustason, (Dept. o

Geographical Sciences, University o Maryland), Mohamad Hejazi (JGCRI,

Pacific Northwest National Laboratory and University o Maryland), Sonny

Kim (JGCRI, Pacific Northwest National Laboratory and University o

Maryland), Fernando Miralles-Wilhelm (ESSIC, University o Maryland)and Raul Muñoz-Castillo (Dept. o Geographical Sciences, University o

Maryland); Computable General Equilibrium (CGE) modelling and analysis

was undertaken by Roberto Roson (Ca’Foscari University/Bocconi

University); A survey on the economics o water and climate change was

undertaken by Anil Markandya (Basque Centre or Climate Change);

Research on transboundary cooperation was provided by Anjali Basnet

(World Bank) and Jacqueline ront (World Bank); An in-depth view o tran-

sboundary cooperation in the Niger River Basin was provided by Johan

Grijsen. A survey o urban water management and climate change was pro-

vided by Bernard Barraqué (CNRS-CIRED) and Bruno assin (Ecole

Nationale des Ponts et Chaussées); Research on urban water management

and climate change was undertaken by Meleesa Naughton (World Bank).

Christina Leb, Diego Juan Rodriguez, and Marcus Wijnen all rom the World

Bank provided expert advice and inputs.

Incisive and helpul peer reviewer comments were received rom: Marianne

Fay (Chie Economist, World Bank), Nathan Lee Engle (Climate Change

Specialist, World Bank), Sanjay Pahuja (Lead Water Resources Specialist),

Claudia Sadoff (Lead Water Economist, World Bank), Vijay Jagannathan

(World Resources Institute), Betsy Otto (World Resources Institute), Dominic

Waughray (World Economic Forum) and Louise Whiting (WaterAid).

Invaluable eedback was also received rom: Jennier Sara (Director, World

Bank), Dina Umali-Deininger (Practice Manager, World Bank) and Marie-

Chantal Uwanyiligira (Practice Manager, World Bank).


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vi The Critical Face of Climate Change—Water

Abbreviations

GDP Gross domestic product

IPCC Intergovernmental Panel on Climate Change

PPP Purchasing power parity RCP Representative concentration pathway

SSP Shared socioeconomic pathway


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The Critical Face of Climate Change—Water vii

Key Messages

Most o the impacts o climate change will be channeled primarily through

the water cycle, with consequences that could be large and uneven across

the globe. Water uels the most vital sectors o the economy, including agri-culture, energy, and burgeoning cities. Hence growth and development are

surprisingly thirsty businesses. Climate change, through its impact on water

availability and floods could significantly impede growth prospects. Tere is

little scientific dispute that many o the key climate risks are channeled

through risks to water resources. Clean energy is ofen more water-intensive

than more polluting alternatives, so achieving global mitigation goals will

require prudent water management policy.

Tis is why smart water policy is undamental to smart climate change

policy . Building climate resilient economies that can develop and grow in an

ever warmer world will necessitate better water allocation—utilizing scarce

water or higher value uses. It will also call or better water proofing o theeconomy to enhance resilience, in the more vulnerable sectors o the econ-

omy, especially or agriculture and in the burgeoning cities where large num-

bers o people and higher value assets are exposed to increasing climate risks

such as floods, water shortages and storm surges.

Tis report highlights these and other major water-related challenges and

the economic consequences that the world will ace with climate change. Te

ocus is on two issues – cities where much o the uture population growth is

expected to occur and managing water resources in transboundary basins

that account or about 60 percent o the world’s reshwater supplies. Te

report shows that:

• Te impacts o climate change on water will be unequal across the

globe. While net global precipitation rates are not expected to change

significantly over the 21st century, some regions will see increases in resh-

water runoff, while others will see decreases. Ironically, regions that are

already water-scarce are projected to experience urther declines in run-

off. Tese also happen to be the poorest areas, where growth is the most

ragile. Diminishing water supplies create powerul headwinds that slow

growth and cloud economic prospects. Hydrological changes will have

significant impacts on agricultural productivity as well as broader ramifi-

cations across other sectors o the economy.

• Conflict ofen has thirsty origins. Where economic growth is impactedby rainall, episodes o drought and floods are ofen ollowed by statistical

spikes in violence, civil war, and regime change. In a globalized and con-

nected world, such misortune cannot be quarantined. Where large ineq-

uities prevail, people move rom zones o poverty to regions o prosperity.

Tis would be a more benign process i it were driven by improving eco-

nomic conditions that gradually “pull” people, rather than by declining

conditions and periodic disasters that “push” them out. Te “push” ofen


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viii The Critical Face of Climate Change—Water

creates waves o migration that are difficult to absorb, and can lead to

increased tensions and, in some cases, conflict.

• Bad water-management policies can exacerbate the effects o climate

change on water, while good policies can neutralize them. In many

water-scarce regions, water is currently being allocated to lower-value

uses. Changing the incentives through policies that allocate water effi-

ciently can redirect it toward higher-value sectors, thus making better use

o diminishing supplies and promoting economic growth.

• Te urban space, where most people and assets reside, is highly vul-

nerable to water stresses and extreme events. Urbanization is occurring

at unprecedented rates, especially in developing countries, and municipal

governments must make the right investments to avoid disasters. Rising

sea levels and storm surges will put large populations at risk, while also

contaminating coastal aquiers and threatening water supplies—i no

action is taken. Te required responses are commonly acknowledged but

inrequently enorced. Tey call or climate- resilient and protective

inrastructure, a wider water resource perspective that includes non-structural measures such as early warning systems, and incentives to

ensure that land-use regulations are enorced.

• Climate change will make managing transboundary river basins more

difficult, but also more important. Nearly 40 percent o the world’s peo-

ple are served by transboundary river basins. Managing these basins is

already difficult, with neighboring countries competing or access to the

water they provide. Te greater variability that climate change brings

increases the need or transboundary collaboration, but the resulting

uncertainty about likely outcomes also renders cooperation more diffi-

cult. Institutions that build consensus and investments in inormation

and inrastructure can build trust and convert climate risks to materialrewards.

Water is to adaptation what energy is to mitigation, and the challenges

the world will ace in adapting to these issues are enormous. Prudent stew-

ardship o water resources pays high dividends, and the world need not pay

much to neutralize many o the undesirable consequences. I water were allo-

cated to its more valuable uses, growth in the affected economies could be

restored and in some cases even exceed projections.

Key Map 1 shows the difference between two utures—the lower one with

smart policies that incentivize efficient water use, and the upper one with

business-as-usual policies. Although this is merely a projection based on a

stylized model, the differences are striking—particularly in much o Arica

and Asia—and indicative o the power o inormed decision-making.

Going orward, there are three overarching global priorities to build the

road to resilience and to achieve the Sustainable DevelopmentDevelopmemt

Goal targets or water.

• Foster economic growth in water-stressed economies with systems,

institutions, and processes that allocate scarce water to higher-value

uses. Te ensuing higher levels o development and wealth also build


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The Critical Face of Climate Change—Water ix

greater resilience to climate shocks. Market-based solutions may be effec-

tive in some contexts, with strong saeguards or the poor and or the

environment.

• Close the considerable inrastructure deficit in developing economies

and cities to build adaptive capacity and enhance resilience. Resilience

is a public good and the path to it requires not just unds but also the

capacity, knowledge, and resources to prepare the right kinds o projects.

Tis calls or a catalyzing und, such as a project preparation acility .

KEY MAP 1 The Estimated Effects of Water Scarcity on GDP in Year 2050, Under Two Policy Regimes

Source : World Bank 2015a.

Note : The top map shows the estimated change in 2050 GDP due to water scarcity, under a business-as-usual policy regime.The bottom map shows the same estimate, under a policy regime that incentivizes more efficient allocation and use of water.

Business

as usual

Efficient

water policies

+6%

+2%

+1%

–1%

–2%

–6%


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x The Critical Face of Climate Change—Water

• Start a high-level conversation about policies and innovations at this

opportune time, since political will is necessary or change, to help

ensure water security throughout the 21st century or the entire planet.

Managing conflicting water demands under climate change will be an

unmatched global challenge. Te hope is that the political and fiscal space

can be generated to build a more resilient uture.


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The Critical Face of Climate Change—Water 1

Section 1

Droughts, Storms, Floods, and

Changing Water SuppliesWater is on the rontlines o climate change. It channels the main impacts o

climate change to all aspects o the economy, society, and environment—

through precipitation, storm surges, floods, droughts, rising seas, and

groundwater recharges. Harnessing the productive potential o water and

limiting its destructive impacts are important even in the most advanced

economies.

About 1.6 billion people—almost a quarter o humanity—live in countries

with physical water scarcity, and in just two decades this number may double.

Some regions o the world already suffer rom significant water scarcity and

excessive variability. Climate change will only magniy the challenges o

managing such a complex natural resource. Indeed, in a recent survey o

almost 900 leading decision-makers rom business, academia, and the public

sector, the World Economic Forum identified water crises and ailures to

adapt to climate change as two o the greatest global risks to economic growth

and social stability.1

© Andrea Borgarello/World Bank/TerrAfrica. Permission required for reuse.


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2 The Critical Face of Climate Change—Water

Uneven Impacts Across Time and Space

Te consequences o climate change or the hydrological cycle could be strik-

ingly uneven across time and space. Te projections used in this report come

rom models that track 235 river basins and span the range o uncertainty—

wet, dry, and normal.2 Te results are consistent with several other global

climate models and do not significantly change across emission scenarios.On a global scale, the total volume o runoff will be relatively stable,

suggesting that the amount o surace water globally remains airly fixed

throughout the next decades—a consequence o the global water cycle being

a closed dynamic system.3 But the spatial distribution o runoff will become

more uneven (map 1.1). Many regions already experiencing water stress will

experience even more scarcity, including much o the Middle East and North

Arica, Central Asia, and Central America, all o which exhibit a consistent

trend toward diminishing runoff. Other parts o Arica present a larger vari-

ation in runoff, with East Arica showing a significant decline by 2050, while

southern latitudes do not exhibit significant changes until the second hal o

the century.

Te declines matter most in areas with low baseline runoff and water

availability. For instance, a 100mm reduction in runoff is o less consequence

when average rainall is 3,000mm a year, as in Colombia, than when it is about

300mm a year, as in Chad.

No major variations in runoff are projected through parts o North America,

the northern parts o Western Europe, and East Asia (excluding China).

Notably, much o the decline in runoff is projected in the least developed

countries, where access to water is most crucial or agriculture and energy

(boxes 1.1 and 1.2).

MAP 1.1 The Spatial Distribution in Runoff Will Become More Uneven to 2050

Source : See World Bank (2015a) for other projections.

IBRD 41933 | O CTOBER 2015

Below –200

–200 to –100

–100 to 0

0 to 100

100 to 200

Above 200

No data


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BOX 1.1 Agriculture Climate Change and Water

Water plays a crucial role in ood production, and agriculture accounts or 70 percent o global

water use. Hal o the world’s total ood supply comes rom lands equipped with irrigation,

representing 18 percent o global agriculture land. Elsewhere, crop production is rained and

depends on sufficient precipitation to meet evaporative demand and the associated soil moisture

distribution.4

Climate change is projected to reduce agricultural yields and livestock productivity in many

regions, worsening the effect o climate shocks on the aggregate ood system.5 Alterations o pre-

cipitation patterns will directly impact rained agriculture and in turn affect the availability o the

surace and groundwater on which irrigation systems rely. Impacts on yields in irrigated agricul-

ture are more uncertain. Without adaptation, Asia and Arica could endure particularly severe

yield declines by 2030 in important ood-growing areas—wheat in South Asia, rice in Southeast

Asia, and maize in southern Arica. Yield declines o more than 7 percent are projected by 2030

in Arica’s Sahel region. Climate shocks will occur more requently, and increasingly affect ood

production. Tough not necessarily attributable to climate change, recent events include the 2009

drought in Mexico, when almost 20 percent o maize production was lost, and the 2010 floods

in Colombia, when 380,000 hectares o crop lands and pastures were flooded and 30,000 head o

livestock died.6

With population growth and changing liestyles and diets, global ood demand is projected

to rise by at least 20 percent over the next 15 years, with the largest increases in Sub-Saharan

Arica, South Asia, and East Asia.7 Over the next several decades, socioeconomic pressure will

lead to increased competition between irrigation needs and demand rom non-agricultural sec-

tors. Combined with the effects o climate change, this will reduce the availability and quality o

water resources or ood production in many regions. Te rural poor could be disproportionately

affected because o their greater dependence on agriculture, their lower ability to adapt, and thehigh share o income they spend on ood.

A growing diverse spectrum o practices shows that it is possible to simultaneously deliver

higher agricultural productivity and greater climate resilience alongside lower emissions—

the three pillars that orm the basis o Climate Smart Agriculture.8 Te potentially devas-

tating impacts o water extremes on crop production can be mitigated through appropriate

agricultural-planning schemes, increasing water efficiency at all levels coupled with pricing to

ensure that water use reflects its scarcity value, and managing watersheds to sustain adequate

water availability.

Tese approaches require strong institutions, technical competencies, and sustainable sector

financing.9 Tey also require reliable inormation on water resources and climate risks, alongwith monitoring actual water use in agricultural processes. Mechanisms to regulate competing

demands, whether through pricing schemes, access rights, or other instruments, will become

increasingly important to manage water scarcity. Ultimately, trade with water-rich countries

can help to mitigate the local effects o water scarcity on ood security, with mechanisms

in place to saeguard countries rom ood-price volatility (such as the Agricultural Market

Inormation System, which aims to provide timely, accurate, and transparent inormation on

global ood markets).


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BOX 1.2 Energy Needs Water—and Water Needs Energy

Te interdependence between water and energy exemplifies the critical role o water across

sectors. Cleaner sources o energy are ofen more water-intensive (such as geothermal, hydroelec-

tric, nuclear, and solar thermal; see figure B1.2), implying that difficult choices will be necessary,

especially where water is scarce.

Water is used in almost all energy generation processes, and energy is required to extract, treat,

and distribute water. Climate uncertainty and variability make the energy sector vulnerable to

limited water supplies. And energy consumption in 2035 is set to increase by 35 percent, requir-

ing 85 percent more water than today.10 rue, cleaner energy sources may reduce emissions, but

hydro, solar, thermal, and nuclear power could increase the demand or water. Indeed, many

o the cleanest sources o energy are highly water-intensive. By contrast, investments in energy

efficiency can produce net positive benefits,11 reducing greenhouse gases and water consump-

tion, and these positive effects can be urther amplified by dual water and energy-efficiency

investments.

Climate change could raise the costs o power generation. Te efficiency, output, and reliability o

thermal power plants are expected to suffer under higher temperatures and less water, two actors

FIGURE B1.2 Many of the Cleanest Energy Sources Are Highly Water-Intensive

Source : World Bank 2010.

01.E-06 1.E-05 1.E-04 1.E-03 1.E-02

0.2

0.4

0.6

C a r b o n i n t e n s i t y ( k g / k W h )

Water footprint (m3 /kWh)

WindPhotovoltaic

Dry condenser

Dry condenserGen IV

Open loop

Pond

Hydro-electric

GeothermalSolar Thermal:

closed loopNuclear:

closed loop

Dry condenser

Open loop

Hybridcooling

Evaporationrecapture

Blowdownrecycling

IGCC

Coal:closed loop

EvaporationrecaptureDry condenser

Hybridcooling

Open loopBlowdownrecycling

Natural gas:closed loop

Inlet cooling

High temperature

0.8

1

1.2

High current availabilityLow current availability

Wind

PV Solar thermal

Hydroelectric

Non renewable sources

Renewable sources Geothermal

Natural gas

Nuclear

Coal


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emperature changes are especially important in snow-dominated regions,

determining the timing o snowmelt and the seasonality o water availability.

Glaciers are expected to shrink and will store less water or release during

warm periods, making water supplies less dependable. Te effects on snow-

ed rivers has been widely documented and publicized.

More Frequent Natural Disasters

Variable precipitation and extreme events are among the more disconcert-ing aspects o the climate challenge. Te toll o water-related extreme events

and natural disasters is high and growing in both requency and intensity.13

With warmer surace temperatures, seas uel more violent storms, increas-

ing the risks o floods and droughts. Severe storms, such as tropical and

extra-tropical cyclones, can generate storm surges over coastal seas and

extreme rainall over land. Te requency o uture tropical cyclones

remains uncertain, but most models project higher precipitation rates and

wind speeds.14

Flood hazards are projected to increase in more than hal the world’s

regions, although this varies greatly or individual river basins. Disaster

hotspots are more requent in developing countries, magnified by thegrowth o coastal cities, where vulnerability to floods is high. While there is

agreement across models on the broad regional and global trends, there is

uncertainty about impacts at smaller spatial scales. Some models predict

increasing flood hazards in parts o South Asia, Southeast Asia, East Arica,

Central and West Arica, Northeast Eurasia, and South America.15 In con-

trast, floods are projected to be less requent in parts o Northern and

Eastern Europe, Anatolia, Central Asia, Central North America, and

Southern South America.16,17

crucial or cooling (alternative processes, such as dry cooling, typically consume more electricity

and require higher investment costs).

Water shortages can also impair the operation o hydropower plants.12 Low flow rates make it diffi-cult to maintain current and proposed generation levels. Recent warm and dry summers in Europe

revealed the vulnerability o the power sector to lower water availability and higher river temper-

atures. By lowering the availability o water or hydropower and cooling water or thermoelectric

power, climate change is likely to raise the relative costs o alternative electricity supplies.

Finally, when water becomes scarce, the demand or energy ofen increases. When surace

flows become unavailable or insufficient, armers ofen turn to groundwater extraction, using

energy-hungry water pumps. Tis can lead to a downward spiral, where water scarcity leads to

increased energy use, which in turn puts a larger burden on water resources.

BOX 1.2 Energy Needs Water—and Water Needs Energy (continued)


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Impacts on Groundwater

Te planet’s aquiers are a vast natural reservoir, containing about 30 percent

o the available reshwater. In contrast, rivers and lakes account or a meager

0.4 percent.18 Groundwater storage provides a natural buffer against climate

variability; it is thus vital not only or the economy but or a country’s

sustainability.Climate change is expected to affect groundwater reservoirs, directly

through changes in recharge patterns, and indirectly through increased

demand, especially rom irrigation, which today takes 67 percent o global

groundwater withdrawals.19 Groundwater recharge varies considerably,

depending on prevailing climatic conditions. In general, in regions where

total runoff is expected to decline (see map 1.1), groundwater resources will

also decrease.20 Similarly, reduced surace water flows in regions that suffer

rom changes in snowmelt may be exacerbated by alling groundwater levels

due to a shorter recharge season.

Climate change also brings risks to the quality o water in aquiers. Regions

with higher temperatures may suffer rom greater groundwater salinity as

more water evaporates beore it can reach deeper levels. Rising sea levels push

seawater inland, and coastal aquiers shrink as rising demand drops ground-

water tables. Although difficult to quantiy, these trends suggest that ground-

water reservoirs will be under the most pressure in regions with declining

runoff, where they will be needed the most.

Te increased variability that comes with climate change will inevitably

raise reliance on underground reshwater supplies. I protected and managed

along with surace water, groundwater can do much in adapting to climate

change. Its widespread availability and typically large volumes—and thus long

retention time and slow response—make it more naturally buffered against

seasonal and inter-year variations in rainall and temperature. Unlike surace

storage, aquiers lose negligible amounts o water through evaporation and

transpiration.

An Uncertain Future

Tere is considerable uncertainty about long-term climate projections. Global

circulation models have not been designed to project changes in the hydro-

logical cycle, which is treated as just one element o a larger climate system.

And this imprecision is compounded when models are extended to finer spa-

tial scales. Forecasts and projections o extreme events are even more chal-lenging, reflecting the statistical complexities o projecting extreme events

and the limitations o the data.

Even so, there is broad agreement on the overall global trends across mod-

els. Te primary challenge or decision makers is to plan or a more uncertain

and hazardous uture, where general trends are known with greater certainty

than the precise nature and timing o the changes. Such circumstances put a

high premium on adaptable and flexible approaches that can respond to new

inormation and changing circumstances (box 1.3).


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BOX 1.3 Decision Making Under Uncertainty

Uncertainty is intrinsic to climate change: there is ample evidence that the climate is changing

but less confidence on precisely how ast or in what ways. Nor is there a ull understanding o the

social and economic consequences o these changes. Furthermore, the uncertainty about these

issues is not always easily quantifiable in probabilistic terms: climate change brings deep uncer-

tainty rather than known risks.

Despite these challenges, a number o methods have evolved to assist in decision-making under

uncertainty. Uncertainty places a high premium on options that minimize regret across a range

o possible outcomes. Te robust decision-making process is one such approach. Applications

begin with an existing or proposed project plan, explore vulnerabilities and sensitivities, and rank

options or their sensitivity to changing conditions. Another is a decision-tree approach that uses

judgments and sensitivity analysis to guide the process through various “decision nodes.” It begins

by assessing the relative perormance and vulnerabilities o alternatives, using that inormation to

describe scenarios, and then applying the inormation to answer specific questions arising during

the decision-making process.

Other common approaches include “no-regret” measures that yield benefits even i orecasts are

proven to be wrong. For example, controlling leakages in water pipes is a sound policy, regardless

o how the climate changes. Another approach emphasizes reversible and flexible strategies. It is

prudent to keep options open when the uture is unknown. Urban planning alls into this cate-

gory. A plan can adapt with the arrival o new inormation on risks. Te option value technique

is one variant that provides a more ormal and rigorous way o assuring greater flexibility in

decision-making.

In general, there is no universally accepted general methodology or assessing the significance o

climate risks, and choices are ofen guided by pragmatism and available resources and inormation.

Notes

1. World Economic Forum 2015. 2. Te Global Change Assessment Model (GCAM) is used as a tool that can track

results rom multiple GCMs. See World Bank 2015a or details. 3. Runoff is that part o the water cycle that flows over land as surace water instead

o being absorbed into groundwater or evaporating. Te flow is usually attribut-able to rainall or snowmelt.

4. Food and Agriculture Organization (FAO), 2018. 5. IPCC 2007.

6. ownsend 2015. 7. Klytchnikova, Sadler, ownsend et al. 2015. 8. ownsend 2015. 9. High Level Panel o Experts (HLPE) 2015. 10. International Energy Agency (IEA) 2012. 11. See http://www.wri.org/sites/deault/files/ghg-chinese-power-sector-issuebrie_1.pd

or inormation on China’s power sector. 12. IPCC 2014. 13. Arndt et al. 2010. 14. Intergovernmental Panel on Climate Change (IPCC) 2012.


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15. Jiménez Cisneros, Oki, Arnell, et al. 2014. 16. World Bank 2015a. 17. Jiménez Cisneros, Oki, Arnell, et al. 2014. 18. World Water Assessment Programme (WWAP) 2006. 19. WWDR 4. 20. Jiménez Cisneros, Oki, Arnell, et al. 2014.


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Section 2

A Brake on Prosperityand Progress?

Growing Populations, Growing Economies,and Growing Water Needs

In 50 years there may be two billion more people on this planet, and the

world’s population will exceed nine billion. And as countries grow more

prosperous, their thirst or water rises. In many basins, especially in arid

parts o the world, water is already over-allocated and the basins are eec-

tively closed to new users. Even where large water-storage acilities have

been built, demand is so great that storage seldom reaches the desiredcapacity. Climate change is set to compound such challenges, intensiying

extremes and accentuating scarcity when runo declines. So it is no sur-

prise that there are growing concerns about water’s availability in the

uture.

Te problem is not the adequacy o available water—it is the distribution

and stewardship o water. Much o the world’s water is used inefficiently by

industry, agriculture, and cities; and much o it is wasted without economic

Planting rice

© Thomas Sennett/World Bank. Permission required for reuse.


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benefit, ofen with negative environmental impacts. Te world uses only

about 10 percent o its reshwater and groundwater, and climate change is not

expected to alter global supplies. Instead, the challenges are regional and eco-

nomic, with growing scarcity in some regions o the world and growing excess

in others.

Water scarcity has commonly been seen as a technical issue. I water is in

short supply in one region, the obvious solution is to obtain it rom another

where it is more abundant. But what is obvious may not always be prudent,

and such supply-side solutions ace economic and ecological limits. Water

has a low value-to-bulk ratio, which makes its transport across vast distances

expensive and economically wasteul. So with climate change increasing the

hydrological challenges, water management will require greater care and

efficiency, recognizing not only the local needs or water but also its multiple

values—as an economic resource, a human right, and the lieblood o

ecosystems.

Water Scarcity and Stress Under Climate Change

Could a lack o water act as a brake on prosperity and economic progress

under climate change? A global economic model was developed or this

report to shed light on this issue.1 Te model considers two scenarios that

correspond to the Shared Socioeconomic Pathways (SSPs) that have been

developed in the climate-change modeling literature (box 2.1). Te SSPs are

highly-stylized depictions o alternative global utures or demography, pol-

icy, the economy, and emissions. One o the scenarios represents a world o

sustainability and optimism with low population growth rates, buoyant per

capita GDP, low emissions, and thus little need or adaptation (SSP1). Tis iscontrasted with a world o regional rivalry and high emissions that warrant

greater adaptation (SSP3).

Te model developed here is not intended to provide orecasts o GDP

growth decades into the uture—a seemingly impossible task. Instead, it

seeks to improve understanding o the role o water in the context o a

changing climate in a more populous world. It is based on a simpliying

ramework designed to isolate the role o water as a productive input in the

economy (box 2.1).

Increasing water demands resulting rom increases in population, coupled

with changes in the water supply, are projected to accentuate shortages in

regions already experiencing some scarcity and water stress. Te largestincreases in water deficits are in the Middle East, North Arica, Central Asia,

and parts o South Asia.

With water in short supply, there will be changes in what is produced,

where it is produced, and the efficiency o production and water use. So, even

local changes can be transmitted across the globe.

Te impacts will depend on the policy regime, and effects can either be

neutralized or exacerbated by policy responses. Te analysis first considers

a business-as-usual scenario where water is managed and allocated as it is


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BOX 2.1 Climate Change and the Economic Effects of WaterDeficits

Projecting the economy even a month into the uture is a complex and hazardous endeavor—

attempting to do so over decades might seem downright imprudent. Future changes in economic

structures, technological innovations, policies, political priorities, and consumer preerences can-

not be known. Nor can the uture path o greenhouse gas emissions be predicted with accuracy.

Recognizing the prevailing uncertainties, climate change scientists have constructed highly styl-

ized development scenarios based on narratives termed Shared Socioeconomic Pathways (SSPs).2

Te SSPs describe changes in demography, policy, institutions, technology, economy, and lie-

styles. Te narratives are intended to serve as a general description o alternative utures that

span a wide range o outcomes. Te modeling described here considers two extreme scenar-

ios as points o comparison. SSP1, “Sustainability,” represents an optimistic outlook, and SSP3,

“Regional Rivalry,” embodies a rocky road in a world o high emissions, low adaptation, and

limited economic progress.

Climate change will have impacts that encompass all areas o development—ecosystems, human

health, agricultural yields, among others—all o which have been examined in the burgeoning

FIGURE B2.1 Global Water Withdrawalsbillion m 3 /year

Source : O’Neill and others 2015.

Socioeconomic challengesfor adaptation

S o c i o e c o n o m i c

c h a l l e n g e s f o r m i t i g a t i o n

2 0 0 5

0

1,000

G l o b a l w a t e r w i t h d r a w a l ( b i l l i o n m 3 / y r )

2,000

3,000

4,000

5,000

6,000

7,000

SSP5

2 0 1 0

2 0 1 5

2 0 2 0

2 0 2 5

2 0 3 0

2 0 3 5

2 0 4 0

2 0 4 5

2 0 5 0

2 0 5 5

2 0 6 0

2 0 6 5

2 0 7 0

2 0 7 5

2 0 8 0

2 0 8 5

2 0 9 0

2 0 9 5

2 1 0 0

2 0 0 5

0

1,000


2,000

3,000

4,000

5,000

6,000

7,000

SSP3

2 0 1 0

2 0 1 5

2 0 2 0

2 0 2 5

2 0 3 0

2 0 3 5

2 0 4 0

2 0 4 5

2 0 5 0

2 0 5 5

2 0 6 0

2 0 6 5

2 0 7 0

2 0 7 5

2 0 8 0

2 0 8 5

2 0 9 0

2 0 9 5

2 1 0 0

SSP1

2 0 0 5

0

1,000

G l o b a l w a t e r w i t h d r a w a l ( b i l l i o n m

3 / y r )

2,000

3,000

4,000

5,000

6,000

7,000

2 0 1 0

2 0 1 5

2 0 2 0

2 0 2 5

2 0 3 0

2 0 3 5

2 0 4 0

2 0 4 5

2 0 5 0

2 0 5 5

2 0 6 0

2 0 6 5

2 0 7 0

2 0 7 5

2 0 8 0

2 0 8 5

2 0 9 0

2 0 9 5

2 1 0 0

SSP4

2 0 0 5

0

1,000


2,000

3,000

4,000

5,000

6,000

7,000

2 0 1 0

2 0 1 5

2 0 2 0

2 0 2 5

2 0 3 0

2 0 3 5

2 0 4 0

2 0 4 5

2 0 5 0

2 0 5 5

2 0 6 0

2 0 6 5

2 0 7 0

2 0 7 5

2 0 8 0

2 0 8 5

2 0 9 0

2 0 9 5

2 1 0 0

2 0 0 5

0

1,000

G l o b a l w a t e r w i t h d r a w a l ( b i l l i o n m

3 / y r )

2,000

3,000

4,000

5,000

6,000

7,000

SSP2

2 0 1 0

2 0 1 5

2 0 2 0

2 0 2 5

2 0 3 0

2 0 3 5

2 0 4 0

2 0 4 5

2 0 5 0

2 0 5 5

2 0 6 0

2 0 6 5

2 0 7 0

2 0 7 5

2 0 8 0

2 0 8 5

2 0 9 0

2 0 9 5

2 1 0 0

Primary energy

Municipal

Manufacturing

Electricity

Livestock

Irrigation


24/53


under current regimes. In this scenario, water allocation does not respond

to the growing shortages and changing comparative advantage o different

sectors across the globe. Te resulting changes in GDP are shown in the

lower bounds o figure 2.1, which presents the worst projected outcome o

SSP1 and SSP3.3

Te economic consequences are highly unequal with the worst effects in

the driest regions. Te expected global damages are small relative to the

expected global GDP in 2050: about 0.37 (SSP1) to 0.49 (SSP3) percent oglobal GDP in that year. But the global loss is a highly misleading estimate

because, as the lower bounds o figure 1 illustrate, significant variations exist

between regions. Western Europe and North America, where much global

GDP is produced, experience negligible damages in most scenarios. Te bulk

o losses are in the Middle East, the Sahel, and Central and East Asia, and the

magnitude o losses is largely driven by the level o the water deficit. In the

most arid regions, the projected percentage losses are large and imply that

baseline growth projections cannot be met.

modeling literature. Te ocus here is on the largely overlooked issue o the economic impacts o

climate change through changes in water supplies.

Since economic growth spurs water demand in rough proportion to the income it generates, there

are legitimate concerns that expanding water deficits in some regions could constrain growth. o

explore this issue, projections o water supply rom a range o hydrological models underlying

the projections in map 1.1 are incorporated in a conventional Computable General Equilibrium

model or the SSP 1 and SSP 3 scenarios.

Te analysis considers economic impacts under various broad policy regimes. Te first is “busi-

ness as usual,” where water allocation policies remain largely unresponsive to changing levels o

scarcity, though there are exogenously driven improvements in water efficiency. Tis is modified

by allowing or increasing shifs in allocation within and between industries to reflect the implicit

value (shadow price) o water in the economy.Te models are not designed to orecast the uture. As with all modeling exercises, the analysis

is based on a litany o assumptions, driven by data availability and computational constraints.

Te results cannot be interpreted as orecasts o uture changes in GDP. Instead, the exercise pro-

vides projections, not predictions and orecasts. Nevertheless, such modeling exercises serve to

improve understanding o the magnitude and direction o changes and to project whether alter-

native policies can either accentuate or mitigate the adverse impacts.

Regardless o which scenario is considered, the results demonstrate that a scarce water supply

remains a significant obstacle to growth and development in the context o a changing climate.

Tey also orceully i llustrates that prudent management o water resources is likely sufficient to

neutralize some o the undesirable growth impacts.

BOX 2.1 Climate Change and the Economic Effects of WaterDeficits (continued)


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Other impacts are less visible, such as changes in trade patterns that cloudeconomic prospects in subtle ways.4 Te projections suggest that trade

becomes distorted when countries in arid areas continue to produce water-

intensive goods at ever-increasing financial and social cost, contrary to their

natural comparative advantage.

But there is a silver lining. When governments respond to water shortages

by boosting efficiency and allocating water to more highly-valued uses, losses

decline dramatically and may even vanish. Tis is illustrated in the upper

bounds o changes in figure 2.1 (note that the larger value between SSP1 and

SSP3 is displayed). Te overarching message is that the outcomes are driven

by policy decisions, suggesting that prudent water-management policies can

do much to secure growth, making people richer and thus more resilient toclimate stresses. Tis ofen, but not necessarily, requires using market orces

and prices to guide water allocation decisions.

Te implication is that the benefits to managing water resources as a valu-

able economic resource are considerable. Water pricing can do much in this

regard. Even i only a part o water use is allocated based on a price that brings

supply and demand into balance, many o the problems o climate and

socio-economic scarcity can be resolved.

Water that is provided ree promotes and condones overuse and waste.

Countries that price water more cheaply also consume it more reely.

Ofen, the most inefficient users o water are ound in countries with the

highest levels o water stress, where incentives are also lacking or prudentwater use. More efficient water pricing, coupled with policies that sae-

guard the most marginal members o society, can thereore ensure that

sufficient water is conserved and guarantee enough water to meet basic

needs. As the Australian experience has demonstrated, market-based solu-

tions, when complemented with policies that secure needed allocations or

the environment, can do much to assure greater efficiency o water use,

higher levels o equity in its allocation, and long-term sustainability o the

resource base.

FIGURE 2.1 Climate-Related Impacts on GDP in 2050


Note : The figure shows the range that climate changes effects on water will have on GDP for selectedregions. It incorporates effects from different growth scenarios (SSP1 and SSP3) as well as different policyscenarios (business-as-usual policies and policies that encourage better water allocation).

–0.02 –0.02

–11.7

–7.08

–10.72

–7.05

–1.98 –0.49

0 –0.01

–6.02

–0.82 0.38

11.5

3.32

1.460.09

–15

–10

–5

0

5

10

15

North

America

Western

Europe

Middle

East

Sahel Central

Africa

Central

Asia

East

Asia

Southeast

Asia

World

R a n g e o f v a r i a t i o n i n G D P ( % )

–14


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Economic Impacts of Extreme Events

Variability and rainall extremes are also hard to manage. Whatever the pro-

jected requency and intensity o floods and droughts, their economic impacts

will almost certainly increase as more people and assets move to areas o

greater climate vulnerability, particularly to cities in coastal regions. In the

past, droughts have been the deadliest, claiming the most lives. But with bet-ter disaster responses, the toll on human lives is declining. Floods, by con-

trast, are exacting a growing toll. Between 1960 and 1990, floods in Europe

destroyed assets worth about $7 billion. I the trend continues—and trends

may change—the damage under most climate scenarios is expected to double

in Europe by 2080.5

Te relative economic cost o extreme events is highest in middle-income

countries. India and China are projected to have the largest urban flood dam-

age by 2080; the main driver is the huge increase in urban assets in vulnerable

areas exposed to hazards.6

Some extreme events directly linked to the hydrological cycle can have

economic effects that are much greater and persist longer than expected.

A recent study used meteorological data to reconstruct every country’s

exposure to tropical cyclones during 1950–2008.7 It finds that national

incomes decline afer a disaster and do not recover within 20 years. Tis

conclusion holds or both developed and developing countries. Income

losses arise rom a small but persistent suppression o annual growth

rates spread across the 15 years ollowing a water-based disaster. Te

results suggest that uture cyclone activity would result in costs o about

$10 trillion larger than previous estimates (in discounted present value).

Tey also point to a path or actionable prescriptions that must be taken as

a priority.

The Thirsty Origins of Conflict

Troughout history, humans have waged war to gain access to natural

resources, including land, minerals, and even water. Te first recorded water

war occurred more than 4,500 years ago in modern-day Iraq, near the conflu-

ence o the igris and Euphrates rivers. Fought between the neighboring

ancient city-states o Lagash and Umma, the conflict erupted when Lagash

diverted the water supplies o its neighbor. History records other instances o

violence over water. Drying events are thought to have ueled tranboundary

invasions in ancient China and political instability in historical Egypt.8

Colonial conquests were ofen driven as much by a quest or territory, as nat-

ural resources.

Tough much has been conjectured about a uture o resource wars, today

states rarely, i ever, fight over water alone. Arguably, this should come as no

surprise. Wars are a costly endeavor with uncertain consequences, which ren-

ders dialog and cooperation a more attractive way to resolve disputes. As a

result, cooperation and dialog over transboundary water resources is more


27/53


common today than Malthusian resource conflicts. Tis is not to deny that

water scarcity could act as a conflict risk multiplier in some cases. But more

typically when disputes arise, they are mediated in ways that acilitate peace-

ul resolution.

While resource wars between countries may be uncommon today, tensions

over water resources within countries are much more widespread. Episodes o

drought and floods are ofen ollowed by spikes in violence, civil war, and

regime change in developing countries. Te strongest evidence is rom Sub

Saharan Arica where civil wars tend to erupt ollowing periods o low rain-

all9. In rural Brazil land invasions are more common during drier years with

more intense conflict in areas where land ownership is more unequal.10 In

India property related violence increases by about 4 percent when there is

below average rainall and communal riots become more requent ollowing

episodes o floods.11

Tere are sound economic reasons to expect rainall anomalies to cascade

into violence. Droughts and floods typically generate poverty and accentuate

deprivation especially in countries where agriculture remains an importantsource o employment. Poverty in turn alters the calculus o participating in

conflict. Combatants have less to lose when customary sources o livelihood

have been dwindled by droughts or floods, and they have more to gain by

participating in violence that might beget a better uture. Te conflict vulner-

ability o a country to rainall shocks typically depends upon the rainall sen-

sitivity o its income and its ability to provide protection and alternative

sources o employment.

Rainall shocks ignite conflicts in other ways too. Evidence rom Arica

suggests that by straining government budgets, their capacity and popularity

decline, making regime change more likely.12 Migration within and between

countries, which tends to increase in areas acing water shocks, remains apotent and widely documented source o riction between locals and new

arrivals across much o the world. In some cases this has the potential to erupt

in conflict.

Te increases in water variability and expanding water deficits that are pre-

dicted to occur due to climate change have the potential to increase the pro-

pensity or conflict. Building resilience to the more extreme precipitation

events o climate change will become a more urgent priority especially in

rainall vulnerable areas.

The Way Forward

Water Allocation

Getting the distribution o water right will go a long way toward decoupling

water use rom economic growth. In many regions, water resources have been

over-allocated, and climate change will compound the scarcity. I but a small

part o water use were allocated to bring supply and demand into balance,

many anticipated problems o climate and socio-economic scarcity could be


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resolved. oday, the marginal value o water or different uses varies greatly

because the prices paid by industry, agriculture, and residential users are ofen

unrelated. For example, in Arizona, water prices vary rom $27 an acre-oot or

agriculture to $3,200 an acre-oot or urban uses—so there is much suppressed

demand in the cities.13 While some o the gap could be explained by the differ-

ence in the nature and quality o the product delivered, most o it is a unction

o institutions that do not allocate water on the basis o economic criteria.

Te gains rom addressing scarcity through markets, prices, or other eco-

nomic instruments would be immediate. But the task will not be easy. Te

past weighs heavily on the present, and those who benefit rom current sys-

tems naturally resist change. Tat calls or raising awareness about the costs

and benefits and about transparent and equitable systems or compensation.

A undamental rethinking o water rights and appropriate governance

mechanisms is also needed. Te ocus could be on how water rights could be

used not as a declaration o inviolate ownership, but as a flexible instrument

to resolve water conflicts at the community, basin, regional, national, and

global levels, while still protecting the needs o the poor. Adequate manage-ment and regulation—particularly o common groundwater aquiers—is

essential to ensure that there is a mechanism or efficient allocation across

water sources and uses. In this context, the emergence o sophisticated tech-

nologies to monitor, measure, and disclose water “perormance” using objec-

tive metrics is an opportunity not yet realized.

Water Proofing Through Investment

Investments in adaptation are also essential, especially when mitigation is

limited. Adaptation will require both private and public action, with the

public initially at least as large as the private. In developing countries, the

inrastructure gap or water storage, flood control, and energy supply ismassive. Compounding the lack o inrastructure is inadequate investment in

maintaining costly assets. Short-term savings on operations and maintenance

are a alse economy and can be counterproductive i they shorten the lie o

the asset. Tis is especially important in the water sector, where assets are

expensive, capital-intensive, and long-lived (can last more than 100 years).

Policy Choices Under Uncertainty

But where uncertainty is high, as in projecting extreme events, it is wise to

leave options open (see box 1.3). Sinking all adaptation efforts into a single

and costly project can prove wasteul, i the anticipated climate uture does

not eventuate. No-regret measures that provide benefits under a range o out-

comes increase flexibility, as do modular approaches that can tailor responses

to evolving circumstances. Sof approaches, such as economic instruments

and climate-inormed plans, can be especially useul in such contexts. Some

studies suggest that i Australia had introduced adequate water tariffs, water

demand might have been managed to a level that no longer required the

investments in costly desalination plants that now risk lying idle due to the

expense o the water they produce.14


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Notes

1. Details are in World Bank 2015a. 2. O’Neill et al. 2015. 3. In general the differences in outcomes between the two SSPs are negligible, with

the lower bound representing SSP1 in most but not all cases, as climate impacts differ across regions (see World Bank 2015a or the ull set o figures).

4. Tese are discussed in the technical volume that accompanies World Bank 2015a. 5. World Bank 2015a. 6. EM-DA database. 7. Hsiang and Jina 2014. 8. Inter alia Bai, Ying, and James Kai-sing Kung 2011 and Chaney 2013. 9. Miguel et. al. 2004. 10. Hidalgo et. Al. 2010. 11. Inter alia Sarsons2015 and Blakeslee, David, and Ram Fishman2013. 12. Brückner, and Ciccone 2011. 13. Olmstead 2013. 14. Grafon and Kompas 2007; OECD 2013.


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Section 3

Changing Citiesand Changing Climate

As the world continues to urbanize and the demand or water in cities increases,

urban residents—particularly the urban poor—become more vulnerable to

the effects o climate change. One in our cities worldwide already experiences

water insecurity.1 Climate change adds to demographic and supply-chain pres-

sures on cities, leading to ears o a perect storm in which water shortages

combine with periodic climate disasters to produce major social and economic

disruptions.2 Te social and economic consequences o climate shocks on cit-

ies can be particularly devastating in low- and middle-income countries. 3 Te

annual global costs o adaptation or 2010–50 are estimated to range between$71.2 billion and $81.5 billion, depending on the climate scenario, and urban

areas could bear more than 80 percent o these costs.4

In cities, as elsewhere, the effects o climate change are mediated largely

through water. Te increasingly common pattern o fixed water supplies and

rising demands is gripping cities across the world. Flooding events can

Rehabilitating Jakarta’s waterways to mitigate flood risk

© Farhana Asnap/World Bank. Permission required for reuse.


31/53


degrade the quality o surace and groundwater, cause the loss o human lives

and property, and disrupt the urban economy. Heat waves and variable pre-

cipitation reduce the availability and quality o water while increasing

demand. Rising seas reduce groundwater availability due to salt-water intru-

sion and can permanently damage urban inrastructure.5

Impacts—Slow and Rapid

Te population affected by river floods is growing substantially, driven by

both climate change and socio-economic change.6 Te additional urban flood

damages resulting rom climate change are projected to reach between $0.7

and $1.8 trillion by 2080 (map 3.1).7

In 2005, about 40 million people and $3 trillion in assets were exposed to

risks o catastrophic damage rom sea-level rise and urban floods. By 2070,

the risk-exposed population will grow to roughly 150 million, with

$35 trillion in assets at risk.8 Tat assumes a hal-meter sea-level rise (the

current mid-range IPCC estimate) and accounts or urban population

growth and coastal subsidence. Sea-level rise can multiply the impacts o

storms by creating devastating tidal surges, ofen aggravated by land subsid-

ence caused by urban construction, groundwater extraction, and the altera-

tion o sedimentation dynamics.9 Jakarta shows what these threats could

mean or coastal city populations (box 3.1).

Cities are also vulnerable to slow-onset droughts, whose requency and

intensity are expected to increase with climate change in many regions.10

MAP 3.1 Yearly Urban Flood Damage by 2080, Billion USD

IBRD 41934 | OCTOBER 2015

Below –1

–1 to 0

0 to 1

1 to 10

10 to 100

Above 100

No data

Source : Based upon World Bank 2015a.

Note : Estimates are for RCP scenario 8.5; dollars are at 2005 PPP exchange rates.


32/53


Droughts may reduce the availability o water or municipal and industrial

use, energy (due to cooling water restrictions), and ood (resulting in reduced

crop yields). Tey may also contribute to heightened urban migration pat-

terns and localized conflicts over scarce water. In Caliornia, the average

annual cost o urban water scarcity (in orgone benefits) is $1.6 billion a year.12

Hydrological Change Meets Urban Change

Te world is urbanizing at a rapid pace, and the most dramatic transorma-tions are in low- and middle-income countries. By 2050, the number o urban

dwellers is projected to grow by 2.5 billion people, with nearly 90 percent o

the increase in Asia and Arica. Almost 70 percent o the world’s population

is orecast to be urban, up rom 30 percent in 1950.13

Te combined effects o rapid urbanization and climate change pose

unprecedented challenges to water security. Without adequate urban planning,

regulation, and development capacity, cities ofen expand through inormal

settlement into flood-prone areas, where dwellers are deprived o municipal

water, sanitation, and flood protection. Economically marginalized popula-

tions are the most directly exposed to extreme events, while health impacts

reverberate across entire cities as flooding contaminates water supplies, over-whelms treatment acilities, and spreads pollution rom sanitation acilities.

With population growth, and to less extent climate change, the number o

urban dwellers who live with seasonal water shortages is orecast to grow

rom close to 500 million people in 2000 to 1.9 billion in 2050.14 Tis estimate

may be a lower bound, since increasing competition between agricultural,

industrial, and municipal water users will urther strain cities. Urban popu-

lations are set to more than double by 2050 in the Middle East, North Arica,

and South Asia. But modeling or this study shows that reduced reshwater

BOX 3.1 Jakarta Faces Multiple Urban Water Challenges11

Te city o Jakarta in Indonesia suffers rom many water-related issues, including chronic flood-

ing every year and extreme floods every ew years. Te 2007 flood, reaching 25 percent o the city,

caused financial losses o $900 million. Despite these severe challenges, it still attracts a quarter o

a million new residents every year.

Flooding has been blamed on deorestation in the nearby mountains, but the main causes lie

closer to home: wetlands and rice fields have been paved over in defiance o urban-planning

regulations. Drainage canals are blocked by garbage, the result o an ineffective disposal system.

And while the city conronts a sea-level rise o 60 cm or more over this century, unregulated and

unsustainable groundwater extraction has already sunk coastal areas o the city by up to 4.5 m

over the past 50 years. Northern parts o Jakarta are predicted to be 4 to 5m below sea level within

20 years, and floods would affect up to 5 million people. But Jakarta is not alone—this situation is

shared by Bangkok and many other coastal or growing cities.


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availability and competition with other uses will reduce municipal water con-

sumption per capita between 31 percent and 66 percent compared with the

situation in 2015 under the SSP3 scenario (or 15 percent and 47 percent

under SSP1).15

The Way Forward

Building urban resilience to water stress requires a wider water-resource

perspective. Projected changes in water availability during the lietime o

major inrastructure projects can no longer be based on historical trends.16

o improve the robustness o system design, cities need a clear grasp o the

available surace-water resources at basin level, the characteristics o local

aquiers, and the associated climate-related risks. Tey can manage uncer-

tainty and variability by diversiying water sources (i needed, with trans-

ers rom adjacent basins) and improving water utilities’ emergency

preparedness. Tey should increase water-storage capacity and managegroundwater not only as a substitute or surace water, but also as insurance

against droughts.17 Tey should reduce water demand through pricing,

reducing water losses, reusing stormwater and greywater, and heightening

awareness.

Adaptation to flood risks can reduce both the scale o events and their

impacts on the city. Te ormer can be achieved through improved land plan-

ning within the city and at basin level, balancing densification and impervi-

ous areas. It can also rely on a combination o innovative techniques to

limit the intensity o runoff. Tese can include sustainable drainage systems

(retention basins, filter drains, porous pavement, rain gardens integrated with

the urban landscape) and green-roo practices.o mitigate the impacts o flooding, early warning systems can comple-

ment structural measures, such as drainage systems and dikes, and more

restrictive enorcement o land use in flood-prone areas. Tose structural

measures need to take into better account a range o climate uncertainty

in their design. Sustainable solid-waste management is essential to pre-

vent clogging o drainage systems and catastrophic consequences rom

otherwise-benign rain events. When impacts are inevitable, insurance or

saety nets should be considered, such as the Pakistan Citizen Damage

Compensation Program.

o realize its ull potential, climate-resilient urban water planning

requires a holistic approach combining interventions in physical inra-structure, ecosystems, governance structures, and financial systems (see

box 3.2). As much as possible, planning or the water sector should be

undertaken jointly with other sectors, such as land use, housing, solid

waste, energy, and transportation—underpinned by a clear understanding

o the city-watershed nexus. Tis would be a deep shif rom the tradition-

ally ragmented management o urban development and services.

Such an approach, reerred to as integrated urban water management,

unctions best when collaboration is strong among the state, local, and


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municipal governments in the metropolitan region, given their different

purviews over the necessary interventions. Its application can also be acil-

itated in institutional settings by integrating the administration o key

urban services (water supply, sewerage, drainage, wastewater treatment,

solid-waste management, and slum upgrading) and water-resource and

land-use planning (ecological zoning, protected areas, and public spaces).

Tis should be backed by sustained analytical work, data, and inormation

on the provision o urban services and hydrologic regimes to inorm

decision-making and monitoring—underpinned by strong governance,

clear institutional mandates, and greater capacity in both the urban and

the water sectors.21

Notes

1. McDonald, R. I., K. Weber, J. Padowski, et al. 2014. 2. Beddington 2015; US Department o Deense 2014. 3. Revi, Satterthwaite, Aragón-Durand, et al. 2014. 4. World Bank 2010a. 5. IPCC 2007.

BOX 3.2 Urban Adaptation Strategies Can Be EconomicallyBeneficial

Few studies have rigorously analyzed the economics o urban resilience to water-related crises.

But whether in Casablanca,18 Copenhagen,19 or Bangkok,20 adaptation programs are less expen-

sive than the damages they avoid.

Inexpensive strategies with high benefit–cost ratios could be priorities. Tey include early warn-

ing systems and more generally measures to improve access to flood-risk inormation, which

can help urban planning, penalize investors supporting real estate development in unsae areas,

and acilitate the development o insurance markets. While the costs and uncertain benefits o

adaptation may complicate the task o decision makers, many measures that contribute to climate

change mitigation are also highly relevant in a pro-poor sustainable urban policy agenda, regard-

less o climate issues.

Te paradigm shif that climate change imposes on cities will require large-scale political, tech-

nical, and financial mobilization. Tree actors will be instrumental to achieving long-termwater security objectives in cities. First is enhancing awareness among high-level policy mak-

ers about climate risks and the availability o economically sound adaptation options. Second

is developing knowledge sharing and collaboration platorms or stakeholders managing or

affecting the urban water cycle. And third is assuring adequate investment unding rom mul-

tilateral development banks, governments, and the private sector. It will also be essential to

support decision-making and demonstrate project relevance with robust economic analysis

applicable to complex adaptation packages that include non-structural measures and cross-

sectoral approaches.


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6. T. Luo et al. 2015. 7. Organisation for Economic Co-Operation and Development (OECD) 2015,

based on Winsemius and Ward 2015. 8. Nicholls et al. 2008. 9. Tessler, Vörösmarty, Grossberg, et al. 2015. 10. Revi, Satterthwaite, Aragón-Durand, et al. 2014.

11. World Bank 2015b. 12. Jenkins 2003. 13. United Nations Department of Economic and Social Affairs (UN DESA) 2014. 14. McDonald, Green, Balk et al. 2011. 15. Based on UN DESA 2014 and CGE model calculations in World Bank 2015a. 16. Milly, Betancourt, Falkenmark, et al. 2008. 17. Koundouri and Groom 2002. 18. World Bank 2012a. 19. City of Copenhagen 2011 and City of Copenhagen 2012. 20. Conable 2009. 21. SWITCH 2002.


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Section 4

Taming the Tempestuous:Managing TransboundaryRivers

Almost 40 percent o the world’s people reside in 275 transboundary river

basins that span almost hal o the Earth’s land surace (map 4.1).1 Accounting

or 60 percent o the world’s reshwater flows, transboundary rivers are

ubiquitous, though much o their potential remains untapped. By supplying

drinking water, irrigating crops to boost yields, supporting industrial

processes, and providing trade and transportation routes, rivers are essential

to economic development. A urther 269 groundwater aquiers also areshared, but their extent and contribution to global water supplies has not

been accurately estimated.

Shared water resources are best governed as an integrated whole. Planning

across an entire river basin yields greater flexibility in determining how ben-

efits can be captured and risks reduced. Hydrological risks such as floods and

droughts can be more cost-efficiently controlled by taking actions along the

river where they are most effective.

Victoria Falls, between Zambia and Zimbabwe © Vadim Petrakov/Shutterstock. Permission required for reuse.


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Cooperation—More Urgent and More Difficult

Climate change will alter the calculus o cooperation, increasing the need or

transboundary collaboration but, paradoxically, also rendering cooperation

more difficult. With climate change comes greater uncertainty and seasonal

variation o flows (map 4.2). So, agreements will need to be effective and

robust across a range o climate possibilities ar beyond what is currently in

place. Tis takes negotiations into the realm o conjecture and disagreement

about likely uture outcomes, which makes negotiations and cooperation

more complex and difficult.

Under a changing climate, three main benefits would accrue rom trans-

boundary agreements: enhanced resilience, greater opportunities or mitiga-

tion, and more effective management.

Enhanced Resilience

Basin-wide coordination is more effective in promoting resilience than a patch-

work o unilateral policies. Since climate impacts are typically shared within a

river basin, there are economies o scale in building regional approaches to

resilience. A large dam, or instance, is considerably cheaper to construct and

operate than several smaller dams o the same total capacity. ransboundarycooperation enables countries to evaluate tradeoffs and optimize benefits, allow-

ing or better storage, regulation, and allocation o water resources to adjust to

climate shocks. Regional collaboration allows countries to choose the best loca-

tion or the desired inrastructure. Tis might include large dams or water stor-

age or transport and delivery inrastructure such as canals, dikes, and inter-basin

transer schemes, which are essential to adapting to variable water flows. Also

possible are cost-sharing arrangements or large and expensive water inrastruc-

ture, allowing countries with greater solvency to finance these structures.2

MAP 4.1 The World’s Largest River Basins and the Populations They Support



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Consider hydropower development in Bhutan, which is well endowed with

hydropower potential but lacks the finances to develop such inrastructure

over an extended period. Meanwhile, its downstream neighbor India endures vast power deficits, especially during the drier months. Trough a mutually

beneficial agreement, India finances and builds much o the hydropower

potential in Bhutan and purchases the electricity at predetermined prices.

Since India is both the lender and the buyer, this setup curbs its market power

and both parties gain—India receives power to meet its growing energy

demand and Bhutan earns revenue.

Greater Opportunities for Mitigation

International rivers could be pivotal in helping countries meet their global

mitigation goals. Water is the vital input in the supply o clean lower-carbonenergy. It is required most obviously or hydropower generation, but also

or other sources o low-carbon energy such as nuclear, thermal, solar, and

geothermal. Lower-carbon options typically require more water, which

determines where sources are located. Ofen this implies that power gener-

ation and other demands on water (such as irrigation) cannot be simultane-

ously satisfied. Building the clean-energy potential that resides in these

rivers requires cooperative action and compromise or the uses and benefits

sacrificed.

MAP 4.2 Change in Seasonal Variability of Flows, 2010 to 2040

Projected change in seasonal variability

1.3x or greater decrease

1.2x decrease

1.1x decrease

Near normal

1.1x increase

1.2x increase

1.3x or greater increase

No data

Source : World Resources Institute 2015.

Note : The image shows projected changes in renewable surface water seasonal variability under a business-as-usual scenariousing the World Resources Institute spatial tool (for RCP8.5 & SSP2).


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More Information for More Effective Management

It is difficult to manage what is not measured. Inormation on the sources and

uses o water is ofen sparse and o varying reliability.3 Inormation becomes

especially valuable when uncertainty and variability are high (box 4.1). Where

hydrological boundaries do not coincide with national boundaries, country

data can provide only a subset o the inormation to assess and mitigate cli-mate risks, especially in downstream countries. Improved inormation

exchanges bring numerous benefits under climate change. Early warning

about disasters can save lives and property. Knowing how water flows are

changing can allow countries to adjust their use patterns. And understanding

the precursors o drought can minimize losses to armers.

The Challenges of Reaching Agreements

Reaching a cooperative agreement over river governance is no easy task.

Te greatest challenge lies in the incentives to cooperate—countries differin their priorities and will benefit rom cooperation in differing ways, so the

willingness to collaborate will vary across a river basin, reflecting expected

economic and political gains and losses. Tis is urther complicated by

BOX 4.1 Information Sharing and Pakistan’s Planning Capacity inthe Indus River Basin

Pakistan is highly dependent on water rom the Indus River, which derives approximately

18 percent o its flow rom glaciers and snowmelt in the Himalayas cutting across India, China,and Nepal. Te rest o its flow is rom monsoonal rainall in India and Pakistan. As the climate

changes and the glaciers recede, the sources o water in the Indus system are expected to change in

ways that are difficul

Documents

Critical Face of Climate Change