Training About the Economics of Climate Mitigation and Adaptation

USAID/Mozambique engaged in programming, assessing, and leading critical climate change technical assistance activities that support low-emission development strategies (LEDS), building climate change resilience, and strengthening local capacity.

The USAID Climate Economic Analysis for Development, Investment, and Resilience (CEADIR) Activity received a request in June 2014 from USAID/Mozambique for training on the methodologies and tools used to assess the economics of global climate change mitigation and adaptation. USAID/Mozambique along with USAID missions in South Africa and Malawi were engaged in programming, assessing, and leading critical climate change technical assistance activities that support low-emission development strategies (LEDS), building climate change resilience, and strengthening local capacity. CEADIR is taking the two courses to the field-assisted Mission staff and select local participants to analyze the most economically attractive mitigation and adaptation actions for the Agency and partner countries.

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Credit: USAID CEADIR

Each course presented the best practices and tools for conducting mitigation and adaptation cost assessments through a set of lectures, field project discussions, case studies, and interactive feedback. The courses presented a continuum of economic analysis methods with tools to move from preparing market-based financial analyses to more complex social-opportunity cost, or economic, assessments and comparative analyses of mitigation and adaptation projects when including secondary benefits such as eco-system services, emission reductions, and cost-effectiveness.

Some of the climate change economic analysis methods and tools that were presented include:

1. Financial and Economic Cost-Benefit Analysis (CBA) of renewable energy, energy efficiency, and sustainable landscape projects (mitigation course);
2. Cost-Effectiveness Analysis of renewable energy, energy efficiency, sustainable landscapes and adaptation projects (mitigation and adaptation courses);
3. Co-benefit and/or Environmental Valuation techniques commonly used in developing countries to internalize into CBA and other assessment important, measurable eco-system costs/benefits associated with high and low carbon technologies (mitigation course);
4. Marginal Abatement Cost (MAC) Curve Analysis to determine the net benefits of a mitigation option per unit of greenhouse gas emission reduced compared to the business as usual baseline scenario (mitigation course);
5. Multi-Sector Economic Analysis for the energy and transport sectors using the Stockholm Environment Institute Long-range Energy Analysis Programming (LEAP) model (mitigation) and sector cost-benefit and/or cost-effectiveness analysis for adaptation projects; and,
6. Decision Criteria for Selecting Mitigation Projects to review the various potential decision criteria recommended by USAID to assist in making funding and programmatic choices about supporting mitigation projects.

The Climate Change Mitigation Economics course was offered in Mozambique from Oct. 20-24, 2014. The Adaptation Economics course was offered from Oct. 27-31, 2014.

All course training materials can be found on the USAID Development Experience Clearinghouse via the USAID Economic Analysis and Planning for Global Climate Mitigation Course website and the Economic Analysis and Planning for Global Climate Adaptation Course website.