From Climate Risk to Resilience: Unpacking the Economic Impacts ... - ReliefWeb

From Climate Risk to Resilience: Unpacking the Economic Impacts of Climate Change in Mozambique, November 2023 - Mozambique | ReliefWeb

EXECUTIVE SUMMARY

Mozambique is already vulnerable to extreme weather events and climate change is projected to exacerbate their frequency and intensity. The occurrence of cyclones and flooding has increased in recent years and the trend is expected to continue. The country’s coast—where 60 percent of the population, the three biggest cities, and critical infrastructure are situated—is most exposed to climate change-related risks, including damage from cyclones and projected sea level rise. Densely populated and low-lying regions, such as Zambezia, Nampula, Sofala, and Maputo Provinces, are particularly exposed to risks from flooding. More broadly, climate change is projected to increase average temperatures across the country and to result in higher variability in precipitation, especially in the south.

The most critical economic sectors vulnerable to climate change in Mozambique are agriculture, transport, and potentially energy. In agriculture, maize is likely to be the most affected key crop. This can pose risks to food security (alongside expected higher food inflation because of climate change), given maize’s widespread cultivation and role in nutrition. The impact on other crops is likely to be more limited, and to a large extent driven by damages from increased frequency of extreme weather events. This could exacerbate challenges in the sector, which is already constrained by low productivity and limited arable areas. That said, climate change could create some opportunities; for example, rice yields are projected to improve. Most studies project agricultural production in the central region to be most adversely affected by climate change, albeit the impact varies by crop and within regions. Mozambique’s transport infrastructure is highly vulnerable to climate change due to the projected increase in flooding, the low proportion of paved roads, their limited interconnectivity, and the vulnerability of ports to cyclones and storm surges. Damages to Mozambique’s transport sector are likely to have knock-on effects to other sectors and can have significant regional implications, as the country serves as a conduit for landlocked neighboring countries. Infrastructure damages, alongside the projected coastal erosion, may severely affect the tourism sector. Furthermore, Mozambique’s high dependence on hydropower exposes it to losses from rainfall variability, which is expected to increase. The country’s largest hydropower plant is located downstream on the Zambezi River, which various studies project to dry up due to climate change. Increased water use in upstream countries (such as because of greater irrigation needs and in response to growing populations) could also pose risks to Mozambique’s hydropower sector.

Mozambique needs to manage risks to its economy because of global mitigation efforts. This is because its main exports (aluminium, coal, and petroleum) are highly carbon-intensive. This poses risks to its trade balance and economic growth, given its already very limited fiscal space. While global mitigation efforts would be positive for the country because they would help limit the impact of the physical risks from climate change, the implications of a global transition to a low-carbon economy may pose more immediate risks.

The Government of Mozambique (GoM) is taking steps to respond to climate change-related risks.

Various national-level climate change policies and the integration of climate resilience considerations in sectoral policies (such as agriculture) include the National Climate Change Adaptation and Mitigation Strategy (2013–2025) and updated Nationally Determined Contributions (NDCs). The GoM has limited deforestation, which has adaptation and mitigation co-benefits. Notably,

Mozambique is following a decentralized approach to climate adaptation, prioritizing the development of Local Adaptation Plans (such plans have been developed for 132 out of 154 districts as of 2021). These will inform the GoM’s national-level climate adaptation and resilience strategy, including the ongoing development of its National Adaptation Plan (NAP). The key constraints to the country’s climate change preparedness include limited technical capacity for policy formulation and implementation, difficulties in government coordination, as well as challenges in mobilizing funding for adaptation at the necessary scale (and mobilizing funding from the private sector in particular).

This report proposes that climate adaptation and resilience efforts in Mozambique focus on ensuring the country can adopt a strategic, transformative, and coordinated approach at national and regional level. More precisely, efforts include to: (i) strategically help the agriculture sector adapt to projected climatic changes to reduce food inflation and food security risks, including diversifying away from maize; (ii) prioritize improving the climate resilience of critical infrastructure, including improving road quality and use of ecosystem-based solutions along the coast; (iii) consider how to ensure that climate and economic resilience considerations are reflected in the national industrial strategy, including with respect to energy sector development; (iv) develop technical capacity and modes for accessing updated climate change-related data and modelling from global sources; and (v) facilitate policy coordination and effective strategy implementation of climate adaptation measures by developing a climate Adaptation and Resilience Investment Platform (ARIP) at national level so that mobilization of funding at scale can occur.

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