This report summarizes a scoping study assessing:
(i) the impacts and economic costs of climate change in Tanzania;
(ii) the costs and benefits of adaptation; and
(iii) the potential for low carbon growth.
Tanzania currently suffers high economic costs due to extreme events
- Tanzania’s economy is very dependent on the climate, because a large
proportion of GDP is associated with climate sensitive activities,
- Current climate variability, i.e. extreme events such as droughts and
floods, already lead to major economic costs in Tanzania. Individual
annual events have economic costs in excess of 1% of GDP, and occur
regularly, reducing long-term growth and affecting millions of people
- A key conclusion is that Tanzania is not adequately adapted to the
current climate. The country therefore has a large existing adaptation
deficit which requires urgent action.
Climate change will lead to potentially high future economic impacts
- Future climate change could lead to large economic costs. While
uncertain, aggregate models indicate that net economic costs could be
equivalent to a further 1 to 2 % of GDP/year by 2030.
- There are potential threats from climate change to coastal zones
(sea-level rise), health, energy supply and demand, infrastructure,
water resources, agriculture and ecosystem services, with potentially
high impacts and economic costs across these sectors.
- The combined effects of current climate vulnerability and future
climate change are large enough to prevent Tanzania achieving key
economic growth, development and poverty reduction targets, including
the planned timetable for achieving middle income status.
Adaptation can reduce these impacts, but requires significant levels of
- Adaptation can reduce the economic costs of climate change but it has
a cost. Significant funding is required to address the existing
adaptation deficit, as well to prepare for future climate change.
- An initial estimate of immediate needs for building adaptive capacity
and enhancing resilience against future climate change is US$100 – 150
million per year. However, additional funding is needed to address
current climate risks, with a conservative estimate of an additional
US$500 million per year (but probably more). Addressing these current
risks and the current adaptation deficit is essential in reducing
future impacts and building resilience to future climate change.
- The cost of adaptation increases rapidly in future years. By 2030,
financing needs of up to US$1 billion per year are reasonable, and
potentially more if further accelerated development is included.
- The study has considered potential priorities to advance adaptation.
There is a need to plan robust strategies to prepare for the future,
rather than using uncertainty as a reason for inaction.
- Accessing adaptation funds will require the development of effective
policy, institutions and mechanisms.
A more sustainable, low carbon pathway would be in Tanzania’s self
- The current use of energy in Tanzania is leading to economic, social
and environmental impacts.The high reliance on unsustainable biomass
use is leading to the removal of forests, while the increasing
dependence on fossil fuels is leading to fuel price shocks and
inflation, affecting the balance of payments and leading to air
pollution (indoors and outdoors).
- The analysis has considered energy and emissions for Tanzania,
consistent with planned development. Emissions of greenhouse gases
(GHG) could double between 2005 and 2030.
- Increases in emissions will be necessary for Tanzania’s growth, and
given its development status, there is no suggestion that future
emissions should be constrained. However, the emissions growth above
is related to a specific development pathway that has increased
dependence on fossil fuel use and unsustainable use of natural
resources. This will lead to higher fuel costs,greater fuel imports,
higher air pollution and increased congestion. Indeed, these factors
are likely to reduce future economic growth and development.
- There is an alternative growth strategy, based around low carbon
options, that would be more sustainable, and which would have the
considerable benefit of providing potential carbon financing.
- The study has found a large number of ‘no regrets’ options that would
enhance economic growth, improve sustainability, and reduce carbon
emissions, whilst also allowing access to international credits. Many
of these options re-enforce existing objectives, but through the low
carbon focus, it would provide a source of finance to fund the
- There are also emerging opportunities from new sources of finances,
such as for forestry (REDD+) and from emerging linkages between
adaptation and low carbon projects. The study has investigated how to
enhance the opportunities for Tanzania.
Tanzania needs to get ready and act now
A number of priority areas are set out in the report. In terms of
translating these into concrete action, a number of specific next steps
- Tanzania should further build it’s national climate change strategy,
towards climate resilient and sustainable/low carbon growth. An
integrated strategy would encourage synergies and reduce conflicts,
and help Tanzania take advantage of opportunities from the
- The national policy should be linked to sectoral objectives, with
effective mainstreaming mechanisms for implementation, monitoring,
reporting and verification. However, as well as the current plans,
there is a need to include this in longer-term strategy up to and
beyond 2030, including in revising the Vision objectives and
supporting intermediate objectives and policy, as well as
- To support all of these areas, there is an urgent need to build
capacity, with mechanisms, institutions and governance systems.
The economics of climate change in the United Republic of Tanzania.