climate change assessment i. basic project information · 2018-07-05 · climate-friendly...

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Climate-Friendly Agribusiness Value Chains Sector Project (RRP CAM 48409-002) CLIMATE CHANGE ASSESSMENT I. BASIC PROJECT INFORMATION Project Title: Cambodia: Climate-Friendly Agribusiness Value Chains Sector Project Project Budget: $141.04 million ($90 million loan from ADB (confirmed), $10 million loan from GCF (to be confirmed), $30 million grant from GCF (to be confirmed), $3.66 million from beneficiaries and $7.37 million from Government) Project Location(s): Provinces of Kampong Cham, Tboung Khmum, Kampot and Takeo Sector: Agriculture and Natural Resources Subsector: Agriculture, natural resources and rural development Themes: Environment, Natural Resources & Agriculture Brief Description of the Project: The proposed Climate-friendly Agribusiness Value Chains Sector Project (CFAVCP) will support the implementation of Cambodia’s Agriculture Sector Strategic Development Plan 1 and the Industrial Development Policy 2 by enhancing competitiveness of agricultural value chains and improving rural household incomes and agricultural competitiveness by (i) providing improved critical production and post-harvest infrastructure, (ii) reducing energy costs by promoting bio- energy use and sustainable biomass management, and (iii) offering targeted agribusiness support services for selected value chains. The impact will be improved agricultural competitiveness through enhanced productivity, climate resilience, quality and safety, value addition and rural household incomes and the outcome will be more productive and resource efficient agribusiness value chains in project areas in the provinces of Kampong Cham, Tboung Khmum along the Greater Mekong Subregion (GMS) southern economic corridor, and Kampot and Takeo along the south-coastal economic corridor. These four provinces contribute significantly to the country’s agricultural gross domestic product (GDP) and have experienced significant losses from the impacts of climate variability and climate change. CFAVCP will build on lessons from recent ADB programs which emphasize the need for: (i) strengthening critical rural infrastructure; (ii) supporting enabling policy environment; (iii) promoting public-private-community partnerships; (iv) building technical and business development capacity of stakeholders; and (v) promoting climate smart agriculture practices. CFAVCP will have three outputs: Output 1: Critical agribusiness value chain infrastructure improved and made climate resilient, Output 2: Climate smart agriculture and agribusiness promoted, and Output 3: Enabling environment for climate friendly agribusiness enhanced. It will achieve these outputs by improving climate resilience of critical agricultural production and post-harvest infrastructure, intensification, and commercialization of rice, maize, cassava and mango. The project will help increase productivity and diversification, improve storage, processing, quality and safety testing capacity, and promote the use of solar and bio-energy. It will also create an enabling policy environment for agribusinesses and strengthen technical and institutional capacity for climate smart agriculture. This will, in turn, promote long-term environmental sustainability and enhance profitability for farmers and agribusiness enterprises. 1 Royal Government of Cambodia. 2015. Agriculture Sector Strategic Development Plan (2014-2018). Phnom Penh. 2 Royal Government of Cambodia. 2015. Industrial Development Policy (2015-2025). Phnom Penh.

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Page 1: CLIMATE CHANGE ASSESSMENT I. BASIC PROJECT INFORMATION · 2018-07-05 · Climate-Friendly Agribusiness Value Chains Sector Project (RRP CAM 48409-002) CLIMATE CHANGE ASSESSMENT I

Climate-Friendly Agribusiness Value Chains Sector Project (RRP CAM 48409-002)

CLIMATE CHANGE ASSESSMENT

I. BASIC PROJECT INFORMATION Project Title: Cambodia: Climate-Friendly Agribusiness Value Chains Sector Project

Project Budget: $141.04 million ($90 million loan from ADB (confirmed), $10 million loan from GCF (to be confirmed), $30 million grant from GCF (to be confirmed), $3.66 million from beneficiaries and $7.37 million from Government)

Project Location(s): Provinces of Kampong Cham, Tboung Khmum, Kampot and Takeo

Sector: Agriculture and Natural Resources Subsector: Agriculture, natural resources and rural development

Themes: Environment, Natural Resources & Agriculture

Brief Description of the Project: The proposed Climate-friendly Agribusiness Value Chains Sector Project (CFAVCP) will support the implementation of Cambodia’s Agriculture Sector Strategic Development Plan1 and the Industrial Development Policy2 by enhancing competitiveness of agricultural value chains and improving rural household incomes and agricultural competitiveness by (i) providing improved critical production and post-harvest infrastructure, (ii) reducing energy costs by promoting bio-energy use and sustainable biomass management, and (iii) offering targeted agribusiness support services for selected value chains. The impact will be improved agricultural competitiveness through enhanced productivity, climate resilience, quality and safety, value addition and rural household incomes and the outcome will be more productive and resource efficient agribusiness value chains in project areas in the provinces of Kampong Cham, Tboung Khmum along the Greater Mekong Subregion (GMS) southern economic corridor, and Kampot and Takeo along the south-coastal economic corridor. These four provinces contribute significantly to the country’s agricultural gross domestic product (GDP) and have experienced significant losses from the impacts of climate variability and climate change. CFAVCP will build on lessons from recent ADB programs which emphasize the need for: (i) strengthening critical rural infrastructure; (ii) supporting enabling policy environment; (iii) promoting public-private-community partnerships; (iv) building technical and business development capacity of stakeholders; and (v) promoting climate smart agriculture practices. CFAVCP will have three outputs: Output 1: Critical agribusiness value chain infrastructure improved and made climate resilient, Output 2: Climate smart agriculture and agribusiness promoted, and Output 3: Enabling environment for climate friendly agribusiness enhanced. It will achieve these outputs by improving climate resilience of critical agricultural production and post-harvest infrastructure, intensification, and commercialization of rice, maize, cassava and mango. The project will help increase productivity and diversification, improve storage, processing, quality and safety testing capacity, and promote the use of solar and bio-energy. It will also create an enabling policy environment for agribusinesses and strengthen technical and institutional capacity for climate smart agriculture. This will, in turn, promote long-term environmental sustainability and enhance profitability for farmers and agribusiness enterprises.

1 Royal Government of Cambodia. 2015. Agriculture Sector Strategic Development Plan (2014-2018). Phnom Penh. 2 Royal Government of Cambodia. 2015. Industrial Development Policy (2015-2025). Phnom Penh.

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Under Output 1, a list of subprojects focusing on irrigation infrastructure and water management systems, post-harvest infrastructure, and support to farmer groups and cooperatives, has been identified and feasibility analyses completed for a representative set.

Water Catchment Ponds. The project includes modernization and rehabilitation of existing 426 on farm surface water catchment ponds and dig/ commission at least 800 on-farm water catchment ponds. These ponds will be used for supplementary irrigation and will be suited to collect surface runoff.

Laser land leveling will be introduced at farm level to effectively prepare the land and manage water resources while reducing emissions for over 4,000 ha of land.

Drip Irrigation technology. The project involves the implementation of 10 drip irrigation systems to enhance quality and quantity of mango production.

Cooperative Storage and Drying Units. Project activities include the construction of an estimated 80 cooperative storage and drying units.

Rural access roads and commune tracks. The project proposes the improvement of rural roads and tracks along at least 250 km to link farm units and production zones to the proposed 80 cooperative storage and drying units.

Biodigester Screening. The project aims to support the National Biodigester Program (NBP) to install about 12,000 biodigesters and 6,000 compost huts in target provinces, and harness the fertilization potential of bio-slurry for households.

In addition, the project will establish four Provincial Agricultural Development Centers (PADC) and four Provincial Agricultural Engineering Workshops to create resource and training centers for service provision, agribusinesses and farmer value chain linkages. The project will finance the building of a PADC in Kampong Cham, Takeo, and Tboung Khmum provinces and the rehabilitation of the existing extension/agricultural development center in Kampot. The project will also support the construction of three mechanization workshops, including classrooms in Kampot, Kampong Cham and Tboung Khmum and commissioning of a new workshop and classroom in Takeo.

At the National Agricultural Laboratory (NAL), the newly inaugurated Plant Biotechnology Laboratory (PBL) will be supported by the project’s capacity building output on (i) establishing genetically modified organism (GMO), plant toxins, bio-fertilizer and organic fertilizer testing capacity; (ii) supporting ISO 17025 accreditation; (iii) developing tissue culture protocols for banana and cassava; and (iv) assisting in the laboratory commercialization process to achieve partial cost recovery.

Under Output 2, the project will support the development of (i) climate smart agribusiness policy; (ii) climate-conscious product standards; and (iii) the development and release of climate resilient varieties. Under Output 3, the project will invest in the creation of an enabling policy and regulatory environment for agribusinesses, the identification of opportunities for private sector engagement in climate change mitigation and adaptation, and provision of improved climate and market information services to allow farmers to plan their cropping season. This output will facilitate

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harmonization of standards, public-private partnerships, and green financing. Three key

activities include: (i) climate friendly agribusiness policies and standards; (ii) green finance and risk sharing mechanisms; and (iii) information and communication technology (ICT) to support climate risk management.

I. CLIMATE CHANGE TRENDS AND PROJECTIONS Cambodia's climate is tropical, with characteristically high temperatures, and two seasons are recognized: a monsoon driven rainy season (May‐October) with south-westerly winds ushering in clouds and moisture that accounts for anywhere between 80% to 90% of the country’s annual precipitation, and a dry season (November-April), with cooler temperatures, particularly between November and January. Average temperatures are relatively uniform across the country, and are highest (26°C - 40°C) in the early summer months before the rainy season begins. Temperatures remain at 25°C to 27°C throughout the rest of the year. The wet season arrives with the summer monsoon, in May through November, bringing the heaviest rainfall to the southeast and northwest. Mean monthly rainfall at this time of year can be more than 5,000 mm in some areas. Inter‐annual variations in climate result from the El Niño southern oscillation, which influences the nature of the monsoons in the region and generally bring warmer and drier than average winter conditions across Southeast Asia, while La Niña episodes bring cooler than average conditions.3 (i) Historical and Projected Changes in Temperature Analysis of historical data (1901-2012) suggest that the rate of temperature increase has been most rapid in the drier seasons (December-January-February and March-April-May), increasing 0.20°C -0.23°C per decade, and slower in the wet seasons (June-July-August and September-October-November), increasing 0.13°C-0.16°C per decade. More recent trend since 1960 suggest accelerated change. The following are climate trends for Cambodia observed between 1960 and 2003 (footnote 3). - Mean annual temperatures have increased by 0.8°C since 1960, at a rate of about 0.18°C

per decade. The rate of increase is most rapid in the drier seasons, increasing 0.20°C‐0.23°C

per decade, and is slower in the wet seasons, increasing 0.13°C‐0.16°C per decade.

- Since 1960, the frequency of hot days4 has increased significantly (+46, with strongest increases noted in September-November), as has the frequency of hot nights (+63, with strongest increases noted in December-February). The frequency of cold days5 has decreased significantly in September- February. - The average number of cold days per year has decreased by 19 (5.2%). This rate of decrease is most rapid in December-January-February.

3 World Bank’s Climate Change Knowledge Portal. 4 Hot days or nights are defined as the temperature above which 10% of days or nights are recorded in current climate

of that region and season. 5 Cold days or nights are defined as the temperature below which 10% of days or nights are recorded in current climate

of that region or season.

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- The average number of cold nights per year has decreased, particularly during the dry season (December-February). Current trends indicate that the most noticeable changes in the weather have been the increasing number of hot days with higher temperatures, and in comparison, the number of cold days have been decreasing.

All of Cambodia can expect a projected increase in temperature over longer periods. These increases are expected to extend the dry season, a phenomenon which for example, has most recently been observed as a drought period from December 2014-June 2016.6 Mean annual temperatures are projected to increase across Cambodia by 0.7°C-2.7°C by the 2060s, and 1.4°C-4.3°C by the 2090s.7 All projections indicate substantial increases in the frequency of days and nights that are considered hot in current climate, with hot days increasing by 14%-49% and hot nights increasing by 24%-68% by 2060, from the12.2% baseline of 1970-1999.8 The projected changes in mean daily maximum temperature by 2050 for all provinces can be found in Figure 1 and Table 1 for wet season, and Figure 2 and Table 2 for dry season. The project province of Tboung Khmum is one of the top six provinces projected to experience a temperature increase (+3.1°C) in the wet season, and again in the dry season (+2.7°C). Kampong Cham is also in the top range for dry season increase with +2.6°C predicted.

Figure 1: Change in Mean Daily Maximum Temperature in Wet Season – 2050

6 Projected data based upon modelling not available at time of writing. However all indicators firmly confirm theories

of greater dynamic and volatility in weather events. 7 UNDP Climate Change Country Profiles and the World Bank’s Climate Change Knowledge Portal. 8 ADB RRIPII RRP Supplementary Appendix- Climate Resilience Measures.

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Table 1: Change in Mean Daily Maximum Temperature in Wet Season – 2050

Figure 2: Change in Daily Maximum Temperature in Dry Season – 2050

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Table 2: Change in maximum daily temperature in dry season – 2050

The projected change for the project area shows a similar trend. The projection data for three provinces are presented below.9 Please note that the Tboung Khmum province is included in the Kampong Cham province for these projections.10 Kampong Cham (including Tboung Khum):

9 GMS CEP SEA STARTRC Climate Change Adaptation Platform. This future climate scenarios are developed from

future climate projection using PRECIS regional climate model. The simulation of future climate is based on initial data from ECHAM4 Global Circulation Model under SRES A2 and B2 greenhouse gas (GHG) scenarios.

10 Tboung Khmum province was formed in 31 December 2013 when Kampong Cham province was split in two.

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Takeo:

Kampot:

The observed historical data based on in-situ weather monitoring from the ground concurs with the national trends. According to the monitoring data collected by Kampong Cham Provincial Department of Water Resources and Meteorology (PDoWRAM), the temperature has been increasing over the last several years.11

Source: PDoWRAM of Kampong Cham (2013)

11 SNV. 2014. Climate Change: Vulnerability and Impact Assessment Cassava and Vegetable Value Chains.

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(ii) Historical and Projected Changes in Precipitation Although climate model projections do not agree that Cambodia will experience an increase in precipitation, the characteristics of rainfall are expected to undergo change. This change will affect the onset of the wet season, a phenomenon which increases the risk for farmers for sowing and planting rice. Theories regarding wet season dynamics strongly favor a prediction of total rainfall increase, through this could occur within a scenario of less rainfall events. Figure 3 and Table 3 show projected change in rainfall for the wet season by 2050. In the wet season, the Kampong Cham and Tboung Khmum provinces are expected to experience increased rainfall of more than 10%; Kampot and Takeo provinces are projected to have increased rainfall of more than 9%. During the dry season, Kampot and Takeo could see a 3.9% decrease in rainfall, with Kampong Cham and Tboung Khmum projected to experience a 0.5% decrease. Figure 4 and Table 4 show these projections.

Figure 3: Change in precipitation in wet season – 2050

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Table 3: Change in Precipitation in Wet Season - 2050

Figure 4: Change in Precipitation in Dry Season – 2050

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Table 4: Change in precipitation in dry season – 2050

The projection data for the project areas shows oscillating trend, with precipitation increasing until 2030, then decreasing until 2050, there after increasing again.12

Kampong Cham (including Tboung Khum)

12 GMS CEP SEA STARTRC Climate Change Adaptation Platform. This future climate scenarios are developed from

future climate projection using PRECIS regional climate model. The simulation of future climate is based on initial data from ECHAM4 Global Circulation Model under SRES A2 and B2 GHG scenarios.

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Takeo:

Kampot:

The monitoring data obtained from the PDoWRAM, does not conclusively show any change in precipitation trend. 13

Source: PDoWRAM of Kampong Cham (2013)

13 SNV (2014): Climate Change: Vulnerability and Impact Assessment Cassava and Vegetable Value Chains

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(iii) Historical and Projected Changes in Sea Level Rise Observed sea level rise in the Gulf of Thailand is 3 to 5.5 mm per year.14 A rise in sea levels of 16 cm by 2030 and up to 45 cm by 2070 is expected to affect Cambodia.15 However, it is likely that the worst effects from climate change in Cambodia will not be related to direct sea level rise, as much of Cambodia’s coast is not at risk (using the accepted 1 to 3 meter range). The worst effects will likely be related to flooding in low-lying areas, discussed in the section below. The coastal and/or low lying provinces of Kampot and Takeo are therefore more at risk in the project areas. One of the target provinces, Kampot, is located in the south-western part of Cambodia and is one of the country’s four coastal provinces. It has a total coastline of 66.5 kilometers and borders Viet Nam to the East. Rising sea levels could pose a significant threat to marine coastal areas, which already suffer from storm surges, high tides, beach erosion, and seawater intrusion. However, target districts of the projects are further inland and might not be significantly affected by sea level rise. (iv) Extreme Weather Events (floods, droughts, cyclones, hurricanes, etc.) Cambodia is one of the more disaster‐prone countries in Southeast Asia, affected by floods and droughts on a seasonal basis. In recent years, a succession of droughts and floods resulted in significant loss of life and considerable economic loss. Summary of major events since 1986 (last 30 years) is presented in the table below.16

Floods: The southwest monsoons begin in mid-May and last through the end of October, bringing over three-quarters of the country’s annual rainfall. As a result, floods along the Mekong River and its tributaries, as well as from the Tonle Sap Lake, are recurrent and often themselves constituting major disasters. Approximately 80% of the country’s population lives along the Mekong River, which is known to have large fluctuations. Floods affect the provinces of Kandal, Kampong Cham, Kratie, Prey Veng, Stung Treng, Svay Rieng, and Takeo. Flash floods in tributaries around the Tonle Sap Lake affect others. The last biggest storm recorded in recent national history was Ketsana typhoon, which hit Cambodia between 29 September and 5 October 2009.

14 IUCN Fact Sheet: Building Resilience to Climate Change Impacts-Coastal Southeast Asia Kampot Province,

Cambodia. 15 Mekong River Commission. 2010. Climate Change Baseline Assessment Working Paper: The MRC SEA of

Hydropower on the Mekong mainstream. 50 pp. 16 The international disasters database (EM-DAT).

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Observed trend in the project area: Among the provinces covered by this project, Mekong river floods are common occurrences in the parts of Kampong Cham, Takeo, and Tboung Khum. Cumulative rainfall in the upper catchments of the Mekong river throughout the rainy season causes a slow but steady rise in water levels lasting several days. This can be aggravated by heavy rains, sometime coinciding with the arrival of tropical depression and storms, affecting provinces around the lake and the southern provinces. Takeo is one of the most severely affected provinces due to its flat and low land. Four districts of Takeo are exceptionally flood prone: Andeth, Borei, Kirivong and Koh. Flood levels in this province are very high and living with floods can almost be considered a way of life.17 Parts of Kampong Cham and Tboung Khum are also prone to flood, particularly along the riverine area of Mekong. 75% of the interviewed farmers in Cheychok Commune of Kampong Cham province revealed that the flooding was most intense during the early 2000s, particularly in 2000 and 2001.18 Flash floods have been reported to affect the provinces of Tboung Khum. Repeated heavy rainfall in mountainous areas, which flows into the streams and tributaries of the Mekong river often cause flash floods. These floods are swift and last only a few days, but often cause severe damages to crops and infrastructure. Kampot province is situated outside Mekong basin and the climate related hazard events are generally determined by the local hydrological system of the Kampot river. Kampot river is a collection of rivers connecting directly to the nearby ocean. The rivers flow in both directions, (up to a point) depending on the tide and thus the river is saline affected. Occasionally during the rainy season, July through October, as the water overflows the banks, the whole town of Kampot becomes inundated. The subproject areas have no record on heavy flood event yet. All of Cambodia and the four target project provinces are at risk from current and future flood events, which may be exacerbated by extreme storm events. Figure 5 shows all four provinces have a high risk of low-land flooding, and Figure 6 indicates that Kampong Cham, Takeo and Tboung Khmum are at risk of long duration flooding.

Figure 5: Risk of Lowland Floods on National and Provincial Roads

17 NGO Forum on Cambodia (2012): Vulnerability and Impact Assessment / Cassava and Vegetable Value Chains. 18 SNV (2014): Climate Change: Vulnerability and Impact Assessment Cassava and Vegetable Value Chains.

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Figure 6: Long duration flood spots in Cambodia based on 2011 and 2013

All provinces have a moderate risk of flash flooding, as shown in Figure 7.

Figure 7: Risk of Flash Flooding on National and Provincial Roads

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Droughts: Coupled with poor management, access, and storage of existing water resources, delays or early ending of the monsoon rains and erratic rainfall have contributed to droughts in Cambodia. Localized drought is also becoming increasingly apparent and significant throughout the country, including areas that are also flood prone. Drought in Cambodia is characterized by loss of water sources caused by the early end or delays in expected seasonal rainfall. Drought severely affects farming productivity especially among rice growing communities who rely solely on rain or river-fed irrigation.

Some of the impacts of recent drought events are as follows: - In 2009, 13 out of 24 provinces were affected by severe droughts. 57,965 ha of rice crops

were affected and 2,621 ha were destroyed; - In 2010, 12 out of 24 provinces were affected by severe droughts. 14,103 ha of transplanted

rice were affected by droughts; 3,429 ha of transplanted rice seedlings and 5,415 ha of subsidiary crops were damaged;

- In 2011, drought affected 3804 ha of rice fields and destroyed 53 ha; - In 2012, drought hit 11 out of 24 provinces, affected 14,190 ha of rice fields and destroyed

3,151 ha; and - A major regional drought has also occurred over the period 2014-2016, affecting several

countries in the region.

Observed trend in the project area: A study done with the limited sample suggest that a prolonged drought due to unusual dry weather during the rainy season frequently occurs in Takeo province. Usually the drought occurs in the middle of rainy season which is from July to September. Delays or early ending of the monsoon rains and erratic rainfall (volume and period) have contributed to agricultural droughts. It is also observed that the drought patterns have changed. Droughts used to happen at the end of the wet season (October-November) in the past, but now occur at the beginning of the wet season (May-July). This means that the drought span has increased from two months in the past up to three months at present. The intensity of drought is also higher than in the past. Heavy rains normally happen from September to November. The difference is that there are more heavy rains now, especially in November. The farmers have also noticed that the temperature has increased especially in March. However, they were not sure by how many degrees celsius it has increased.19

It is predicted that the region can expect a greater incidence of drought periods, and also the incidence of drought periods within the wet-season (Figure 8 and Table 5). A major regional drought has occurred over the period 2014-2016 and Figure 9 and Table 6 indicate that Kampot (.63), Kampong Cham (.52) and Tboung Khmum (.45) can all expect significant increase in the number of drought months by 2050.

19 NGO Forum on Cambodia (2012): Vulnerability and Impact Assessment / Cassava and Vegetable Value Chains

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Figure 8: Number of Drought Months – 2050

Table 5: Number of Drought Months - 2050

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Figure 9: Change in Number of Drought Months – 2050

Table 6: Change in Number of Drought Months – 2050

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(v) Other associated events (landslides, etc.) Cambodia is vulnerable to disasters caused by natural hazards, including floods, droughts, cyclonic storms, epidemics, landslides, and earthquakes.20 Based on slope, lithology, geology, soil moisture, vegetation cover, precipitation and seismic conditions the area is classed as medium to very high risk from landslides. Risk is locally influenced by other factors, for example local slope and vegetation conditions as well as long term precipitation trends. Data suggests that the four project provincial locations (Kampong Cham, Kampot, Takeo, and Tboung Khmum) are at risk from precipitation induced flood damage and therefore potential landslide events.

I. CLIMATE RISK, VULNERABILITY AND IMPACT ASSESSMENT (i) Climate risk classification as per AWARE The overall AWARE prognosis regarding climatic risk in Cambodia indicates that the country will experience increases in average temperature, a longer and warmer dry season, more rainfall during the wet season, as well as an increase in the intensity of rainfall and the occurrence of extreme weather events. While the sea level rise could pose a significant threat to marine coastal areas of Kampot province, the project districts are further inland and might not be significantly affected by sea level rise. The AWARE risk screening report is attached in Annex 1. Breakdown of Risk Topic Ratings

20 UNISDR. 2010. Synthesis Report on Ten ASEAN Countries Disaster Risks Assessment. Phnom Penh.

http://www.unisdr.org/files/18872_asean.pdf

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(ii) Climate Risk Classification as per detailed assessment Project area is classified as high for precipitation decrease, medium for temperature increase and high precipitation increase. Other categories which were rated high risk included flood, landslide, water availability, and sea level rise. Wind speed increase was classified as medium risk. Based on the internationally reported losses due disaster events between 1990-2014, flood is the most frequently occurring natural hazard in Cambodia, associated with most economic and collateral losses.21

Probabilistic risk assessment attributes flood hazard’s contribution to be 100% of the average annual loss.22 This is of relevance to the project as most of the investment is allocated for small infrastructure assets along the agriculture value chain. Risk topic, description of the risks, and risk classification are presented in the table below:

21 PreventionWeb. http://www.preventionweb.net/countries/khm/data/ 22 Probabilistic risk assessment involves possible future hazard scenarios, information about the exposed assets and

the vulnerability; and Average Annual Loss is calculated as loss per annum associated to the occurrence of future perils assuming a very long observation timeframe.

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(iii) Sensitivity of Project Outputs to Climate/Weather Conditions and Sea Level Rise The project aims to enhance productivity of the agriculture sector. The sector inherently is highly sensitive to climate change. Temperature increase and prolonged droughts could contribute to potential negative crop productivity, compromising projects ability to deliver on the results (impact and outcome). Increase in temperature will also demand more energy and water input. The capacity/coverage of irrigation system could get reduced due to surface water loss because of increase in evapotranspiration rate. Temperature increase will not have significant impact on rural infrastructure investments and on assets, such as irrigation system, roads, storage house. Infrastructure projects are however sensitive to catastrophic events such as flood and drought. Considering that the lifespan of these infrastructure project is 20 years, the small-scale irrigation infrastructure and roads are likely to get exposed increasing frequency of flood events. Similarly, project investment in drying and storage facilities for cooperatives are also sensitive to climate/ weather conditions if situated in hazard prone areas. Current assumption for the

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laser land leveling is that it will last for four years, however with the increase in precipitation, frequency of flood and storm, the process of soil erosion and gully formation might accelerate, necessitating a need for more frequent laser land levelling.

Output Activities sensitive to climate change impacts

Output 1: Critical agribusiness value chain infrastructure improved and made climate resilient

1. The upgrading of off-farm and on-farm water management infrastructure is at risk from uncharacteristic weather events, including flooding from storms, heavy rainfall events, landslide and drought periods.

2. The construction of post-harvest facilities (drying, processing and storage) and access road upgrades are potentially vulnerable to increases in uncharacteristic weather events including flooding, high winds and increased precipitation during storm events. Building designs will need to include high specification against weather events, and located outside flash-flooding zones where possible

Output 2: Climate smart agriculture and agribusiness promoted

1. No activities involve construction of physical infrastructure / assets on the ground, hence is not sensitive to climate risk.

Output 3: Enabling environment for climate friendly agribusiness enhanced

1. No activities involve construction of physical infrastructure / assets on the ground, hence is not sensitive to climate risk.

(iv) Vulnerability Assessment (Sensitivity, Exposure and Adaptive Capacity) High risks of floods and drought, combined with poverty and low adaptive capacity makes Cambodia one of the most vulnerable countries in the world.23 According to the Notre Dame Adaptation Index, Cambodia is the 51st most vulnerable country and the 56th least ready country. The high vulnerability score and low readiness score of Cambodia places it in the upper-left quadrant of the ND-GAIN Matrix. It has both a great need for investment and innovations to improve readiness and a great urgency for action.

23 Cambodia is ranked 8th most vulnerable on the Maple Croft Climate Change Vulnerability Index 2015.

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The government recognizes Cambodia as one of the most climate vulnerable countries in the world.24 As a least developed, agrarian country, Cambodia’s vulnerability to climate change is mainly due to its geography, high reliance on the agriculture sector, and low adaptive capacity, including limited financial, technical and human resources. Vulnerability ranking of provinces of Cambodia by agro-ecological zones using the findings of various assessments suggests that Tonle Sap ecological zone, where Kampong Cham is situated has the highest vulnerability scores. Kampot is most vulnerable among coastal provinces.25

Source: Source: MOE (2013b)

Also, it is to be noted that provinces vulnerable to flooding are equally vulnerable to drought. The rice producing provinces of Kampong Cham and Takeo are affected by flood and drought almost every year.

24 Royal Government of Cambodia (RGC, 2012), RGC (2006) and RGC (2015), Second National Communication to

the UNFCCC, Ministry of Environment (unpublished) 25 CDRI.2013. Climate Change Adaptation and Livelihoods in Inclusive Growth: A Review of Climate Change Impacts

and Adaptive Capacity in Cambodia. Phnom Penh.

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Level of Vulnerability to Flood and Drought by Province (1982 to 2002)

Source: Government of Cambodia, Ministry of Environment. 2005.

Observed impacts of climate change trends in recent years have manifested by longer dry seasons and more intense El Niño related droughts, delayed onset of the rainy season (preventing any early wet season crops), more intense rains over shorter periods leading to floods, and unexpected dry periods during the rainy season, spoiling ready to harvest or drying crops, such as rice and maize.26 The agriculture sector, particularly cropping, is already highly sensitive to climate variability. For example, an increase in temperature of 1°C would result in significant decline in rice production and increase in pests, making rice farming not viable for many farmers, leaving them with fewer options and less income. Although Cambodia is considered a water rich country with a renewable water resource amounting to 32,695 m3/person/year, only 15% of the cultivated rice area in Cambodia is irrigated, in comparison to 28% in Thailand and 33% in Viet Nam. Along with Lao PDR, it is among the Southeast Asian countries with the least share of irrigated versus rainfed agriculture, which makes 85% of rice cropping area in Cambodia fully exposed to changing rainfall patterns. Given that 80% of the population in Cambodia derives its livelihood from agriculture, the degree of exposure to climate extremes and long term climate changes is high.27 In recent years Cambodia experienced severe losses in the agricultural sector due to floods in the targeted provinces. For instance, in August 2011, heavy rains and overflow of the Mekong river impacted 18 of the 24 provinces of Cambodia and destroyed crops and communal infrastructure, including national, provincial and rural roads, irrigation schemes, rural water supply, schools and health centers, amounting to at least $624 million in damages and losses across all sectors.28 Droughts are also recurring, with a trend towards accentuation of the severity of water shortages during dry and wet seasons.29 2015-2016 saw the country suffering from a 1-in-35 year drought, with drastic reductions in rainfall (over 50%) and severe impacts on yields and, as a result, food insecurity. Low yields, coupled with natural disasters and a lack of access to water during dry periods, contribute to temporary food shortages. A mapping of food security concluded that seven provinces are classified as severely to extremely food insecure, and an

26 IFAD. 2013. Cambodia: Environmental and Climate Change Assessment. Phnom Penh. 27 N. Phirun, S. Sreymom, L. Pichdara, and O. Chhuong. 2014. Adaptation Capacity of Rural People in the Main

Agro-Ecological Zones in Cambodia, CDRI Working Paper Series No. 93. CDRI. Phnom Penh. 28 ADB. Report and Recommendation of the President to the Board of Directors: Flood Damage Emergency

Reconstruction Project - Preliminary Damage and Loss Assessment. Manila. 29 B. Coerver and E. Salvadore. 2016. Drought Analysis, Cambodia. UNESCO-IHE.

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additional seven as moderately insecure.30 Adaptive capacity among rural populations and national institutions remains low and many households have been locked into a cycle of debt caused by borrowing money as a coping strategy during natural calamities and emergencies. It has been estimated that the negative impacts of climate change led to a 10% loss in GDP in 2015.31 At the national level, Cambodia has ongoing activities in: (i) sensitization and building awareness of climate change impacts and risks; (ii) building climate monitoring and analytical capacity, including climate modelling and climate data/records; (iii) building adaptation planning capacity at national and local levels; (iv) developing vulnerability and adaptation assessment and planning tools; and (v) preparing and implementing a Climate Change Policy (2011). In addition, the Cambodian Climate Change Alliance working within the Ministry of Environment is playing a brokerage and information sharing role to facilitate the mainstreaming of climate change issues across government. However, as one of the poorest nations of the world, Cambodia is likely to be hardest hit by the effects of climate change because the country:

(i) relies heavily on climate sensitive sectors such as agriculture and fisheries; (ii) is less able to respond due to limited human, institutional and financial capacity; and (iii) a large percentage of the country is geographically occupying more exposed or marginal areas including flood plains or on nutrient-poor soils.

In addition, it is recognized that within any national program, poorer groups are most vulnerable to climate shocks and stresses. (v) Impact assessment (key impacts on the sector and project) Impact on sector: Agriculture is identified and prioritized as one of the most vulnerable sectors to the impacts of climate change. Most agricultural production systems in the country are dependent either on rainfall or on the annual flooding and recession of the Tonle Sap Great Lake. The sector is therefore particularly sensitive to potential changes in local climate and monsoon regimes.32 Increase in temperature is also likely to affect agricultural productivity.33 Research has shown that increased temperature stresses and in particular high night-time temperatures and drought conditions have substantial effects on biomass production and the reproductive stages of several plants and crops. 34 Carbon dioxide concentrations on the other hand have some positive effects on photosynthesis. Increased temperature may also exacerbate pressures in water availability, accessibility, and quality. Historically, the monsoon lasted from May to early October, and the dry season from November to April, the coolest month being January and the hottest is April. In recent years, changing weather patterns are manifested by longer dry seasons with delayed onset of the rainy season and droughts.

30 GSSD 2015. Cambodia’s Second National Communication under the United Nations Framework Convention on

Climate Change. General Secretariat, National Council for Sustainable Development/Ministry of Environment, Kingdom of Cambodia. Phnom Penh. (http://unfccc.int/resource/docs/natc/khmnc2.pdf)

31 Khmer Times. 2016. 10% of GDP Lost to Climate Change. Phnom Penh. http://www.khmertimeskh.com/news/26780/10--of-gdp-lost-to-climate-change/

32 Cambodia’s Intended Nationally Determined Contribution (INDC). 33 Cambodia Climate Change Strategic Plan 2014 – 2023. 34 International Center for Tropical Agriculture. 2013. Prediction of the impact of climate change on coffee and mango

growing areas in Haiti. Cali.

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Inter-annual variability in rainfall significantly influences river discharges, the extent of areas that get flooded, and the beginning and end of the wet and dry seasons. In any given year, between one and four million hectares of the floodplain may be submerged during the wet season. Decreased seasonal runoff may exacerbate pressures on water availability, accessibility and quality. Variability of river runoff may be affected such that extremely low runoff events (i.e. drought) may occur much more frequently. The proportion of total rainfall that falls in heavy events has increased at a rate of 0.67% per decade since 1960 and is projected to increase by an additional 0 to 14%, by the 2090s. The heavy rainfalls are more likely to occur during the rainy season between June and November. An increase in heavy precipitation events could have an impact on critical thresholds and design standards of project infrastructure. Seasonal runoff may lead to erosion and siltation of water courses, lakes and reservoirs. Flooding and precipitation induced landslide events may occur. Data suggest that the project is located in a region which has experienced recurring major flood events in the recent past. A high exposure in Aware means that between 1985 and 2010 there have been more than one significant, large-scale flood event in the region. The risk and type of flooding is dependent on local geographical factors including: proximity to the coast and inland water courses, local topography, urban drainage infrastructure. Regional models suggest that the above risks (temperature and precipitation variance and extreme events) will all contribute to a potential negative impact on crop production. The greatest variable in crop productivity is water availability and increase in temperature over longer periods, both of which place greater risk on productivity. - According to the International Rice Research Institute, rice grain yield will decline by 10% for

each 1oC increase in growing season minimum (night) temperature in the dry season. - The Mekong Adaptation and Resilience to Climate Change demonstrated that rainfall will get

higher in the provinces of higher elevation during the wet season, but will get drier during the dry season, which could hamper the production of coffee and rubber in Cambodia.

- The 435 km Cambodia coastline is vulnerable to sea level rises and the severe impacts of more frequent typhoons under future climate projections. This could cause coastal erosion, while strong winds could damage settlements in coastal areas.

- Given only 7 – 8% of total production land area is under full irrigation, and under climate change impacts (e.g. drought), it is difficult for Cambodia to achieve 5% annual agricultural growth target of agricultural production export by 2030, especially for some cash crops such as rice, without further investment in the expansion of irrigation schemes.

- According to the International Disaster Database, the natural disaster in 2011 resulted in economic losses to Cambodia of about 4.3% of its GDP.

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Impact on Project:

Output Climate Change Impact

Output 1: Critical agribusiness value chain infrastructure improved and made climate resilient

Activity 1.1 Rehabilitating water management infrastructure to climate resilient condition

Increase in temperature and frequency of drought will increase demand for water and will also affect availability of water stored in water catchment ponds. Increase in precipitation, frequency of flood, and storm will affect life span of water catchment ponds by increasing sedimentation, breaching embankments and damaging infrastructures like sludge gates and distribution canals. This will increase overall maintenance cost of the irrigation system

Soil erosion and gully formation due to increasing precipitation and frequency of flood will necessitate the need for more frequent laser land leveling.

Increasing temperature and more frequent drought will affect availability of water for drip irrigation. Flash flood may destroy drip irrigation equipment.

Activity 1.2 Upgrading agricultural cooperative value chain infrastructure

Flood and storms could destroy produce stored in cooperative storage and drying units, and might also destroy equipment and infrastructure.

Activity 1.3 Improving connectivity to cooperatives and markets through climate resilient farm road networks

Roads could be damaged and washed out by flood and storms. Segments of the road could be eroded by flash floods. Embankment erosion and sedimentation of culverts could also affect the lifespan of roads.

Activity 1.4 Strengthening infrastructure for agricultural quality and safety testing

Flood could damage equipment and infrastructure of Provincial Agricultural Development Centers (PADC) and Provincial Agricultural Engineering Workshops

Activity 1.5 Promoting renewable energy for value chain improvement

Flood could destroy biodigesters and compost equipment and infrastructure.

Output 2: Climate smart agriculture and agribusiness promoted

Not applicable

Output 3: Enabling environment for climate friendly agribusiness enhanced

Not applicable

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II. CLIMATE RISK MANAGEMENT RESPONSE (Adaptation Measures) WITHIN THE

PROJECT

A. Contribution of the project to National Climate Resilience Plans (identified in Intended

Nationally Determined Contribution, National Adaptation Program of Action Climate

Change and other documents)

The project is aligned with the government’s priorities on low-carbon and climate resilient development as outlined in the Government’s overarching Rectangular Strategy Pillar III, and the National Strategic Development Plan (NSDP) 2014-2018. The NSDP’s objective is to reach an annual economic growth of 7% and achieve more than 1% reduction in the poverty rate annually. Cambodia has developed and implemented the Climate Change Strategic Plan 2014 – 2023, and associated action plans developed by each relevant ministry. These plans are Cambodia’s first ever comprehensive national policy documents that illustrate not only the country’s priority adaptation needs, but also provide roadmaps for the decarbonization of key economic sectors and the enhancement of carbon sinks. Further, Cambodia has developed a Green Growth Policy and Roadmap which sets the path to stimulating the economy through low carbon options, savings and creating jobs, protecting vulnerable groups, and improving environmental sustainability. The project’s focus on climate resilient agriculture value chain is expected to significantly contribute towards achieving climate change adaptation policy objectives outlined in the National Adaptation Program of Action to Climate Change of 2006, the Intended Nationally Determined Contribution of 2015, and the individual climate change action plans for Ministry of Agriculture, Forestry and Fisheries, Ministry of Rural Development and Ministry of Water Resources and Meteorology. The project is also in line with the government’s Agriculture Sector Strategic Development Plan (2014-2018) which aims to enhance competitiveness of the agriculture sector through the increase of agricultural growth by approximately 5%, by enhancing of agricultural productivity (intensification), diversification and commercialization, through emphasis on the implementation of the strategy and action plan for climate change adaptation and mitigation. The project is also in line with Cambodia’s Country Partnership Strategy (CPS) for 2014-2018, which focuses on agricultural commercialization, rural infrastructure, and climate change. Furthermore, the project aims to promote resource use efficiency, renewable energy supply and biogas and bioenergy consumption; a priority in the government’s nationally determined contribution. The promotion of alternative energy is linked to reducing poverty by supplying energy and power to the poor, especially in remote area, which will also contribute to (i) the NSDP 2014–2018; (ii) Rural Electrification Master Plan; (iii) the Cambodia Green Growth Roadmap and National Strategic Plan on Green Growth 2013-2030; and (iv) the policy on biodigesters (2016 – 2025).

B. Contribution of the project to enhanced climate resilience

CFAVC will improve climate resilience of critical agricultural production and post harvest infrastructure, intensification, and commercialization of rice, maize, cassava and mango. Project activities directly addressing identified climate risks are mainly centered in Outputs 1 and 2 as listed below:

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Project Outputs Key Adaptive Measures

Output 1: Critical agribusiness value chain infrastructure improved and made climate resilient

1. The upgrading of off farm and on farm water management infrastructure will include interventions addressing vulnerability to increases in uncharacteristic weather events, including flooding from storms, and secure supplemental irrigation opportunities during drought periods. The introduction of water efficient technology, improved water supply and improved management of water will be achieved through tertiary canal improvement, introduction of drip technology, and construction of farm ponds. Construction of new and rehabilitation of existing water catchment ponds and reservoirs, will include upgrading standards to withstand changed climate patterns and projected climate changes, including overflow and flood control mechanisms, increased depth for added storage, and restoration of the vegetation in the immediate landscape. The upgrade of the selected existing ponds and reservoirs will be conducted to increase storage capacity both for irrigation, while also upgrading the distribution system and improving drainage system for flood prevention purposes.

2. For the roads component the project will assist coping with climate variability and change through activities focused on rehabilitation, and will specify stiff bitumen and use where appropriate of bio-engineering applications to withstand projected rise in temperature and the potential impact of aggressive storm events. Additionally, specification clauses will ensure that design and construction standards are raised to appropriate levels.

3. For areas situated within lowlying floodprone zones where infrastructure cannot be relocated, flood defense and mitigation measures will be implemented, including raising new infrastructure works to be positioned above the maximum projected flood level (taking into account maximum recorded levels and future flood level projections).

4. Installation of stronger more climate resilient buildings; to include but not restricted to installation of pre-stressed, spun concrete poles for reinforcement purposes. In addition, it will be important that good quality materials combined with appropriate bioengineering technologies are used for ground cover, given the additional wear and tear and potential damage from future storms.

5. Operations and Maintenance: Considering the vulnerability of various sub-project areas to extreme weather events, regular operations and maintenance activities and equipment inspections will be carried out to help mitigate damage and ensure continuous operations and/or faster restoration after natural disaster events.

6. Roads built in lowlands and in close proximity to adjacent rivers will include additional protection works to resist erosion and scour.

7. Integrated waste and energy systems will utilize and manage agricultural waste and residues in selected value chains, enhancing competitiveness, reducing environmental risk, reduce greenhouse gas (GHG) emissions and increase resource efficiency.

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Project Outputs Key Adaptive Measures

Output 2: Climate smart agriculture and agribusiness promoted

1. Improved management of water to ensure availability during drought periods will be achieved through capacity buildings of the Farmer Water User Groups.

2. Capacity building of district environmental officers and project staff in undertaking safeguards due diligence to also incorporate climate change resilience procedures.

3. The development and distribution of climate resilient seeds of rice and maize will match varieties in correlation with agro-ecological analysis by land unit.

Output 3: Enabling environment for climate friendly agribusiness enhanced

1. Capacity building of civil servants in enabling agribusiness policy/regulatory development will help in mainstreaming climate change concerns into agribusiness at policy and operational levels.

2. Pilot climate risk sharing instruments such as weather indexed crop insurance.

III. Adaptation Finance

Additional details on Adaptation finance by activity: Output 1 will avoid lock in of long lived, climate vulnerable infrastructure by constructing or rehabilitating, upgrading and climate-proofing water infrastructure, as well as rural roads and post harvest/processing facilities. This will ensure that said infrastructure remain operational regardless of the climate scenarios that materialize, while providing lasting, cost efficient economic assets. The project expects to climate proof 27 water management systems over 15,000 ha, benefitting 25,000 households, with at least 50,000 women, as well as 800 on-farm rainwater harvesting ponds and 4,000 ha of land laser leveled to optimize the amount of water for irrigation and better germination and crop growth. Drip irrigation will also be promoted to further save water and ensure water use efficiency for key crops. Furthermore, the project expects to construct or upgrade 80 pos -harvest storage units, as well as four provincial agricultural development centers and four engineering workshops to provide agribusiness services and strengthen farmer value chain linkages. Furthermore, 250 km of rural roads will be built, with climate-proofed specifications in order to ensure connectivity to markets in all climate conditions. This will ensure increased production of higher quality products that can be more easily sold. Output 2 and 3 will lead to a significant reduction in vulnerability of local populations by enhancing adaptive capacity and resilience through the increased production of higher quality products, leading to better nutrition, higher incomes, and diversification of income sources. Farmers will produce quality climate smart products, on time and with continuity of supply. Women, landless people and poor households will be included in agribusiness, mechanization, and operation and maintenance training. The project expects to strengthen 40,000 farmers’ adaptive capacity (among which 16,000 women) and reduce their exposure to climate risks through capacity building on climate-smart agriculture practices and agribusiness development skills, which will in turn improve productivity and diversify farming systems. The project expects to contribute to an increase in yields of at least 15% from the 2016 baseline (rice 2.7 tons, maize 4 tons, cassava 20 tons and mango 15 tons/ha) and to help at least 50 agribusinesses to become more resource efficient along the value chain in terms of water savings (5-10%

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efficiencies), energy savings (20%) and reduction in post-harvest losses (10%). The project also expects to reduce vulnerability to climate change by strengthening institutional and regulatory systems for climate-responsive planning and development. This will include testing capacity for bio-fertilizers and pests and diseases, the establishment of a set of standards conducive to the mobilization of green finance and crop insurance.

IV. Greenhouse Gas Emissions Profile (Country and Sector) (i) Historical Trends of Emissions in the country (based on UNFCCC reports) Building on the Initial National Communication for the UNFCCC, Cambodia’s National Adaptation Program of Action to Climate Change was finalized by the Ministry of Environment in 2006. It stated that the majority of Cambodia’s GHG emissions have been recognized as being driven by land use change and forestry (79%), and agriculture (18%), of total emissions respectively (MoE, 2002). However it should also be recognized that Cambodia’s emissions are insignificant on a global scale. Cambodia is actually a low GHG emitter and at the same time a highly vulnerable country to the negative effects of climate change. The absolute change in total GHG emission in Cambodia has seen an increase by almost 74% from 1946-2013 with the greatest part of this growth in the agricultural sector (43.22%).35

In 2000, energy consumption by sector was highest in the transport sector, followed by electricity production, residential and the industrial sectors. (ii) Projected emissions by 2030 or 2050 Cambodia’s Second National Communication to the UNFCCC offers a forecast emissions increase from -8,822 Gg CO2-eq in 2000 to 34,112 Gg CO2-eq in 2050 under the business as usual scenario in the agriculture and land use change/forestry sector.36 At the Paris Summit (2015), Cambodia pledged a reduction of 27% in emissions below a business-as-usual scenario by 2030, with an additional target to increase forest cover to 60% of national land area by 2030. This is conditional upon international support.37 (iii) Sector-related GHG emissions The agriculture sector is expected to grow at an annual rate of 5% in order to meet national economic growth and export targets, as well as to contribute to the population’s food security needs. At the same time, Cambodia has more than 57% forest cover, which the government endeavors to increase and maintain, to ensure livelihoods for forest dependent communities and future generations. However, the pressure on natural resources and land is high. The latest available GHG inventory suggests that Cambodia was an overall net carbon sink in 2000; in 2000, total emissions of the two main GHGs (CH4 and N2O) from agriculture reached 21,112 GgCO2-eq. CH4 contributed to approximately 99% of total emissions, while N2O contributed only 1%. Rice cultivation accounted for 68% of emissions, enteric fermentation for 16% and agricultural soils for 11% (footnote 25).

35 World Resources Institute. http://cait.wri.org/profile/Cambodia (accessed on 4 October 2017). 36 UNFCC. http://unfccc.int/resource/docs/natc/khmnc2.pdf (accessed on 4 October 2017). 37 Cambodia’s INDC.

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(iv) Key Mitigation Response Measures in the sector (in line with INDC) In total, 46 GHG mitigation options were identified and assessed – 14 relating to livestock, 12 to rice cultivation, 9 to agricultural soils and 11 to the land use change/forestry sector. In order to identify the most suitable options to reduce GHG emissions, the UNFCCC screening matrix (UNFCCC 2006) was adapted for use in Cambodia. The matrix provides a qualitative ranking of options based on four main categories – feasibility, implementation feasibility, consistency with MDGs and data availability. Recommended response measures include: for rice production (a) improved drainage in rainy season; (b) switch to sulphur fertilizer; and (c) promotion of compost/bio-slurry; for agricultural soils (a) organic input agriculture and bio-slurry; and (b) improved crop management; for livestock (a) small-scale and large-scale biogas and composting; (b) aquaculture; and (c) fodder production.

V. GHG Mitigation Estimates The Climate-friendly Agribusiness Value Chains Sector Project contributes to mitigation of greenhouse gases (GHG) both directly and indirectly. For the purposes of this report, direct mitigation benefits are attributed to biodigesters (supported by both GCF grant and ADB loan) and agricultural cooperatives (supported by ADB loan only).

(i) Under project activity 1.5, Renewable energy for value chain improvement, the project will promote the adoption of domestic bio-digesters in the four project provinces to provide alternate source of energy for cooking and lighting to households and to exploit the fertilizer potential of bio-slurry as a critical climate friendly input for crop production. An estimated 12,000 bio-digesters will be constructed and made operational during the 6 years of the project.

(ii) Under project activity 1.2, Agricultural cooperative value chain infrastructure, the project will strengthen post harvest facilities in about 80 agricultural cooperatives and support solar energy deployment through rooftop panels. The quality of solar systems will be ensured through using certified companies and products.

The indirect GHG mitigation benefits are from the adoption of climate smart agriculture in project areas.

Bio-digesters contribute to the reduction in GHG emissions by capturing methane, which has a 25 times higher global warming impact than CO2, and preventing its release to the atmosphere. It is estimated that the average bio-digester saves the emission of the equivalent of 4.5 to 5 tons CO2/year. By reducing or replacing the use of biomass for cooking, bio-digesters also reduce the release of black carbon, one of the most significant emissions contributing to global warming. Reducing the use of fuel wood also has significant potential to reduce deforestation and forest degradation. The National Biodigester Program (NBP) estimates that between 2006 and 2014, its biodigesters have saved the equivalent of 1,084 ha of primary forest.38

Furthermore, the bio-slurry produced from the biodigesters replaces some of the chemical fertilizers used in crop production and thereby reduces the emission of NO2 which is a powerful GHG. Bio-slurry is an excellent fertilizer which has positive effects on the soil and the potential

38 NBP Monitoring Report, 2014.

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to increase yields. Bio-slurry is a potent organic fertilizer that can be used to improve soil fertility, soil structure and crop productivity but the concentration of macro-nutrients is lower than in chemical fertilizers, and for that reason relatively large amounts of bio-slurry are required. Bio-slurry can also be used in fishponds to simulate growth of algae and plankton, which can be used as fish feed or animal feed for pigs, ducks and sheep. Based on livestock populations, it is estimated that the potential for biodigesters in the four project provinces is about 268,000 compared with only 11,468 currently in operation.

Baseline Scenario (without the project): Before the onset of the project activities, most households with the technical potential for a biodigester depended primarily on wood for their thermal energy demand for cooking and kerosene for lighting. The reliance on these mostly fuels causes substantial indoor air pollution (with related health hazards). A substantial part of the fuel wood is collected, which is both drudgery and significant time expenditure for women especially. Bought wood on the other hand is a burden on the limited household’s revenues. In addition, unhygienic animal waste management practices and the lack of access to basic sanitation result in pollution, foul odor, methane emissions and a relatively high prevalence of hygiene related diseases, such as diarrhea.

The biodigester technology reduces GHG emission through three pathways:

(i) The replacement of non renewable cooking and lighting fuel by a renewable fuel: biogas. It is anticipated that a rural household (especially those that do not yet have access to grid) can meet 90-100% of its cooking and lighting energy needs from biogas (a reduction of 90% of fuelwood and charcoal for cooking).

(ii) The avoidance of methane emissions from the animal waste management system by capturing and destroying methane in an energy service device.

(iii) The displacement of chemical fertilizers by bio-slurry. The production of chemical fertilizers is energy intensive and the application of chemical fertilizers to the soil result in GHG emissions such as N2O.

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Assumptions: The assumptions for emission reduction estimates from biodigesters are based on the Project Design Document (PDD) developed by the National Biodigester Program available at UNFCCC website. The PDD was developed based on experiences of SNV and HIVOS Foundation. The emission reductions are based on the voluntary gold standard project of NBP Cambodia and are to be certified on an annual basis. The methodology is based on the calculations for emissions reductions (2015 - NBP, Cambodia – The Gold Standard). A few assumptions have been slightly modified based on recent experience.

(i) Total number of biodigesters commissioned over 6 years: 12,000 (ii) Average cost of commissioning a biodigester: $550 (iii) Operational percentage during project implementation: 95% (iv) Average emission reduction per unit of biodigester: 5 tons of carbon dioxide

equivalent (tCO2e) – project emissions of 0.25 tCO2e = 4.75 tCO2e (v) Project crediting period: 7 years

The emission reductions resulting from the biodigesters are calculated on the basis of (i) displacement/replacement of biomass with biogas for cooking, and (ii) reduction of methane emissions through improving animal manure management systems. The first source is calculated with the UNFCCC default value of 77% for non-renewable biomass (NRB) and links therefore directly with reducing deforestation. IPCC Tier 2 approach was used for calculation of baseline emissions from the animal waste management system. The UNFCCC approved “Tool for the demonstration and assessment of additionality” version 7.0 with a 4-step approach (Identification of alternatives to the project activity; Investment analysis to determine that the proposed project activity is not the most economically or financially attractive; Barriers analysis; Common practice analysis”) was used to demonstrate additionality.

Based on the above assumptions, the total estimated GHG emission reductions over a 7-year credit period is 231,627 tCO2e as shown in the table below.

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Solar Technology

The grid electricity tariff is relatively high in Cambodia, which reduces the competitiveness of agribusinesses in Cambodia vis-a-vis those in neighboring countries. While the electricity tariff is projected to slowly reduce, from $17.7/MWh to $16.20/MWh in 2015 and 2020 respectively, tariffs remain high compared to neighboring countries. In addition, not all companies are connected to the national grid but instead to an Independent Power Purchaser (IPP). The IPP is connected to the national grid and on-sales the electricity at a higher price to these companies.

In Cambodia, the Global Horizontal Irradiation (GHI) is over 1,900 kWh/m2/yr, which amounts to a daily average of 5.2 kWh/m2/day. Various initiatives have promoted the use of solar power in Cambodia recently. Examples include a 200 MW Solar PV at ISPP (International School of Phnom Penh) by Solar Partners Asia, an 8 MW plant for 7MG’s Vihear Sour Special Economic Zone in Kandal by Kamworks, and the Phnom Penh Special Economic Zone there is a 190 solar panel project of Cleantech Solar. Payback period is estimated to be around 5 years with a lifespan of around 25 years. These PV power plants focus on ensuring a stable supply of electricity and complementing existing power sources. Obstacles faced are lack of a developed regulatory framework, difficulties with ensuring long-term supply contracts and local banks that hesitate to invest.

The project aims to install solar roofs for cooperatives to reduce energy costs. The project also plans to install 10 pilot solar water pump systems (4.5 kWp solar panels) in mango orchards and 1kWp grid connected solar arrays in each of four agricultural development centers in target provinces. However, emissions avoided from these are not estimated.

The project will equip 80 cooperatives with a PV power system including an array of solar batteries as back up power, to store excess power and for night-time consumption of electricity. Where possible, these systems would be grid connected. A grid connection is advantageous because the power output of a solar system is otherwise limited by the capacity of the inverter. Seasonal high demand for electricity would in that case be complemented by the grid, i.e. for the blowers of the rice husk furnaces.

The total amount of power required for each agricultural cooperative is around 9 kWh in the season where the demand is the highest (when the storage room is ventilated with the power fans). Most of the electricity demand will be during the day and will be directly supplied by the PV panels. The batteries will only be used for night time power demand (i.e. the fans and lights outside the building) and as back up power. With a daily depth of discharge (DOD) level of 33%, an array of 12 kWh deep cycle lead acid batteries are required. The lifespan of these batteries is around 5-10 years with a DOD of 33%.

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Input Data and assumptions for GHG mitigation calculations:

Description Value Unit

Number of agricultural cooperatives 80 numbers

Installable area (average m2 per cooperative) 300 m2/coop

Conservative estimate of shade-free roof area per kW of capacity 10 m2/kW

Installation of solar PV per cooperative (calculated) 30.0 kW

Conservative estimate of GHI in target provinces (Cambodia’s daily average is

actually 5.2 kWh per m2 per day) 4.5 kWh/m2/day

Conservative estimate of sunshine days in target provinces 300 days

Grid emission factor (Cambodia - Kampot-Sihnouk grid) 0.6116 kgCO2/kWh

(source: http://portal.gms-eoc.org/uploads/resources/1904/attachment/GEF-Cambodia_2010-2012.pdf)

Emission factor - Diesel genset 1.3 kgCO2/kWh

(source: http://cdm.unfccc.int/methodologies/DB/9KJWQ1G0WEG6LKHX21MLPS8BQR7242)

Based on the above assumptions, the total estimated GHG emissions avoided over a 7-year credit period is tCO2e as shown in the table below.

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7

Cooperative participation Numbers 5 15 15 20 25

80

Installable area (average m2 per

cooperative) m2/coop 300 300 300 300 300

Installable area in each year (m2) m2 1500 4500 4500 6000 7500

Cumulative installable area (m2) m2 1500 6000 10500 16500 24000 24000 24000

Installed solar PV (Assumption 1 kW

per 12 m2) kW 150 600 1050 1650 2400 2400 2400

Electricity generation (Assumption

GHI 4.5 kWh/m2/day) kWh/m2/day 675 2700 4725 7425 10800 10800 10800

Sunshine days (Assumption 300

sunny days per year) kWh/yr 202500 810000 1417500 2227500 3240000 3240000 3240000

Avoided emissions (Cambodia -

Kampot-Sihnouk grid) tCO2 123 495 866 1362 1981 1981 1981 8789

Avoided emissions - Diesel genset tCO2 263 1053 1842 2895 4212 4212 4212 18689

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The total emissions reduced from biodigesters (231,627 tCO2e) and avoided emissions from solar technologies (18,689 tCO2e) would be about 250,316 tCO2e. However, due to additional uncertainties regarding operational efficiency of biodigesters and cooperatives, we have taken a conservative estimate of 240,000 tCO2e.

Indirect Emission Reductions from Good Agricultural Practices

The indirect emissions were calculated on the basis of anticipated areas under improved cultivation and management methods as detailed in the subproject feasibility studies. The EX_ACT simulation provides an initial emissions scenario that takes into consideration the following activities and accounts for the emissions generated by the project (assumed capitalization phase of 10 years after the project ends):

(i) Application of improved, resilient land and water management practices for maize, cassava and mango, including the use of improved resilient varieties, improved fertilizer management (including the use of bio-slurries for soil amendment), laser land leveling, improved water management, water use efficiency, and manure application.

(ii) Adoption of tried and tested, emissions reducing rice cultivation practices in both

rainfed and irrigated situations for lowland rice (estimated 157,459 ha). The project is not expected to lead to any land use change, meaning that there will be no deforestation for agricultural expansion or land conversion. Below is a list of input data used in the EX_ACT model.

A. Hectares under resilient, improved agriculture

Cropland Tab: Annual systems Previous Use

Improved Use

Start (ha) Without

project (ha)

With project

(ha)

Tab in Exact

Maize: Traditional cultivation (4.5

t/ha/yr yield)

27,750

27,750 Cropland

Improved practices for maize 27,750 Cropland

Cassava: Traditional cultivation

(30 t/ha/yr)

140,000 140,000 Cropland

Improved practices for cassava 140,000 Cropland

Mango (tree) traditional cultivation

(15 t/ha/yr)

10,000 10,000 Cropland

(perennial)

Improved practices for mango

trees (perennial)

10,000 Cropland

(perennial)

Total

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Flooded rice systems (average yield: 3 t/ha/yr yield) Previous Use

Improved Use

Start (ha) Without

project (ha)

With project (ha) Tab in Exact

Traditional rainfed lowland rice 113,047 113,047 Cropland

Improved practices for lowland

rice

113,047 Cropland

Traditional irrigated flooded

rice (lowland)

44,412 44,412 Cropland

Improved practices for lowland

rice

44,412 Cropland

Total

The EXACT simulation also accounts for emissions resulting from the implementation of

irrigation systems as well as emissions generated from the construction of agricultural buildings

(agricultural cooperatives, workshops, post harvest storage). Both of these activities are

expected to result in 54,421 TC02-eq for the entire lifetime of the project.

Irrigation systems (in ha):

• Number of hectares of farming covered with drip irrigation systems and laser

land leveling (surface without IRRS: Irrigation Runoff Return System): 4,000 ha

of laser land leveling + Ten pilot drip Irrigation schemes of 5 ha = 4,050 ha

(Trickle)

• Number of hectares of farming covered by the 27 small-scale irrigation

schemes, command area for 22 sub-projects = 15,901 ha, therefore for 27

projects, the command area would be 19,515 ha.

• Number of hectares of farming covered by water catchment ponds (700 m2 for

one pond): 800 ponds x 700 m2 = 560,000 m2 (56 ha)

Surface without IRRS => 20,000 ha

Buildings (in m2):

• Area for each of the 80 agricultural cooperative storage units: 1,000 m2

The scale, dimensions and capacities of the drying unit are based on a

maximum storage capacity of 200 tons of dried cassava chips at any one time,

with a combined gross footprint of 1,000 m2 (a usable net area of 214m2 within

the store and a net drying surface of 573m2).

=> 1,000 x 80 = 80,000 m2

1. Construction of farm roads cannot be accounted for in EX-ACT.

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VI. Concluding Remarks Cambodia currently faces increasing climate vulnerability and in its efforts to increase production, increasing GHG emissions from the agriculture sector. Low capacity and insufficient access to technologies, compounded by an inadequate policy environment, maintain producers in a situation of high vulnerability to climate risks and leads to a gradual decline in agricultural livelihoods. In order for the government’s investments to achieve its growth objectives in the agricultural sector, while meeting its commitments under the UNFCCC and Paris Agreement, a number of barriers must be addressed, which are hindering competitiveness, undermining the performance of the sector, and accentuating climate vulnerability. The proposed CFAVC project will address these barriers by enhancing competitiveness of agricultural value chains and enhance rural household incomes and agricultural competitiveness by (i) providing improved critical production and post harvest infrastructure; (ii) reducing energy costs by promoting bio energy use and sustainable biomass management; and (iii) offering targeted agribusiness support services for selected value chains. The project expects to make a significant contribution to increased climate resilient sustainable development for the 390,000 direct project beneficiaries and 975,000 indirect beneficiaries it expects to reach, who are among the most vulnerable segments of society: smallholding, agriculture-dependent farmers. The project will lead to reduced exposure of the value chain to climate change by ensuring that key productive assets are adequately protected against increased variability and extremes. These include infrastructure rehabilitation and upgrade, protection of crops after harvest, and dissemination of timely agro-meteorological advice. The project will also help reduce the sensitivity of the sector sensitivity by promoting CSA practices, as well as through the use of improved varieties and breeds that are more tolerant to anticipated climate conditions. The provision of irrigation infrastructure will also reduce the rate of crop loss due to drought or irregular rainfall patterns. This will play a key function in making the entire crop subsector less sensitive to climate change. Finally, the project will increase adaptive capacity by improving the skills of key value chain stakeholders, including governments, local communities and farmers, agri-business operators, agro-processors, finance institutions and the private sector – using a gender sensitive approach. The dissemination of proven technologies such as ICTs, laser land-leveling, CSA practices at all levels, will contribute to increasing the adaptive capacity of producers and traders. The project’s efforts in the setting of an enabling policy and normative framework will further increase institutional adaptive capacity at the provincial and, ultimately, national levels. The support to developing policy and standards for adequate agri-business development will also ensure climate responsive planning and development in the longer term.

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Table 7: Project Types and Sensitivity – Water Resources

Project type

Climate change threats

Increased Maximum temperatures

Decreased rainfall Increased rainfall

Increased rainfall intensity

Flooding

Drought

Dry Season

Wet season

Dry season

Wet season

Dry season Wet season Flash floods Long

duration Dry season Wet season

Sector - Water Resources

Water supply infrastructure

Irrigation infrastructure

Improved irrigation management

Improved water storage capacity

Improved weather forecasting services

Flood Protection

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Table 8: Project Types and Sensitivity – Agriculture

Project type

Climate change threats

Increased Maximum temperatures Decreased

rainfall Increased rainfall

Increased rainfall intensity

Flooding Drought

Dry Season

Wet season

Dry season

Wet season

Dry season

Wet season

Flash floods

Long duration

Dry season

Wet season

Sector - Agriculture

Improved or new cultivation systems

Livestock breeding and infrastructure

Aquaculture

Value chain development (seeds, post-harvest storage & processing) and support to marketing

Large-scale cultivation and plantations

Biofuel production

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Annex 1: AWARE risk screening report

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