Assessing Climate Risks in the Energy Sector: A summary of tools and resources available for LEDS planning
The implementation of climate resilient low-emission development (LED) strategies is essential for ensuring the integrity and performance of LED programs and projects in the face of evolving climate impacts. However, most LED planners do not yet routinely consider the potential impacts of climate change, such as risks associated with extreme weather events or climate trends. Fortunately, in the past several years, a variety of tools have been developed by development partners (e.g., USAID, World Bank, African Development Bank, Inter-American Development Bank) that planners can now use to determine whether and to what extent climate change may impact their investments.
Climate change risk screening tools provide planners with an understanding of current and future climate risks to existing and planned program investments in energy infrastructure and services. Climate risk screening typically integrates the concepts of:
- Exposure—which hazards could affect the energy project components and to what extent;
- Sensitivity—how the different project components would be impacted by different hazards; and
- Adaptive capacity—how other factors, such as the broader development context, would moderate or exacerbate potential impacts.
A new paper from the Resources to Advance LEDS Implementation (RALI) Series, called Climate Risk Screening Tools for Low-Emission Energy Development, highlights climate change risk screening tools available to help LED planners, project investors and developers assess the potential risks to new or existing energy programs. The tools capture a spectrum of applications that can be adapted to suit the capacity and needs of energy planners. These tools can help users identify risks to physical infrastructure, such as weather or fire damage to transmission lines, or to resource inputs required for electricity production, like impacts to biofuel production. A case example showing the use one of these tools for a hydropower activity in Vietnam is included in the paper.
Energy programs are often highly capitalized, long-term investments, meaning they will experience shifting climate conditions throughout their service life. Climate impacts can undermine LED objectives if resiliency is not considered, particularly if electricity grids must turn to carbon-intensive energy sources such as coal-fired plants when renewable energy becomes constrained. Therefore, understanding and addressing these diverse climate risks to energy programs is an essential component to realizing and safeguarding LED objectives.
The climate change risk screening tools presented in the paper provide relatively easy assessments of the level of climate risk faced by programs. This initial climate change risk assessment is an important first step in the program planning process to ensure that development practitioners make wise decisions efficiently and that LED investments are ready to withstand the tests of climate change.
The opinions expressed herein are solely those of the authors and do not necessarily reflect the official views of the GGKP or its Partners.