WESTERN AND CENTRAL AFRICA SENEGAL World Bank Group Country Climate and Development Report West Bank and Gaza Country Climate and Development Report i October 2024 © 2024 The World Bank Group 1818 H Street NW, Washington, DC 20433 Telephone: 202-473-1000; Internet: www.worldbank.org This work is a product of the staff of the International Bank for Reconstruction and Development (IBRD), the International Development Association (IDA), the International Finance Corporation (IFC), and the Multilateral Investment Guarantee Agency (MIGA), collectively known as The World Bank Group, with external contributors. The World Bank Group does not guarantee the accuracy, reliability or completeness of the content included in this work, or the conclusions or judgments described herein, and accepts no responsibility or liability for any omissions or errors (including, without limitation, typographical errors and technical errors) in the content whatsoever or for reliance thereon. 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WESTERN MIDDLE EASTERN AND EAST AND AND NORTH AFRICA CENTRAL AFRICA SENEGAL World Bank Group Country Climate and Development Report October 2024 Contents List of Figures iv List of Tables iv Chapter 2: Country Acknowledgements vi Climate Readiness 17 Acronyms and Abbreviations vii 2.1. Climate Commitments 17 2.1.1. A Focus on Adaptation and Energy Transition  17 2.1.2. Incorporating Climate into National and Sectoral Strategies and Plans  17 2.2. Climate-Related Legislation and Institutional Coordination Mechanisms 19 2.2.1. Climate-Related Legislation  19 Chapter 1: Climate 2.2.2. Institutional Coordination for Change and Development 1 Climate Change  21 1.1. Development Context 1 2.3. Institutional Readiness for Climate Change Action 23 1.2. Climate Change Vulnerabilities 3 2.3.1. Integration into Investment 1.3. Greenhouse Gas emissions profiles 13 Instruments and Budget Processes  23 2.3.2. Risks to Climate Action Due to Lack of Data Accessibility and Accountability  25 2.4. Private Sector Readiness 26 2.3.1. Integration into investment instruments and budget processes  26 ii West Bank and Gaza Country Climate and Development Report Chapter 5: Rationale for a Climate‑Resilient, Low-Carbon Chapter 3: Scaling Up Climate Development Trajectory 83 Action Across Natural, Built, and Human Capitals 33 5.1. The High Cost of Climate Inaction to Senegal’s Development Aspirations 83 3.1. Productive Landscapes 33 5.1.1. Climate Uncertainty and Impact 3.1.1. Food Security  33 Channe Considerations for Senegal  83 3.1.2. Water Security  42 5.1.2. The Impact of Climate Inaction 3.1.3. Forested Landscapes  44 on the Pace of Poverty Reduction  86 3.2. Sustainable Cities 47 5.2. Benefits of Climate Action Beyond Adaptation and Mitigation 89 3.2.1. The Role of Cities in Driving Economic Development in Senegal  47 5.3. Boosting Growth and Poverty Reduction 3.2.2. Vulnerability of Cities to Climate Risks  50 through Adaptation (Modeling in Select Sectors) 93 3.2.3. Investing in Cleaner, More Resilient, 5.4. Opportunities in the New and More Productive Cities for Senegal’s Hydrocarbon Sector 95 6 Development Goals  52 3.3. Resilient Human Capital 56 3.3.1. Social Protection  57 3.3.2. Human Health  62 3.3.3. Education  65 Chapter 6: Financing Climate Action 99 6.1. Context: Climate Action Needs and Current Levels of Funding 99 6.2. Key Opportunities: Review of Promising Chapter 4: Engaging Climate Finance Sources and Instruments 100 the Energy Transition 69 6.2.1. Market-Based Instruments  100 4.1. A Dynamic Sector with Significant 6.2.2. Concessional Finance  104 Growth and Transformation Potential 69 6.2.3. Dedicated Instruments  105 4.2. Senegal’s Vision for the Energy Transition: 6.3. Leveraging Sources and Instruments Balancing Increasing Access to Low-Cost to Mobilize Financing at Scale 108 Power with Climate Objectives 71 6.3.1. Making the Most of Debt and 4.2.1. Universal Access  71 Derisking Instruments  108 4.2.2. Energy Transition  72 6.3.2. Tapping into Disaster Risk Financing  109 4.2.3. Regional Integration  78 6.3.3. Aligning (Carbon) Prices  110 4.2.4. Energy Efficiency  79 6.3.4. Strengthening the Role of Local 4.2.5. Adaptation and Resilience  79 Authorities in Climate Adaptation  112 West Bank and Gaza Country Climate and Development Report iii List of Figures Figure B1.1.1. Evolution of Mean Annual Temperature (Left) and Number of Hot Days (Right) in Senegal 4 Figure 1.2. Senegal’s GHG Emissions (1990–2022) 13 Figure 1.4.1. Methane Gas Concentrations over Mbeubeuss, the Largest Landfill in West Africa 14 Figure B2.1.1. Senegal’s Adaptation and Resilience Performance Across All Pillars 18 Figure 2.1. Proposed Governance Framework for the Climate Change Agenda in Senegal 22 Figure 2.2. Senegal’s Exposure to Climate Shock 26 Figure 2.3. Estimated Average Annual Monetary Cost of Damages Caused by Climate Events (in US$ Thousands) 27 Figure 2.4. Top 6 Channels of Climate Impacts on Enterprises (Share of Firms Affected) 27 Figure 2.5. Share of Firms Using Climate Solutions, by Sector 28 Figure 2.6. Types of Climate Solutions in Use 28 Figure 2.7. Main Motivations for Use of Energy Efficiency Measures 29 Figure 2.8. Main Reasons for Not Using Energy Efficiency Measures 29 Figure 3.1. Climate Change Impact on Yields in the Nioro Region of Senegal (2050s) 34 Figure B3.2.1: Level of Readiness for Agriculture and Food Security 36 Figure B3.3.1: Map of Senegal Highlighting Areas Suitable for Naatangue Farming 37 Figure B3.7.1. Observed and Predicted Presence of Dense Humid Forests in Senegal under SSP5-8.5 for the Period 2041–60 46 Figure B3.8.1. Level of Readiness for Coastal Zone Management 49 Figure 3.2. Overview of GHG Emissions by Sector and Subsector in the City of Dakar. 51 Figure 3.3. Contribution (%) of Each Type of Vehicle to Road Transport GHG Emissions in Dakar 51 Figure 3.4. National Social Protection Programs Contributing to Climate Adaptation in Senegal 58 Figure 4.1. Production Schedule for Oil and Gas Fields (Government’s Estimates) 73 Figure 4.2. Capacity Mix in Senegal (2022, Installed Capacity 1.7 GW ) 75 Figure 4.3. Installed Capacity in 2022 and 2050 under the Base Case and the Low Emissions Scenarios 76 Figure 4.4. CO2 Emissions under the Base Case and the Low Emissions Scenarios 77 Figure 4.5. Cumulative Investment Needs 2022–50 in Billion US$ (Discounted at 6%) 77 Figure 4.6. Average Production Cost (US$c/kWh) 77 Figure 5.1. Figure ES.1. Cost of Inaction over Time (% Deviation in GDP from the Baseline) 84 Figure 5.2. GDP Losses in Dry/Hot and Wet/Warm Climate Scenario, by Impact Channel 85 Figure 5.3. The Effects of Climate Change on the Livelihoods of the Poor and Vulnerable 87 Figure 5.4. The Impact of Poverty on Structural Change and Wages 88 Figure 5.5. Adverse Impacts of Climate Change on Both Urban and Rural Populations 89 Figure 5.6. CA/OPEX of Climate Action and Corresponding Emission Reductions 90 Figure 5.7. Net Present Value of CA/OPEX of Climate Action and Corresponding Benefits 90 Figure 5.8. Expected Public/Private Shares in Costs, by Sector 92 iv West Bank and Gaza Country Climate and Development Report Figure 5.9. A Snapshot of Potential Gains from Adaptation Action 94 Figure 5.10. The Impacts of Adaptation Measures on Poverty Reduction Over Time 95 Figure 6.1. Inefficiencies in How Energy Subsidies are Targeted 100 Figure 6.2. Evaluating the Ambition of Senegal’s Sustainability Targets 102 Figure 6.3. Evaluating the Feasibility of Senegal’s Sustainability Targets 102 Figure 6.4. Stronger Compensation Measures to Mitigate the Short-Term Effects on Poverty 107 List of Boxes Box 1.1. Ongoing Climate Change and Current Impacts in Senegal 4 Box 1.2. Values of Select Ecosystem Services in Senegal and West Africa 7 Box 1.3. Climate Change and Migration 10 Box 1.4. Precision Emission Surveys for Landfill and Gas Management in Senegal 14 Box 2.1. What is Senegal’s Adaptation and Resilience Readiness? 18 Box 2.2. Senegal’s 2024–26 Multiyear Budget and Economic Programming Document 23 Box 2.3. Senegal’s Budget for 2024 24 Box 2.4. Ten Policy Responses to Accelerate Climate Adaptation by the Private Sector in Senegal 31 Box 3.1. Enhancing Adaptation Outcomes by Strengthening Women’s Land Rights 34 Box 3.2. Key Insights from the Adaptation and R Diagnostic on Agriculture and Food Security 36 Box 3.3. Assessing the Potential for Agroforestry in Senegal 37 Box 3.4. Agriculture Sector Development in Senegal 38 Box 3.5. Mangroves and Sea Grass Beds are Key for Coastal Adaptation and Mitigation 40 Box 3.6. Promoting the Private Sector’s Role in Climate-Smart Tourism in Senegal 44 Box 3.7. Climate Change Impact on Forest Cover and Carbon Stocks in Senegal (Mid-Century) 45 Box 3.8. Key Insights from Adaptation and Resilience Diagnostic on Coastal Zone Management 49 Box 3.9. Nature-Based Solutions (NBS) for Adaptation in Dakar 55 Box 3.10. Job Creation Opportunities for Climate Action in Senegal 61 Box 3.11. Key Insights from Adaptation and Resilience Diagnostic on Human Health 62 Box 4.1. Key Insights from Adaptation and Resilience Diagnostic on Energy 80 List of Tables Table 2.1. Awareness of Climate Exposure by Sector 26 Table 2.3. Awareness and Adoption of GHG Reduction Measures by the Senegalese Private Sector over the Past Three Years 30 Table 3.1. Carbon Dioxide Mitigation Potential for Climate-Smart Agriculture Interventions 39 Table 4.1. Scenarios and Parameters for the Energy Transition Deep Dive 74 Table 5.1. Climate Action Cost and Benefits by 2030 and 2050 91 Table 6.1. Existing DRF Instruments in Senegal 106 West Bank and Gaza Country Climate and Development Report v Acknowledgements This report was authored by a World Bank Group task team led by Philippe Ambrosi, Stephanie Brunelin, and Daniela Marotta, and including Mazen Bouri, Claire Davanne, Isabelle Kane, Tamaro Kane, and Julie Lohi, with the editorial support of John Carey and Nour Masri. The report has benefitted from invaluable inputs from the task team as well as the energy, macro-economic, and poverty modeling teams, which include: Kodzovi Senu Abalo, Edouard Al-Dahdah, Fatima Arroyo Arroyo, Edi Assoumou, Bernardo Atuesta, Helene Ba, Sokhna Ba, Fatimata Barry, Sabine Beddies, Alida Alves Beloqui, François Bertone, Lucas Bochud, Thibault Bouessel du Bourg, Lorenzo Carrera, Abdallah Cisse, Mamani-Massiri Coulibaly, Lucie Crotat, Stephane Dahan, Laurent Damblat, Francis Dennig, Nicolas Desramaut, Chloe Genevieve Helene Desjonqueres, Cheikh Tidiane Diagne, Tenin Fatimata Dicko, Papa Lamine Diouf, Clemence Dryvers, Nicholas Elms, Alioune Fall, Benoit Faucheux, Francisna Christmarine Lakshini Fernando, Thomas Flochel, Laurent Frapaise, GianLeo Frisari, Aida Gadiaga, Aram Gassama, Apolline Gaye, Rebekka E. Grun, Gabriela Inchauste, Ann-Sofie Jespersen, Vasundhara Jolly, Charl Jooste, Alioune Badara Kaere, Eliakim Kakpo, Fred Kizito, Walker Kosmidou-Bradley, Wilfried A. Kouame, Laurence Lannes, Jia Li, Cecile Lorillou, Pierre Lorillou, Jana Malinska, Luisa Texeira De Melo De C Felino, Oulimata Ndiaye, Aifa Ndoye, Claire Nicolas, Martin Oswald, Jonas Ingemann Parby, Christina Paul, Anupurba Roy, Marion Sagot, Lars Schmidt, Samuel Seo, Ian Andrew Smith, Kamel Soudani, Immanuel Steinhilper, Clementine Stip, Venkatesh Sundararaman, Philippine Sutz, Baidy Toure Sy, Koen Tieskens, Maimouna Toure, Daniel Valderrama, Patricia van de Velde, Frederic Verdol, Emma Willenborg, and Boris van Zanten. The team would like to extend sincere thanks to the Industrial Economics (IEc) team of Sydney Austin, Brent Boehlert, Diego Castillo, and Kenneth Strzepek, who led the impact channel and adaptation modeling. The team benefited immensely from the guidance of, and is grateful to, the peer reviewers: Kevin Carey, Stephane Hallegatte, Jamele Rigolini, and Arame Tall. The report team would also like to thank warmly participants in the Country Climate and Development Report (CCDR) consultations for their availability, their collaborative spirit, and the quality of their contributions. They comprise representants from ministries and government agencies, academia and civil society, private sector, and the development partner community. Thanks are also extended to Management and their teams on their guidance, in particular, Ousmane Diagana, Sergio Pimenta, Ethiopis Tafara, Chakib Jenane, Olivier Buyoya, Moritz Nikolaus Nebe, Keiko Meiwa, Pierre Bonneau, Trina Haque, Abebe Adugna, Ellysar Baroudy, Abdelaziz Lagnaoui, Maria Sarraf, Christian Bodewig, Hans Beck, Kanta Kumari, Faruk Khan, Asha Johnson, and Sujatha Venkat Ganeshan. vi West Bank and Gaza Country Climate and Development Report Acronyms and Abbreviations Acronym Definition aDALYs Avoided deaths and avoided disability-adjusted life years AEME Agency for Energy Saving and Management (Agence pour l 'Economie et la Maîtrise de l'Energie) AI Artificial intelligence ANACIM National Agency of Civil Aviation and Meteorology ARC African Risk Capacity ANSD National Agency for Statistics and Demography (Agence Nationale de la Statistique et de la Démographie) ASP Adaptive Social Protection BC Black carbon BCEAO Central Bank of West African States (Banque Centrale des Etats de l’Afrique de l’Ouest, BCEAO) BRT Bus Rapid Transit CAPEX Capital expenditure CCDR Country Climate and Development Report CCGT Combined-cycle gas turbine CCKP Change Knowledge Portal CCS Carbon capture and storage CDM Clean Development Mechanism CH4 Methane CIMA Inter-African Conference on Insurance Markets (Conférence Interafricaine des Marchés d’Assurances) CNAAS Senegal National Agriculture Insurance Company (Compagnie Nationale d’Assurance Agricole du Sénégal) COMNACC National Committee on Climate Change CO2 Carbon dioxide CSA Climate-smart agriculture CSE Centre de Suivi Ecologique DALY Disability-adjusted life year DFI Development Financing Institution DGPRE Water Planning and Management Directorate (Direction de Gestion et Planification des Ressources en Eau) DPC Directorate of Civil Protection DRF Disaster-risk financing DRM Disaster-risk management DRR Disaster risk reduction West Bank and Gaza Country Climate and Development Report vii Acronym Definition ECOWAS Economic Community of West African States ECF Extended Credit Facility EFF Extended Fund Facility EHCVM Harmonized Survey of Household Living Conditions (Enquête Harmonisée sur les Conditions de Vie des Ménages) EIC European Investment Bank EPM Electricity Planning Model ESCO Energy Services Company EWS Early warning systems FONGIP Priority Investment Guarantee Fund (Fonds de Garantie des Investissements Prioritaires) FONSIS Sovereign Wealth Fund for Strategic Investments (Fonds Souverain d’Investissements Stratégique) GBV Gender-Based Violence GCF Green Climate Fund GCM General Circulation Model GDP Gross domestic product GHG Greenhouse gas GIZ Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH GTA Greater Tortue Ahmeyim GW Gigawatt GWh Gigawatt hours G7 Group of Seven GoS Government of Senegal GSFF Global Shield Financing Facility Funding Ha Hectare HFO Heavy fuel oil ICR Implementation Completion and Results Report ICS Improved cookstoves ICT Information and communication technology ICZM Integrated Coastal Zone Management IEc Industrial Economics IFC International Finance Corporation IMF International Monetary Fund IoT Internet of Things IPP Independent power producer IRES Intermittent renewable energy sources viii West Bank and Gaza Country Climate and Development Report Acronym Definition JETP Just Energy Transition Partnership KPI Key performance indicator LMIC Lower-middle income country LoCAL Local Climate Adaptive Living Facilityf LPDSE Energy Sector Development Policy Letter (Lettre de Politique de Développement du Secteur de l’Energie) LNG Liquefied natural gas LPG Liquefied petroleum gas LT-LEDS Long-Term Low-Emission Development Strategy LTV Long-Term Vision IBRD International Bank for Reconstruction and Development ICMA International Capital Markets Association IDA International Development Association IGA Income-generating activity IPBES Intergovernmental Science-Policy Platform on Biodiversity and Ecosystem Services IPCC Intergovernmental Panel on Climate Change MEPC Ministry of Economy, Planning, and Cooperation (Ministère de l’Économie, du Plan et de la Coopération) MEPM Ministry of Energy, Oil, and Mines (Ministère de l’Énergie, du Pétrole et des Mines) METE Ministry of the Environment and Ecological Transition (Ministère de l’Environnement et de la Transition Ecologique) MFB Ministry of Finance and Budget (Ministère des Finances et du Budget) MFI Microfinance institution MFMod Climate-augmented macro-fiscal model MIGA Multilateral Investment Guarantee Agency MoHSA Ministry of Health and Social Action MRV Measurement, reporting, and verification MtCO2e Million tons of CO2 equivalent MUCTAT Ministry of Urban Planning, Territorial Communities, and Regional Planning (Ministère de l'Urbanisme, des Collectivités territoriales et de l'Aménagement des territoires) MSME Micro, Small, and Medium Enterprise MW Megawatt MWh Megawatt hours NAP National Adaptation Plan N2O Nitrous oxide NBS Nature-Based Solution NDC Nationally Determined Contribution West Bank and Gaza Country Climate and Development Report ix Acronym Definition ND-GAIN Notre Dame Global Adaptation Initiative NPL Non-Performing Loan NPV Net present value OMVG Organization for the Development of the Gambia River (Organisation pour la Mise en Valeur du fleuve Gambie) OMVS Organization for the Development of the Senegal River (Organisation pour la Mise en Valeur du fleuve Sénégal) OPEX Operational expenditure PAGIRE National Action Plan for Water Resources Management PANA National Adaptation Programme of Action (Plan d’Action National d’Adaptation) PAUE Universal Electricity Access Program (Programme d’Accès Universel à l’Electricité en 2025) PAYG Pay-As-You-Go PBCRG Performance-based climate resilience grants PIM Public investment management PNADT National Territorial Development Plan PNBSF National Cash Transfer Program (Programme National de Bourses de Sécurité Familiale) PNER National Rural Electrification Program (Plan National d’Electrification Rurale) PPP Public private partnership PRA Agricultural Resilience Program PROCASEF Senegal Cadastre and Land Tenure Improvement Project PROGEDE Sustainable and Participatory Energy Management Project (Projet de gestion durable et participative des énergies traditionnelles et de substitution) PROGEP Stormwater Management and Climate Change Adaptation Project (Projet de gestion eaux pluviales et d'adaptation au changement climatique) PROMOGED Senegal Municipal Solid Waste Management Project (Projet de promotion de la gestion intégrée et de l'économie des déchets solides) PSE Plan Sénégal Émergent PSMRE Strategic Plan for the Mobilization of Water Resources PV Photovoltaic RCP Representative Concentration Pathway RE Renewable energy REDD+ Reducing Emissions from Deforestation and Degradation RGE Recensement Général des Entreprises RISE Regulatory Indicators for Sustainable Energy RNU National Single Registry (Registre National Unique) RSF Resilience and Sustainability Facility x West Bank and Gaza Country Climate and Development Report Acronym Definition SE4ALL Sustainable Energy for All SDG Sustainable Development Goals SHS Solar home system SLB Sustainability-linked bond SLL Sustainability-linked loan SMAB Senegal-Mauritanian Aquifer Basin SME Small and medium enterprise SPT Sustainable Performance Target SNPS National Social Protection Strategy (Stratégie Nationale de Protection Sociale) SOE State-owned enterprise SSA Sub-Saharan Africa SSP Shared Socioeconomic Pathway TFP Total factor productivity UCRA Urban Climate Risk Analysis UEMOA Union économique et monétaire ouest-africaine UNCDF United Nations Capital Development Fund UNFCCC United Nations Framework Convention on Climate Change VAT Value-added tax VRE Variable renewable WACA West Africa Coastal Areas Management Program WAEMU West African Economic and Monetary Union WAPP West African Power Pool WASH Water, sanitation, and hygiene WB World Bank WMO World Meteorological Organization WRM Water Resource Management YKK Yokk Koom Koom West Bank and Gaza Country Climate and Development Report xi Senegal © Mohammed alsdudi/Shutterstock xii West Bank and Gaza Country Climate and Development Report Chapter 1: Climate Change and Development 1.1. Development Context Senegal has become one of the fastest-growing economies in Sub-Saharan Africa (SSA), after decades of subpar growth. Annual real gross domestic product (GDP) growth surged from an average of 2.5 percent over 2008–13 to more than 6.0 percent over 2014–19. This period coincided with more favorable external conditions, including global price declines for oil, commodities, and food; significant foreign direct investment (FDI) in natural resource extraction; strong performance in both industry and agriculture;1 strong exports aided by its strategic coastal positioning; political stability; and prudent fiscal and macroeconomic policies. Despite the rapid growth, poverty and income inequality remain high, and low labor productivity hampers economic growth prospects. After declining from 43.0 percent in 2011 to 37.8 percent in 2019, the poverty rate has plateaued at 37.5 percent. Poverty is concentrated in rural areas, where three out of four poor people live. Meanwhile, income inequality is high. The wealthiest 10 percent of the population consumes 46 percent more than the poorest 40 percent. Contributing to these challenges is low school enrollment and completion, low levels of learning achievement, and poor learning conditions. In addition, labor productivity has not improved over the past two decades and lags many peer countries.2 Economic development and growth are also threatened by external shocks and climate change impacts. The COVID-19 pandemic, Russia’s invasion of Ukraine in 2022, and the conflict in the Middle East, coupled with domestic political uncertainty and regional instability, slowed annual growth to 3.8 percent between 2020 and 2023. The shocks also exacerbated structural vulnerabilities, such as low productivity, limited human capital, high informality, and youth emigration. In addition, Senegal is highly vulnerable to climate change impacts and natural hazards, particularly droughts, floods, and locust invasions (see box 1.1 and section 1.2). A key reason is that the economy is highly dependent on an agricultural sector that suffers from low productivity, limited investment and access to finance, uncertainties over land tenure, and lack of insurance mechanisms. Senegal has an opportunity to create an integrated, inclusive, resilient, and low-carbon economy, as outlined in the upcoming Long-Term Vision (LTV) 2050.3 Achieving these goals, however, will require a paradigm shift and structural transformation, with three key challenges: 1 The industrial sector, fueled by FDI inflows in extractive industries, experienced an average growth rate of around 6 percent between 2014 and 2019. During the same period, the agriculture sector exhibited significant growth at 8.0 percent and the services sector grew by 5.3 percent. On the demand side, public and private investment have remained the largest contributors to growth, expanding by close to 8 percent and 15 percent over the period, respectively. 2 Aspirational peer countries of Senegal include Indonesia, Morocco, and the Philippines. Senegal’s capital per worker was 245 percent of Indonesia’s level in 1960 and fell to just 19 percent of Indonesia’s by 2019, though it has increased by roughly 27 percent since its low point in 1991. In fact, Senegal’s capital per worker was higher than all its peers (both structural and aspirational) and 176 percent higher than its peer average in 1960, but it dipped below all peers in capital per worker by 1991. 3 Long-term visions (LTVs) and long-term low-emission development strategies (LT-LEDS) are prepared by parties to the Paris Agreement to communicate their plans on long-term (2050) low-emissions development. Senegal’s vision is under development with political validation expected before COP29. This will be followed by the preparation of an LT‑LEDS. West Bank and Gaza Country Climate and Development Report 1 Shifting from informal employment to higher-productivity formal employment. Ninety percent of nonagricultural employment is now informal, constraining human capital and long- term productivity.4 While Senegal has a significant percentage of young people, offering a demographic dividend, the private sector now falls short of generating enough high-quality jobs. Rural economies are hampered by a combination of unemployment and low productivity, while much of the labor force in urban areas is low-skilled and engaged in informal trade. Young people face precarious working conditions and generally lack skills. More than half (54 percent) of the working-age population has no formal education, with the proportion rising to 69 percent for rural men and 77 percent of rural women between 15 and 65 years old. Creating more jobs in the formal economy. Tourism, transport, and logistics services offer significant potential for creating more jobs in the services sector. Manufacturing remains limited, but the government is investing in more processing of raw materials with the development of special economic zones. Other crucial actions to create better jobs and develop a more dynamic private sector include improving market competition, reducing the cost of doing business (by improving access to energy, financial services, transport, and digital technologies), and improving markets with stronger institutions and regulations (World Bank 2021). Taking advantage of sustainable hydrocarbon development. Senegal made substantial oil and gas discoveries in the late 2010s, and the first barrels of oil were produced in spring 2024 from the Sangomar field. Gas production is still pending. Hydrocarbon production is projected to increase annual GDP growth from 3.7 percent in 2023 to 7.1 percent in 2024 and 9.7 percent in 2025 before declining, with revenues reaching around 1.0 percent of GDP on average.5 Senegal has recognized the potential of gas as a transitional power source and has developed a gas-to-power strategy to use locally-produced gas to generate much-needed electricity to power economic activity while installed renewable energy capacity expands. This approach not only provides a cleaner alternative to heavy fuels but also reduces reliance on traditional firewood or charcoal cooking methods, reducing air pollution and improving health. The additional capacity under the gas-to-power strategy would remain small (at around 2GW), with limited lock-in risk, and therefore would not threaten the long-term deployment of renewable energy (chapter 4). At term, electricity export revenues (from expanded installed renewable energy capacity, mainly solar), could become as large as, or even surpass, oil and gas revenues during the transition. The exploitation of oil and gas resources also presents governance challenges associated with the management of hydrocarbon revenues (especially with respect to fiscal discipline and spending efficiency) and the equitable redistribution of the benefits to improve societal well- being (especially by not distracting from development priorities). The road ahead is challenging as Senegal needs to find ways to accelerate its growth and drive the necessary structural transformation. Achieving long-term aspirations will require sustained high growth levels driven by higher productivity growth, higher levels of physical and human capital, and innovations to improve resilience and accelerate a low-carbon transition. It calls for significant investments in education and health, for reducing the population’s vulnerability to climate change-related shocks and safeguarding the essential resource base 4 The recent Public Expenditure Review for Senegal projected stagnant access to primary education, with the estimated primary enrollment in 2030 at 79 percent, virtually unchanged from 78 percent in 2018. 5 Other key macroeconomic variables are set to improve in the short and medium term. For instance, the current account deficit is anticipated to narrow starting from 2024 when oil and gas exports begin, following the positive effect of increased export revenues. However, the impact on the current account will be somewhat dampened by the repatriation of profits by international companies operating in the sector. 2 West Bank and Gaza Country Climate and Development Report crucial for sustaining robust and long-term growth. The Project , Senegal’s new development plan articulated around five priority areas6 (under preparation and expected in fall 2024) intends to help the country address these challenges. Analysis of climate measures in the NDC further demonstrates that Senegal can pursue a green and resilient growth path that boosts growth, generates jobs, and alleviates poverty. 1.2. Climate Change Vulnerabilities The impacts of climate change are already evident in Senegal (box 1.1 ) and are projected to worsen in the future with increased temperatures, greater variability, and extreme events, as well as rising sea level. Temperatures are predicted to rise between 1.05°C and 1.15°C by 2050 and up to 1.85°C to 4.5°C by 2090 (in reference to 2005, comparing Shared Socioeconomic Pathway (SSP) 1-2.6 and SSP5-8.5),7 with higher temperatures and more temperature extremes projected over eastern and southern Senegal. In the more intense climate change scenario, this could include up to more than two months (65 more days than in 2005) of very hot days by 2050, and more than four months by 2090 (140 more days more days than in 2005). While climate projections across models are not consistent for precipitation, given the high natural year-to-year variability, more intense climate change scenarios suggest an overall drier future for Senegal and a further increase in variability, with future dry and wet periods likely to become more extreme. Finally, the sea level off the coast of Senegal is projected to rise, and at a faster pace than it did up to now (at least twice). In the more intense climate change scenario, sea level is thus expected to rise as much as 18 cm by 2030, 60 cm by 2050, and over 1m by 2100 (over 2000 levels), conservatively. Senegal © Mohammed alsdudi/Shutterstock 6 The initial version of this new national development plan highlights the following core areas: (i) institutional renewal and African commitment; (ii) endogenous economy and food sovereignty; (iii) human capital and quality of life; (iv) science, technology, innovation and sustainable infrastructure; and (v) national security and international influence. It includes several areas that are essential for climate action such as food sovereignty, quality of life, and sustainable infrastructure. 7 The SSPs are climate change scenarios of projected socioeconomic global changes up to 2100 as defined in the Intergovernmental Panel on Climate Change’s (IPCC) Sixth Assessment Report on climate change in 2021. There are five SSPs, with SSP1 (sustainability) and SSP5 (fossil-fueled development) being the two extremes. They are combined with radiative forcing scenarios and SSP1-2.6 corresponds to a low GHG emissions world (CO2 emissions cut to net zero around 2075) and SSP5-8.5 corresponds to very high GHG emissions (CO2 emissions triple by 2075). All data are from the World Bank Climate Change Knowledge Portal, consulted in April 2024. West Bank and Gaza Country Climate and Development Report 3 Box 1.1. Ongoing Climate Change and Current Impacts in Senegal Climate change is a reality for Senegal, which is already experiencing rising temperatures, erratic rainfall, weather-related hazards, and sea level rise. Senegal is getting warmer. Mean annual temperatures have increased by nearly 2°C since 1950, or an average of 0.28°C per decade (figure B1.1.1), with the greatest warming in the southern and southeastern regions. Of the ten hottest years on record in Senegal, five are in the 2010–19 decade. In addition, Senegal is experiencing more extreme high temperatures. Since 1950, the number of days per year with a heat index above 35°C has increased by 50 days, and the number of nights with temperatures higher than 20°C (so-called tropical nights) has increased by 30. Senegal is also becoming drier. Annual rainfall has dropped by 250 mm since the 1950s (or 36.93 mm per decade), while variability has increased. As a result, the country’s drier areas have expanded southward, with the 500 mm isohyet shifting from a line between north Dakar and Linguère in the 1950–80 period to the Kaolack and Fatick regions. Similarly, the 1,000 mm isohyet migrated from southern Gambia to the Senegalese-Guinean border between 1981 and 2013. Meanwhile, the number of consecutive dry days increased, causing higher water stress. Figure B1.1.1. Evolution of Mean Annual Temperature (Left) and Number of Hot Days (Right) in Senegal 30 80 Days with Heat Index > 35°C (days) 60 29 Mean - Temperature 40 28 20 27 0 26 -20 1950 1960 1970 1980 1990 2000 2010 2020 1950 1960 1970 1980 1990 2000 2010 2020 Annual Mean - Temperature Trend 1971-2020 Annual Days with Heat Index Trend 1971-2020 Trend 1951-2020 Trend 1991-2020 Trend 1951-2020 Trend 1991-2020 Sources: World Bank Climate Change Knowledge Portal 2024. Senegal’s coastline is at increased risk, from both unmanaged coastal development and climate change–induced sea level rise (of about 1.5 mm per year). A quarter of the coastline is at risk today from erosion and half from storm surges. Overall, erosion is estimated to have cost Senegal US$537 million in 2017—3.3 percent of 2017 GDP (Croitoru, Miranda, and Sarraf 2019). As to flooding linked to sea-level rise, the cities of Dakar and Saint-Louis are particularly exposed. Since 1989, floods have displaced around 300,000 people in Dakar, and according to UN-Habitat, Saint‑Louis is the city most threatened by sea-level rise in Africa (Rigaud et al. 2021). 4 West Bank and Gaza Country Climate and Development Report Senegal © Mohammed alsdudi/Shutterstock Weather-related hazards, particularly too much or too little water, are having an increasing human and economic toll. Over the last 40 years, floods represented nearly half of weather-related hazards while droughts have had the largest impact, affecting 3.3 million people. According to the Think Hazard! tool, Senegal’s vulnerability to natural hazards is high (highest level) for all weather-related hazards categories (river flood, urban flood, coastal flood, water scarcity, extreme heat, and wildfire). In 2023 alone, Senegal reported four extreme events to the World Meteorological Organization (WMO), the highest number for West Africa, including drought in the north, flooding in Oussouye department, and heatwaves in Podor and Ziguinchor departments (WMO 2024). Climate change is increasing the stress on natural resources, such as water and productive landscapes, increasing food and water security issues. The WMO notes that increases in temperature and drought, combined with higher water demand, are causing a long-term decline in river flow in West Africa (WMO 2022). Current climate change is estimated to have already impacted yield, with an 11 to 18 percent drop for millet and a 6 to 15 decline percent for sorghum (Sultan, Defrance, and Izumi 2019). Worsening environmental conditions linked to climate change are also causing populations to move, such as pastoralists leaving dry and depleted pastures or people moving away from flooded coastal settlements. Note: All data are from the World Bank Climate Change Knowledge Portal unless otherwise indicated. Senegal is particularly vulnerable to intensifying climate change given its coastal exposure and its reliance on natural resources for economic activities, jobs, and livelihoods. Globally, the country ranks a high 137 out of 185 countries surveyed for climate vulnerabilities, according to the Notre Dame Global Adaptation Index (ND-GAIN). According to this assessment, it is the 37th most vulnerable country, with a great urgency for action, and the 60th least ready country, with a great need for investment and innovation to improve readiness. Most risks identified are not new in the context of Senegal, but they are likely to be amplified as climate change intensifies. West Bank and Gaza Country Climate and Development Report 5 Overall, there are four main sources of climate vulnerability for Senegal, which encompass the seven resilience and adaptation sectors put forward in the NDC and are further discussed respectively in the “Productive Landscapes”, “Sustainable Cities”, and “Resilient Human Capital” sections of chapter 3:8 y Exposed coastal zones. More than half (52 percent) of Senegal’s population lives in coastal zones, which are responsible for 68 percent of the country’s GDP and which contain 90 percent of its industrial facilities.9 Dakar’s port concentrates the largest share of trade activity and Senegal’s exports (and an important share of that of the subregion’s). According to the World Travel and Tourism Council (2023) and ANSD (2023), respectively, coastal zones host virtually all the country’s tourism (9 percent of GDP)10 and the coastal fishing industry (11 percent of exports).11 Through peri‑urban agriculture, they supply 70 percent of the national production of fruit and vegetables, on the Niayes strip (CSE 2020). These zones are threatened by sea level rise, with levels potentially climbing as much as 18 cm by 2030, 60 cm by 2050, and over 1 m by 2100—over 2000 levels (World Bank 2020). The low-lying coastal areas of Senegal are already highly susceptible to flooding from seawater, particularly near the Senegal River and the Saloum Delta. Rising sea levels and increasingly intense storm surges will exacerbate flooding, coastal erosion, and the salinization of water bodies and agricultural land. Overall, 75 percent of the 530 km coastline will be at risk. The areas most exposed to erosion will include N’Dar Toute (St. Louis) and the Palmarin peninsula (Fatick), while the areas most exposed to flooding will include the cities of Saint-Louis and Dakar and the Casamance region. In Dakar alone, the population at risk of coastal flooding is expected to increase by 20 to 30 percent, with economic damages increasing by 30 percent (Aniel-Quiroga et al. 2021). Sea level rise and decreased precipitation will also increase saltwater intrusion into a number of coastal aquifers, especially around Dakar and in the Saloum estuary. y Natural capital under pressure. The erosion of Senegal’s natural capital is affecting the country’s prospects for sustainable and resilient future economic growth and development. Senegal’s natural base is rapidly thinning, given high human and economic pressures, inadequate management (for example, overfishing, and deforestation), and mounting risks (for example, pollution and climate change). Senegal has been a net borrower of natural resources since 200712 and climate change impacts will further erode the country’s natural capital. The NDC thus emphasizes the vulnerability of Senegal’s ecosystems and natural resources, which sustain the livelihood of 60 percent of the population and require specific actions for mitigation and adaptation. Four areas are especially vulnerable: agriculture, fisheries, water resources, and ecosystems and biodiversity. 8 The seven sectors are coastal zones, disaster risk management (DRM, with a focus on flooding), human health, and agriculture, livestock, fisheries, and biodiversity (clustered under natural capital). 9 Senegal’s country profile on the website for West Africa Coastal Areas Management Program (WACA): https://www.wacaprogram.org/country/senegal 10 Data for 2019. Tourism receipts equate about 9 percent of Senegal’s GDP—mostly from coastal recreation—and about the same share in jobs. 11 ANSD FN 13 data for 2023. 12 Data from 2021 Global Footprint Network’s National Footprint and Biocapacity Accounts (data up to 2017). Data and analysis show a long-term trend of increasing ecological footprint (defined as how much area of biologically productive land and water an individual requires to produce all the resources he or she consumes and to absorb the waste he or she generates) and decreasing biocapacity (defined as the capacity of ecosystems to regenerate what people demand from those surfaces). Senegal ceased being a creditor in 2007. 6 West Bank and Gaza Country Climate and Development Report Agriculture: Senegalese agriculture is predominately rainfed and of low productivity, making it particularly exposed and vulnerable to climate change. Hotter and drier conditions are expected to reduce cereal yields (millet, sorghum, maize, and paddy rice) and lead to crop failures while heat stress and water scarcity will reduce pasture productivity and forage production, with negative impacts on livestock and the livelihoods of pastoralists. Recent economic modeling shows that the sector’s production could decline by 17 percent and household income by 8 percent by 2030 (Sarr 2021). Achieving food self-sufficiency would require a stark increase in water withdrawals, becoming problematic under a changing climate. With Senegal already being a net food importer, a growing population and reduced domestic production will push food imports, with higher food prices and food insecurity. Box 1.2. Values of Select Ecosystem Services in Senegal and West Africa Ecosystems provide productive service, such as crops and pastures, timber, fuelwood, and fish, that contribute 15 percent of Senegal’s GDP, provide about 30 percent of jobs in the country,a and account for at least 17 percent of its exports.b For West Africa in general, the value of fisheries is US$4 billion per year, reflecting the large potential of West Africa’s coastal waters (Archer et al. 2018). Fuelwood and charcoal help households in Senegal meet up to 80 percent of their energy needs. Ecosystems also provide nonmaterial services, improving people’s subjective or psychological quality of life. These services are exemplified by nature-based tourism and the importance of land or seascapes in myths, culture, and sacred rituals, and represent about 9 percent of Senegal’s GDP and jobs. Ecosystems also provide regulative services, such as coastal protection, water purification, pollination, and carbon sequestration. In West Africa, annual water purification services from inland surface water and water bodies are estimated at US$40,000 per square kilometer, while mangroves provide annual coastal protection services estimated at US$4,500 per square kilometer. Marine and coastal ecosystems are estimated to provide annual carbon sequestration services equivalent to US$2,800 per square kilometer (Archer et al. 2018). Senegal-specific estimates are of US$190,000 per square kilometer and per year from sea grass beds, mostly for coastal protection and breeding grounds (Touron-Gardic et al. 2023). a. Per the 2023 census, there were 908,628 households with an agricultural activity, or 45.6 percent of households in Senegal. b. Per ANSD data on macroeconomic aggregates (trade), fishery, horticulture, and peanut product exports represented 17 percent of total exports by value in 2023. Fisheries: Fish production and trade represent about 3.2 percent of Senegal’s GDP and 10 percent of exports, a main source of foreign revenue (ANSD 2015). The sector is estimated to sustain about 100,000 direct and indirect jobs also including the postcatch, handling, sale, and transformation sectors (ANSD 2019; FAO 2022).13 Fish are also crucial for the country’s food security by providing 13 Artisanal fishing accounts for more than 86,000 direct jobs. Fishing and transformation provides employment for 97,444 workers. West Bank and Gaza Country Climate and Development Report 7 more than 70 percent of the population’s protein intake and calories. However, weak governance and management have led to overexploitation of fish resources and habitat degradation. Climate change will compound these challenges and put productivity at risk as the maximum catch potential is estimated to decrease by 17 to 19 percent by 2050 (World Bank 2019b). The socioeconomic repercussions are expected to be significant, including food security concerns, loss of jobs and livelihoods, and displacement as people search of better opportunities. Water resources: Senegal’s crucial water resources are already strained (World Bank 2022).14 Surface waters are the main water source for agriculture but are already insufficient to meet needs in drier years. Groundwater supplies 85 percent of potable water and for most industrial uses, but it is threatened by overuse and pollution from mining, agriculture, and poor sanitation. Current water withdrawals are projected to increase by 30 to 60 percent by 2035 to meet the needs of agriculture and a quickly urbanizing population, further exacerbating water stress. Simulations show that because of climate change, average flows in the Senegal River basin will be reduced by 2035, while increased heavy rainfall events will make floods more likely. Senegal’s only water reservoir, the Lake of Guiers, will be under increased pressure to provide irrigation and drinking water to urban centers, aggravating the competition among different users (Sambou et al. 2018). Today, the cost of the water management status quo already impacts more than 10 percent of Senegal’s GDP due to water-related extreme events and pollution. The country has spent millions on emergency measures to meet demand gaps for water supply and to remedy flood damages. Without better water management, lack of water could slow the pace of urbanization in Senegal and reduce its positive dividends. Ecosystems and biodiversity: Senegal’s ecosystems provide a wide range of services (box 1.2) that are yet to be comprehensively mapped and economically assessed. They are already under high pressure from human activities, which can lead to ecosystem fragmentation, habitat destruction and species extinction as well as land degradation—he main cause, together with desertification, of low agricultural productivity—costing Senegal about US$996 million per year.15 The speed and magnitude of climate change will challenge ecosystems’ capacity to migrate and adapt, bringing hotter and drier conditions, intensifying wildfires, and causing more saltwater intrusion, all making it more difficult for species to regenerate. This, in turn, increases habitat fragmentation and loss and reduces biodiversity. There will be changes in species distribution and ecosystems towards those more suited for drier and saltier conditions. A decrease in biodiversity and tree density is also expected. y More prevalent natural hazards and exposed manmade capital. Extreme weather events already have devastating effects on human settlements and economic production sites, especially in urban areas with high population densities and vulnerable informal settlements like Dakar, Rufisque, and Touba. In 2020, for example, floods washed out bridges, waterlogged streets, and made thousands of people homeless and enclaved in the Dakar and Thiès regions. Between 1980 and 2008, floods affected an estimated 400,000 to 600,000 people a year, with average estimated damages of more than US$42 million. A major flood in 2017 in the Dakar region caused an estimated US$230 million 14 This statement and the numbers provided in this paragraph are sourced from the Senegal – Challenges and Recommendations for Water Security in Senegal at National Level and in the Dakar-Mbour-Thiès Triangle report published in 2022. The Government of Senegal is carrying out a second study based on existing water resources data to corroborate this analysis. 15 See Senegal’s the Economics of Land Degradation Initiative profile: https://www.eld-initiative.org/en/country-work/africa/senegal. 8 West Bank and Gaza Country Climate and Development Report of damages (1.4 percent of GDP). The cost of a year of drought is estimated at US$500 million, or 3 percent of agricultural GDP (Croitoru, Miranda, and Sarraf 2019), while the three drought episodes that occurred over the past 20 years caused a rise in the number of persons affected by food insecurity of between 300,000 and 800,000. Urbanization (especially when it is unplanned), lack of efficient drainage systems, and development in low-lying areas and wetlands (like the Niayes ecosystem) have reduced natural resilience to flooding. Without adequate planning, urban centers will not be able to cope with rapid urbanization and population influx from rural areas, locking cities into vulnerable (for example, floods and urban heat islands), polluted (for example, low-air quality, inadequate waste management, and lagging water quality), and high-emitting (for example, congestion) configurations. Cities also have a large mitigation agenda in front of them, including in terms of transport, energy efficiency in buildings, and waste management—respectively 40, 13, and 6 percent of greenhouse gas (GHG) emissions in Dakar.16 Without the implementation of climate-smart measures, climate change will increasingly threaten many types of infrastructure. Road networks, for example, are already in relatively poor condition due to lack of investment and overload, and many inland rural roads are inaccessible during the rainy season, cutting off agricultural production from potential markets. Climate change will bring even more severe flooding, damaging infrastructure and bringing isolation, along with higher temperatures that can cause roads and bridges to develop cracks and degrade more quickly. Senegal © Mohammed alsdudi/Shutterstock Similarly, the power sector is highly vulnerable to climate change. Currently, Senegal is heavily reliant on heavy fuel oil (HFO) imports and generation facilities located along the coast, though it is also making new investments in solar, gas-to-power, and transmission infrastructure to access imported hydropower. This infrastructure can be damaged or destroyed by flooding, causing extensive power outages and significant economic losses. Extreme heat and wildfires, particularly in more rural parts of Senegal, can damage and disrupt the operation of transmission and distribution infrastructure as well as increase technical losses. In addition, extreme heat and changes in hydrological patterns will affect the availability and reliability of the hydropower that Senegal imports. Offshore oil and gas infrastructure, which are an important part of Senegal’s energy future, will also be vulnerable to sea level rise. Finally, climate change will modify energy demand (for example, cooling for buildings and increased need for refrigeration), which might challenge a system already at capacity and necessitate improved and adaptive master planning efforts. 16 As laid out in the Territorial Climate Energy Plan of Dakar: 2021-2025. West Bank and Gaza Country Climate and Development Report 9 Another key sector is digital technologies. They offer opportunities for both economic growth and greater climate resilience since they can provide such vital services as weather forecasts to farmers and payments to communities in the aftermath of natural disasters (GSMA 201). However, the data centers, communication networks, and power supply systems needed to deliver these services are themselves vulnerable to climate hazards. The sector also offers avenues for mitigation, such as the use of energy-efficient computing systems, energy-efficient civil works, climate-smart networks (migrating from copper to fiber optic access networks and decommissioning inefficient legacy equipment), and using solar power as a source whenever feasible. As Senegal’s digital economy sector continues to expand, it is essential to focus on climate-resilient infrastructure, digital adaptation solutions, e-governance, and supportive policy frameworks. Box 1.3. Climate Change and Migration Senegal © Mohammed alsdudi/Shutterstock Climate change is contributing to increased population migration as a coping mechanism of poor and vulnerable households in the face of both fast- and slow-onset climate shocks. The high prevalence of poverty and reliance on agriculture, livestock, and fisheries for livelihoods drive climate-induced migration. Climate change will accelerate conflicts over diminishing resources, triggering migrations from vulnerable hotspots. Farmers, for example, are expanding their fields into pastoral regions because of water scarcity, while pastoralists are leaving their villages with their herds earlier in the year to deal with drought (Rigaud 2021). There are also conflicts around water extraction between the mining industries currently developing around the North Littoral region and local market gardeners. Climate change will accelerate migration from rural areas, which could result in increased informality with low-skilled workers with limited economic opportunities. Overall, worsening environmental conditions and depleted natural resources could force up to 1 million people to migrate within Senegal by 2050, one of the highest rates of migration (per share of total population) among West African countries. 10 West Bank and Gaza Country Climate and Development Report y Human capital under threat. The vulnerability rate17 in Senegal is 55 percent, which means that following a shock such as a drought, more than half of the population could fall into poverty in the absence of any compensatory measures to support households, and those already in poverty might become poorer. Poor households are more exposed to shocks and have limited ability to protect themselves from shocks; therefore, they tend to rely more heavily on negative coping strategies when a shock hits. They will be disproportionately impacted by climate change, which will put their assets, income and livelihood, and health at risk (figure 1.1). Their assets are more at risk of being destroyed and damaged and they have fewer resources available to protect and restore those assets. Income is also more at risk as climate events can disproportionately increase morbidity and mortality. Poorer people are more vulnerable to spikes in staple prices, which can also be induced by climate events. Climate change will put additional pressure on food security and potentially lead to food deprivation in infants and young children. That would have long-term consequences on those children’s future welfare, leading to poorer performance at school, lower future incomes, and reduced life expectancies. Climate change is also likely to exacerbate the risks and impacts of water- and vector-borne diseases and respiratory diseases, which are already prevalent in Senegal. Currently, three of the top five causes of death are environment- or climate-related: lower respiratory infections, malaria, and diarrheal diseases.18 Climate change is expected to raise the prevalence of malaria in the south (while decreasing the incidence in the north and center), while extreme weather events, such as droughts and floods, will potentially increase the occurrence of malnutrition and diarrheal diseases. In 2009, for example, floods that affected the coastal regions and Saint-Louis were associated with 2,000 cases of diarrhea and 3,300 cases of malaria, and caused more than US$100 million in overall damage and loss, including to health centers (USAID 2018). In addition, increasingly severe heat waves are expected to reduce the productivity of outdoor workers, increase heat-related mortality, and combine with poor air quality to exacerbate cardiovascular and respiratory diseases. Climate impacts disproportionally affect women, via direct threats on their income and assets, constraints on adaptation investment, and migration-induced vulnerability. Despite a lower share than men in employment, women participate actively in the production of goods and services, particularly in rural households or coastal communities (where they dominate the artisanal transformation sector). Thus, climate change directly threatens major sources of livelihood for women, including crops and crop by-products, fish catch and oysters (given pressure on mangrove ecosystems), and nontimber forest products. Further, women lack access to production factors, financing, and extension services, and social pressure prevents them from developing their income- generating activities. They are also hindered by discriminatory laws, norms, customs, and institutions that exclude them from schooling and participation in decision-making and community processes. This makes them even more vulnerable to poverty and shocks (including climate-induced ones), as it prevents them from developing and investing in adaptation and coping strategies. Finally, women, children and the elderly are often those left behind in rural areas when the male head of household is seeking employment opportunities in cities or other locations, rendering them particularly exposed to food insecurity and other risks. 17 The vulnerability rate includes those who are nonpoor but with a high probability to fall into poverty if a shock occurs. Households are generally considered vulnerable if they have a 50 percent or greater probability of falling below the poverty line within the next two years. Vulnerability can be either poverty-induced (as a result of low consumption) or risk-induced (due to shocks). 18 Data for Senegal are from Institute for Health Metrics and Evaluation (accessed April 2024), https://www.healthdata.org/senegal. West Bank and Gaza Country Climate and Development Report 11 Figure 1.1. Exposure of Poor Households to Extreme Weather Events a. Heat Stress19 c. Drought21 EAE classes: <10,000 people, EAE classes: 10,000–25,000 people, > 25,000 people 2,500ha, 2,500–9,000ha, > 9,000ha Higher exposure $ Higher S2 $ Higher poverty $ Higher poverty $ b. Flooding20 d. Air Pollution22 EAE classes: EAE classes: <50,000 people, 50ha, 50–250ha, > 250ha 50,000–100,000 people, > 100,000 people Higher exposure $ Higher exposure $ Higher poverty $ Higher poverty $ Source: World Bank 2024. Note: EAE = expected annual exposure; ha = hectares. 19 Except for settlements located along or near the Atlantic coast, heat stress occurs throughout the country and affects nearly all Senegalese with relative high frequency and intensity. The northern areas are the most exposed to intense heat stress, yet the relatively higher wealth scores and the presence of the Senegal river can partially compensate for the heat risk. The innermost areas show medium to high heat stress risk and relatively lower wealth distribution. The communities in these areas are most at-risk of the negative health consequences of extreme heat stress. The densely populated urban centers such as Dakar and Saint-Louis are comparatively less exposed to heat stress and have more means to cope with their impact. However, the urban heat island effect can increase the intensity of extreme temperature events. 20 Recurring drought events can affect large areas of the Senegal territory, and their impact can be more severe in lower wealth areas in the center of the country, north of the Gambia. The south and southeast areas have high relative poverty, but low hazard occurrence. Conversely, the western and northern region show higher drought risk value but lower poverty rates. 21 The effects of flooding on agricultural land and the poorest households are concentrated in the central parts of the country. Farmers located in these regions face high flood risk while likely having less capacity to respond to it or take adaptive measures. 22 Air pollution hazard is widespread in the country due to dry conditions and the presence of desert dust. Thus, the range between the low and high exposure class is very small (18.6 percent to 19.4 percent of total population) and poverty is the main driving factor of potential severe health impacts. 12 West Bank and Gaza Country Climate and Development Report 1.3. Greenhouse Gas emissions profiles Senegal’s GHG emissions have grown steadily, with a slight decoupling from economic growth. However, emissions will increase faster as oil and gas resources are developed. In 2022, Senegal emitted 30.92 million tons of carbon dioxide (CO2) equivalent or million tons of CO2 equivalent (MtCO2e) as shown in figure 1.2—less than 0.1 percent of global emissions.23 Of those emissions, agriculture accounted for 44.3 percent, energy 33.1 percent, and the other sectors (industrial processes and waste) for the remainder. Land use, land-use change, and forestry provide a net sink of about 10–12 MtCO2e per year. CO2 accounts for 42 percent of all emissions, mostly from energy and the remainder from industrial processes; methane (CH4) for 34 percent of all emissions, most of which are from agriculture and the rest from waste; and nitrous oxide (N2O) for the remaining 19 percent of emissions, virtually all from agriculture. There are other gases as well, though not as significant in terms of emissions. Figure 1.2. Senegal’s GHG Emissions (1990–2022) Historical emissions Emissions targets 38Mt 2022 30.92Mt 29Mt 19Mt 9.5Mt 0 1990 1994 1998 2002 2006 2010 2014 2018 2022 2026 2031 1990 2022 Agriculture Energy Industrial Processes and Product Use Waste Other Source: Global Climate Watch data, accessed April 2024. According to the NDC, baseline emissions are expected to grow by nearly 50 percent until 2030, primarily from the energy sector. Agriculture emissions are expected to continue growing at the same pace as currently, with enteric fermentation being the main emission source for the sector.24 On the other hand, emissions from energy are expected to grow exponentially on the back of economic and population growth and the start of oil and gas resource exploitation. Senegal’s energy sector is comparatively highly carbon- dependent, highlighting the scope for a clean energy transition. Oil is the dominant fuel in power production (at more than 80 percent versus 64 percent for the SSA average). In addition, only 24 percent of Senegal’s population has access to clean fuels and technologies for cooking, with wood energy a major source of forest degradation (and emissions) in the southeast of the country. This underscores the importance of initiatives supporting access to improved cooking services, and more globally, programs to protect, restore, and expand forests to maintain and grow their carbon sink. 23 Global Climate Watch data, accessed January 2024. 24 Although expansion of irrigated rice areas for food security purposes might result in a significant growth of methane, unless specific practices are applied. West Bank and Gaza Country Climate and Development Report 13 The development of oil and gas resources is expected to begin in 2024–25, allowing a significant switch from HFO to gas for domestic power production. That will lower GHG emissions for each unit of electricity generation, but the addition of generation capacity and demand growth might offset part of these reductions. Emissions from the utilization of domestic gas are estimated to plateau at about 8 MtCO2e per year (still displacing significantly more carbon-intensive energy production), while upstream emissions from production and gas liquefaction are likely to add another 2 MtCO2e per year (not including methane emissions).25 As a nascent oil and gas producer with a strong export component, Senegal has a particular interest in producing at a low carbon footprint to be able to gain and maintain market share (and avoid stranded assets in a worst case scenario) in an increasingly environmentally conscious market. The energy transition is further discussed in chapter 4. Box 1.4. Precision Emission Surveys for Landfill and Gas Management in Senegal Precision emission surveys developed in partnership with the Senegal Municipal Solid Waste Management Project (PROMOGED) could help managing landfill and gas-related facilities. Figure B1.4.1 displays results of drone-based surveys of the atmospheric concentration of methane released across baseline weeks from Mbeubeuss, the largest landfill in West Africa, bordering Dakar. Directly measured signals confirm strong emissions (30 percent of Senegal’s waste sector GHG emissions) and show the locations of methane plumes on site. Major emission hotspots are seen concentrated on the outskirt slopes of the site, where controls can be particularly effective. Plugging fugitive emissions is only possible where leaks can be seen. The results point the way for new approaches and tools for monitoring emissions to make the unseen visible, so that carbon leaks into the atmosphere can be located and curbed at gas-related facilities in Senegal. Figure 1.4.1. Methane Gas Concentrations over Mbeubeuss, the Largest Landfill in West Africa Identifiable emission hotspots Mean CH4 concentration (ppm-m over 5m grid) 0 500 1000 1500 2000 2500 3000 Source: PROMOGED-DIME Surveys 2024.a Note: Inverse-distance-weighted, gridded concentrations. Emission hotspots occur on the landfill plateaus’ outer inclines, where controls can be most effective to contain risks. a. See also Seo et al. 2024. 25 It is difficult at this stage to estimate methane emissions from hydrocarbon production as activity is just beginning. Furthermore, as methane emissions originate mostly from old and/or poorly maintained facilities, it can be expected that this does not pose a major issue in the years to come as the facilities are new and were put in place for operators who are known to be responsible. Finally, new regulation covering flaring and venting will help further control the impact of hydrocarbon production. 14 West Bank and Gaza Country Climate and Development Report Additional emissions will come from landfill gas and other waste, now estimated at 2.6 MtCO2e. Waste generation in Senegal is expected to increase threefold within 30 years, from 2.44 million tons in 2020 to almost 9 million tons in 2050. As a result, significant investments will be needed to reduce unregulated dumping and to capture landfill gas. Reducing dumping by 25 percent in 10 years, compared to 2020 level, is estimated to lead to 39 percent reduction in emissions. Such steps will also reduce the amount of pollution flowing into soils and the marine environment, improving health and environmental outcomes, and strengthening conditions for local economic development (see discussion in the “Sustainable Cities” subsection of chapter 3). Box 1.4 highlights new approaches to measure methane emissions from waste and inform landfill g-as management accurately and in real time. West Bank and Gaza Country Climate and Development Report 15 Senegal © Mohammed alsdudi/Shutterstock 16 West Bank and Gaza Country Climate and Development Report Chapter 2: Country Climate Readiness 2.1. Climate Commitments 2.1.1. A Focus on Adaptation and Energy Transition Senegal is a party to the Paris Agreement on climate change and has committed to both adaptation objectives and GHG emissions reduction in its NDC. The NDC, submitted in 2020, is increasing in ambition compared to the Intended Nationally Determined Contribution submitted in 2015. The NDC commits to a 5–7 percent reduction in GHG emissions by 2025–30 (below business as usual), making additional efforts conditional on external support (23.7–29.5 percent emission reduction by 2025–30). Mitigation commitments demonstrate the intent to initiate a sustainable energy transition while balancing increasing access for energy security with mitigation ambition for cost-effectiveness, other cobenefits (like improved air quality), and nascent carbon constraints on trade with other regions. Adaptation is a top short-term priority, combined with maximizing development. The three main adaptation objectives are: improving monitoring by enhancing networks for climate, oceanic, and coastal data; strengthening the resilience of ecosystems and productive activities like agriculture; and better protecting people from the risks and disasters caused by the impacts of climate change, especially floods. The following 4 sectors account for almost 70 percent of adaptation needs: water resource management (20 percent), flood risk management (17 percent), agriculture (16 percent), and coastal zone management (15 percent). To reduce GHG emissions, Senegal’s NDC proposes to increase renewables (solar, wind, and hydropower) and replace oil for energy production with natural gas. It also envisions deploying efficient cookstoves, boosting energy efficiency across the economy, enhancing carbon sequestration through more sustainable agriculture and forestry, and improving solid and liquid waste management. Almost 70 percent of mitigation needs would go to three sectors: power production (30 percent), waste management (21 percent), and transport (18 percent). Senegal has also joined the Global Methane Pledge and the Bonn Challenge, under which the country has pledged to restore 2 million hectares (ha) of degraded and/or deforested lands by 2030. The development of the oil and gas reserves will mark 2024 as a major turning point for the Senegalese economy. As chapter 4 describes in detail, Senegal is gearing up to become a producer and exporter of oil and gas, with several projects already underway. In 2019, the International Monetary Fund (IMF) estimated that the additional oil and gas revenues could add extra 1.5 percent of GDP per year from 2022 to 2043. Also, Senegal’s GHG emissions will likely rise, a consideration to be fully integrated into the NDC update. 2.1.2. Incorporating Climate into National and Sectoral Strategies and Plans Over the past few years, Senegal has begun to include some of its international NDC commitments in its public policies (that is, operationalizing top-down goals and objectives into bottom-up strategies and actions). In the past years, the central policy framework enabling Senegal to meet its NDC commitments has been its national development strategy, the Agenda Senegal 2050. The Agenda Senegal 2050 highlighted the vulnerabilities of key economic sectors to climate change impacts, such as coastal erosion, drought, higher temperatures, and more extreme rainfall patterns. Through its successive five-year actions plans, the Agenda Senegal 2050 increasingly aligned the country’s development objectives with the NDC’s goals by envisioning a green and resilient strategy that also boosts growth, generates jobs, and alleviates poverty. Senegal is West Bank and Gaza Country Climate and Development Report 17 developing a comprehensive climate change framework with the upcoming Long-Term Vision (LTV) until 2050, a subsequent strategic roadmap for its operationalization through a Long-Term Low-Emission Development Strategy (LT-LEDS), and the planned NDC update in 2025. The key challenge for the LTV will be balancing oil and gas development with the country’s decarbonization and mitigation commitments. Senegal also needs to define the role of the private sector in climate action, for instance for energy, in converting existing power plants to gas, which requires strengthening the regulatory, contractual, and financial framework. Similarly, the LT-LDES will need to integrate long-term zero emissions goals into the short- to medium-term sectoral policies. The LTV and LT-LDES are thus expected to play a crucial role in the NDC update and the development of subsequent country-wide, sectoral, and regional climate and development action plans, with clear short- to medium-term targets and indicators consistent with the LTV and LT-LDES. On mitigation, Senegal is also progressing towards its participation in Article 6 of the Paris Agreement, as evidenced by the May 2024 validation of a first-of-its- kind operational manual on carbon market transactions. However, further work is needed to establish a solid governance framework, including defining project selection criteria and setting up a budgeted medium-term roadmap to fully enable carbon transactions under the Paris Agreement’s Article 6 in Senegal. Box 2.1. What is Senegal’s Adaptation and Resilience Readiness? This Country Climate and Development Report (CCDR) used the Adaptation and Resilience (A&R) diagnostic tool to provide a macrolevel assessment of Senegal’s adaptation and resilience readiness. The assessment is built around six pillars specific to the priority areas of action, supported by a set of qualitative and quantitative indicators. A red, yellow, or green “traffic light system” is used to evaluate each indicator as being Nascent, Emerging, or Established. The preliminary findings show that Senegal is making progress toward building resilience and adaptive capacity, with 57 percent of indicators classified as Emerging (43 percent) or Established (14 percent). Based on the findings, the recommendations include: strengthening governance and coordination on adaptation and resilience among relevant stakeholders; integrating adaptation and resilience considerations strategically into national development and sectoral agendas; developing a cohesive climate and disaster financing strategy, including engaging closely with the private sector; enhancing communication, access to climate information, and capacity to manage risks; and implementing monitoring and evaluation to track progress towards adaptation and resilience targets. Full details of the assessment are provided in annex 5. Figure B2.1.1. Senegal’s Adaptation and Resilience Performance Across All Pillars A: Prioritization, implementation and progress monitoring 13 13 2 P4: Manage financial and macrofiscal issues 7 6 1 P3: Help firms and people manage residual risks and natural disasters 10 9 5 P2: Adapt land use plans and protect critical public assets and services 25 27 8 P1: Facilitate the adaptation of people and firms 11 16 5 F: Foundations for rapid, robust and inclusive growth 11 7 5 0 10 20 30 40 50 60 70 80 90 100 Nascent Emerging Established Share of indicators % Source: Based on findings in annex 5. 18 West Bank and Gaza Country Climate and Development Report For effective adaptation, Senegal will need to update its National Adaptation Program of Action (Plan d’Action National d’Adaptation, PANA), which dates back to 2006. No other plan since then addresses adaptation in a wholesome manner (that is, considering all sectors and their interdependence); therefore, developing a new PANA, including updated baselines, targets, and measurable indicators, is a priority. The latest sectoral national adaptation plan (NAP) was adopted in 2016; it specifically addresses fisheries and aquaculture and is in the process of being updated. In 2015, Senegal adopted a revised National Strategy Action Plan for Biodiversity (Stratégie Nationale et Plan National d’Actions pour la Biodiversité), the first one dating back to 1998, and a biodiversity adaptation action plan, Assessment of the Vulnerability of the Biodiversity Sector to Climate and Adaptation to Climate Change within the Framework of the Nationally Determined Contribution (Evaluation de la Vulnérabilité du Secteur de la Biodiversité au Climat et de L’adaptation aux Changements Climatiques dans le Cadre de la Contribution Déterminée au niveau National), was further developed in 2017. Several other sectoral NAPs have been under development, including for agriculture (with Québec’s support), coastal zones (with European Union support), livestock farming, biodiversity and tourism, water resources, flood-focused disaster risk management (DRM), health, and infrastructure (with United Nations Development Programme support), per FAO 2020. To date, very few sectors have climate action plans in place and when they do, integration into sectoral projects and programs, funding mobilization, and monitoring and reporting are not systematic. Lagging climate action across sectors weighs on economic activities, especially those in agriculture, fisheries, and transport that are least prepared (see findings from private sector survey in section 2.4 ). While Senegal is making efforts to integrate resilience into policy, planning, and economic sectors, it has a fair amount of work to do to improve existing adaptive capacity and create the functional, enabling environment needed to deliver on its adaptation and resilience priorities (see box 2.1 and figure B2.1.1). While Senegal has clearly articulated its climate commitments and ambitions, the status of effective implementation is not well known, at least publicly. Reporting on the NDC mitigation and adaptation actions does not yet appear to be systematic (even though the yearly progress report from the ministry in charge of the environment does report on climate action, but not systematically in light of the NDC). Publishing regular, public status updates on the implementation of Senegal’s plans would benefit stakeholders’ decision-making processes related to climate actions. Further, extracting lessons from the implementation of existing NAPs and climate-related programs remains to be carried out and integrated into the formulation of upcoming policies and plans. 2.2. Climate-Related Legislation and Institutional Coordination Mechanisms 2.2.1. Climate-Related Legislation Senegal displays a scattered corpus of climate-related legislation (CAT 2022),26 with crucial energy transition matters such as renewable energy and carbon markets or adaptation sectoral areas lacking full, consistent, and comprehensive legal coverage. For instance, renewable energy production from solar, wind, and biogas sources is dealt with by a law and implementing interministerial decree27 that mainly tackle incentive schemes through value added tax (VAT) exemptions for selected production purchases. Similarly, the policy framework for DRM lacks in consistency and comprehensiveness. Often, climate considerations are not the primary object of these policies and are more a cobenefit. Overall, legal gaps are further reinforced by missing implementation decrees and the absence of comprehensive, cross-cutting 26 Also see ”Climate Change Laws of the World” at https://climate-laws.org/search?l=senegal&o=0. 27 Renewable Energy Law (No. 2010-21) of December 2010 and Arrêté interministériel n° 010 158 of May 28, 2020. West Bank and Gaza Country Climate and Development Report 19 connections. Once a new overall institutional framework for coordinating and managing climate change issues is defined, further work will be needed to exhaustively assess and then fill these gaps to effectively support climate action in Senegal. The country still lacks a comprehensive climate change law or a regulatory framework to achieve its adaptation and decarbonization goals. The country has ratified the main multilateral climate-related agreements,28 which supported the preparation of several national policy documents. Still, there is still no legal requirement for public sector organizations to include climate change dimensions in their policies, planning instruments, or budget processes. Climate considerations are not a mandatory part of environmental assessments either. The lack of comprehensive, cross-sectoral climate change legislation exposes climate policies to shifts in political priorities and weakens predictability over existing incentives and potential redress mechanisms or sanctions. However, Senegal has initiated significant reforms in an attempt to curb its growing carbon footprint. In August 2023, Senegal adopted a new Environment Code (Loi n°2023-15)29 with provisions for managing mining, oil, and gas activities (that is, venting and flaring), among others. The code is still awaiting its implementation decrees. The legal enshrinement of the principle of corporate responsibility also creates new legal tools to further support mitigation and adaptation objectives. In addition, in 2022, Senegal adopted a law (Loi n°2022-09) to allocate hydrocarbon revenues, including those of state-owned enterprises, to the national budget. The law envisages a more transparent and inclusive administration of hydrocarbon revenues, facilitating investments that prioritize social and environmental considerations. For this purpose, an “Intergenerational Fund” was established as a climate-dedicated fund managed by the existing Sovereign Fund for Strategic Investment (Sovereign Wealth Fund for Strategic Investments, FONSIS), which offers an opportunity to strengthen the country’s climate financing in critically underfunded adaptation sectors. In October 2023, the pending implementing decree was adopted by the Council of Ministers, thus specifying the fund’s management procedures, as well as its investment committee’s missions, composition, and operational procedures (Art. 10). Yet, the absence of a streamlined legislative and institutional framework hampers disaster prevention, mitigation, and management. While DRM prerogatives mostly fall under the authority of the Ministry of Interior, overseeing the Directorate of Civil Protection, high-level coordination mechanisms for disaster response and risk management (across ministries and agencies, including at the territorial level) have been established and ad hoc institutions have been regularly created in the aftermath of the main flooding events to coordinate flood risk management and flood response. Resource constraints and fragmentation, low human capacity, and lack of clarity on the operational and/or hierarchical links between these different bodies have created inefficiencies. Overall, while resources allocated to DRM have increased, funding remains fragmented, with DRM undertaken by sectoral ministries within their own envelope and funding for disaster response undertaken by reserve funds. Further, despite the recent reforms, DRM remains poorly integrated into budget planning. The 2024 Finance Law provides aspects of regulatory enhancement for risk preparedness. It improves mechanisms to identify climate-related budgetary risks (occurrence and impacts), identifying mitigation measures, and planning scenarios to address risks and disasters when they occur. These are specifically either macroeconomic risks (that is, inflation, decline in agricultural production, and higher costs of adapting to climate change) or related to health and natural emergencies (for example, floods, droughts, and fires). 28 For instance, the United Nations Framework Convention on Climate Change (UNFCCC, 1994), the Convention on Biological Diversity (1994), the Convention to Combat Desertification (1995), the Kyoto Protocol (2001), and the Paris Agreement (2016). 29 See https://faolex.fao.org/docs/pdf/sen220404.pdf. 20 West Bank and Gaza Country Climate and Development Report 2.2.2. Institutional Coordination for Climate Change As of 2024, there is no clearly defined or established coordination mechanism among institutions to facilitate the implementation of climate change objectives and NDC commitments across ministries and public agencies. To date, the only national sustainable development strategy referencing climate change, which was developed by the ministry in charge of the environment in 2015, has remained limited in reach and implementation. With the new government in place, there is a clear opportunity to politically and technically reassess all climate objectives, benchmark existing texts’ gaps and inconsistencies in order to harmonize legal tools and procedures and define and reconfirm the institutional responsibilities for managing and coordinating climate change. To improve climate change governance, Senegal could strengthen existing institutional and organizational arrangements and improve coordination among all key government institutions. Currently, the main ministries and government bodies with responsibilities for climate change include: y The Ministry of Environment and Ecological Transition (METE) develops and implements Senegal’s environmental policy, oversees the monitoring and evaluation of the NDC’s activities and indicators, and coordinates and monitors the sectoral NAPs. It also prepares and implements policies for environmental monitoring, reducing pollution, and protecting nature, wildlife, and flora. However, the ministry does not have a clearly defined mandate for adaptation, mitigation, or emissions reduction measures, or for the transition towards carbon neutrality. y The National Committee on Climate Change (COMNACC), an inter-ministerial body with broad stakeholder participation, is tasked with advisory, information sharing, and awareness raising functions. y The Ministry of Economy, Planning, and Cooperation (MEPC) monitors the policy framework for Senegal’s efforts to meet its unconditional NDC commitments. It also oversees the FONSIS and the public investment management (PIM) framework, which aligns Senegal’s investments with the NDC. y The Ministry of Finance and Budget (MFB) monitors yearly allocations of resources to various climate-related projects and action plans and tracks expenses. y Sectoral ministries develop sectoral strategies and sectoral NAPs. Creating a more effective whole-of-government approach will require Senegal to clearly articulate these institutions’ respective responsibilities and mandates of for climate change under the strategic guidance of the center of government. One possible first step for more effective coordination would be placing the climate agenda within a central planning and coordinating body, such as the Primature or Cabinet. This body could then establish clear strategic directions and arbitrage among competing priorities. In this model, the METE and the COMNACC could assume key coordinating and technical roles, informing the decisions to be taken by the Council of Ministers. Better coordination would also improve the performance of the Monitoring and Evaluation Unit (Cadre harmonisé de suivi-évaluation des politiques publiques, CASE). Another top priority would be strengthening the advising role of the METE, elevating its technical expertise to a higher political level, and enabling it to collaborate more effectively with the ministries implementing the action plans. In addition, the role of the MEPC could be expanded to include more climate-smart PIM while building the capacity of the MFB on climate-smart budgeting (see section 2.3). Once a more effective whole-of-government approach is in place, actual implementation of climate policies can begin. Effective implementation will require systematically measuring progress towards climate change goals, using standardized and verifiable reporting. The Operational Monitoring Office (Bureau Opérationnel de Coordination et de Suivi des Projets et Programmes, BOCS), which enabled regular and comprehensive reporting on the 29 flagship projects and 17 reforms of the Agenda Senegal 2050 Priority Action Plan 2019‑23, could be West Bank and Gaza Country Climate and Development Report 21 an example for a future climate dashboard. This methodology and experience could be used more broadly in the design of the upcoming cross-government measurement, reporting, and verification (MRV) system. In addition, all government entities could share a common database and access information systems that track progress and bottlenecks, and a component of the MRV system could be specifically dedicated to mitigation efforts. Overall, an effective MRV system would generate accurate and regular updates on the government’s mitigation and adaptation actions, as well as on technology transfer, climate finance, and institutional capacity building. Effective climate change governance also requires participation by subnational governments, with climate change measures mainstreamed into local plans (figure 2.1). Decentralization has significantly increased expectations toward subnational governments, which have not been met by commensurate implementation capacity and resources allocations. Local governments can play key roles in improving climate resilience, but they typically lack the capacity and resources to design, implement, and monitor climate actions. New or enhanced subnational institutional mechanisms are needed. Revised budget nomenclature can promote green investment and better management of natural resources, for example, while local vulnerability studies can enable local governments to better understand and assess climate risks and improve urban planning and the delivery of municipal services. Training and sensitization could be organized based on the new Urban Code and its climate-related provisions and other key policy and planning documents to raise awareness and build capacity of territorial administrations. In addition, the regional climate change committees (Comités Régionaux sur les Changements Climatiques, COMRECC) could play larger roles. Finally, the Local Governments Equipment Fund Endowment (Fonds d’Equipement des Collectivités Locales, FECL) and the Fund for Decentralization (Fonds de dotation de la décentralisation, FDD) could be better targeted at climate change-related needs and local resilience projects. Figure 2.1. Proposed Governance Framework for the Climate Change Agenda in Senegal Strategic guidance and oversight for climate change policy and Presidency / Primature implementation. Whole-of-government coordination Interministerial committee on Climate Change: and support to strategic decision-making and development - Chair: to de decided by the authorities of core climate strategies and - Secretariat: Ministry of Environement (climate questions) and Ministry of Finance (resource allocation) systems (Annual implementation - Members: All relevant ministries and government institutions report of PSE projects, NDC and - Advisory body: COMNACC NAP updates, LTV/LTS compliance, MRV, communication). - Strategic results monitoring: BOCS Ministry of Sector ministries Agencies Green Resource allocations & Ministry of (Interior, Energy, (Statistics, finance, Finance and Economy, action plans monitoring. Planning and Water, Renewable Private sector, Budget Agriculture) energy) CSOs Cooperation Sovereign Funds Projects Climate Impact for Strategic + tagging assessments Investments Action (FONSIS) Plans Source: World Bank 2024. Note: COMNACC = National Committee on Climate Change; LTS= long-term strategy; LTV =long-term vision; MRV = measurement, reporting, and verification; NAP = national action plan; NDC = Nationally Determined Contribution; NGO = nongovernmental organization. 22 West Bank and Gaza Country Climate and Development Report 2.3. Institutional Readiness for Climate Change Action 2.3.1. Integration into Investment Instruments and Budget Processes While the METE oversees NDC implementation, the MEPC and the MFB will be crucial to accelerating climate action at the pace and scale needed. They are in a position to elevate the issue and facilitate cross-sectoral coordination, influence development planning by ensuring it is fully climate-informed and resources are aligned with climate objectives, leverage fiscal instruments for climate action, and mobilize new and innovative climate finance. Recognizing this need, Senegal has committed to strengthening the budget process (box 2.2) and the public investment appraisal framework. In addition, in the 2023 climate- focused Public Investment Management Assessment (C-PIMA), the IMF has recommended that the MEPC strengthen the correlation between expenditure planning and budgeting, in part by providing a detailed cost breakdown of all major projects related to the country’s climate objectives. Box 2.2. Senegal’s 2024–26 Multiyear Budget and Economic Programming Document30 In the latest publication of the Multi-Year Budget and Economic Programming (Document de Programmation budgétaire et économique pluriannuelle, DPBEP) for 2024–26, the government integrates mitigation and adaptation measures into the budgetary process as it makes every effort to fulfil its NDC commitments. The document thus emphasizes the importance of including the following in the upcoming yearly budgets: prioritized investments related to improving water management in the agricultural sector, managing resilience to coastal erosion, and addressing climate-related risks. It also commits to having budgets reflect all related measures in sectoral policies and relevant reforms. Senegal has also recently started to consider the national budget’s climate impacts more systematically. The government has, for the first time, prepared a “green budget” (budget vert) to better address the adverse effects of climate change (box 2.3). The budget thus includes fiscal policy incentives, such as a 30 percent tax credit for manufacturing renewable energy production equipment, tax reductions for investing in antipollution goods and renewable energy, and higher taxes on goods and materials having negative effects on the environment. Similarly, the budget supports adaptation efforts in climate-sensitive sectors. It includes funding measures towards improving water management in the agricultural sector, resilience to coastal erosion, climate risk management, biodiversity conservation, and natural heritage preservation, among others. Finally, the Senegalese government could also highlight the level (or share) of green budgeting compared to the overall budget with actual expenditures at the national and at the decentralized levels. Clear reporting on green budget reflects the level of a country’s commitment to resilience and sustainability more tangibly than any policy or plan. 30 See Document de Programmation budgétaire et économique pluriannuelle, June 2023 : https://budget.sec.gouv.sn///articles/fichiers/649b225a-0b2c-4839-b0c1-408d0a2a028a.pdf West Bank and Gaza Country Climate and Development Report 23 Box 2.3. Senegal’s Budget for 2024 Senegal’s budget document for 2024 (Projet de Loi de Finance,31 PLF) indicates the government’s strong commitments to implementing a green budget and addressing climate change impacts. It includes: • A primary focus on climate-smart investments. The budget document highlights climate-sensitive investments to facilitate the analysis of climate adaptation and mitigation policies. All government projects will also be screened for climate change relevance and tagged accordingly. • A secondary focus on budget risks management. The budget document attempts to safeguard the budget from various environmental and financial shocks by enhancing the regulatory framework for budgetary risk provisions. It establishes mechanisms to better identify risks, develop methodologies for assessing possible impacts, identify and plan mitigation measures, and report on the utilization of those measures. The 2024 document also calls for the establishment of a “green budget” with fiscal incentives for mitigation, funding allocation for adaptation in priority sectors, and improved reporting. Significant work remains to be done to further mainstream climate change considerations into the entire budget process. A clearer costing of NDC objectives and allocations in the budget, and a clear quantification of climate risks, would greatly enhance the public expenditure cycle. For example, climate tagging (and prioritization) and ex-post assessments of the impact of climate spending32 would strengthen the process. The government is working with the IMF to accomplish this through a capacity-building program (IMF 2023a).33 The type of method to tag climate-related expenditures will need to justify the categorization choices and the regularity and granularity of the reporting system. Clarification will be expected on the mandate attribution for effective implementation, monitoring, and reporting of climate-related expenditures, as well as for database management on climate financing, containing detailed information on fund allocations, project outcomes, and impact assessments. In addition, Senegal has agreed to assess and quantify fiscal risks associated with disasters in the upcoming 2025 budget law. 31 See Senegal’s budget law (PLF) for the year 2024: https://budget.sec.gouv.sn/telecharger-le-document/65298ab8-f828-42c3-be7a-c7830a2a028a/telechargement 32 As a starting point, the MFB highlights the importance of using the existing Program Budget Support System (SYSBUDGEP) to support any tagging of climate-related expenses for accountability and impact assessments. This includes revising the budgetary classification for local authorities, echoing the 2016 Opinion of the Economic, Social and Environmental Council (CESE) titled “Green Economy in Senegal” regarding the necessity to integrate the revision of the budgetary classification into the ongoing reform of Phase II of Act III of decentralization. 33 As a start, the IMF reported in 2023 that it will support the Senegalese government in 2024 through a capacity building program to strengthen its institutional and operational framework for collecting, analyzing, and disseminating geo-tagged climate risk information to strengthen DRM; and fast-track basic budget preparation and implementation reforms to strengthen climate tagging and ex-post assessment of impact of climate spending. Both the MEPC and the MFB will greatly benefit from this coordinated capacity-building exercise in order to streamline their approach and adopt compatible practices moving forward. 24 West Bank and Gaza Country Climate and Development Report Similarly, climate change considerations need to be incorporated into sectoral ministries’ policy letters and multi-annual budgets. Sectoral ministries need to streamline climate change considerations into their planning instruments and build the capacity of their staff to implement change. The information base, tools, and methodologies for these assessments need to be developed and capacity built for their proper implementation. External audit or ex-post evaluation of climate-sensitive projects have yet to be conducted. The maintenance needs of existing assets also need to consider climate risks. Senegal is strengthening a comprehensive framework for managing public investments. In October 2023, the Council of Ministers adopted a decree in the general framework for PIM to include climate considerations in each ministry’s processes (Décret n°2023-2142). The decree states that each potential new action plan project should be assessed by each ministry for how well it meets both development and climate change objectives. It also requires reports after three or five years assessing achievements in increasing sustainability and addressing climate change. This will be especially important for the Ministry of Energy, Petroleum, and Mines (MEPM), given the coming development of oil and gas resources. Overall, a priority would be to ensure the implementation of the new decree regulating PIM within each ministry to fully enable assessments of environmental and socio-economic factors and climate risks for all new government-funded projects. 2.3.2. Risks to Climate Action Due to Lack of Data Accessibility and Accountability While considerable climate data and information are being produced, the lack of database sharing and institutional coordination hinders their effective use. Several government ministries and agencies already collect substantial climate-related data (for example, geotagged granular climate risk data and project information, which can contribute to climate vulnerability assessment and response management), but they do not systematically share their databases for information cross-referencing nor update it systematically. Working towards public sharing of climate data (for example, scenarios and forecasts, vulnerability analyses, technology performance assessments, and so on) would greatly benefit the design and implementation of climate interventions. As a caveat, risk disclosure requirements can potentially dissuade investors from directing funds where spending is most needed, especially for adaptation projects, which might exacerbate vulnerability. Efforts to take action on climate also suffer from insufficient accountability at the public procurement level, which is especially relevant in the provision of essential utilities like water and electricity. Key legal documents that implement public procurement directives do not explicitly acknowledge that environmental outcomes should be an objective of the procurement system. As a result, they overemphasize the selection of the lowest cost bids in awarding contracts. Other potential instruments, such as the Law on Public- Private Partnership (Loi n°2021-23) by MEPC, do not apply to contracts related to the energy, mining, and telecommunications sectors (Décret n°2021-1443). The procurement system thus fails to take advantage of the opportunity to achieve social and environmental objectives in procurement decisions. Developing guidelines to assist and incentivize procuring entities in integrating environmental impact assessments in contractor selections would further align the government’s actions with the NDC and future climate policy. Enhancing citizen or civil society involvement in evaluating projects could bolster local-level policy ownership and improve compliance with environmental standards and climate change considerations. While legal instruments like the environmental or mining codes are in place, greater citizen participation could significantly improve environmental preservation and restoration activities, while also having positive climate impacts (for example, participation in environmental and climate monitoring). West Bank and Gaza Country Climate and Development Report 25 2.4. Private Sector Readiness 2.3.1. Integration into investment instruments and budget processes To gauge the degree of climate readiness among private sector operators, a Private Sector Green Survey was conducted at the end of 2023 by the International Finance Corporation (IFC), the World Bank Group entity in charge of private sector development. The survey assessed the private sector’s awareness of climate risks, the potential impacts of climate shocks on their operations, the use of innovative solutions for adapting to climate shocks and mitigating emissions, and the available green finance instruments. The survey covered a representative sample of 600 enterprises spread among regions and sectors, using the latest business census (Recensement Général des Entreprises, RGE) by the National Agency for Statistics and Demography (ANSD) (annex 5), and was conducted in person. The ANSD database showed that the Senegalese private sector has a high degree of informality (95.5 percent) and is concentrated in the Dakar region (39 percent) and in the commerce sector. The survey revealed the following about the private sector: A high awareness of climate exposure. Most Senegalese private enterprises are aware that both the country in general and their own operations are exposed to climate shocks (figure 2.2, table 2.1). However, the survey also revealed low awareness in highly vulnerable sectors, such as fisheries and forestry, which may be because operators are aware of shocks but do not systematically link them to climate change. Figure 2.2. Senegal’s Exposure to Climate Shock Table 2.1. Awareness of Climate Exposure by Sector 81.4% Agree Disagree Do not know 73.9% Agriculture 90.0% 0.0% 10.0% Fisheries 64.3% 7.1% 28.6% Forestry 50.0% 25.0% 25.0% Services 71.3% 21.8% 6.9% Water 71.4% 28.6% 0.0% 19.3% Manufacturing 75.3% 22.1% 2.6% 9.3% 9.3% 6.8% Transport 84.6% 7.7% 7.7% Mining 100.0% 0.0% 0.0% Agree Not agree Don’t know Energy 82.6% 13.0% 4.3% Senegal is exposed Your enterprise is exposed to climate shocks to climate shocks Waste Management 0.0% 100.0% 0.0% Source: World Bank 2024, based IFC survey data. Source: World Bank 2024, based IFC survey data. Recurrent climate shocks. Droughts, floods, heat waves, heavy rains, landslides, storms, strong winds, and wildfires are the most common climate shocks that inflict damages on private sector assets. The cumulative annual monetary costs of these damages are estimated at US$59,000 to US$733,000, with floods causing most damages (figure 2.3). Wildfires cause the second highest costs, but only affect a small number of firms (about 10 percent). In terms of flooding, the most affected regions are Kaffrine, Diourbel, Dakar, and Saint‑Louis, while wildfires are most common in Tambacounda and Kédougou . These climate shocks affect Senegalese firms by delaying deliveries (for nearly 20 percent of respondents), reducing working hours 26 West Bank and Gaza Country Climate and Development Report and numbers of customers, damaging or destroying equipment, and decreasing production or increasing input prices (figure 2.4). The agriculture sector is particularly exposed to climate change, through recurrent droughts and heavy rains, which disrupt seasonal cycles of crop production. Operators in services or commerce are more sensitive to delays in deliveries. Figure 2.3. Estimated Average Annual Monetary Cost of Damages Caused by Climate Events (in US$ Thousands) 733 625 534 473 95 94 59 Drought Flood Heat waves Heavy rains Landslides Storms and winds Wildfires Source: World Bank 2024, based on IFC survey data. Figure 2.4. Top 6 Channels of Climate Impacts on Enterprises (Share of Firms Affected) Delays in deliveries 19.8% Reduction or loss of customers 15.4% Reduction in number of working hours 5.4% Heating and destruction of machinery 3.8% Drop in production 1.6% Input price increase 0.6% 0% 5% 10% 15% 20% Source: World Bank 2024, based on IFC survey data. Climate solutions. Private operators in Senegal are implementing a wide range of climate adaptation solutions, although the practice remains limited to a few sectors. Only the energy and mining sectors have implemented substantial measures to reduce climate-related risks (figure 2.5). In other sectors, climate solutions are not used because of financial constraints or lack of awareness about possible solutions. The survey also found some confusion about which solutions improve overall sustainability and adaptation and which are aimed just at mitigation and also what counts as climate solutions (see very low rate for forestry and water). Most climate solutions now in use by the private sector are low-carbon or flood-prevention- oriented (figure 2.6 and table 2.3). Some firms have also tried to increase climate awareness among their staff or suppliers (18 percent of the firms surveyed). Popular measures being implemented to reduce carbon emissions include making packaging materials more environmentally friendly, installing more efficient lighting and heating and cooling systems, upgrading machines, and retrofitting buildings (figure 2.6). The West Bank and Gaza Country Climate and Development Report 27 use of insurance and other forms of protection to hedge against climate effects is limited. Only 12 percent of firms surveyed are insured against damage caused by extreme weather conditions; 82.7 percent are not covered, and 5.3 percent are unaware of such insurance. Twenty-three percent of firms have adopted other protective measures, which they consider more cost-efficient than insurance. This suggests a need to develop affordable insurance or other protective instruments to support the private sector. Figure 2.5. Share of Firms Using Climate Solutions, by Sector 100% 100% 75% 78% 63% 65% 57% 52% 46% 38% 35% 29% 27% 23% 21% 22% 10% 14% 13% 8% 8% 8% 3% 4% e ry ry s er g rt ng gy ce ur rin po he ste at er ini rvi ult W tu ns En Fis re M Se ric ac Tra Fo uf Ag an M Using Not Using Unaware No Response Source: World Bank 2024, based IFC survey data. Figure 2.6. Types of Climate Solutions in Use Use of LED lamps 0.9% Regular maintenance of equipment 1.3% Adopting preventive measures 1.7% Awareness-raising in the company 1.7% Increase in safetynet 2.5% Adoption of energy-saving measures 2.6% Use of low-carbon materials 3.7% Use of recyclable materials 6.1% Reduction of gas emissions 7.1% Use of solar energy 8.7% Use of electric vehicles 10.0% Adaptations to prevent flooding 12.2% Purchase and renewal of equipment 14% Building buildings/construction 14% 0% 2% 4% 6% 8% 10% 12% 14% Source: World Bank 2024, based IFC survey data. 28 West Bank and Gaza Country Climate and Development Report Energy efficiency. Firms that use energy efficiency measures saved 694,477 MWh per year on average over the past three years. The survey showed that companies have various motivations for using energy efficiency measures (table 2.2). About 41 percent of firms use energy efficiency measures to reduce their energy cost, 18 percent used the measures only to meet customers’ requirements, and 14.3 percent are trying to reorient their business activities. Only 6.6 percent of users are aware of government policies and are implementing energy efficient measures to meet net zero emissions commitments. Meanwhile, 27.5 percent of firms that have not been using energy efficiency measures (figure 2,7) cited the lack of financial resources as the main constraint, while 22.5 percent did not see investing in energy efficiency as being a priority. Others (10.3 percent) cited regulatory uncertainties, concern over future prices, and technical difficulties; 16.6 percent are unaware of possible energy efficiency solutions; and 5.5 percent found energy efficiency measures unprofitable. Overall, the average annual amount of energy saved, while modest, suggests that promoting the use of energy efficiency measures can help reduce carbon emissions, reduce energy costs, and increase firms’ profit margins and competitiveness. The survey also showed a high preference for solar energy as a cost-efficient energy-saving solution among renewable energy users: 85.4 percent of those with renewable energy were solar users, compared to 7.3 percent using biogas, 4.9 percent using hydroelectricity, and 2.4 percent using wind turbines. Figure 2.7. Main Motivations for Use of Energy Figure 2.8. Main Reasons for Not Using Energy Efficiency Measures Efficiency Measures Reduce Lack of financial 41% 27.5% energy costs resources Because others Not a priority 18.8% 22.5% are using investment Meet customers’ Don’t 18% 16.6% requirements know Reorient Business Not 14.3% 5.5% activities profitable Meet the net zero Uncertainty about 6.6% 3.5% emission commitment regulations Avoid custom Uncertainty about 1.4% 3.5% fees on imports future prices Reduce carbon taxes on the Operational and / or 0.6% 3.3% budget of the enterprise technical risks Other 18% Other 17.6% Source: World Bank 2024, based IFC survey data. Note: More than one reason could be provided making the total exceeds 100%. West Bank and Gaza Country Climate and Development Report 29 Table 2.3. Awareness and Adoption of GHG Reduction Measures by the Senegalese Private Sector over the Past Three Years Aware but No Measure Using Unaware not using response Improved heating and cooling systems 34.8% 47.6% 1.2% 16.5% Installation of a renewable energy production system 22.1% 59.6% 1.7% 16.6% Upgrading machines for better energy efficiency 38.9% 46.1% 1.7% 13.3% Avoiding the use of inputs from fossil fuel-related sectors 24.3% 50.9% 4.5% 20.3% Thermal insulation of industrial equipment 13.3% 58.7% 4.8% 23.1% Recovery and optimization of waste heat 5.3% 64.4% 5.2% 25.1% Water conservation system 20.5% 57.4% 1.5% 20.6% Adoption of electric vehicles 9.2% 62.4% 2.5% 26.0% Energy efficient lighting system 47.6% 46.6% 1.7% 4.2% Process enhancements to reduce the energy intensity in 30.6% 54.2% 3.8% 11.3% production Process enhancements to reduce GHG emissions 23.0% 56.2% 4.7% 16.1% from production Introduction of more environmentally- friendly packaging 50.4% 36.6% 2.3% 10.6% Source: World Bank 2024, based IFC survey data. Note: More than one reason could be provided making the total exceeds 100%. Low awareness of government’s policies. Achieving Senegal’s ambitious NDC goals will require substantial participation by the private sector, both in developing climate solutions and participating in their financing. Although the public policies aimed at reducing GHG emissions are yet to be widely understood by the private sector, some climate solutions are emerging. The Green Private Sector Survey undertaken for the present CCDR revealed that 62 percent of the firms reviewed are not aware of the government’s policies to reduce GHG emissions. The water, mining, and energy sectors are the most aware. Though still at limited scales, private operators are implementing a wide range of solutions to reduce emissions. Awareness of climate risks is low, while exposure in some sectors is high. Scaling up adaptation is a priority (box 2.4). See also Tall et al. 2021. The private sector is best placed, through its role as producer and distributor to drive the greening of the economy. The present report estimates that at least 40 percent of funding needs will have to come from the private sector (see chapter 5). While the trend of increasing private sector use of climate solutions is encouraging, it is critical to accelerate this progress. A healthy private sector that invests in climate-resilient solutions and promotes efficient use of resources is indispensable to enhance green and sustainable economic development. The present CCDR identifies several areas where government can act as an enabler around raising awareness and building capacity (as discussed in section 2.3.2 and a general recommendation from the Adaptation and Resilience Diagnostic tool), making available information and decision-support tools (for example, via extension services in agriculture), providing incentives (for example, adopting a coastal law or aligning carbon prices), and supporting the development and scaling up of affordable financing instruments (as discussed in chapter 6). Further analysis of the barriers impeding climate action that the private sector is facing will be required in key development and climate-relevant sectors, such as agriculture, energy, and tourism, to propose concrete applications of the policy directions defined in box 2.4 for each of these sectors. 30 West Bank and Gaza Country Climate and Development Report Box 2.4. Ten Policy Responses to Accelerate Climate Adaptation by the Private Sector in Senegal The following measures can help create a supportive environment for scaling-up climate adaptation in the Senegalese private sector: • Climate information access: Enhance access to climate information by establishing a centralized portal where businesses can obtain relevant data, such as weather forecasts, climate projections, screening tools, and sector-specific adaptation guidelines. • Localized risk assessment: Support the development of localized climate risk assessment tools that help businesses in Senegal understand their specific vulnerabilities to climate change, including sea level rise, extreme weather events, and changing rainfall patterns. • Strengthening regulatory frameworks: Develop and enforce regulations that require businesses to incorporate climate adaptation measures into their operations. This can include setting standards for building resilience, promoting sustainable practices, and mandating climate risk disclosure for large enterprises or for loan applications. On mitigation, this could include energy efficiency audits for small and medium enterprises (SMEs). • Tailored incentives: Implement targeted and time-bound tax breaks, subsidies, or grants for Senegalese businesses that invest in climate-resilient infrastructure or adopt practices that enhance climate adaptation, particularly in sectors most vulnerable to climate impacts (similarly to what the Environment Code supports for clean technologies). • Financial instruments for adaptation: Work with financial institutions to create financial products that cater to the needs of Senegalese businesses looking to invest in adaptation measures, such as low-interest loans for resilience-building projects (see chapter 6). • Capacity-building programs: Offer training programs tailored to the Senegalese context that help businesses understand climate risks and adaptation strategies, focusing on local languages and cultural practices. This can help businesses develop the necessary skills and knowledge to assess climate risks, adopt resilient practices, and integrate climate considerations into their decision- making processes. • Market development for adaptation: Promote the development of markets for climate-resilient goods and services in Senegal, encouraging innovation in areas like drought-resistant crops, water- saving technologies, and resilient construction materials. • Inclusive policy development: Involve a broad range of private sector stakeholders in Senegal in the development of climate policies and strategies to ensure that diverse perspectives are considered and to build a collaborative approach to adaptation. • Recognition programs: Launch programs that recognize and reward businesses in Senegal that demonstrate leadership in climate adaptation, showcasing success stories and encouraging others to follow suit. • Encouraging information sharing and collaboration: Establish platforms for knowledge exchange, networking, and collaboration among businesses, government agencies, and civil society organizations. This can facilitate the sharing of best practices, lessons learned, and innovative solutions for climate adaptation. West Bank and Gaza Country Climate and Development Report 31 Senegal © Mohammed alsdudi/Shutterstock 32 West Bank and Gaza Country Climate and Development Report Chapter 3: Scaling Up Climate Action Across Natural, Built, and Human Capitals The CCDR includes deep dives on climate action across natural, built, and human capitals, where they examine the intersection between development priorities and aspirations, social and economic dynamics, and vulnerability to climate risks. The deep dives attempt to quantify climate change impacts in areas that are critical to the country’s development (food security and environmental stability, productive cities, and human capital) as well as the tradeoffs and synergistic opportunities for climate action that may exist because of interactions and interdependencies between these sectors. The deep dives informed the macroeconomic exercise (for example, sectoral background, calibration of damage functions, costs, and benefits of action) in chapter 5. Food and water security are at risk from climate change. The natural capital deep dive examines the scope for adaptation in agriculture and for strengthened water planning and management as well as the role forests and agricultural landscapes can play in building resilience (for example, protecting water resources) and sequestering carbon (the largest share of emission reductions in the NDC comes from forests). Cities are key economic and population centers that face important adaptation (for example, sea-level rise and flooding) and mitigation challenges (for example, transport and waste management) that are exacerbated by rapid urbanization. The built capital deep dive highlights an array of climate-smart solutions for urban planners and decision-makers. Finally, the human capital deep dive examines how to build resilience and strengthen human capital in response to disasters as well as the slow-onset impacts of climate change via actions in social protection, health, and education. 3.1. Productive Landscapes This section focuses on natural capital and climate change and considers the future of food production (across agriculture and livestock as well as fisheries and aquaculture), water availability and management, and forest ecosystems and their services. The section looks at risks and opportunities so that the population is food- and nutritionally secure. It also looks at how to protect and strengthen natural capital, which is foundational for human life via the critical goods and services it provides. 3.1.1. Food Security Embracing Climate-Smart Agriculture Climate change will lower yields and cause crop failures, increasing food insecurity, pushing food prices up, and increasing the need for imports. A study on small scale producers in the Nioro region (part of the Senegal peanut basin), for example, found that 13–77 percent of all farms would be vulnerable to the higher temperatures and reduced precipitation expected from climate change. Maize yields would drop, though peanut yields could rise (figure 3.1). For the country as a whole, any worsening of the nutritional situation for children under five, who already suffer from a prevalence of wasting (9 percent) and stunting (16.5 percent), would have serious implications for the development of the country’s human capital (IRI 2021). The government is taking measures to improve agricultural productivity in staple crops and achieve food sovereignty as well as seize opportunities for structuring the sector, developing value chains, and creating jobs. West Bank and Gaza Country Climate and Development Report 33 Figure 3.1. Climate Change Impact on Yields in the Nioro Region of Senegal (2050s) Maize Peanut Pearl millet -100 -80 -60 -40 -20 0 20 40 60 80 100 Moderate Emissions High Emissions Source: AgMip 2024; MacCarthy et al. 2013. However, limited technological advancements and gaps in institutions and infrastructure present barriers to more resilient and productive agriculture, hitting the rural poor hardest and pushing further natural resource degradation. Subsistence farmers lack good quality seeds and fertilizers, technology, finance and credit, and agricultural insurance. There has also been insufficient investment in irrigation, reliable storage, and transportation, limiting yields and leading to an estimated 20–50 percent loss of vegetable and fruit production. In addition, traditional practices such as overgrazing and bush fires are contributing to land degradation. A prime reason for the underinvestment in agriculture is unsecure land tenure (box 3.1). Box 3.1. Enhancing Adaptation Outcomes by Strengthening Women’s Land Rights In Senegal, women continue to face significant challenges in accessing and controlling land despite the existence of legal provisions and international commitments for gender equality in land rights. While Senegalese women represent 70 percent of the rural labor force (GoS 2016a), they do not usually make any claims for their own piece of land. Only 6 percent own agricultural land (Gaddis, Lahoti, and Li 2018), and women most often hold land rights that are primarily secondary or temporary access and use rights obtained through unsecured customary practices (World Bank 2024). Although socially legitimate, these practices are not legally recognized and therefore do not provide formal tenure security to a large majority of rural land users. Not having secure land rights poses a risk to the food security and livelihoods of the most vulnerable social groups. It can also be a potential source of conflict and a major obstacle to increasing agricultural productivity as well as public and private sector investment in the country. Securing access to land and property through the establishment of a national cadastre is key to structural change and transformation of agricultural and social policies. The Senegal Cadastre and Land Tenure Improvement Project (PROCASEF) was conceived to support the structural transformation of the land sector, economic development, and long-term social stability by improving the land administration system and registering all legitimate tenure rights in a quarter of the country’s municipalities. This includes registering 158,000 occupancy titles to women. PROCASEF is expected to have several benefits, including enhanced adaptive capacities among female-headed households and higher agricultural productivity as the recognition of rights has been shown to lead to greater 34 West Bank and Gaza Country Climate and Development Report investments in higher-yielding crops, better infrastructure, and adoption of climate-smart practices. Research underscores that formalized tenure is associated positively with sustainable land use practices, soil and water conservation measures, and investments in adaptation infrastructure among female-headed households (Landesa 2023). In Rwanda, for instance, a pilot land regularization effort by the government resulted in women increasing their soil conservation investments (Ali, Deininger, and Goldstein 2011). In Benin, land use planning and demarcation of community customary lands initially resulted in increased land fallowing by women, as well as sustained increases in investment in perennial crops by both men and women (World Bank 2019a). This attests to the need to continue registering the land rights of agricultural land users in the remaining 75 percent of municipalities, the vast majority of whom are women, with a view to meeting the government’s objective of establishing a nationwide cadastre. Beyond strengthening women’s land tenure, other critical gender gaps (especially knowledge and finance) must be addressed for successful adaptation in agriculture. Improving women’s access to extension services can be achieved by including female extension agents and utilizing digital delivery methods designed with women in mind (Lecoutere, Spielman, and Van Campenhout 2020). Enhancing women’s access to credit involves developing credit products that do not rely on traditional collateral (which women tend to have less access to), using broader creditworthiness metrics (Alibhai et al. 2018), and offering larger loan amounts to support sustainable income diversification (Alibhai, Buehren, and Papineni 2018). Finally, making agricultural insurance more accessible and attractive to women can be accomplished by providing flexible premium payment options, financial literacy programs tailored to women, and index-based insurance products for crops predominantly grown by women (Akter et al. 2016), as well as integrating insurance into social protection programs targeting women. To improve productivity and build resilience, it will be essential to pursue the following agricultural interventions and policy reforms, which could increase agricultural production by 20 percent and revenues by 26 percent, while decreasing GHG emissions (see box 3.4 for a private sector perspective): y Provide access to affordable, improved climate-resilient seed varieties (staple crops and horticulture) and better livestock breeds. Other inputs such as fertilizers (both industrial and organic) and mechanization options would also go a long way in enhancing productivity. The use of digital approaches that allow for traceability to avoid inefficient use of subsidies and further promote equitable access to farmers will be a game changer. y Improve irrigation infrastructure and water resources management. The current area under irrigation in Senegal is 104,000 ha, far below the country’s estimated potential of 350,000 ha. In addition, nearly half of the area equipped for irrigation is not actually irrigated34 due to lack of maintenance. Climate-smart irrigation technologies such as drip irrigation or small-scale, solar- powered irrigation from shallow groundwater can help increase farmers’ resilience to droughts and variable rainfall and substantially improve household income through off-season agricultural production. Rehabilitating existing irrigation schemes, adopting water-saving practices, and more systematically capturing runoff water will also help improve water efficiency and productivity while increasing resilience in water-scarce environments. 34 Based on FAO Aquastat data from 2020. West Bank and Gaza Country Climate and Development Report 35 y Provide agricultural insurance mechanisms (AIMs) to help farmers cope with climate shocks and to increase climate change preparedness. Currently, only about 5 percent of the farming population has crop insurance (IPAR and RTI International 2019), and the concept remains largely unknown. Existing national insurance mechanisms should be strengthened, along with efforts to link farmers to private sector players. In addition to loss and damage compensation, insurance can also be a powerful tool to increase preparedness as it can raise awareness on risks and solutions and encourage farmers to adopt climate-smart practices and technologies. Along with expanding insurance coverage, the A&R diagnostic on agriculture and food security also recommends strengthening agriculture EWS to help anticipate climate shocks on production (see box 3.2 ). Box 3.2. Key Insights from the Adaptation and R Diagnostic on Agriculture and Food Security Summary: Senegal has an ambitious adaptation Figure B3.2.1: Level of Readiness for strategy for the agriculture sector demonstrated Agriculture and Food Security through its Nationally Determined Contribution (NDC) and Scaling Up Climate Ambition on Land Food security index Use and Agriculture (SCALA) program. Progress 3 has also been made to encourage agricultural Climate change Global 2 adaptation research and development, including hunger index strategy for the through support to the Senegal Institute agriculture sector 1 for Agricultural Research. Senegal’s Public Expenditure Diagnostic Review, which monitors Agriculture Agriculture the effectiveness and efficiency of its public irrigated early warning land system expenditure in agriculture, has also helped to inform climate adaptation– and mitigation- related decision-making (figure  B3.2.1). Public agricultural Agriculture Despite these efforts, Senegal still ranks in the research expenditure insurance lowest third among peers in the Notre -Dame Global Adaptation Index (ND-GAIN) climate Source: Based on findings in annex 5. vulnerability index. Proposed areas for action to enhance adaptation and resilience: • Enhance existing agriculture insurance system to expand coverage and inclusion of climate hazards. • Strengthen agriculture early warning system (EWS) by more effectively deploying the Food and Agriculture Organization’s (FAO) global information and agriculture EWS or strengthening in-country EWS capacity in collaboration with the National Agency of Civil Aviation and Meteorology (Agence Nationale de l’Aviation Civile et de la Météorologie, ANACIM). Note: See annex 4 for details on methodology and findings. 36 West Bank and Gaza Country Climate and Development Report Box 3.3. Assessing the Potential for Agroforestry in Senegal The CCDR examined the potential for agroforestry, with a specific focus on the Naatangue farm model. This well-proven model integrates crops, horticulture, and potentially aviculture oraquaculture, while ensuring year-round access to water through solar-powered irrigation from groundwater. To gauge the potential of Naatangue farms, a comprehensive suitability analysis was conducted, encompassing topographic factors (land use, groundwater availability, productivity, and depth), socioeconomic indicators (proximity to roads and settlements), climatic variables (temperature and precipitation), and ecological considerations (soil health and structure). See figure B3.3.1. The analysis also looked at job potential and forbade deforestation. Figure B3.3.1: Map of Senegal Highlighting Areas Suitable for Naatangue Farming N Suitable Naatangue Agroforestry Areas - Most Climate Vulnerable Areas Highly Vulnerable, Suitable Areas Very Highly Vulnerable, Suible Areas Suitable Naatangue Agroforestry Areas - Least Climate Vulnerable Areas Low Vulnerable, Suitable Areas Very Low Vulnerable, Suible Areas Source: Original work for the CCDR, unpublished. The suitability analysis conducted by the CCDR indicates that there are currently approximately 1.1 million hectares (ha) of suitable land for Naatangue farm development (from today’s 2,500 ha), and as many as 1.4 million hs of suitable land by 2050. The increase in suitable land is primarily driven by an increase in “highly vulnerable, suitable areas” as temperatures increase and yearly precipitation falls. The analysis finds that least vulnerable, suitable areas will decline if conventional agriculture is developed in these areas, whereas if Naatangue farms are developed between 2025 and 2050, these areas will increase over time. This is because it is assumed that Naatangue farms will provide protective services to the land on which they are developed, even if climate becomes more challenging (for example, with erratic rainfall and higher temperatures). The economic assessment, factoring in the impact of climate change and rising prices of conventional inputs (such as fertilizers and diesel), reveals that Naatangue farms could generate US$5.27 in economic benefits for every dollar invested, compared to US$0.95 for conventional agriculture. Additionally, Naatangue farms have the potential to create 1.4 million jobs and to sequester over 1.24 million tons of carbon dioxide (tCO2) annually (by 2050). Scaling-up Naatangue farms to their potential will necessitate new financing options for farmers and extensive capacity-building. West Bank and Gaza Country Climate and Development Report 37 y Develop an enabling environment and support services to address these constraints. Policy makers, extension agents, and research services need climate-informed policy reforms so that they can focus more on climate adaptation and mitigation. Specific policies would include investing in nature-based solutions (NBS) such as agroforestry (box 3.3) and sustainable water mobilization. These solutions can help restore landscapes and enhance ecosystem services and productivity, thus increasing communities’ resilience to climate-related shocks. They could be promoted by public and private extension services, complemented with digital tools that allow for the formation of a one-stop shop for farmers. Box 3.4. Agriculture Sector Development in Senegal The Senegalese agriculture sector is ripe with opportunities for private investment to foster food security, expand export, and create jobs. These include: horticulture with a competitive advantage due to proximity to Europe, water availability, and favorable climate; staple food production like rice, potato, maize, fonio, sorghum, and millet; and investment in livestock and poultry value chains in broiler, egg, and animal feed production as well as aquaculture. Scaling up productivity in the agriculture sector will require overcoming limited access to financing; seasonality issues due to lack of irrigation technologies and adequate storage facilities; fragmentation with smallholder farmers and complex land tenure; and limited human capital capacity and access to climate-resilient inputs. Reform objectives should include: • Increasing access to diversified financial services: This would include the adoption of innovative agricultural financing methods like commodity-based collateral finance, agricultural index insurance, and equipment leasing to support smallholder farmers, primary production, and processing firms. To expand access to agricultural finance, the government should review the governance of La Banque Agricole to increase transparency and data sharing and support derisking with blended finance for the modernization of the sector through local market and financial actors. • Increasing access to irrigation infrastructure and building storage facilities: Provide incentives to encourage private sector investments in irrigation and the construction of storage facilities. • Simplifying land tenure procedures to support private sector investments and farm extension services: Enable access to land for commercial farming by simplifying and digitizing the procedures for land acquisition while encouraging investments in soil improvement. • Facilitating access to climate-resilient inputs: Revise the input subsidy program to encourage investments in the input sector by addressing the misalignment of quality and delivery of inputs, poor targeting, and obstruction of sustainable practices and supply chain development. The program’s focus should shift to improving productivity in harmony with sustainable natural resource management (especially soil) and capacity building of farmers. Financial mechanisms that reward GHG emissions reductions offer important opportunities to encourage agroforestry and other sustainable practices. Analysis for this CCDR shows that the value of the climate mitigation cobenefits of sustainable agricultural practices ranges between US$133 and US$266 million over 20 years (table 3.1). The value could be much larger (US$6.8 to US$13.5 billion over 20 years) if potential increases in livestock emissions are prevented through affordable strategies such as improving feeding 38 West Bank and Gaza Country Climate and Development Report practices, pasture management, and animal health and husbandry; practicing rotational grazing; using biodigesters or better composting of manure; and avoiding the conversion of rangelands and grasslands to farmland (FAO 2018). As discussed in chapter 6, well-functioning carbon markets with clear and predictable rules and procedures as well as consistent capacity support for project sponsors could potentially be powerful drivers for the adoption or scaling up of sustainable crop and livestock practices. Senegal © Mohammed alsdudi/Shutterstock Table 3.1. Carbon Dioxide Mitigation Potential for Climate-Smart Agriculture Interventions Overall acreage (Hectares) and Actions mitigation potential (tCO2e/yr) Rainfed crop diversification with climate-resilient varieties and 1,200,000 sustainable land management (includes integrated pest and disease management coupled with existing agricultural insurance, mechanisms) 3,200,143 tCO2e/yr Irrigation (with small-scale, solar-powered irrigation using shallow 1,015,000 groundwater in green houses and irrigation from rehabilitated schemes) 537 tCO2e /yr Nature-based solutions including agroforestry and land and water 500,000 conservation for enhanced biodiversity; farmer-managed regeneration 8,268,026 tCO2e/yr Improved livestock productivity (livestock heads considered with 17,000,000 Heads reduced tillage practices and rotational grazing) 11,242,283 tCO2e/yr Carbon revenues (net present value over 20 years, at 6 percent) US$133 million • Low price of carbon (US$43 to US$66 from year 1 to 20) US$266 million • High price of carbon (US$86 to US$131 from year 1 to 20) West Bank and Gaza Country Climate and Development Report 39 Box 3.5. Mangroves and Sea Grass Beds are Key for Coastal Adaptation and Mitigation Forty-two percent of Senegal’s mangroves disappeared between 1980 and 2006, nearly twice the rate of the whole West Africa region (UNEP 2007). The causes included prolonged drought (leading to soil acidification and salination), firewood cutting, road construction, and land clearance upstream. Since 2006, mangroves have rebounded somewhat and are now found along 38 percent of Senegal’s coastline,a primarily in the Sine Saloum delta and Casamance, thanks to several nongovernmental organizations (NGOs) and investors interested in blue carbon. Now, however, sea level rise and enhanced coastal erosion from climate change are increasing the threats to mangroves. Mangroves provide many services. They protect against coastal erosion, extreme weather events, and the incursion of seawater into paddy fields. They also sequester carbon, provide soil fixation, and offer important breeding grounds for fish and shellfish. Bassi et al. (2020) estimate that restoring 1,000 hectares of mangroves per yearover the next 10 years in the Saloum Delta would provide CFAF 257,148 million in additional ecosystem services, while also raising incomes. Actual restoration projects in Casamance demonstrate improved coastal resilience or greater fish abundance (Livelihoods Funds 2023). Agence Française de Développement (2024) highlights options to continue to attract sustainable climate finance for mangroves restoration. Sea grass beds, which cover 67 km2 in Senegal, also provide coastal protection, breeding grounds, and other services (Touron-Gardic 2023). Their value in Senegal is estimated at CFAF 7.65 billion per year, but they are at risk from climate change and human activities (such as pollution and habitat disturbance). a. They cover 1,270 km2 (Global Mangrove Watch data for 2020). Making Fisheries and Aquaculture Resilient Weak governance and management are leading to overexploitation of fish resources and degradation of associated habitat, despite the large economic and social importance of fisheries. Half of the eight monitored pelagic stocks are overexploited (particularly Sardinella sp.), Of the nine monitored groundfish stocks, one-third are overexploited. The main cause is inadequate management that has allowed fishing fleets that are too large for the resource, along with illegal, unreported, and unregulated (IUU) fishing.35 In addition, fish habitats are being degraded by industrial bottom trawling (EJF 2023)36 and other destructive fishing practices, pollution (including marine plastics) (World Bank 2023e),37 and loss of key habitats, such as mangroves, which function as important fish nursery areas (box 3.5). 35 Increased surveillance in recent years seems to have partially kept the growth of IUU fishing in check. However, it is still considered a critical threat, with more than 50 percent of the catches estimated to not have been reported in 2018. According to the Sea Around Us website and data portal, 254,210 tons were reported and an estimation of 312,260 tons were unreported. 36 Bottom trawling leads to indiscriminately catching nontarget species and juveniles, precipitating the decline of fish populations as well as disturbing a large volume of seabed sediment, putting benthic marine life at risk and causing the release of 2 million tonnes of blue carbon annually. 37 Recent estimates put the overall cost of marine plastic pollution at US$10,000 to US$33,000 per ton of plastic while specific damage to the fisheries and (coastal) aquaculture sector could reach close to US$300 per ton of plastic in the coastal areas of West Africa. Estimate for fisheries and aquaculture does not take into account market impact of plastic pollution (lower price due to lower quality of fisheries products). 40 West Bank and Gaza Country Climate and Development Report Climate change is expected to compound these challenges. The fisheries sector is highly vulnerable to climate impacts such as changes in upwelling intensity, sea water temperatures, salinity, and acidity, with maximum catch potentials estimated to decrease by 17 to 19 percent by 2050 and by 9 to 36 percent by 2100 (World Bank 2019b). That vulnerability is heightened by the current poor health of fish stocks and the lack of alternative livelihoods for fishers and other workers. Climate change could thus have severe socioeconomic consequences for fishing communities, causing conflicts, loss of jobs and livelihoods, increased poverty, and population displacement. Senegal has addressed these challenges with one of its first adaptation plans, the Plan national d’adaptation du secteur de la pêche et de l’aquaculture face au changement climatique – Horizon 2035 (2016b), which is currently being updated. The plan describes 11 adaptation measures in 4 strategic areas: knowledge and capacity building in fisheries and climate change (including increased research, monitoring, training, and planning); sustainable management of fishing resources and habitat restoration (with fisheries management plans, greater protection of ecosystems like mangroves, and aquaculture development); enhanced value addition for fish products and diversification of sources of income for fishing communities (such as modernization of fish processing); and improved safety for fishing communities and fishing infrastructures (aimed at reducing accidents, loss of life, and damage to fishing infrastructures). The three top priority actions in the plan are to: y Scale up aquaculture.38 Senegal has made institutional and regulatory reforms to develop aquaculture as a means of improving food security and creating jobs.39 The country has prepared a masterplan, identifying suitable sites and conducting the necessary environmental and social assessments. The plan targets the private sector for developing the new sites. y Improve the sustainable management of fishery resources. Under the Programme Régional des Pêches en Afrique de l’Ouest (PRAO), Senegal has been successful in balancing fishing efforts and community livelihoods with stock recovery and habitat restoration in some areas. Expanding these efforts to more communities, including monitoring where boats are fishing, can boost fisheries health, improve community resilience, and make fishing safer.40 Other management interventions could include developing a fisheries management plan for overharvested species (Sardinella sp.), implementing a biological rest period during the warm season (for species like Dentex anolensis, Pagellus bellotti, and Pomadasys incisus), or adopting admissible catch rates y Strengthen the preparation of management plans (and their implementation) for marine and coastal protected areas. That would include updating monitoring systems (using new developments in remote sensing and image analysis), identifying quickly degrading zones or ecosystems, and natural capital accounting methods to include the value of ecosystem services in planning and decisions. 38 The new sectoral strategy for aquaculture (2023–2032) sees the sector as contributing to food sovereignty and job creation. The NDC identifies the development of aquaculture as one main adaptation direction in fisheries, to mitigate the volatility that climate change could impose on marine fisheries and reduce the dependence of communities on natural protein sources from catch fisheries, whose abundance is threatened by climate change. Developing aquaculture could also help some fishermen whose livelihood is threatened by climate change and farmers whose land is getting increasingly salinized. 39 These include: the creation of the Agence Nationale de l’Aquaculture and its decentralization by implementing branches and regional offices; the creation of tools for the development of the sector (Aquaculture Code, technical guidelines, a strategic development plan, the organization of stakeholders in the aquaculture sector, a guide to good hygiene practices, and an investment model for aquaculture SMEs); and fiscal incentives (exemption for industrial investments in sustainable aquaculture). 40 On fisheries management, other measures could include improving stock monitoring and advancing knowledge of the impact of climate change. On safety of fishermen and infrastructure, other measures could include setting up weather warning systems and linking geolocation with coast guard and rescue as well as defining of standards and preparing best practices for coastal construction (including mitigation), followed by rehabilitating or strengthening of infrastructure work. West Bank and Gaza Country Climate and Development Report 41 3.1.2. Water Security Senegal faces periodic water stress,41 water insecurity, and deteriorating water resources, as detailed in chapter 1, in part because of significant gaps in water resource management (WRM) functions. Currently, WRM functions are shared between the Water Planning and Management Directorate (Direction de Gestion et Planification des Ressources en Eau, DGPRE), which focuses on groundwater, and the Lakes and Rivers Board (Office des Lacs et des Cours d’eau, OLAC). Both are under the Ministry of Hydraulics and Sanitation. However, other departments within the Ministry of Agriculture, Food Security, and Livestock manage water for irrigation and oversee the associated artificial water bodies.42 This fragmented responsibility was temporarily addressed with the establishment of a national water platform as part of the Senegal Water Security Study but remains a problem due to overlapping functions and poorly defined responsibilities. A revised Water Code aiming to replace the 1981 law is currently at Ministerial Council level for approval. The new code would improve the definition of water resources and the institutional management framework, and would formally include climate change considerations in all WRM planning. The revision, however, fails to provide for the creation of stakeholder committees or for their proper functioning. These gaps result, in part, from the limited human and financial resources available to the DGPRE. The gaps in WRM are costly and must be addressed to improve future socioeconomic development. The government has spent millions on emergency water supply measures and on remedying flood damages to people, infrastructure, and the environment. Better water management is needed to reduce these costs, create a more productive agriculture sector, enable sustainable urban development, and improve water security. Senegal should: y Strengthen the institutions in charge of WRM so they can fulfill their mandates and coordinate with institutions in other sectors. This will require: approving and publishing the new Water Code; finalizing and implementing a roadmap for WRM sector reform; decentralizing the DGPRE; decentralizing WRM by identifying community groups to oversee the implementation of the master plans for water development and management (Schémas Directeurs d’Aménagement et de Gestion des Eaux, SDAGE); and maintaining coordination mechanisms like a water platform to encourage ministries overseeing water- using sectors to consider water in future planning and decision-making. These measures will then make it possible to mandate that the availability of and potential impacts on water resources43 must be considered by other sectors at the strategic (policy) and intervention levels. Such requirements44 will encourage improved coordination on water management, helping to avoid future conflicts. y Improve water resources information and monitoring for climate-informed decision-making. While sound studies on the status of both surface and groundwater exist in Senegal, this information is not easily accessible. Making both water and climate information available on an open data 41 At around 1,400 m3 per capita per day, the steadily decreasing renewable water availability per capita already falls below the 1,700 m3 threshold defined by the FAO, under which a country experiences periodic water stress. 42 They include: the Retention Basins and Artificial Lakes Directorate (Direction des Bassins de Rétention et Lacs artificiels, DBRLA), the Senegal River Delta Land Development and Exploitation Company (Société nationale D’Aménagement et d’Exploitation des Terres du Delta de Fleuve Sénégal, SAED), and the National Agency for Agricultural Integration and Development (Agence Nationale d’Insertion et de Développement Agricole, ANIDA). 43 These include the Strategic Plan for the Mobilization of Water Resources (PSMRE) that was intended to serve as a national reference, identifying the potential and limits for the development of water resources;) the National Action Plan for Water Resources Management (PAGIRE), and the Senegal River Basin masterplan, including a vision and priorities for all water-related sectors by 2050 (including water supply, irrigation, hydropower, and navigation). 44 Approval of the PAGIRE and PSMRE by a “revived” Conseil Supérieur de l’Eau following the approval of the new Water Code could lend them this associated authority. 42 West Bank and Gaza Country Climate and Development Report public platform could facilitate decision-makers’ use of these data in planning and better educate the public about the importance of and threats to water resources. Planning should also account explicitly for future uncertainties by using deep uncertainty principles.45 y Scale up small-scale storage. While Senegal has been a leader in managing and coordinating large water storage systems along shared transboundary waterways, the country has limited physical space for large water reservoirs. However, small-scale approaches such as planting pits or microbasins that capture and hold water46 can deliver significant benefits: they can reduce runoff, recharge groundwater, and increase baseflows, thus increasing the amount of water available for water supplies, irrigation, and other uses. The Sahel Water Harvesting Explorer tool identifies several suitable solutions for Senegal, with a focus on nature-based solutions.47 y Prioritize access to safely managed water and sanitation services and leverage circular economy principles to increase drought resilience, reduce emissions, and protect water resources. Only 13 percent of rural people have safely managed water supplies and less than 10 percent have safe sanitation.48 While the rural water supply reform is underway through delegation of service in eight areas defined to the private sector, alternate arrangements are needed in some areas where groups continue to operate boreholes in parallel to the service provider, endangering the sustainability of the reform. Poorly managed sanitation causes GHG emissions as fecal sludge decays without proper treatment or valorization and contaminates water resources, in addition to having significant impacts on human capital. For rural areas and secondary towns, where population density may render sewerage networks cost prohibitive, onsite solutions considering the whole service chain should be prioritized to reach the 90 percent of people without safely managed sanitation. Proper fecal sludge management—either centralized or decentralized to reduce transport distances and associated emissions—provides an opportunity to capture biogas (including from cocomposting) and capitalize on treated sludge as fertilizer to replace production-intensive chemical fertilizers. y Continue to promote transboundary management and expand to shared aquifers. In Senegal, 88 percent of water resources are transboundary, so building resilience to the impacts of climate change requires international cooperation within the three main basins: the Senegal river, the Gambia river, and the Senegal-Mauritanian Aquifer Basin (SMAB). Senegal has made successful contributions to transboundary water management through OMVS (Organisation pour la mise en valeur du fleuve Sénégal) and OMVG (Organisation pour la mise en valeur du fleuve Gambie), which are being leveraged to establish management arrangements for the SMAB, initiated in September 2021. Strengthening national capacities in water resource knowledge and management enforcement will enable Senegal to maintain its leading role in these institutions by promoting the resilience of shared and local water infrastructure to climatic extremes, developing EWS, training water-using actors, and conducting local awareness campaigns. 45 Regional engagements at OMVS (Organisation pour la mise en valeur du fleuve Sénégal) level also plan to review and update climatic projections and their impact on water resources to improve planning and early warning within the basin. This review would rely on the application of new technologies for climate-informed decision-making and planning. The pipeline regional transboundary water program (Development, Resilience & Valuation of Water for West Africa or DREVE, P179448) will also include protection and restoration of land and ecosystems of the Senegal River Basin to protect water resources both in terms of quality and quantity. 46 Watershed programs can also be defined as sustainable land and/or water management, integrated catchment management, among others. 47 View the Water Harvesting Explorer tool at https://sahel.acaciadata.com/. 48 WHO-UNICEF Joint Monitoring Programme data. West Bank and Gaza Country Climate and Development Report 43 3.1.3. Forested Landscapes Forests in Senegal are critical to sustaining economic development and livelihoods and mitigating climate change. Forests cover 41 percent of the country’s land area, mainly in the central and southern regions.49 They provide many important ecosystem services, particularly for the poor. They produce and conserve soil and slow water runoff, both of which help prevent land degradation and reduce the risks of droughts, floods, and landslides. They sequester carbon and provide habitat for a wide range of species. Furthermore, forests provide timber, fiber, medicinal plants, natural gums, and many foods, such as honey, nuts, and fruits. These products can generate income and provide essential sustenance during lean periods, helping to reduce poverty and spur economic development. In addition, up to 80 percent of Senegal’s households rely on wood or charcoal for fuel and cooking. Finally, forests sustain tourism, providing resources for natural resources management and creating local jobs (box 3.6). Box 3.6. Promoting the Private Sector’s Role in Climate-Smart Tourism in Senegal The following actions can be considered to support and promote the private sector’s role in making Senegal’s tourism sector climate-smart, ensuring the long-term sustainability and attractiveness of the destination for tourists: • Sustainable tourism practices: Encourage businesses to adopt sustainable practices that minimize environmental impact, such as using renewable energy, conserving water, and reducing waste. • Research and innovation: Support research into new materials and construction techniques for tourism infrastructure that are more resilient and more efficient. • Green and climate-resilient infrastructure: Invest in the development of green and climate-resilient infrastructure, such as accommodations and attractions that can withstand extreme weather events and sea-level rise and have a low environmental footprint. • Ecotourism development: Promote eco-tourism initiatives that provide unique experiences to tourists, contribute to the conservation of natural resources and generate jobs and revenue for local communities. • Capacity building for adaptation: Provide training for tourism operators and staff on climate risks and adaptation measures, ensuring that they are prepared to respond to climate-related challenges. • Emergency preparedness: Develop and implement emergency preparedness plans for tourism businesses to ensure the safety of tourists and staff during extreme weather events. • Policy and regulatory support: Advocate for policies and regulations that support climate adaptation in the tourism sector, such as zoning laws that prevent development in high-risk areas. • Public awareness campaigns: Launch public awareness campaigns (including labeling) to educate tourists about the impacts of climate change on Senegal and the importance of responsible tourism practices. 49 There are also, to a lesser extent, riparian forests, along the banks of watercourses or in steep, humid valleys, as well as mangroves.. 44 West Bank and Gaza Country Climate and Development Report Forests are under considerable pressure and are shrinking by about 40,000 ha per year. About 7 percent of Senegal’s forests were lost between 2005 and 2020 because of conversion to agriculture (about 37.5 percent of the forest loss), illegal logging (25 percent), virulent bushfires (25 percent), and other activities like mining (12.5 percent) (GoS 2022). Reforestation efforts are growing, but lag behind the rate of deforestation (GoS 2023a).50 Degradation is also a concern. Forests lost about 15 percent of their carbon on average over 2007–23 because of fires, illegal logging, droughts, uncontrolled grazing, and other causes (GoS 2023b).51 Higher temperatures, more severe droughts and fires, and declines in rainfall caused by climate change are increasing the mortality rates of trees and other forest vegetation. Climate change impacts have contributed to the decline of such important forest ecosystems as riparian zones and gonakier forests (CSE 2020).52 Climate change is expected to lead to changes in forest ecosystem composition, favoring xerophilic or high-tolerance species while also reducing tree density (box 3.7). In addition, the incidence of forest fires has almost tripled in 10 years,53 and fires now burn about 234,137 ha per year (GoS 2023a). Hotter and drier conditions, coupled with poor land management (such as slash and burn methods), are expected to increase the prevalence of fires, leading to greater losses of trees, biodiversity, and essential ecosystem services, along with increased GHG emissions. Box 3.7. Climate Change Impact on Forest Cover and Carbon Stocks in Senegal (Mid-Century) To assess climate change’s impact on forest ecosystems in Senegal, from range shifting to significant structural changes, including possible irreversible dieback, a geo-statistical approach was applied to identify key dependencies between current climatic variables (1970-2000) and forest presence (2019). These geostatistical approaches, now in use, especially from the 2000s onwards, are justified because there are no eco-physiological-based models able to satisfactorily depict tree formations in West Africa and their evolution under a changing climate, all the more in a climatic transition zone like Senegal. The model finds that the current presence of dense humid forests in Senegal depends heavily on a mean annual precipitation > 700mm per year (that is, in Casamance and Eastern Senegal). Under both SSP5-8.5 (the most intense scenario) and SSP2-4.5 (a medium scenario), there is a considerable replacement of humid forest cover by tree and shrubland forest types. Under both scenarios, the area of humid forest declines from approximately 4.4 million ha in 2019 to between 0.32 to 0.47 million ha in the period 2041–60, an 89 to 93 percent loss. The model predicts that these humid forests are largely replaced by tree and shrubland savannah type forest ecosystems, with an estimated release of carbon of approximately 100 million tCO2 during the period 2041–60. Both forest cover predictions and emission estimates yield uncertainties that still need to be quantified. Such a dramatic change in land cover will have secondary effects on rainfall, potentially impacting other regions of Senegal and neighboring countries. 50 The afforestation or reforestation to deforestation ratio was equal to 0.47 on average over 2018–22, much less than unity. 51 Average forest carbon stock was 31.66 tC/ha in 2023, compared with 37.07 tC/ha in 2007. 52 A 40 percent shrinkage of gonakier forests in the Senegal river valley was observed over 30 years (1984–2012), and a recession of riparian forests, from 20 percent in Casamance to 50 percent in Eastern Senegal, over 40 years (1972–2012). 53 According to Global Forest Watch data, there were 11,175 fire episodes in 2012 and 31,842 in 2022. West Bank and Gaza Country Climate and Development Report 45 Figure B3.7.1. Observed and Predicted Presence of Dense Humid Forests in Senegal under SSP5-8.5 for the Period 2041–60 Forests and Short Vegetation Forests and Short Vegetation Forests and Short Vegetation in Current climate in Future climate in Future climate 1970–2000 SSP 245 2041–2060 SSP 585 2041–2060 Others Others Others Forests Forests Forests Short Vegetation Short Vegetation Short Vegetation 16 16 16 15 15 15 Latitude (°) 14 14 14 13 13 13 -17 -16 -15 -14 -13 -12 -17 -16 -15 -14 -13 -12 -17 -16 -15 -14 -13 -12 Longitude (°) Longitude (°) Longitude (°) Source: Original work for this CCDR. Senegal has made political commitments to preserve and sustainably manage its forests and land resources. The National Forest Policy (2005-25) was updated in 2014 to reflect climate change impacts and to focus more on mangrove ecosystems and fire management. Senegal also pledged in 2019 to restore 2 million ha (or 10 percent of the territory) of degraded or deforested lands by 2030 under the Bonn Challenge, and it joined the Great Green Wall Initiative, which includes activities for afforestation and support for resilient livelihoods. In addition, Senegal prepared a forestry NDC strategy in 2022. The strategy includes adaptation and mitigation actions to slow down deforestation by 25 percent over the period 2010‑30, along with measures for reforestation, water and soil conservation, fire management, and ecosystem services enhancement. While some progress has been made, Senegal is falling well short of the forestry NDC’s goals. Further efforts and resources are needed. Key priorities include combating fires, supporting communities in managing the forest resources they depend upon, and mobilizing new and innovative sources of finance. More specifically: y Modern forest fire management will require combining interventions on the ground (such as building observation towers or creating firewalls) with remote sensing to quickly spot new fires and map occurrence and severity as well as forecast events. It will also require engaging with communities to change agricultural practices and to involve the local people in firefighting activities (also targeting women and youth in awareness raising, capacity building, and empowerment efforts). y Community-based approaches, pioneered in Senegal under the Sustainable and Participatory Energy Management Project (Projet de gestion durable et participative des énergies traditionnelles et de substitution, known as PROGEDE), have proven to be transformative in improving forest management and natural capital, and bringing concrete gains in income, living conditions, and sustainability. Consolidating regulatory documents, approaches, and lessons learned can help scale 46 West Bank and Gaza Country Climate and Development Report up these approaches. In addition, it is important to develop and update management plans with the involvement of local communities for increased ownership of resources and to support their implementation, including by providing equipment to combat fires, poaching, and illegal logging. y Along with renewable energy, forest-related activities are the most prominent type of carbon projects in Senegal in the compliance and voluntary segments. Currently, most of these activities involve mangrove restoration, but many more forest types could potentially be leveraged for carbon finance (see chapter 6 for more discussion on climate financing). As part of its preparation for the UNFCCC reducing emissions from deforestation and forestry degradation in developing countries (REDD+) mechanism, Senegal is currently working on a forest reference emission level and equipping itself with a forest monitoring system. A national REDD+ strategy is also under development and a REDD+ operational manual will also be needed. More research on key native tree species will also be required to better understand their physiology and ecology, more accurately model their growth, estimate biomass and carbon content, and provide targeted advice to populations managing tree nursery and forest regeneration and plantation activities. 3.2. Sustainable Cities With almost half of its population living in urban areas, Senegal’s level of urbanization (49 percent)54 is higher than the average for SSA (42 percent). Total population was 18 million people in 2023, and the population has been growing at 2.9 percent on average per year between 2013 and 2023 (ANSD 2023). By 2050, Senegal is projected to have 39 million inhabitants, 65 percent of them living in urban areas. Urbanization is being driven by both natural growth and migration from rural areas, which has been caused in part by climate impacts, such as frequent droughts. For many rural people, cities offer new employment and investment opportunities, with improved living standards and better access to basic amenities. This deep dive will focus on strategies for tackling both climate risks and city development needs in a sustainable manner. Cities are highly vulnerable to climate change impacts, especially floods, but also extreme heat (exacerbated by urban heat island effects) and sea level rise. There is an urgent need to take climate adaptation and mitigation actions so that cities can realize their potential as economic engines and catalysts for socioeconomic development. This deep dive has four parts: the role of cities in driving economic development; the vulnerabilities of urban areas to climate risks; how investing in cleaner, resilient, and productive cities can make a real difference in meeting the country’s development goals; and the priority actions needed to create sustainable and climate-resilient cities. 3.2.1. The Role of Cities in Driving Economic Development in Senegal Most of the urban population will live in the western part of the country, mostly along 60 km of the coastline (out of 530 km of coastline), the center, and the northwest. The regions of Dakar, Thiès, and Diourbel currently have nearly 8.5 million inhabitants—46.8 percent of the country’s population in 2023 (ANSD 2023). Dakar, the capital, currently has a population of 3.9 million (21.6 percent of Senegal’s population) with a density of 7,277 people per km²—far higher than the country’s average of 92 per km² (ANSD 2023). Dakar’s population should reach more than 5 million by 2035 (GoS 2020b). The capital and its surrounding areas are the main destinations of people from elsewhere who are looking for better jobs, health care, education facilities, and urban services, helping to create significant regional disparities (ANSD 2023). The country’s second largest urban area is Touba in the greater Mbacke area, 54 World Bank Open data: https://data.worldbank.org/indicator/SP.URB.TOTL.IN.ZS?locations=ZG-SN. West Bank and Gaza Country Climate and Development Report 47 with a population of more than 1 million (7.7 percent of the country’s population).55 The main continuous urbanized area of the country (called the Dakar-Thiès-Mbour Triangle after the three major cities in the area) has more than 4.7 million inhabitants.56 The development of Diamniadio, the new administrative and economic city located between Dakar and Mbour, is expected to increase the urban density and sprawl in this region. Under the National Territorial Development Plan (PNADT), the government aims to develop 10 economic zones, centered on a regional city,57 to spur economic development outside of Dakar and its peri-urban area. For these new economic zones, the PNADT provides for sustainable infrastructures, additional services, and efficient metropolitan governance (GoS 2020b). Meanwhile, a 2013 territorial and administrative reform known as Act III of Decentralization58 gives cities concrete mandates in areas such as urban and housing planning and climate resilience,59 which municipalities are responsible for implementing. However, urban development in Senegal is often haphazard, with land rights that are not completely secured. A new urban planning and construction code adopted on December 20, 2023, should address these problems by bringing more coherence to planning documents, while also taking environmental issues, such as energy, air quality, and natural disasters into account. Cities in Senegal (notably Greater Dakar) are a driving force for growth and provide most of the country’s economic opportunities. Dakar generates 68 percent of the country’s GDP and is home to 95 percent of industrial and commercial companies, 80 percent of the country’s infrastructure and services, and 87 percent of formal jobs (Ville de Dakar 2016). Each year, 100,000 young people enter the urban job market (ILO 2020) and this number is expected to increase to 300,000 by 2030 (GoS 2018). Senegalese cities have mixed records on public services. Access to drinking water and electricity for urban households is almost universal, bringing socioeconomic gains. However, only 68 percent of the urban population has access to basic sanitation services, and only 25 percent of the collected wastewater is treated. The use of unlined latrines, as well as the poor fecal sludge management and treatment, causes methane emissions and water pollution, threatening water resources and public health, particularly during extreme events like floods and droughts. Access to health and education services is also still inadequate in Dakar and other cities (Rouhana et al. 2015). An economic downturn in 2022 dropped Senegal’s growth rate from 6.5 percent in 2021 to 4.0 percent in 2022 (AfDB 2022), slowing urban development. This slowdown has jeopardized progress towards Agenda Senegal 2050 objectives and put urban populations at greater risk. While the poverty rate in Dakar dropped from 14.2 percent in 2011 to 8.7 percent in 2018–19, it has remained at about 30 percent in inland cities (ANSD 2021) because of high costs for housing and services and the lack of formal jobs, particularly for young people. Inland cities with the highest poverty rates, such as Kaolack, Kaffrine, Fatick, and Ziguinchor, often serve as gateways to the Dakar metropolitan area. 55 See https://africapolis.org/en/explore?country=Senegal&poprange=1,2,3,4,5,6&year=2020. 56 See https://africapolis.org/en/explore?country=Senegal&poprange=1,2,3,4,5,6&year=2020. 57 Thiès, Saint-Louis, Ziguinchor, Kaolack, Tambacounda, Kolda, Matam, Kédougou, Mbour and Touba-Mbacké. 58 Loi n°2013-10 du 28 décembre 2013 portant Code général des collectivités locales, modifiée par la loi n°2014-19 du 20 avril 2014. 59 The municipal-specific competencies are environment and natural resource management; health, population, and social action; youth, sports, and leisure; culture; education, literacy, the promotion of national languages, and vocational training; planning; regional development; and urban planning and housing. 48 West Bank and Gaza Country Climate and Development Report Box 3.8. Key Insights from Adaptation and Resilience Diagnostic on Coastal Zone Management Summary: While Senegal has coastal zone management systems in place—including information systems and management plans—and encourages community engagement (figure B3.8.1), evidence shows that these tend to either be partially developed, not always updated, or limited in scope. In addition, there is currently no formal coordination structure for coastal areas, though efforts are underway to establish this. Figure B3.8.1. Level of Readiness for Coastal Zone Management Information and assessment of coastal change 3 2 1 Community Integrated coastal zone management participation and 0 plan incorporating climate risks and local knowledge resilience measures Coastal zone management agency Source: Based on findings in annex 5. Proposed areas for action to enhance adaptation and resilience: • Establish an integrated coastal zone management (ICZM) agency with adequate authority and funding, in line with the country’s draft coastal law. • Strengthen the collection and publication of information on climate change impacts on coastal areas in line with the West Africa Coastal Areas Management Program or WACA–financed project to create a national coastal observatory by 2025. • Ensure effective implementation of a national strategy for ICZM plans as validated under the WACA project and in alignment with the 2022 national adaptation plan for coastal zones developed by the Ministry of Environment and sustainable Development. • Establish a more effective and systematic process for community participation and local consultations on adaptation and resilience issues. Note: See annex 4 for details on methodology and findings. West Bank and Gaza Country Climate and Development Report 49 3.2.2. Vulnerability of Cities to Climate Risks The concentration of assets, jobs, and human capital in cities, combined with often inadequate planning and informal development, make urban areas increasingly vulnerable to climate and disaster threats, reducing their potential as engines of economic growth. These threats include flooding, heat waves, drought, coastal erosion, sea level rise, salinization, nitrate pollution, and eutrophication (World Bank 2023a), as described in Senegal’s Urban Climate Risk Analysis (UCRA). Between 1980 and 2008, for example, urban floods affected an estimated 400,000 to 600,000 people a year, with average estimated damages of more than US$42 million (World Bank 2011), and a major flood in 2017 in the Dakar region caused an estimated US$ 230 million of damages (1.4 percent of GDP). Floods also affect cities along the main rivers, namely the Senegal River (Matam and Saint-Louis), the Gambia River (Kedougou), and the Sine Saloum (Kaloack), resulting in major damages to housing, urban agriculture, and public infrastructure during the rainy season. Moreover, the risks of flooding and impacts of flooding have been exacerbated by unplanned urbanization, the lack of drainage or its obstruction, and rising groundwater levels. Continued urban growth will push more built-up areas into flood zones. With two thirds of Senegal’s population living in the coastal zone, mostly in urban areas, the country is particularly vulnerable to coastal hazards. The coastal zones are the main socioeconomic engine of the country as they host more than 80 percent of economic activities in urban agglomerations such as Dakar, Mbour, Kaolack, Ziguinchor, and Saint-Louis . Sea levels are projected to rise as much as 1 meter by the end of the century, which would flood 6,000 km2 of low-lying areas. People in the bottom 40 percent of incomes are likely to be the most affected, with their incomes reduced by more than 9 percent (World Bank 2018). Sea level rise poses a particularly large threat to Dakar, leading to coastal erosion, rising groundwater levels, flooding, land salinization, and the infiltration of saltwater into freshwater sources. For example, Dakar’s Thiaroye aquifer, known as “Nappe de Thiaroye,” is experiencing saltwater intrusion, a rising water table, and higher nitrate concentrations because of increased rainfall, inadequate drainage, unregulated urban growth, and sea level rise. Many low-lying areas in the capital region are also at high risk of flooding and erosion, given high population density, rapid urbanization, high water tables, and poorly planned drainage systems. These changes are not only reshaping the physical landscape, they are harming the economy, with negative impacts on residential areas, infrastructure, tourism, urban agriculture, and water resources. Coastal flooding exacerbated by sea level rise could be catastrophic for cities such as Saint-Louis, Kaolack, Mbour, and Dakar. By 2080, 80 percent of Saint-Louis could be submerged each year as sea level rise impedes the flow of the Senegal River at the river’s mouth (World Bank 2013), raising concerns about the viability of the Priority Development Plan and Vision for 2035, which positions Saint-Louis as driving the development of the Senegal North region. Similar impacts can be seen in the Dakar neighborhoods of Guédiawaye and Pikine because of poor drainage, low altitude, and proximity to the sea. By 2050, the population at risk of coastal flooding in Dakar (including Rufisque) is expected to increase by 20 to 30 percent, with economic damages increasing by 30 percent (Aniel-Quiroga et al. 2021). Increased temperatures will bring heat waves and exacerbate urban heat island effects. Temperatures in some cities could reach 65°C by 2040–2059, creating dangerous living conditions and public health problems. In general, inland cities like Kaolack , Mbacke, and Tambacounda are expected to experience a greater number of hot days compared to coastal cities such as Dakar and Mbour. Drought is a growing constraint to development in Senegalese cities. The amount of available renewable water, now at 1,400 m3 per capita per year, is already below the periodic water stress threshold and is steadily decreasing. Since 1960, it has dropped five-fold due to over-extraction and climate change. Three major droughts over the past two decades caused GDP to decline by 11 and 26 percent compared to the 50 West Bank and Gaza Country Climate and Development Report ten-year average, and increased the number of people experiencing food insecurity by between 300,000 and 800,000. For urban residents, droughts have serious impacts on access to local agricultural products, increasing food prices and urban migration, in addition to the impacts on water supplies. Cities and regions in Senegal suffer from very poor air quality. All eight cities covered in the UCRA experience high levels of pollution. The main sources are urban transport (notably private vehicles), factories, waste burning, and the widespread burning of biomass and wood for cooking and heating. Burning is a major source of exposure to PM2.5 pollution, which has been shown to increase long-term risks of cardiopulmonary mortality by 6 to 13 percent per 10 μg/m3 of PM2.5. Surprisingly, high pollution levels are found across entire cities as well as in cities located in Senegal’s more rural areas, such as Tambacounda. Figure 3.2. Overview of GHG Emissions by Sector Figure 3.3. Contribution (%) of Each Type of and Subsector in the City of Dakar. Vehicle to Road Transport GHG Emissions in Dakar Wastewater 5.54% Residential Buildings 2-Wheeler 3% Incineration and burning 6.24% of waste 0.04% Commercial/Institutional Bus/Minibus 15% Solid Waste 6.42% buildings 6.98% Private car 60% Rail 0.04% Heavy vehicle 22% Road 40.28% Manufacturing and construction industries 34.45% Source: Territorial Climate Energy Plan of Dakar 2021–2025 Source: Territorial Climate Energy Plan of Dakar 2021–2025. Cities are also responsible for a large share of Senegal’s GHG emissions. Dakar alone generates more than a quarter of national GHG emissions. The last GHG inventory in Dakar city (from 2016) showed that 40 percent of the emissions come from transportation, 34 percent from manufacturing and construction, 13 percent from buildings, 6 percent from solid waste, and 5 percent from wastewater (figure 3.2). Transportation is also the fastest growing source of emissions. Almost 60 percent of the transportation emissions come from private cars (compared to 22 percent from freight vehicles and 15 percent from public transport vehicles, as shown in figure 3.3 (CETUD 2023). As incomes and population increase in Dakar, more and more people will be able to afford private vehicles, leading to a threefold increase in the number of private vehicles and continued growth in emissions in a business-as-usual scenario. Waste generation in Senegal is expected to increase more than threefold by 2050, from 2.44 million tons in 2020 to almost 9 million tons, significantly above a projected global increase of 73 percent. More than 70 percent of waste is currently dumped, and 22 percent goes to landfills that lack effective gas capture systems. As a result, emissions from waste (estimated at 1.71 MtCO2e in 2020) are expected to increase in a business-as-usual scenario. Improving waste management systems can reduce GHG emissions and generate significant environmental, economic, and health benefits. West Bank and Gaza Country Climate and Development Report 51 3.2.3. Investing in Cleaner, More Resilient, and More Productive Cities for Senegal’s Development Goals Senegal already has policies in place for climate adaptation and mitigation that offer a solid foundation for resilient and sustainable cities. However, the roles and responsibilities of subnational governments in implementing the NDC have yet to be formally defined. This is considered an important operational gap, given the need for local government action in climate change adaptation. Therefore, it is critical therefore to ensure that Senegal’s increasing urbanization is supported by climate-resilient policies, legal frameworks, and institutional capacities at all levels of government. A holistic approach for risk-sensitive urban planning and development can reduce climate risks in cities. Such an approach requires developing deep knowledge of cities’ characteristics and projected climate hazards and risks. It also requires enhancing the capacity of the central and local governments to design and implement urban plans and tools that will lead to more resilient and climate-smart cities. For example, the deployment of networked sensors (the Internet of Things, IoT) with AI analytics can provide essential real-time monitoring and management of environmental conditions and urban infrastructure. Such tools can help control unplanned urbanization while helping to facilitate and coordinate necessary investments in urban services and equipment. Territorial development is essential to make cities productive and sustainable. To rebalance socioeconomic dynamics between Dakar and secondary cities and create competitive cities based on opportunities in retail trade, manufacturing, services, livestock farming, agribusiness, fishing, and tourism, Senegal needs to manage the interrelationships among cities and between cities and their surrounding rural areas in a process called territorial development. That involves putting in place territorial development planning tools that are inclusive and allow community participation; promoting integrated plans to implement complementary systems, such as transport, water and sanitation, housing, public spaces and community services in urban areas, and the preservation of agricultural spaces in peri-urban areas (green belts); and improving access to social housing and restructuring irregular neighborhoods (which include 35 percent of inhabited areas in Dakar, often in vulnerable zones) to control urban sprawl. Territorial development also calls for active cooperation among municipalities to build climate resilience since climate hazards know no administrative border and solutions such as drainage for flood reduction may only be sustainable when applied at the watershed level, beyond each municipality’s limits. Formalized land use and property rights can increase land tenure security and contribute to climate change adaptation in both urban and rural areas. Digital storage of land information makes land records more resilient and less vulnerable to losses from climate-related disasters. Such safe storage of critical land valuation data is essential for post-disaster recovery efforts involving compensation or insurance. In addition, greater land tenure security provides more motivation for landholders and land occupants to plant trees, invest in better infrastructure, and adopt climate-smart agricultural methods, which will enhance both climate change resilience and carbon sequestration efforts. Likewise, geo-referenced information on land occupation and hazards can be easily analyzed and used to inform construction permit attribution and settlement regulation, specifically in disaster- prone areas. In the water sector, circular economy approaches would build resilience by refocusing urban centers as users within a broader WRM perspective and by finding greater efficiencies through closing the resource gap. Key steps for cities include diversifying water sources and improving stormwater drainage, sanitation infrastructure, and solid waste management. Diversification of water sources could include reuse of wastewater, though that faces such barriers as the “yuck factor” or challenges in delivering treated wastewater from treatment plants to the points of use. Wastewater reuse also requires better regulation, quality control, and planning, while water source diversification using seawater desalination can be very costly (US$1.26 per m3) and using brackish 52 West Bank and Gaza Country Climate and Development Report groundwater needs to be better studied. In addition, constructing new sanitation infrastructure is sometimes prohibitively expensive. Another potential barrier is conflicts among water users, which can be exacerbated by poor urban planning. Reaching the country’s water and sanitation goals will require support from all potential sources of finance, such as the International Finance Corporation (IFC), the Multilateral Investment Guarantee Agency (MIGA), other development partners, and the private sector. Resilient urban planning and construction practices, better control over development, investments in drainage and coastal protection, improved operation and maintenance, and the use of NBS can reduce the risks of urban flooding and coastal erosion. Past efforts, such as the Ten-Yyear Flood Reduction Program 2012–22, which included the World Bank Stormwater Management– and Climate Change Adaptation–funded projects (PROGEP and PROGEP 2), have been proven to significantly reduce floods in Dakar, Kaolack, Theis, and Touba, while also creating more resilient zones in Dakar, Mbour, Saint-Louis, and Thies. The next government Ten-Year Flood Reduction Program (2024–34) offers a critical opportunity to continue the progress. However, Senegal still lacks a unified coastal zone management framework and there is little coordination among the many ministries that have roles in coastal governance, including the separate ministries overseeing environment and sustainable development, fisheries and maritime economy, oil and energy, sanitation, and even the armed forces. It is important to continue efforts at both the national and local levels to develop a shared vision and to coordinate sustainable coastal development. While a national ICZM Strategy (first prepared in 2012) has been updated and awaits political validation, the legal framework for coastal area management remains outdated, not reflecting the current and future challenges, including climate change. Similarly, a proposed coastal law was prepared in 2011 and revised in 2020, but it has never been adopted because of opposing interests. The law would establish a national coastal agency and a marine and coastal observatory to improve knowledge about coastal areas and their vulnerabilities (box 3.8). Unplanned, anarchic development is a major concern, exposing assets, economic activities and lives to sea level rise and associated risks, and the law would help prevent further improper development in coastal areas, better identify zones at risk, and monitor coastal dynamics.60 Coastal adaptation will include a mix of brick-and-mortar investments as well as NBS, but also retreat (especially for those developments that occurred without proper information and reporting). A share of the revenues from upcoming offshore hydrocarbon production could help finance coastal and marine resilience activities, as is already the case for continental mining activities, which often support environmental conservation and community activities. NBS61 are essential features of investment projects supported by technical and financial partners. Cities in many countries, including Senegal, lack green spaces and other basic social infrastructure, creating poor living conditions. However, there are opportunities in cities like Dakar and Thies to add or enhance urban forests, green corridors, bioretention areas, and other open green spaces. West Dakar, for example, already has protected green corridors in the forests of Hann and Mbao and in wetlands called “Niayes” in the city suburb that could be expanded. In built-up areas, green spaces and urban forests could be built along roads (box 3.9). 60 Assessing coastal risks requires very complex hydrodynamic and morphodynamic modeling and data that only exist for a few large cities such as Dakar, Mbour, and Saint-Louis. For a large part of the coast, such data are not available. As a result of this lack of information, the quantitative coastal risk assessment shows low and underestimated figures at the national level. Given that coastal areas represent a real asset for the country, the CCDR includes as a priority measure in its action plan the need to invest in data collection and monitoring coastal degradation in order to improve the understanding of coastal risks. 61 NBS are measures focused on the protection, conservation, restoration, and sustainable use and management of natural or modified terrestrial, freshwater, coastal, and marine ecosystems, which effectively and flexibly address social, economic, and environmental issues, and simultaneously deliver benefits in terms of human well-being, ecosystem services, resilience, and biodiversity. West Bank and Gaza Country Climate and Development Report 53 Current approaches focus on preventing and reducing major disaster risks, particularly in urban areas, by developing national and regional contingency plans. One essential step is creating effective EWS at the local level that can interpret climate information and provide tailored early warning messages with clear instructions. Other key steps include strengthening the capacities of local flood management committees, improving flood forecasting (in part by implementing more functional radar systems to provide accurate predictions), and better coordinating between national agencies and regional organizations such as Agrhymet. Digital channels can enhance disaster response and awareness. Currently, Senegal’s National Agency of Civil Aviation and Meteorology (ANACIM) produces alert messages (one to six hours before an event) and broadcasts them using various communication channels (Zurich Climate Resilience Alliance 2022). However, citizens often do not receive the information they would need to take preventative, on-site action to prepare for events. Communications and warnings about coming risks and effective response measures, including the availability of aid, could be significantly enhanced by implementing low-cost, mobile network– based text messaging solutions. Digital innovations and technologies improve urban climate resilience and sustainability. The deployment of smart city solutions, which integrate IoT sensors with AI analytics, is essential for real-time monitoring and management of environmental conditions and urban infrastructure. This approach can help cities like Dakar meet the growing challenges of coastal erosion and urban flooding. Expanded mobile connectivity is also crucial for disseminating information and providing reliable communications during climate disasters and mobile payments post disasters. In addition, geospatial and mapping platforms enable cities to map flood risks and urban heat islands and to identify the most vulnerable neighborhoods in cities like Dakar and Saint-Louis. That information then can guide targeted interventions. There is also a key role for predictive analytics in forecasting extreme weather events, allowing city planners and residents to prepare and adapt more effectively. Digital technologies have the potential to significantly advance critical climate- related sectors such as agriculture, urban planning, infrastructure management, financial inclusion, and coastal zone management. However, to fully harness their benefits while mitigating risks, it is essential to implement robust cybersecurity and data privacy measures. These measures should encompass: security by design (incorporating cybersecurity objectives and standards as a fundamental part of the research and design process); resilience (ensuring that nations, systems, and institutions can adapt to evolving contexts, absorb disturbances, and rapidly return to or reach a desired state of stability); cyber hygiene (establishing a foundational set of precautions and monitoring protocols that all users of information and communication technologies should follow); active data governance frameworks and a legal and regulatory environment that is conducive to data protection; physical, administrative, and technical security measures to protect anonymous customer information; and procedures to maintain data quality and integrity (instituting procedures to ensure the accuracy and consistency of data). In light of the expected significant impact of AI applications, it is equally critical to establish a regulatory framework that guides their ethical development and deployment. Investing in resilient transportation is imperative for future-proofing urban mobility and for supporting cities’ economic growth. Designing resilient transportation systems requires an “infrastructure life analysis” to understand their vulnerabilities and potential risks over their entire lifecycles, as extreme weather events become more frequent. Resilient systems also require good maintenance programs, with sufficient financial resources, and EWS to aid in evacuations using roads. 54 West Bank and Gaza Country Climate and Development Report Box 3.9. Nature-Based Solutions (NBS) for Adaptation in Dakar A nature-based solutions (NBS) opportunity scan was performed for Dakar to assess the scope for NBS adaptation to pluvial flooding and heat stress and improve human health overall (proxied by density of public green spaces). The opportunity scan is a geospatial analysis and participatory process that provides a starting point to identify NBS investment opportunities for adaptation. It relies on openly available global geospatial data sets that are complemented with local data where available. Its results can be used to inform the development of more detailed analyses, such as prefeasibility studies. The results show that there are NBS opportunities in Greater Dakar, with good suitability for urban forests, green corridors, bioretention areas, and open green spaces (figure B3.9.1b). There are also opportunities in Dakar, mainly for green corridors and open green spaces, and to a lesser extent, bioretention areas (figure B3.9.1a). The cost of NBS implementation is around US$28 million for Dakar and US$69 million for Greater Dakar. This corresponds to a scenario in which greater importance is given to the reduction of pluvial flooding than to the reduction of heat stress and the availability of green spaces for recreation. In addition, only the most effective NBS opportunities in providing these benefits (which provide the highest 20 percent of combined benefits) is taken into account. Figure B3.9.1. Nature-Based Solutions for Adaptation in Dakar and Greater Dakar a. Dakar (West) b. Greater Dakar (East) N 0 1 2 km N 0 1 2 km Optional NBS Bioretention Areas Green Corridors Urban Forests Open Green Spaces Settlement Extent Source: World Bank 2024. Original work for this CCDR. To respond to current trends and challenges, the Government of Senegal has developed a Sustainable Urban Mobility Plan (SUMP) Vision 2035 for Dakar, with similar plans in progress or anticipated for Mbour, Kaolack, Saint-Louis, and Touba. The Dakar SUMP aims to transform the city from congested and West Bank and Gaza Country Climate and Development Report 55 vehicle‑oriented to green and people-oriented, with improved public transportation and more opportunities for walking, biking, and other active mobility. The plan includes the construction of the first bus rapid transit (BRT) system in Africa. Senegal’s cities need better performing waste management systems that can sustainably handle increasing volumes of waste. Better systems would reduce GHG emissions and pollution, improve health, enhance environmental awareness, strengthen conditions for local economic development, and improve city competitiveness and livability. Effective approaches would include modernizing waste collection, separation, and disposal infrastructure; closing dumps; retrofitting landfills; and promoting behavioral change to minimize waste generation and increase recycling and reuse. These actions would also start to put the sector on a path towards a circular economy. The government has taken some positive steps, increasing public investment and working to formalize the legal and institutional framework for the sector. These interventions have shown early promising results, including increases in collection rates, reductions in waste burning, and increased revenues in the circular economy. Looking ahead, the sector needs stable public financing, further clarification of legal and institutional aspects, and greater engagement with the private sector, including setting up models for public-private partnerships (PPPs). 3.3. Resilient Human Capital Senegal © Mohammed alsdudi/Shutterstock With half of Senegal’s 18 million people under the age of 19, the country faces major challenges providing education, healthcare, and jobs. In Senegal, a child who starts school at age 4 can expect to complete 7.3 years of school by her 18th birthday, but in terms of actual learning, the schooling is equivalent to only 4.8 years of education. As a result, students in Senegal record an average of 412 on harmonized test scores, where 300 represents minimum attainment and 625 is advanced attainment. Children born in Senegal today will only be 42 percent as productive when they grow up as they would have been with complete education and full health care—higher than the average for SSA but lower than the average for lower middle- income countries. Between 2010 and 2020, the Human Capital Index value for Senegal increased from 0.39 to 0.42 (World Bank 2023b). 56 West Bank and Gaza Country Climate and Development Report Despite progress, health challenges persist. Maternal and child morbidity and mortality rates remain high. Under-5 mortality increased in 2023 with 40 deaths per 1,000 live births, for example (ANSD and ICF 2023). Rates of communicable diseases (including malaria and diarrheal diseases) are also high, and the burden of noncommunicable diseases has increased rapidly. Communicable, maternal, neonatal, and nutritional diseases are the main causes of death and disability, and in 2023, 18 percent of children under 5 were stunted or chronically malnourished (ANSD and ICF 2023). Climate change affects the poor and vulnerable disproportionately and exacerbates existing exclusion trends in Senegal. All four dimensions of social exclusion—economic exclusion, resilience, social cohesion, and process legitimacy—are high in Senegal, with total multidimensional exclusion estimated at 69 percent nationally. Exclusion is highest among women and rural populations. These are the same groups that also are disproportionately affected by climate change because they are often located in areas or engaged in livelihoods that are highly exposed and sensitive to climate risks. In addition, their vulnerability to climate change is increased by pre-existing and intersecting patterns of inequality and social exclusion. Climate change and climatic shocks tend to escalate gender-based violence (GBV). Following climate- induced disasters, women and girls are more vulnerable to violent acts, including rape, sexual assault, harassment, intimate partner violence, trafficking, child marriage, and sexual exploitation. The highest rates of GBV are found in the south and southeast regions (Kédougou, Kolda, Sedhiou, and Tambacounda). Climate change is contributing to increased population migration. The World Bank’s Groundswell report on internal migration in Senegal estimates that sea level rise and storm surges could drive up to 206,000 people from coastal areas by 2050 (though this number could be reduced by 85 percent with equitable development and lower emissions). The report also identified water availability as the most important factor in population shifts. In general, high rates of poverty and reliance on climate-vulnerable livelihoods like agriculture, livestock, and fisheries, create conditions for migration driven by climate change impacts. Mitigating the negative impact of climate change on human capital will require sustained and coordinated efforts in social protection, health, and education . 3.3.1. Social Protection Senegal’s social protection systems can mitigate the impacts of climate change by building long-term household resilience and providing assistance in the aftermath of shocks. In one pathway, regular safety net programs help build household resilience by promoting household health and education. This is done by fostering the diversification of livelihoods and boosting investments and productivity of businesses, primarily for the extreme and chronic poor. A second pathway focuses on providing direct support in the immediate aftermath of a shock to prevent the loss of assets and livelihoods and to discourage negative coping strategies (figure 3.4). These shock response programs can also be effective at reducing future poverty. Senegal has several effective government-led social protection programs, including: y Social protection programs designed to reduce poverty and inequalities and build long-term resilience include: the National Cash Transfer Program (Programme National de Bourses de Sécurité Familiale, PNBSF), which delivers quarterly cash transfers and accompanying measures to chronically poor households; Yokk Koom Koom (YKK), which provides a comprehensive, productive inclusion package to boost climate resilience, with a focus on women in both urban and rural areas; and the Agricultural Resilience Program (PRA), which offers cash grants and agricultural extension services to smallholder farmers in rural areas. West Bank and Gaza Country Climate and Development Report 57 y Senegal also has substantially improved its shock response programs for both rapid onset shocks (such as floods) and slow onset shocks (such as droughts). Since 2019, 55,000 households have received cash transfers to help them cope with flood damage, and 30,000 households have received support to reduce climate-related food insecurity. In 2022, Senegal was able to provide about 470,000 poor families with one-off cash grants to mitigate the economic impacts of the COVID-19 pandemic and high inflation. The programs have been successful. An evaluation of the PNBSF found that beneficiaries increased the value of their durable assets by 11 percent, and the number of households negatively affected by a shock dropped by 7 percent (World Bank 2023c). The program also helped diversify livelihoods and increase women’s access to finance: the number of recipient households with at least one nonagricultural income- generating activity increased by 20 percent, and female recipients have twice as many microfinance accounts. Similarly, the YKK program increased annual household income by 25 percent, driven by an increase in revenues from income generating activities, with the largest benefits in rural areas. Figure 3.4. National Social Protection Programs Contributing to Climate Adaptation in Senegal Objetives National programs Outcomes Prevent loss of livelihoods and assets in the event of climate - Food and nutrition security shocks for poor and vulnerable Shock response programs: households Cash transfers provided in - Asset protection response to climate shocks such - Reduced reliance on as drought, floods, fires etc. negative coping strategies i. Strengthening the productive Yokk Koom Koom Agricultural Resilience capacities of the poor (YKK) Program (PRA) - Food and nutrition security Productive inclusion Cash grants + - Asset building package (cash grant, agricultural skills and entrepreneurship extension to strengthen - Income diversification training, savings groups) agricultural productivity - Access to finance ii. – 18 months support. of poor farmers - Women’s socio-economic inclusion - Climate-resilient agricultural production Building resilience and supporting consumption of the National Safety Net Program (PNBSF) poor and the extreme poor 350,000 households – 5 years – Quarterly cash transfers + Accompanying measures on human capital, shock preparedness and financial inclusion iii. Cross cutting tools 3/ Payment system able to deliver timely 1/ Social registry covering poor 2/ Decentralized delivery payments for regular programs and vulnerable households network and for shock response Source: World Bank 2024. Original work for this CCDR. 58 West Bank and Gaza Country Climate and Development Report After years of sustained investments, the foundations of a well-functioning social protection system are in place, including a large social registry, an increasingly digitized payment system, and a decentralized network of service delivery agents. Senegal’s social registry (Registre National Unique, RNU) is being expanded to reach almost 50 percent of the population and cover those vulnerable to poverty in the face of shocks. Up to date RNU data are crucial to ensure accurate targeting of social programs, especially for shock response. The payment system includes both direct cash payments for PNBSF recipients, delivered at post offices throughout the country, and digital payments. Expanding digital payments in particular will facilitate timely and accurate shock response programs and increase digital financial inclusion. The social protection system relies on a decentralized network of community-based agents, covering the entire country and providing such services as information, mobilization, and awareness raising. These three core delivery system tools are essential for increasing the government’s ability to respond to future climate shocks and to build resilience for poor and vulnerable households. Senegal can build on this successful social protection system along the three following priorities: y Strengthen Senegal’s adaptive social protection (ASP) delivery system. – Digitalize social protection payments: While the current payment infrastructure in Senegal is advanced enough to move forward with the digitalization of government-to-person payments, evaluations of shock response programs have revealed shortcomings, such as insufficient liquidity and long queues at payment points, overcrowded payment sites, access constraints, long wait times, and security risks. Modernizing and digitalizing the payment system will enhance its capacity to provide timely transfers (especially in shock response programs) and improve financial inclusion, beneficiaries’ experiences, and transparency. – Improve data safety, updating, and interoperability of the Senegal social registry: The Senegal social registry has been instrumental in enabling the ASP system to respond to shocks. The RNU is well functioning, but it lacks a platform to exchange information with other relevant registries. Creating such a data sharing platform requires a data protection policy so that data sharing is done in a controlled and permissioned manner. That would improve data exchange as well as access for the most vulnerable to a wide range of social programs. Developing a functioning on-demand registration and updating mechanism enabling continuous updates of the registry is also a priority for the efficiency of shock response programs. – Improve the ability of the ASP system to deliver assistance to climate migrants: Senegal’s social protection systems do not yet explicitly accommodate the needs of internal migrants or displaced populations during transit or at their new locations. As a result, migrant populations are being inadequately served (Gray Meral and Both 2021). Assessments need to be conducted to review internal migration and to help design systems to reach migrants at their source, during transit, and at their destinations. The ASP tools and programs will need to reflect migration patterns in Senegal in the face of climate change, to target efforts to reach migrant groups with cash transfers, and to expand use of e-payments. The findings of these assessments will help identify whether new programs need to be developed or existing programs can be adapted to effectively support migrant individuals and households. y Enhance the shock response capacity of the safety net system. – Improve early warning efforts and shock response: Over recent years, Senegal’s ASP system has developed its capacity to deliver assistance to households affected by climate shocks such as floods and droughts. However, the capacity of Senegal’s EWS to anticipate adverse West Bank and Gaza Country Climate and Development Report 59 climatic events is limited, and coordination between the EWS, the social protection system, and agencies working on disaster risk reduction (DRR) is insufficient. Improving the ability of Senegal’s EWS to anticipate shocks, floods in particular, and to disseminate early warning messages to vulnerable populations is critical. It is also important to strengthen the institutional mechanisms for coordination between social protection and DRM stakeholders. – Institutionalize adaptive social protection programs: Despite recent progress, shock response programs, especially those addressing food insecurity, lack consistency and predictability. Establishing the key principles and modalities of shock response programs is critical for ensuring timely implementation of activities. These include defining triggering mechanisms for the most frequent climate shocks (droughts and floods), clarifying coordination mechanisms, and ensuring timely interventions. – Raise awareness of climate change among safety net beneficiaries: Senegal’s main safety net program delivers quarterly cash transfers to the poorest households, along with programs to change behaviors in health, education, and civil registration. However, to boost the resilience of the poor and vulnerable to climate shocks, the measures delivered to PNBSF beneficiaries should be broadened to promote awareness of the effects of climate change and the need for natural resources management. y Elevate the role of social protection in promoting green jobs and green growth. – Equip youth with skills for green jobs: Green jobs are defined as those in economic activities that i) are low in emissions of GHG; are efficient in resource use; maintain biodiversity and ecosystems; and enhance social inclusion. Energy, construction, and agriculture are among the sectors that can potentially create green jobs in Senegal. An important first step is a green skills assessment to identify skills shortages and the skills needed for green jobs (box 3.10). That would then enable Senegal to mobilize investment and design training programs to develop the needed skills. In addition, Senegal needs to address the multiple barriers to decent employment faced by young people, who typically lack employment skills or the resources needed to support entrepreneurial activities. To address both the need for green jobs and the challenges of youth unemployment, Senegal could invest in training courses and programs providing technical advisory services and financing to micro and small enterprises and to young entrepreneurs in sectors that are heavily affected by climate change and environmental degradation. Social protection interventions can help achieve these goals through skills development, financial inclusion programs, and private sector partnerships. – Build resilience to climate shocks through livelihoods development and diversification efforts: Senegal’s social protection sector needs to keep investing in economic inclusion programs that are contributing to climate change adaptation through diversification of economic activities and livelihoods development, such as the Yokk Koom Koom program, which promotes the diversification of livelihoods, and the PRA, which boosts the agricultural productivity of vulnerable poor farmers. The effectiveness and sustainability of these programs could be raised through better coordination among key stakeholders, the institutionalization of these programs, and increased government funding. 60 West Bank and Gaza Country Climate and Development Report Box 3.10. Job Creation Opportunities for Climate Action in Senegal Job creation and retention are central to building community resilience in the face of climate change. People with decent jobs in climate-smart sectors are likely to have better adaptive capacity and to be less impacted by the effects of climate change. With the right approaches and coherent policies, the considerable resources likely to be invested in adaptation provide an opportunity to drive environmentally sustainable and inclusive job-rich development. In Senegal, potential job creation opportunities for the private sector in climate action span several labor-intensive sectors: • Renewable energy: Development and installation of renewable energy sources such as solar, wind, and hydroelectric power reduce energy cost for businesses and lead to more job creation in manufacturing, installation, and maintenance. • Green building: Designing and constructing energy-efficient buildings requires skilled labor, creating opportunities for engineers, construction workers, and building retrofitters. • Sustainable agriculture: As the need for resilient agricultural practices grows, there will be increased demand for jobs, skills, and solutions in organic farming, agroforestry, and so on. • Water management: Climate adaptation involves managing water resources carefully, which can lead to job opportunities in water conservation, infrastructure development, and flood defense systems. • Climate consulting: Companies and governments may seek expertise on how to adapt to climate change or lower their footprint, creating opportunities for consultants (including auditors and certifiers). • Technology and innovation: Developing new technologies to address climate change can lead to jobs in software development and various tech startups focused on sustainability. • Training: As new skills are required to meet the demands of a changing climate, there will be a need for trainers to upskill the workforce. The need for new skills is likely to increase in the urban planning, coastal management, disaster risk reduction (DRR), manufacturing, and transport sectors, for example. – Increase integration between social protection and climate adaptation policies. While significant progress has been made in social protection programs, linking social protection programs with climate change adaptation strategies and policies still requires more effort. Social protection is often exclusively focused on responding to shocks, overlooking its potential role in building resilience to climate change impacts before they occur. Senegal’s National Social Protection Strategy (Stratégie Nationale de Protection Sociale, SNPS) nicely lays out climate-related risks and the role of social protection in promoting climate resilience, but it remains mostly oriented towards DRR and response, minimizing the potential role of economic inclusion programs in climate change adaptation. Similarly, Senegal’s NDC framework should explicitly describe how the social protection system can contribute to advancing SDGs and boosting access to climate finance. West Bank and Gaza Country Climate and Development Report 61 3.3.2. Human Health The health of the Senegalese population will be worsened by the impacts of climate change. Three out of the top five causes of death today in Senegal are linked to environment and climate conditions, and the Ministry of Health and Social Action (MoHSA) has identified five priority diseases potentially affected by climate change.62 Four climate factors that significantly affect health are elevated temperatures, heavy rainfall leading to flooding, rising sea levels, and droughts. High temperatures can lead to heat exhaustion due to dehydration and can strain the body’s ability to cope, leading to increased hospitalizations and mortality rates among vulnerable populations. Heatwaves can also exacerbate existing health conditions, such as cardiovascular diseases, respiratory illnesses, and diabetes. Elevated temperatures can worsen air pollution, which already has been identified as a top risk factor for death and disability in Senegal, and may expand the geographic range of mosquito-borne diseases like malaria and dengue fever, as well as the distribution and behavior of other disease vectors such as ticks. Heat also can accelerate the replication rates of certain pathogens, increasing the risks of water and foodborne illnesses during extreme weather events. Box 3.11. Key Insights from Adaptation and Resilience Diagnostic on Human Health Summary: Senegal performs in the top tier of the Figure B3.11.1. Level of Readiness for Global Health Security Index and on health risk Human Health communication when compared to other low- Global Health Security Index and middle-income countries. The country also 3 maintains an effective health sector emergency Infectious Health sector diseases 2 emergency response plan (Strategic Plan COUS 2019–2023). surveillance response plan However, there are opportunities to improve the 1 resilience of the country’s healthcare systems to Quality of health care Health risk climate shocks by addressing challenges such delivery communication as limited data and insufficient staff capacity, which are currently hindering progress towards Health facility Surge demand quality of health care delivery, access to health accessibility health capacity facilities, management of medical stockpiles, and Medical countermeasures stockpiles infectious disease surveillance (box 3.11.1). Source: Based on findings in annex 5. Proposed areas for action to enhance adaptation and resilience: • Improve the quality of healthcare delivery through enhancing financial resources and staff capacity, including to ensure that staff are trained to respond in the event of a climate and/or natural disaster. • Increase health facility accessibility and supplies. Rural communities tend to live relatively far from health facilities compared to urban communities. Efforts could be considered to improve their accessibility (especially during climate events) or expand health services in rural areas. • Expand infectious disease surveillance through capacity building, better data, and improved conditions for health workers. Note: See annex 4 for details on methodology and findings. 62 The five diseases are dengue, rift valley fever, diarrheal diseases, meningitis, and acute respiratory infections. 62 West Bank and Gaza Country Climate and Development Report Sea level rise and flooding can damage healthcare infrastructure, disrupt access to medical care, and compromise the delivery of essential health services. The 2009 floods that affected the coastal regions of Senegal, including Saint-Louis, caused more than US$100 million in damages and losses, including to health centers. About 2,000 cases of diarrhea and 3,300 cases of malaria were reported following the floods (USAID 2018). Flooding can also create breeding grounds for disease-carrying mosquitoes and other vectors, and sea level rise threatens the quality of potable water and agricultural production and may increase food insecurity and malnutrition. Droughts can reduce water availability and impair drinking water supplies, sanitation, and hygiene practices. Those effects can increase the risk of waterborne diseases such as diarrhea, cholera, and typhoid fever. Droughts can also affect food availability and harm agricultural production causing price spikes, increased food insecurity, and malnutrition, particularly among vulnerable populations such as children, pregnant women, and the elderly. Senegal has made significant commitments to addressing the negative impacts of climate change on health. The updated 2020 NDC (GoS 2020a)63 and National Health Development Plan (2019-2028)64 identify health as a priority for climate adaptation. To increase the adaptive capacity of the health sector, the plans focus on: (i) improving disease surveillance, early warning systems, and information and research on climate-sensitive diseases and appropriate responses; (ii) preventing and controlling climate-sensitive diseases; and (iii) strengthening vector control efforts. Additional measures aim to fight disease through: (i) capacity building of health personnel to diagnose, treat, and manage climate-sensitive diseases; (ii) strengthening community-level preparedness and response plans to stockpile medicines and other important products and to build community awareness; (iii) increasing funding for climate change-related health interventions; and (iv) ensuring adaptation of health infrastructure, equipment, products, and services. Meeting these commitments requires implementing adaptative and innovative actions, following recommendations organized around key components of the World Health Organization’s Operational Framework for Building Climate Resilient Health Systems (2015): y Strengthen integrated disease surveillance and monitoring to guide climate-sensitive disease control. – Create a more integrated health information system that combines cross-sectoral data for stronger decision making: Climate-sensitive health indicators should be standardized across surveillance actors and activities, and healthcare professionals must be appropriately trained to report on epidemiological and syndromic health data. The collection and analysis of data on environmental hazards, socioeconomic factors, and health outcomes will be critical for monitoring vulnerabilities, early warning planning, prevention, and responding to climate‑sensitive diseases. Data availability and transparency should also be strengthened to address current data gaps, such as the lack of data on the availability of water, sanitation, and hygiene in health facilities. – Raise awareness of the impacts of climate change on health: Greater awareness can enable affected communities to prevent and respond to climate shocks. In collaboration with community leaders, informational materials on the climate health impacts should be produced and presented to communities by community health workers. This can be done in combination 63 See https://unfccc.int/sites/default/files/NDC/2022-06/CDNSenegal%20approuv%C3%A9e-pdf-.pdf 64 See https://sante.gouv.sn/sites/default/files/1%20MSAS%20PNDSS%202019%202028%20Version%20Finale.pdf. West Bank and Gaza Country Climate and Development Report 63 with other health prevention and education activities targeting diseases for which the knowledge remains low, such as HIV/AIDS.65 y Ensure equitable distribution and climate-focused training of healthcare professionals. – Increase the number and distribution of health professionals: Senegal only has an average of 7 medical doctors and 31 nurses per 100,000 people, with greater shortages in rural areas.66 The deployment of newly recruited health workers to climate-vulnerable rural communities in target regions should be a top priority. – Give healthcare workers the necessary knowledge and tools to promote climate resilience: Environmental health should be incorporated into the undergraduate and postgraduate curricula for all health professionals, including community health workers (especially those intervening in climate-sensitive areas). Trained healthcare workers will be able to collect and transmit health and climate data across the health system in a timely manner. They will also be able to educate communities on how to prepare for and adapt to climate change–related shocks. Training should include expertise on mental health so that healthcare workers can monitor and treat psychosocial impacts from extreme weather events. y Ensure that health infrastructure and technologies are climate resilient and sustainable. – Incorporate climate considerations in new or renovated health structures: This will improve the physical resilience of the infrastructure and enable continuity of health services delivery. Each health facility should have contingency plans and capacity building for preparedness and response, improving the delivery of health care during and after extreme events. Health structures should apply environmental and water, sanitation, and hygiene (WASH) norms. – Improve energy and resource efficiency: Where feasible, health facilities should incorporate green procurement practices; more efficient lighting, heating, and cooling; renewable energy sources; sustainable medical waste management; and fuel-efficient vehicles. y Scaling up coverage and delivery of essential health services to climate vulnerable groups. – Promote health insurance enrollment among climate-vulnerable groups: This should be part of MoHAS’s efforts to scale up community-based health insurance for informal and rural populations. Greater insurance coverage will improve the ability of health and nutrition services to prevent climate-induced diseases and improve resilience against climate change impacts. – Prioritize maternal, newborn, and child healthcare needs: Senegal’s NDC omitted to mention and include maternal and child health among its adaptation measures for healthcare. Since women and children are particularly vulnerable to climate events, the MoHAS should design integrated health and climate programs that make high-quality maternal, newborn, and child healthcare available and accessible to all in need. 65 Only around 17 percent of young people aged 15–24 know how to prevent HIV, according to the 2023 Demographic Health System. 66 World Health Statistics data visualizations dashboard. Health workforce. 2023.  https://apps.who.int/gho/data/node.sdg.3-c-data?lang=en 64 West Bank and Gaza Country Climate and Development Report – Develop mental health programs: There is growing evidence of mental health consequences from climatic events, such as increased financial stress from lowered agricultural output events. The health sector must develop effective mental health prevention and treatment programs and strong social services, in the context of climate change. 3.3.3. Education Senegal © Mohammed alsdudi/Shutterstock Senegal is struggling to keep children in school and ensure that they get a quality education. One quarter of children are not enrolled in schools, with higher shares for boys. Education in schools is poor: 69 percent of late primary school age children are not proficient in reading and 59 percent of the students at the end of primary school do not meet the minimum proficiency levels. In addition, students enrolled in Daraas (traditional religious schools) may not be acquiring critical literacy and numeracy skills. Senegal is only gradually emerging from the disastrous impacts of the COVID-19 pandemic on the education and training sectors. Nearly 3.5 million students were affected by school closures that lasted for 7 months in 2020. Surveys by the Center for Global Development find that the pandemic had significant impacts on student repetition rates and dropout. While there are many possible reasons for this increase in dropouts, it is known that grade repetition leads to an increased likelihood of dropping out, and the survey finds that nearly two-thirds of children who were asked to repeat a grade dropped out of school. Dropout rates doubled for boys and tripled for girls in rural areas, but barely changed in urban areas. Childhood exposure to climate shocks is likely to worsen the problems of lost schooling, poor learning outcomes, and weak nutritional inputs, impairing the developmental trajectories of those children. Resilient education systems are required to ensure continued human capital accumulation. To build such systems, the CCDR makes the following recommendations: West Bank and Gaza Country Climate and Development Report 65 y Invest in preschool education and improve the overall quality of schooling. – Increase funds to preschools and institutionalize one year of free, mandatory pre-school education: Preschool provides a structured environment in which children can develop essential skills for social interactions, language, cognitive abilities, and motor development. It can also play a role in reducing inequalities and disparities in educational outcomes by providing resources and experiences to children from low-income families that they may not otherwise receive at home. Enhancing preschool education will require significant funding to expand access by investing in infrastructure development and by training teachers in effective pedagogical practices. – Improve the quality of teaching to address learning poverty and facilitate access to education: Research has shown that children learn best when instruction is delivered in a language they understand and use proficiently. One way to improve learning quality would be through bilingual education that allows students to learn in their native language while gradually acquiring proficiency in a second language. That approach can facilitate comprehension and engagement, leading to improved outcomes and greater academic success. In addition, teaching methods could be improved to promote active participation and to stimulate students’ interest and motivation. Finally, strategic teacher deployment is essential for optimizing educational resources and promoting equitable access to education, ultimately improving student learning outcomes. y Ramp up efforts for a more climate-resilient education system. – Improve hazard characterization and mapping of climate risks to better assess schools’ exposure and design resilient infrastructure: Senegal faces significant climate stresses, which will affect instruction due in part to infrastructure inadequacies. The geographic distribution, scale, and potential consequences of flooding in particular (coastal, pluvial, and fluvial) warrant more in-depth investigation and mapping. In addition, relevant monitoring and early warning data should be collected and shared with the Ministry of Education. This could include climate data used for decisions on heat-related school closures, data showing the suitability of buildings to the climate conditions (such as passive buildings), data on coastal flooding and erosion, and data on water availability. In alignment with Senegal’s 2006 National Adaptation Plan of Action, data could be collected by teachers and students themselves as part of a science curriculum, using a wide array of available sensor and communication technologies. Data collection at individual schools could include monitoring heat stress and air quality in classrooms, making it possible for school authorities to implement heat or pollution mitigation strategies to protect students and staff. – Invest in climate-resilient infrastructure and facilities for schools: This can include building or retrofitting schools to withstand natural disasters, improving drainage systems in and around schools, installing cooling systems to mitigate heat stress within classrooms, and enacting policies for building and operating schools that are more resilient to floods, storms, and excessive heats. y Curriculum reforms to raise awareness about climate change. – Introduce climate change concepts into the education and training curricula across subjects and grade levels: This would help ensure that students gain a comprehensive understanding of the impacts of climate change and the strategies for adaptation and mitigation. UNESCO 66 West Bank and Gaza Country Climate and Development Report (2016) has developed an all-of-school or whole-school approach to introducing the concepts of climate action. It has a four-pronged framework that includes school governance, teaching and learning, community partnerships, and facilities and operations. Meanwhile, Senegal has introduced several new relevant programs: the University Program on Renewable Energies and Energy Efficiency in Senegal; training for unskilled women about the energy sector broadly, and specifically on solar energy jointly with DP World and Barefoot College; and installation of solar photovoltaic (PV) systems. In addition, to truly involve children and youth in discussions about climate change, it will be important to include relevant activities for them during their schooling, such as recording local temperatures and rainfall levels, identifying animal species and biodiversity levels in the areas around schools, and involving them in discussions and decisions about school closures caused by climate change impacts. West Bank and Gaza Country Climate and Development Report 67 Senegal © Mohammed alsdudi/Shutterstock 68 West Bank and Gaza Country Climate and Development Report Chapter 4: Engaging the Energy Transition 4.1. A Dynamic Sector with Significant Growth and Transformation Potential Senegal’s energy sector has grown tremendously in the past decade, providing a catalyst for the country’s economic growth and shaping its growing role as a regional power hub. The country is resource rich. It has recently discovered large offshore oil and gas reserves and substantial potential for renewable energy both domestically, with solar and wind power, and regionally, with hydropower interconnections. The power sector is also well developed and structured, with an installed generation capacity in 2022 of 1,789 MW, much higher than the peak demand of 957 MW. However, significant investments are required to lower the cost of electricity, reduce dependence on fuel, and increase the share of renewables. About 70 percent of installed capacity is still fueled by coal and HFO with the other 30 percent consisting mostly of solar, wind, and regional hydropower. As a result, Senegal is highly exposed to fluctuating global fuel prices and electricity prices are among the highest in Africa due to this exposure. These high tariffs still fail to fully cover the expenses of electricity supply, leading to considerable revenue shortfalls for the utility. Electricity tariffs remain unaffordable for many with the absence of a true social tariff policy and create challenges to the removal of sector subsidies. To mitigate the social impact of tariff increases, the government opts to compensate the utility for revenue shortfalls in lieu of tariff hikes, but delays in their payment create liquidity constraints, impacting the utility’s ability to meet its financial obligations with suppliers and implement adequate maintenance on its infrastructure. Despite these measures to regulate tariffs that impose strains on the government budget, tariffs remain too high relative to regional comparators and unaffordable for consumers. Addressing the high costs of electricity is a sector priority as it could hinder economic growth and competitiveness and must be addressed in tandem with efforts to improve the financial viability of the utility. There is a need to lower the overall cost of supply but also to develop a true social tariff that improves targeting of the subsidies to ensure relief for the most vulnerable. With the government committed to phasing out sector subsidies, the transition away from fuel oil generation is imperative to enhance the financial sustainability of the sector while ensuring universal access to affordable electricity. Senegal benefits from regional interconnections and has been developing into a regional power hub. Senegal is a member of the OMVSthat connects Mali, Mauritania, and Senegal; and the OMVG that connects The Gambia, Guinea, Guinea Bissau, and Senegal. Through these interconnections, the country diversifies its energy mix with hydropower imports from Guinea. Given recent capacity issues in Guinea, studying the potential impact of climate change on variability and reliability of hydropower production in that country is critical for ensuring energy security and adequate production planification as regional trade increases. Senegal is well positioned to play a major role in the developing West African Power Pool (WAPP) regional market. Through the OMVG interconnection, Senegal has begun to export to The Gambia and has been negotiating other power sale contracts with neighboring countries. Sector policies and regulatory frameworks have been strengthened to create an enabling environment for private sector participation, but there is a need to improve planning and adopt a more competitive approach to procurement. While the state-owned utility, Senelec, has a monopoly for transmission and distribution, Senegal’s electricity sector has a strong record of private sector participation. Multiple independent power producers (IPPs) account for over half of electricity production through solar, wind, coal, and thermal generation. Most IPPs are under restrictive take-or-pay contracts at relatively high prices West Bank and Gaza Country Climate and Development Report 69 that were awarded through spontaneous offers and directly negotiated agreements. However, awarding future projects based on transparent competitive tenders could deliver significantly lower prices and help reduce electricity tariffs, as shown by the scaling solar program. In rural areas not covered by Senelec, Senegal has adopted an innovative rural concession model to attract private operators, albeit with mixed results and limited impacts. The sector is overseen by the Ministry of Energy, Petroleum, and Mines and regulated by the Commission de Régulation du Secteur de l’Energie (CRSE). The government’s policy has been traditionally defined in the Energy Sector Development Policy Letter (Lettre de Politique de Développement du Secteur de l’Energie, LPDSE). The latest LPDSE (2019–23) clearly states Senegal’s intentions to shift from coal and fuel oil generation to gas-based and renewable generation, and to ensure equitable and sustainable access to reliable, low-cost energy. An electricity law passed in 2021 and a gas law passed in 2019 establish the overall framework and sector reform strategy, including creating subsidiaries for Senelec and ending the utility’s monopoly. To achieve its vision, Senegal must enhance sector planning, better target subsidies, diligently implement least cost plans, maximize use of renewable sources, adopt competitive procurement, execute sector reforms and provisions of the electricity code, and leverage off‑grid solutions. Senegal’s energy sector is, together with agriculture, the largest source of emissions for the country and leads CO2 emission, with a 76 percent share. Overall, the country’s emissions (CO2 only or all GHGs) are relatively modest compared to countries in the region and around the world. In 2021, Senegal was 15th out of 35 countries for CO2 emissions in SSA and 101st globally. Its emissions of 9.253 MtCO267 represented about 0.38 percent of Africa’s energy-related emissions and about 0.03 percent of global emissions. Senegal’s emissions from energy are expected to grow further with sector expansion and the impending exploitation of oil and gas reserves. The largest share of energy emissions (40 percent) in Senegal come from electricity production—estimated to be around 3.7 Mt CO2—followed by transport (36 percent), industry (16 percent), and the residential sector (6 percent). This is in large part due to the high dependence on fuel in the electricity sector which has an emission factor 30 percent higher than gas. Senegal’s 2020 NDC sets targets of reducing total emissions by 7 percent by 2030 (and by 10 percent in the energy sector) compared to business-as-usual levels, and by up to 29.5 percent (and 41 percent in the energy sector) with international financing support. To achieve these targets, Senegal plans to increase the shares of both on- and off-grid renewable generation, replace high-emitting fuel oil and coal with natural gas and renewable energy production, and improve energy efficiency in households, buildings, industry, and public administration. Proper management of this energy transition is critical to ensure that Senegal can meet its economic growth, climate, and access objectives. While shifting from gas to power in the short to medium term will reduce emissions, deploying renewable energy capacity and reinforcing the grid will be critical to put Senegal on a net-zero pathway over the long run. Improving energy efficiency and exploring cross-sectoral strategies for more optimal use of resources in sectors like water and transport could help accelerate decarbonization. While Senegal’s energy decarbonization strategy focuses primarily on electricity, significant progress is also possible through energy efficiency measures and emissions reductions in end-use sectors. About 70 percent of final energy consumption in the residential sector (which accounts for the highest share in Senegal at 45 percent) comes from biofuels and waste, for example, so a switch to clean cooking and heating would both cut emissions and improve health. Similarly, the electrification of transportation (which accounts for 33 percent of final energy consumption) through projects like Dakar’s new electric BRT system will accelerate the transition while also reducing air pollution and improving resilience. Senegal is transitioning to become a fossil fuel producer with sizable oil and gas reserves under development. Exporting these resources can generate 67 Against 0.63 for 35th ranking country (Eritrea) and 391.746 for the 1st ranking country (South Africa). Data are from the IEA’s Greenhouse Gas Emissions from Energy Data Explorer database. 70 West Bank and Gaza Country Climate and Development Report significant income while their domestic use provides an avenue to lower the cost of supply and reduce sector emissions by replacing the use of HFO in power generation with natural gas. Given the lasting impact of energy investments, it is imperative to approach this transition with the right combination of gas-to-power and renewable energy generation to ensure alignment with long-term climate objectives. 4.2. Senegal’s Vision for the Energy Transition: Balancing Increasing Access to Low-Cost Power with Climate Objectives 4.2.1. Universal Access Senegal aims to achieve universal access to electricity by 2025, ahead of the 2030 Sustainable Development Goal (SDG), but needs to rationalize efforts, improve coordination, and secure remaining financing. The country boasts one of the highest electrification rates on the continent at 78 percent, but there is still a large disparity between rural and urban areas and across the country. Whereas urban access is at 96 percent, rural areas lag at 55 percent with regions such as Kedougou and Kolda having single digit access rates. Electrification of basic public institutions such as health centers and schools is also low, at around 60 percent. Improving access is crucial for socioeconomic development and the achievement of SDGs, but progress has been slow and primarily led by Senelec in urban areas and private concessionaires in rural areas. Multiple programs were launched to accelerate progress and prioritize efforts, but poor coordination and financing gaps have impeded implementation despite various donor-funded projects. Both grid expansions and off-grid solutions will be needed to meet access targets with better renewed planning, improved coordination, and efficient fundraising. While 95 percent of the remaining population can be connected through grid expansion, 4 percent will need to be connected through mini-grids and 1 percent through standalone solar home systems (SHS). The strategy to implement mini-grid and off-grid programs, notably in the hard-to-reach rural areas, still needs to be defined. Challenges include product quality control, limited working capital and access to local debt for providers, and limited client affordability and slow adoption of pay-as-you-go (PAYG) and SHS business models. Senegal still needs to dedicate resources to adequately develop off-grid markets and provide regulatory support to accelerate progress towards achieving universal access. In its 2020 NDC, Senegal has recognized the importance of scaling up access to clean cooking, setting ambitious targets of distributing 800,000 improved cookstoves and 27,000 biodigesters by 2030. However, there is a need for an implementation roadmap and clear financing strategy to yield results. With significant financial support, the targets would increase to 1.5 million cookstoves and 48,000 biodigesters. Over 63 percent of households still rely on traditional polluting fuels, and a substantial share of cooking wood fuel is harvested unsustainably. Lack of action is estimated to cost around US$7.9 billion per year due to adverse impacts on health, gender, and climate. Overexploitation of forest resources, paired with low availability of alternative fuel sources, are important drivers of deforestation, contributing to climate change and putting Senegal’s natural resources–driven economy at risk. The annual cost of lack of progress on the clean cooking agenda, considering gender alone, is estimated at US$1.2 billion due to lost productivity from extended time spent on cooking-related tasks, including fuel collection, cooking, and stove cleaning. Reaching Senegal’s clean cooking targets by 2030, as outlined in the 2020 NDC, is estimated to require a total of US$137.5 million per year, including US$25.1 million per year from the public sector to support the development of the clean cooking market, bridge the affordability gap for poor households, and unlock private investments. However, the overall benefits would be significant, estimated to be US$3 billion per year—more than 21 times the public financing needed. Health benefits are estimated at US$2.2 billion per year, mostly from avoided deaths and avoided disability-adjusted life years (aDALYs) because of the reductions in exposure to household air pollution. Senegal must ensure that its current clean cooking targets West Bank and Gaza Country Climate and Development Report 71 are aligned with broader energy, climate, and development goals, and that the fuels and solutions promoted are adapted to households’ contexts and preferences. Moreover, it is key that the National Strategy for Domestic Fuels is revised to ensure that the clean cooking targets are ambitious but achievable and include an implementation roadmap with detailed financing resources to facilitate its execution. Further detail and analysis are provided in the clean cooking section of annex 7. 4.2.2. Energy Transition Senegal has an ambitious energy transition agenda, centered around the expansion of renewable energy generation capacity and use of domestic gas as a transition fuel to anchor national growth and enable the development of a more inclusive, resilient, and sustainable electricity sector. The area offshore of Mauritania, Senegal, Gambia, Guinea-Bissau, and Guinea-Conakry (known as the “MSGBC Basin”) has proven to be rich in oil and gas resources. Major discoveries have been made offshore of Senegal and Mauritania, and there are prospects for additional discoveries across the region. Two of the three major offshore oil and gas discoveries in Senegal—Greater Tortue Ahmeyim (GTA) for liquefied natural gas (LNG) and Sangomar for oil—are now under development, with initial production expected by late 2024 or early 2025.68 The domestic gas component of GTA will likely take several more years because of the need to invest in receiving infrastructure. Development plans for the third project, Yakaar-Teranga (for gas), have not yet been approved, but the project is expected to include a strong domestic component. Despite the significant development delay and the high level of uncertainty on the timing for availability of the gas and necessary domestic infrastructure, Senegal’s energy sector strategy relies heavily on using gas to replace coal and fuel oil for electricity generation. The government and sector partners are making a strong effort to ensure that these resources will have a transformational impact on socioeconomic development and are managed well to ensure a just energy transition. However, risks and uncertainties remain. They include persistent schedule delays and uncertainties about the development of the gas transport infrastructure and the future costs of domestic gas. Gas prices will have direct impacts not only on the development of the hydrocarbons industry but also on connected sectors, such as electricity. Replacing high-emitting HFO-based electricity generation with transition fuels like gas and further expanding renewable generation is critical not only for ensuring adequate, low-cost electricity to bolster economic growth, but also for meeting climate targets. At the anticipated consumption levels from domestic gas production,69 CO2 emissions from domestic gas use would increase from about 1 million tons during the first year of production to about 8 million tons once production plateaus (excluding methane emissions resulting from fugitive methane and venting).70 These estimates do not include emissions from the liquefaction process for LNG exports, which would amount to around 2 million tons of CO2 per year at the plateau. Figure 4.1 shows the government’s official estimates for production volumes for the oil and gas fields.71 68 First oil production at Sangomar was achieved in June 2024, shortly prior to publication of this report. 69 Anticipated consumption is around 35 million standard cubic feet per day after the GTA Phase 1 production start announced for 2024. This level will increase to over 300 million standard cubic feet once production plateaus for all the country’s known gas fields shortly after 2030. 70 Methane emissions in the oil and gas industry originate mostly from old and/or poorly maintained facilities. It can be expected that this does not pose a major issue in the years to come as the facilities are new. 71 According to official estimates from late 2023, the curve could shift backward with delays. Production levels from known discoveries are expected to plateau starting in 2040, but production is expected to continue well into the 2050s. 72 West Bank and Gaza Country Climate and Development Report Figure 4.1. Production Schedule for Oil and Gas Fields (Government’s Estimates) (mmscf/day) 700 600 500 400 300 200 100 0 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044 2045 Export Domestic Source: Based on data compiled for this report. As a nascent oil and gas producer and exporter, Senegal has a strong incentive to produce with a low carbon footprint in an increasingly environmentally conscious market. Senegal has amended its environmental code to include provisions for reducing routine flaring and venting of natural gas, including specific exceptions and penalties for noncompliance. Addressing this issue at the early stages of development is important since examples from the region show that rates of flaring and venting can be high (11–20 m3/barrel) when not specifically addressed. For Senegal, it will be important to operationalize the flaring and venting provisions in the 2023 environmental law, levy payments on flaring and venting, and, as a next critical step, address fugitive methane emissions. Enforcement capabilities will need to be built up to ensure that payments are set accurately and collected on time and in full. For newly established assets, there is an opportunity to design the development to keep all production emissions (fugitive methane, flaring, and venting) to a minimum, which will also minimize the future risk of stranded assets in high carbon cost scenarios. As a medium-term strategy, Senegal intends to use domestic gas to replace other, more harmful fuels in electricity generation. At current production levels, replacing HFO with natural gas for electricity production will enable the country to reduce carbon emissions per project by almost half. That will be important, given the expected growth in Senegal’s power generation to meet its economic development ambitions, which, otherwise, could challenge its ability to achieve NDC targets. Scaling up renewable energy remains the optimal and lowest cost option for Senegal, but given constraints on its pace of deployment, acceleration efforts are needed to ensure sufficient capacity in the long term and achieve the lowest electricity prices. While shifting from HFO to gas in the short to medium term will reduce energy sector emissions, putting Senegal on a long-term net zero pathway will require increasing the renewable energy capacity and reinforcing the grid. Some of the financial support needed for this transition could come from the Just Energy Transition Partnership (JETP) recently launched by the Group of Seven (G7) to help countries meet global climate change mitigation targets. Senegal signed an agreement in June 2023 to launch the program following JETP agreements with Indonesia, South Africa, and Viet Nam. As part of that agreement, Senegal committed to increasing the share of renewable energy in its electricity mix to 40 percent by 2030. This objective is expected to be specified in the Letter for Development Policy of the Energy Sector 2024–28 currently being drafted. With significant wind and solar PV potential, Senegal can unlock important cobenefits from the energy transition to support the decarbonization of other key sectors, such as transportation, agriculture, water, and telecom. West Bank and Gaza Country Climate and Development Report 73 This report used the World Bank’s Electricity Planning Model (EPM), a least-cost generation expansion model, to explore potential decarbonization pathways for Senegal to better understand the implications of those pathways for the development of the energy sector and explore timeframes beyond those in the current NDCs and government policies.72 At the time of this modeling exercise, Senegal had not adopted an LTV with clearly articulated plans to achieve decarbonization targets, but a number of medium‑term analyses were underway (including the development of the LTV presented at COP 28,73 with a full investment plan expected to be finalized by end of 2024). This analysis complements ongoing modeling exercises and existing sector master plans. It is important to note that this EPM modeling analysis is explorative and does not identify specific investments but instead seeks out optimal pathways that will enable Senegal to achieve its lower cost generation objectives as well as its decarbonization targets. The results also provide some guidance on the policies that would need to be adopted in the short to medium term with these pathways in mind. Table 4.1 summarizes the aspects explored through this exercise. See annex 7 for more details. Table 4.1. Scenarios and Parameters for the Energy Transition Deep Dive Carbon Regional Scenario Additional factors Scenario ‘label’ constraint integration Evolution None With regional - Base Case integration Accelerated renewable Base Case Unlimited VRE energy expansion No regional - Base Case Isolated integration Neutrality Carbon neutrality With regional - Low Emissions by 2050 integration Accelerated renewable Low Emissions Unlimited VRE energy expansion CCS with gas from 2035 Low Emissions Gas CCS No regional - Low Emissions Isolated integration Source: Based on findings in annex 7. Note: CCS = carbon capture and storage; VRE = variable renewable energy. 72 See annex 7 for more details on the analysis. 73 The presented vision is, “In 2050, Senegal will be a prosperous country, with an integrated, inclusive, resilient, and low-carbon economy.” 74 West Bank and Gaza Country Climate and Development Report The analysis of these scenarios resulted in the Figure 4.2. Capacity Mix in Senegal (2022, following key insights and conclusions: Installed Capacity 1.7 GW ) y A consistently optimal strategy to Wind Coal meet increasing energy demand is Water for Senegal to develop its substantial renewable energy resources. Senegal’s power demand is expected to grow by 3.56 percent per year from 2025 to 2030, and then by 2.68 per year from 2030 to 2035. The electrification of transportation and end uses could further accelerate peak demand growth. PV Senegal has the advantage of substantial solar PV and wind resources, but the potential of these resources is still largely untapped. Currently, wind, solar PV, and hydropower74 represent only 30 percent HFO/Diesel of the installed capacity, compared to 62 percent for electricity generation with Source: Based on calculations in annex 7. HFO (figure 4.2). y Scaling up renewable energy capacity is the most cost-effective strategy for the sector, even in the absence of decarbonization goals. Renewable energy capacity could overtake thermal capacity for the largest share of the generation mix by 2035 (well in line with the announced target of 40 percent renewable energy by 2030) and even earlier if carbon constraints are considered.75 Thus, it is critical that Senegal further reinforces the enabling environment to make it more favorable for the rapid deployment of renewable energy. That should include using competitively tendered contracts that provide more contractual flexibility. It is also possible to explore and exploit the potential of untapped technologies, such as offshore wind. y The government’s plan to shift from HFOs to gas for electricity generation is a fundamental part of the least-cost solution with or without decarbonization targets. Displacing expensive and carbon‑intensive HFO generation by gas-to-power lowers power sector emissions in the short to medium term and could decrease generation costs, whether the prices used for gas are the ones currently discussed by the energy ministry (around 5.5US$ per MMBtu) or whether the gas is priced at its opportunity cost.76 Across the Base Case and Low Emissions scenarios analyzed, gas capacity increases from about 2 GW in 2030 to between 2.2 and 2.6 GW around 2035, depending on the decarbonization ambitions (figure 4.3). Not only is the volume of additional gas capacity fairly small across both scenarios, it also does not threaten the decarbonization of the sector. A quarter of the gas capacity will come from the conversion of existing HFO plants, in line with the current production plan, while the remainder (1.4 GW in new capacity in both scenarios) will be through new combined cycle gas turbine (CCGT) plants. The model does not achieve 74 Hydropower includes Felou, Gouina, and Manantali production shares assigned to Senegal. 75 It should be noted that the model limits the capacity of wind and solar that can be deployed; thus, results are conservative. Greater deployment of renewables would result in further lowering electricity costs. 76 Based on the assumptions on the domestic price of gas outlined in the technical annex. West Bank and Gaza Country Climate and Development Report 75 carbon neutrality in 2050 as gas‑based production remains less costly than other technologies and alternative solutions to maintain system stability, despite a very high shadow cost of carbon. Scenarios run with technology options like carbon capture and storage (CCS) still had residual emissions (see figure 7A.13 in annex 7). Given the high values of carbon cost, it is likely that cleaner technologies will sufficiently mature over time to allow for more economic deployment of technologies like clean hydrogen, which could provide more renewable options for Senegal to feasibly achieve neutrality. Figure 4.3. Installed Capacity in 2022 and 2050 under the Base Case and the Low Emissions Scenarios Base Case Capacity in GW Net Zero Capacity in GW 12 16 11.3 14.3 14 1.4 10 2.4 12 2.3 0.4 8 0.4 10 3.2 3.2 6 8 6 4 4 6.8 5.0 2 1.6 2 1.6 1.0 1.0 0 0 2022 2050 2022 2050 HFO Wind Diesel Biomas LNG PV Water Coal Battery Gas Source: Based on findings in annex 7. Note: HFO = heavy fuel oil; LNG = liquefied natural gas; PV = photovoltaic. y The combination of significant investment in renewable energy and displacement of HFO-based generation with gas-to-power would allow Senegal to exceed its NDC targets. While Senegal will be able to achieve its 2020 NDC targets with the implementation of current sector plans and the upcoming launch of gas production, emissions could be c cut in half by accelerating gas-to- power development and implementing more ambitious development of renewable energy capacity (figure 4.4). The EPM model shows that the gas-to-power strategy is well aligned with a least-cost optimization of the sector—emissions reductions only diverge significantly between the scenarios from 2032 onwards—but the timing for implementation remains uncertain. Transport infrastructure needed for domestic gas-for-power facilities has not yet been developed, for example, which could delay the use of gas after production starts, as expected, in 2024. Furthermore, the conversion of the various candidate plants in the grid from HFO to gas is still pending and financing is uncertain, especially for IPP thermal plants. 76 West Bank and Gaza Country Climate and Development Report Figure 4.4. CO2 Emissions under the Base Case and the Low Emissions Scenarios Annual emissions in Mt per year 6 5 4 3 2 1 0 2023 2028 2033 2038 2043 2048 Base Case Low emissions Source: Based on calculations in annex 7. y Sizable investments will be needed in the short term to enable the transition to gas-to-power and to renewable energy (figures 4.5 and 4.6). Investment needs for power generation are similar across the scenarios assessed, reaching US$4.8 to US$5.8 billion in the absence of any carbon constraint, depending on the level of regional integration and pace of renewable energy deployment. With ambitious decarbonization scenarios, investment needs are estimated at US$5.8 to US$6.9 billion in the neutrality scenario. They are higher with larger deployments of renewables. Close to US$3.5 billion could be needed for investments in generation alone by 2035. A successful energy transition depends not only on the deployment of new CCGT power plants, but also on the timely construction of the gas transport needed to supply both the converted plants and the new CCGTs. This means that the energy sector will have to attract a greater amount of investment (in both renewable energy and gas) than at the current pace. It is critical to accelerate the implementation of the gas-to-power strategy, which, in turn, will require Senegal to mobilize additional cost-effective private sector investment. Figure 4.5. Cumulative Investment Needs Figure 4.6. Average Production Cost 2022–50 in Billion US$ (Discounted at 6%) (US$c/kWh) 7 0.09 0.08 6 0.07 5 0.06 4 0.05 3 0.04 0.03 2 0.02 1 0.01 0 0.00 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 2024 2026 2028 2030 2032 2034 2036 2038 2040 2042 2044 2046 2048 2050 Base Case Base Case isolated Base Case Low emissions Low emissions Low emissions isolated Source: Based on calculations in annex 7. Source: Based on calculations in annex 7. West Bank and Gaza Country Climate and Development Report 77 4.2.3. Regional Integration Senegal © Mohammed alsdudi/Shutterstock Senegal has been a key player in regional institutions and a champion for regional integration and stands to benefit as a key exporter in the WAPP once the regional market is established. Access to the regional WAPP market allows countries to draw from a larger pool of buyers and sellers, facilitating the development of larger scale renewable energy generation, such as regional solar parks. A well-functioning regional market will provide flexibility to WAPP members for matching supply and demand across the region. It also improves the economic and financial viability of larger projects in countries with abundant resources. Countries are now working to build the necessary transmission infrastructure and to finalize the interconnections that are required to facilitate the flow of energy and synchronize the regional grid. They are also adopting the needed regulatory frameworks and instruments (such as a grid code, a market code, and a transmission tariff), and establishing compliance frameworks and trading platforms. There is still some work to be done to develop trust in the market, such as by ensuring the delivery of supply commitments and by ensuring timely payments for electricity. Establishing this trust will require improved planning and support mechanisms like the Liquidity Enhancing Revolving Facility, which supports payment guarantees. As a major player, Senegal is well positioned to help guide the development of these instruments and to benefit from their implementation. The country is positioned to become a key exporter of lower-cost gas- and renewable energy–generated electricity (with substantial income-generating opportunities), which can help enable neighboring countries’ efforts to decarbonize and support the transition for countries with less renewable energy potential. In addition, the combination of large-scale regional renewable projects and a dynamic power trade market will increase the resilience of the grid across West Africa. Results from the EPM show that Senegal’s integration within the WAPP will facilitate the use of domestic resources and increase decarbonization in the regional system. In the absence of a carbon constraint, increased trade with the WAPP will result in more PV deployment in Senegal by 2050 (an additional 1.5 GW) and less renewable energy curtailment. Senegal will become a net exporter, with a stable amount of about 10 percent of generation exported into the regional market and potential earnings in US$ billions through regional exports. When analyzing higher decarbonization ambitions, the model shows that the installed capacity would be similar with and without increased trade. However, with limited regional integration, variable renewable (VRE) curtailment would be very high, reaching up to 20 percent of PV generation in 2050. In addition, increases in gas generation would lead to higher CO2 emissions, resulting in higher costs as penalties are applied. In the Low Emissions scenarios, Senegal remains an exporting country, with exports representing between 5 and 20 percent of its generation depending on the deployment pace of VRE, the technologies considered in the future, and the amount of CO2 taxes levied. Senegal could have a key role in decarbonizing the region by exporting low-cost and low-emissions generation and by contributing to regional grid stability. 78 West Bank and Gaza Country Climate and Development Report 4.2.4. Energy Efficiency Energy efficiency is a key priority because of its ability to save energy and improve performance, particularly in the public sector. Senegal’s NDC aims to use energy efficiency measures to save 627 GWh of energy by 2030 (and 3,402 GWh with international financing support) and to reduce energy demand by 126.8 MW (or by 814 MW with international support, which is about a 49 percent reduction in peak demand). Some progress has been made in the policy framework for energy efficiency, but additional support is needed to reap the full potential. Senegal’s energy efficiency policies are largely based on the efficiency rules and regulations set by the Economic Community of West African States’ (ECOWAS) regional policy. In addition, the Africa/ Europe/Middle East (AEME) group has developed the Strategic Development Plan 2019–23 and the 2030 Energy Management Strategy outlining key actions that are expected to deliver total accumulated savings of 1,725 GWh per year and to shave peak demand by 441 MW by 2030. That strategy shows that cooking fuel offers the largest share of potential energy efficiency gains (about 40 percent), followed by electricity (36 percent) and hydrocarbons (18 percent). In 2022, FONSIS and AEME together created a super energy services company (super ESCO) to drive cross-sector progress on energy efficiency. AEME has developed a detailed program to realize the efficiency potential outlined. However, the program lacks sufficient resources. There is need for a holistic legislative and regulatory framework and targeted support to encourage investments in energy efficiency, notably in key areas like improved lighting. For lighting, it would help to implement existing standards and labeling requirements. These interventions also need to be made available to more vulnerable consumers through grant programs. For example, the impact of the Ecofridges loan program, which provides support to upgrade domestic appliances and equipment, has been limited because beneficiaries must be able to afford to participate. When well implemented, energy efficiency measures can bring energy savings in many sectors, helping to substantively reduce generation investment needs. 4.2.5. Adaptation and Resilience While Senegal’s NDC does not include energy-specific actions to improve adaptation and resilience, such actions offer win-win strategies that complement mitigation measures (box 4.1). An energy sector with higher shares of renewables and lower peak demand provides the additional resilience benefit of reducing exposure to supply chain disruptions and volatility in fuel prices. There are also opportunities to design new generation, transmission, and distribution infrastructure to be more resilient to climate change and weather events, helping to prevent the type of damage that Senegal’s energy infrastructure has experienced in recent years from extreme weather incidents like flooding. In addition, existing installations can be retrofitted with climate-smart technologies to increase resilience. To take advantage of these opportunities and to systematically identify adaptation measures for the sector, Senegal should first evaluate the exact extent and nature of the hazards climate change poses to the delivery of electricity services as well as the subsequent impacts on resilience in other critical sectors, such as health care and education. The potential actions include both improvements in hard infrastructure and “soft” interventions, such as improved planning and regulatory or design measures. An energy sector vulnerability assessment and a detailed adaptation roadmap are underway.77 The study will make recommendations for integrating climate resilience into sector planning and improving the capacity of sector stakeholders to anticipate and adapt to climate change. It will be essential for Senegal to establish long-term integrated adaptation plans that consider the interconnectedness of infrastructure sectors and to closely monitor and evaluate their implementation in coordination with stakeholders. 77 With grant funding from the Global Facility for Disaster Reduction and Recovery (GFDRR), the World Bank is supporting Senegal to undertake an energy sector vulnerability assessment and associated roadmap. West Bank and Gaza Country Climate and Development Report 79 Box 4.1. Key Insights from Adaptation and Resilience Diagnostic on Energy Summary: Senegal has made strong climate Figure B4.1.1. Level of Readiness in the mitigation commitments related to the energy Energy Sector sector. However, there appears to be limited efforts or information on the integration of Energy Sectoral Climate risk and vulnerability assessments adaptation and resilience considerations in the 3 sector. Notably, there is no clear adaptation Climate adaptation and Energy 2 resilience considerations in strategy for the sector or evidence that relevant efficiency 1 energy system planning authorities have conducted any climate risk and vulnerability assessments to inform decision making (figure B4.1.1). Research and Adaptation governance development of energy sector Emergency response plans Source: Based on findings in annex 5. Proposed areas for action to enhance adaptation and resilience: • Conduct routine climate risk and vulnerability assessments for critical energy assets and infrastructure. • Develop a comprehensive adaptation and resilience strategy for the energy sector that integrates climate adaptation and resilience planning to reduce impact of climate hazards (for example, future floods), including expansion of research and development for the sector. • Introduce a dedicated agency or assign responsibility for adaptation governance, either as part of or in addition to the Energy Transition Unit of the ministry in charge of energy or other relevant authority. • Emergency protocol plans of the Directorate of Civil Protection (DPC) or other relevant authority should be publicly available and accessible to ensure that stakeholders have information on managing disruptions due to climate disasters. Note: See annex 4 for details on methodology and findings. To provide a foundation for its energy transition and to ensure effective and concerted efforts for achieving sector and climate objectives, Senegal should implement the following priority measures: y Improve sector governance and planning and implement sector reforms. – Improve sector planning and ensure diligent implementation of least cost development plans. – Develop a true social tariff and a clear plan to phase out subsidies. – Further develop institutional and operational capacity for regional trade in preparation for the launch of the regional market. – Accelerate the implementation of the provisions in the electricity code. 80 West Bank and Gaza Country Climate and Development Report y Create an enabling environment for rapid deployment and integration of renewable energy, ensure timely implementation of the gas-to-power strategy, and keep the exploitation of resources on track. – Establish and implement competitive procurement processes for new renewable energy projects to ensure competitive pricing (standard tender approaches). – Undertake VRE integration studies and implement critical grid upgrades to prepare for increased VRE deployment and make it more climate-resilient, and start deployment of battery storage solutions to improve reliability. – Develop renewable energy resource assessments and prepare renewable energy potential mapping in the country to facilitate the deployment of utility scale, solar, and onshore and offshore wind. – Operationalize the provisions of the electricity code to allow for the development of innovative business models with third party access to the grid and increase private sector participation. – Secure financing to develop the infrastructure needed to implement the gas-to-power strategy and ensure proper management of revenues. y Rationalize access efforts, improve coordination and planning, and develop a framework to enable expansion and market development in the off-grid sector. – Centralize monitoring and planning for universal access investments and ensure concerted efforts across donors and stakeholders to maximize impact and avoid duplications in targets. – Develop an enabling environment for the growth of off-grid solutions, including rooftop solar PV, commercial and industrial business models, private mini-grids, and solar home systems by establishing clear roadmaps to achieve access targets, developing policies and facilitating access to financing to develop the market, establishing standards and quality control, and improving governance and coordination among stakeholders as well as monitoring and evaluation of ongoing projects. Chapter 4: Engaging the Energy Transition. West Bank and Gaza Country Climate and Development Report 81 Senegal © Mohammed alsdudi/Shutterstock 82 West Bank and Gaza Country Climate and Development Report Chapter 5: Rationale for a Climate‑Resilient, Low-Carbon Development Trajectory This chapter puts into perspective the technical and economic, bottom-up analyses form chapters 3 and 4 on climate risks and vulnerabilities and priority climate action measures across sectors, together with a macroeconomic, top-down analysis based on the structural macrofiscal model (MFMOD) of the World Bank. The chapter looks first at the impact of climate change on development prospects for Senegal, focusing on select impact channels. The analysis considers seven climate change impact channels encompassing natural, built, and human capitals, and examines climate change repercussions across the economy, how they slow down growth, and the channels through which they hit the growth engine most. The analysis also looks at the link between climate change and poverty; the extent to which the pace of poverty reduction could be slowed down or even reversed, pushing even more people into poverty because of climate change; and what are the underlying mechanisms. Second, the chapter looks at the costs and benefits of climate action, based on measures from the deep dives (see annex 6), in particular, identifying and assessing the multiple benefits of climate action. Focusing on select sectors (primary sector and flood-risk management), the analysis also examines how climate action can boost growth and reduce poverty headcount, supporting the rationale for immediate action. 5.1. The High Cost of Climate Inaction to Senegal’s Development Aspirations 5.1.1. Climate Uncertainty and Impact Channe Considerations for Senegal To estimate the impact of climate change on the country’s economy, this CCDR considered two development pathways, striking a reasonable balance between Senegal’s aspirations and structural factors. The pathways account for the layers of uncertainty around the future structure of Senegal’s economy. First, a business-as-usual scenario draws from historical economic trends, projecting per capita income growth (2.3 percent annual) and structural change at their most recent 10-year average. Reflecting the scaled-up hydrocarbon production, GDP growth will first accelerate over 2024–25 before reverting to its historical average. As a result of limited structural change, the economy will remain vulnerable to climatic shocks. The CCDR also considers an aspirational pathway, consistent with Senegal’s development goals, with higher per capita income growth (3.9 percent annual) and some degree of structural transformation by 2050 alongside rapid productivity growth. The newly available hydrocarbon revenues are assumed to support the needed socioeconomic investments to reduce climate vulnerabilities (section 5.4). The CCDR then considers ten climate scenarios, to model climate uncertainty under the two scenarios, and seven impact channels— the ones that best reflect Senegal’s climate vulnerability. See annex 1 on the macrofiscal model used, annex 2 on the choice of climate scenarios, and annex 3 on impact channels. Without further adaptation efforts, average annual GDP losses are projected to increase over time to reach up to 9.4 percent of GDP by 2050. The modeling done for this report estimates that real GDP losses due to climate change impacts will increase steadily from an average of 3.6 percent in the 2030s to 7 percent by 2050, compared to the baseline under the wet/warm climate scenario and from an average of 4 percent in the 2030s to 9.4 percent by 2050 in the more pessimistic dry/hot climate scenarios.78 See figure 5.1. GDP per capita is projected to be over 9.4 percent lower than the baseline by 2050 in the hot/dry scenario. 78 A baseline (business as usual) macroeconomic framework was calibrated to simulate the growth path in the absence of climate change. See Chapter 1 for details. West Bank and Gaza Country Climate and Development Report 83 The cost of inaction increases over time and could reduce GDP by more than 9 percent by 2050. Figure 5.1. Figure ES.1. Cost of Inaction over Time (% Deviation in GDP from the Baseline) GDP at constant market prices (% deviation from the baseline) 0.00 -1.00 -2.00 -3.00 -4.00 -5.00 -6.00 -7.00 -8.00 -9.00 -10.00 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 DryHot WetWarm Source: MFMOD simulations. Note: Deviations from the baseline. Climate change principally affects the Senegalese economy through reductions in already historically low levels of labor productivity. These are derived from the impacts of higher average temperatures on labor through heat stress, general human health, and reduced availability of water supply and sanitation. Overall, under higher temperatures, the negative labor productivity shock to GDP is expected to average 8.5 percent by 2050 under a hot/dry scenario, and 5.3 percent under a warm/wet scenario (figure 5.2). Labor heat stress is expected to reduce labor productivity in all sectors, especially in agriculture, with a 27.4 and 19.3 percent projected decline by 2050 under the dry/hot and wet/warm scenarios, respectively. The industry and services sectors expect the mildest impacts, with an average productivity loss of 2.3 to 3.6 percent by 2050. Overall, decreased labor productivity from the combined impacts of heat stress and other health issues79 could reduce domestic production between 4.6 percent (under the wet/warm scenario) and 6 percent (dry/hot scenario) by 2050. At the sectoral level, agriculture stands to be significantly impacted through lower crop yields. Under climate change, crop yields can be affected by changes in rainfall patterns and irrigation water availability, increasing evaporative demand, extreme heat as temperatures rise, and soil erosion. Livestock productivity is also estimated to be impacted by climate change through, for instance, impacts on the quantity and quality of forage and crop-based feeds, as well as pastureland and water availability. In the absence of adaptation measures, by 2050, agriculture’s value-added is likely to decrease by 10 percent compared to the baseline. 79 Over 2041–2050, labor supply shocks are expected to be highest from heat-related diseases, followed by water- borne and vector-borne diseases. We use Industrial Economics (IEc) estimates that apply different biophysical and statistical relationships between climate variables and the incidence of or transmissibility for each disease, with changes in disease incidence and death rates, then used them to estimate the number of hours of labor supply lost (see section 3.3). 84 West Bank and Gaza Country Climate and Development Report Increased capital repair and renewal costs will be another important channel of impact on Senegal’s economy, albeit less pronounced than the shock on labor productivity. Inland flooding, sea-level rise, and storm surges directly impact the use and availability of capital goods. Overall, impacts to the capital stock from sea level rise and surge events increase consistently through 2050 relative to baseline conditions, with surges accounting for the greatest impact.80 By 2050, impacts from climate events will result in a 6 percent loss of capital stock. Negative shocks to output from damage to physical capital stock are much less pronounced than from labor productivity, likely because of the low capital stock at baseline. Overall, the projected GDP shock through the capital stock caused by flooding, sea level rise, and water surge events ranges between 0.2 and 0.5 percent of GDP by 2050 (in both the dry/hot and warm/wet scenarios). Indirectly, however, productivity growth is likely to be dampened by significant losses to capital stock. The impact on physical capital is likely underestimated and could be significant if future capital stock does not incorporate resilience standards.81 Heat stress will have the largest impact on GDP. Figure 5.2. GDP Losses in Dry/Hot and Wet/Warm Climate Scenario, by Impact Channel A: GDP Losses in Dry/Hot Climate Scenario B: GDP Losses in Wet/Warm Climate Scenario (% Change Relative to the Baseline) (% Change Relative to the Baseline) 0 0 -1 -1 -2 -2 -3 -3 -4 -5 -4 -6 -5 -7 -6 -8 -7 -9 -10 -8 2030 2040 2050 2030 2040 2050 Rainfed crops Erosion Heat on labour Roads and bridges Sea level rise Urban flooding Health Combined Source: MFMOD simulations. Note: Deviations from the baseline. 80 The impacts from sea level rise are likely underestimated, since they do not include erosion and given data and modeling limitation for coastal risk assessment (as discussed in chapter 3). 81 The projected impact of climate change on physical capital is a bound estimate for two reasons. First, the costs of erosion are not captured in the model (as explained above). Second, the macroeconomic impacts are based on the median and 80th percentile shock. Extreme shocks (like 1 in 50-year events) are projected to generate capital losses that could exceed 25 percent of the baseline stock of capital. West Bank and Gaza Country Climate and Development Report 85 5.1.2. The Impact of Climate Inaction on the Pace of Poverty Reduction82 The current growth scenario will result in a substantial reduction of poverty by 2050. According to the CCDR team’s estimates,83 in the business-as-usual scenario, Senegal’s poverty rate (measured using the national poverty line) is expected to decline from 37.8 to 9.6 percent during the 2018–50 period. This reduction will be supported by a process of structural change, where labor income increases because of higher total factor productivity84 and the reallocation of workers from low to high productivity sectors.85 Climate change will reduce—and potentially reverse—the pace of poverty reduction, increasing the level of poverty in 2050 by up to 6.8 percentage points. Figure 5.3 shows the effects of climate change on poverty in the absence of adaptation measures. In line with the growth projections, the highest increase corresponds to the dry/hot scenario, with poverty increasing 5.4 percentage points in 2030 and 6.8 percentage points by the end of the studied period. The lowest increase corresponds to the wet/warm scenario, where an additional 4.7 percent of the population is expected to be poor in 2050 due to climate change.86 Overall, these results suggest that climate change could push up to 2 million Senegalese into poverty if no action is taken. Moreover, the impoverishing effects of climate change exhibit an inverted U-shaped pattern over time, with the effects reaching a peak in 2040 and declining afterward. This U-shaped pattern is consistent with the expected increase in the resiliency of households, which is expected to follow from structural change, particularly from the reallocation of workers from agriculture towards services and the upskilling of the labor force. 82 Estimates are based on 2018–19 household survey poverty data. The expected changes on a potential update of the data to the more recent 2021–22 survey are minimal. The distributional impacts of climate change for Senegal uses as main inputs the general equilibrium estimates from MFMOD and biophysical damage functions estimated from IEc 2024. These estimates should be considered as a lower bound of the impact of climate change as its inputs do not consider all the channels through which climate change can impact the livelihoods of the poor and vulnerable population. For instance, the model does not consider the impacts of sea level rise and floods on monetary poverty. Moreover, these simulations focus on the long-term impacts of climate change that affect the productive capacity of households to generate income and their purchasing power. This implies that our modeling is agnostic about the temporary declines in household income (for example, due to unemployment) or any decline in welfare that happens through nonlabor income or affects nonmonetary poverty (for example, effects of natural disasters on housing and assets). 83 The long-term nature of climate change requires projecting the welfare distribution up to 2050 for the business-as- usual and aspirational development paths. These projections involve a high degree of uncertainty; Therefore, the projected level of poverty should not be taken at face value but just as a reference point to compare the impact of climate change. 84 Between 2018 and 2050, labor productivity is expected to increase across all sectors, with larger increases for the agricultural sector, where the annual growth rate of labor income is expected to be 3.8 percent. The corresponding growth rate for industry and service sectors are expected to be smaller—2 and 1.4 percent respectively. 85 Agricultural employment is expected to shrink, with the share of agricultural workers declining from 30.8 to 17.2 percent—a decline mirrored by an increase in the number of workers in the service and industry sectors. 86 The results are qualitatively similar when using international poverty lines between 2018 and 2050 (measured at US$6.85 a day in 2017 purchasing power parity terms) and the aspirational scenario as a development pathway. 86 West Bank and Gaza Country Climate and Development Report Climate change will substantially affect livelihoods. Figure 5.3. The Effects of Climate Change on the Livelihoods of the Poor and Vulnerable A: Difference in poverty headcount compared to Business-as-Usual B: Additional Millions of Poor Compared to Business-as-Usual (% Points Change Relative to the Baseline) (Millions of People Relative to the Baseline) 10 3 7.9 8 2.2 2.1 6.8 2 6 5.4 5.2 1.2 1.5 4 4.8 4.7 1.4 1 1.0 2 0 0 2030 2040 2050 2030 2040 2050 Dry/Hot Wet/Warm Sources: Based on EHCVM 2018–2019 microdata and a consistent set of macroeconomic projections obtained from CC‑MFMOD and biophysical damage functions generated by IEc. Note: The poverty estimates include direct effects spatially and sectorally disaggregated and indirect effects modeled through climate change. Climate change increases poverty through two general equilibrium mechanisms. The first is lower labor productivity growth.87 The general equilibrium model predicts that climate change will reduce total factor productivity growth and with it, the returns to labor. This decline is expected to affect all sectors, particularly the agricultural sector. Panel B of figure 5.4 shows that the decline in wages is associated with an increase in the poverty headcount. For instance, in the dry/hot scenario, where poverty is expected to increase the most, annual agricultural wage growth will be one percentage point lower (2.7 percent) than in the BAU scenario (3.8 percent). This implies that, in 2050, wages of agricultural workers in the dry/hot scenario are expected to earn almost 30 percent less than in the BAU scenario. This result is consistent with agricultural workers suffering disproportionally from heat stress due to the outdoor nature of their work and because their productivity is directly affected by declines in crop and yield productivity. The second mechanism is a slower structural transformation. The declines in productivity, combined with an increasing demand for food (due to population growth), results in a higher allocation of workers to agriculture compared to a baseline scenario without climate change. In other words, climate change is expected to slow down the process of structural transformation, and with it, increase poverty. Panel A of figure 5.4 shows that in every single year, the scenario with the highest increases in poverty is associated with a higher excess of workers in the agricultural sector compared to the BAU. For instance, by 2050, the highest increase in poverty is expected to take place in the dry/hot scenario—6.7 percentage points. The figure shows that this scenario also corresponds with the highest increase in the share of agricultural workers, expected to be 4.8 percentage points higher than in the baseline scenario. 87 The so-called “imported” impacts, including through global food prices, are not considered in the poverty estimates. West Bank and Gaza Country Climate and Development Report 87 Increases in poverty are associated with slower structural change and lower wages. Figure 5.4. The Impact of Poverty on Structural Change and Wages A: Poverty Headcount and Percentage of Agricultural B: Poverty Headcount and Wages Workers by Decade and Scenario in 2050 by Industry 12 0 10 Poverty headcount (% points wrt BAU) Wages in 2050 (%wrt BAU) 8 -10 6 4 -20 2 0 -30 0 2 4 6 0 2.0 4.0 6.0 8.0 Percentage of agriculture workers (% points wrt BAU) Poverty headcount in 2050 (% points wrt BAU) 2030 2040 2050 Agriculture Industry Service Sources: Based on EHCVM 2018–2019 microdata and a consistent set of macroeconomic projections obtained from CC- MFMOD and biophysical damage functions generated by IEc. Note: To obtain more robust correlation, panels A and B include four climate scenarios: dry/hot, wet/warm, SSP1-1.9, and SSP3-7. The poverty estimates include direct effects spatially and sectorally disaggregated and indirect effects modeled through climate change. SSP = shared socioeconomic pathway. Rural areas are disproportionally affected by climate change, though a growing urban population shows nonnegligible increases in poverty. In 2050, the rural poverty rate is expected to increase between 7 and 9 percentage points (panel B offigure 5.5), which is more than 2 times the expected increase for their urban counterparts (panel A offigure 5.5), expected to increase between 3 and 4.4 percentage points. This result suggests that direct effects are the dominant force through which climate change could affect households’ welfare, but also that urban households are better equipped to adapt because they have a more diversified labor market and better access to infrastructure and services that increase their capacity to protect themselves from falling into poverty as a result of climate change. However, the impact on urban poverty may be downward biased88 if high food inflation is expected, which is not predicted by MFMOD, given the exposure of Dakar to international markets and the control that the monetary union exerts on prices.89 Still, the expected increase in the urban poverty rate (panel A of figure 5.5) should not be overlooked, as the expected population growth in urban areas implies a substantial increase in the number of urban citizens 88 One of the reasons for the downward bias is that urban dwellers in Dakar will be affected by sea level rise and floods— two essential channels not being considered in the microsimulation modeling as they mostly affect nonmonetary poverty and housing. 89 Inflation is expected to be stable and neutral to differences caused by climate change because of the strict control exerted by the common monetary union and by the import competition to which Dakar is exposed. If prices still change, we expect urban poverty to increase around 1 percentage point. This back-of-the-envelope calculation is based on assuming climate change will increase the price of food staples by 25 percent, as in the recent study on the welfare effects of increasing import prices, which suggests that increasing the price of three main staples (maize, wheat, and rice) by 25 percent would increase poverty by 0.02 percentage points for maize, 0.4 percentage points for wheat, and 0.8 percentage points for rice (World Bank 2024). 88 West Bank and Gaza Country Climate and Development Report falling into poverty due to climate change. Overall, the differential effects between urban and rural areas also highlight the importance of migration and sectoral reallocation as potential adaptation measures to increase household’s resilience to climate change. Although rural areas are adversely affected, the impacts on urban population are not negligible. Figure 5.5. Adverse Impacts of Climate Change on Both Urban and Rural Populations A: Urban B: Rural 12 12 10.5 9.8 10 10 8 8 5.7 5.9 6 6 7.0 7.0 4.9 4.4 5.4 4 4 4.2 3.8 2 3.0 2 0 0 2030 2040 2050 2030 2040 2050 Dry/Hot Wet/Warm Sources: Based on EHCVM 2018–2019 microdata and a consistent set of macroeconomic projections obtained from CC‑MFMOD and biophysical damage functions generated by IEc. Note: The poverty estimates include direct effects spatially and sectorally disaggregated and indirect effects modeled through climate change. 5.2. Benefits of Climate Action Beyond Adaptation and Mitigation The financing requirements of climate action are large, but they are relatively small compared to Senegal’s economy (2 to 4.5 percent of cumulative GDP), as reflected intable 5.1. They total US$8.2 billion over 2025–30 (in present value, at 6 percent per year), or 4.5 percent of discounted cumulative GDP over the same period. Achieving water security and developing sustainable (urban) transport represent the largest share of costs at 54 percent. The CCDR estimate is in line with the NDC’s financing requirements, albeit a one-to-one comparison is made difficult by differences in sectoral coverage,90 varying climate ambition, adaptation and mitigation split,91 and use of discounting.92 After 2030, as decarbonization ambition rises, this number increases to US$10.6 billion over 2031–50 (in present value terms), or 2.0 percent of discounted cumulative GDP over the same period. Achieving water security, developing sustainable (urban) 90 The CCDR includes more sectors on the human capital side (that is, education and social protection beyond human health) while the NDC considers biodiversity and a more granular energy demand and use. 91 While the distinction between mitigation and adaptation is a core tenet of the NDC, the CCDR considers investments that can deliver both (for example, forestry or agriculture) and does not specifically allocate funding towards one or the other climate objective. In addition, the CCDR considers the period to 2050 and a low emissions scenario. 92 The NDC needs are not announced as discounted, unlike the CCDR ones. CCDR needs also include technical assistance in support of policy reform and investment. West Bank and Gaza Country Climate and Development Report 89 transport, and the energy transition represent the largest share of costs at 91 percent. In the meantime, average annual emission reductions could reach 20 MtCO2e over the period to 2050 depending on the success of interventions in forestry, deployment of improved cooking services, sustainable transport, and energy production. Interventions in forestry and for improving cooking services are the largest contributors in terms of emission reductions (per year) with the lowest average cost per emission reduction (figure 5.6). A transition towards a low-carbon path in the power sector will not add any significant cost relative to the reference scenario and bring significant benefits from lower emissions and increased resilience. Figure 5.6. CA/OPEX of Climate Action and Figure 5.7. Net Present Value of CA/OPEX of Corresponding Emission Reductions Climate Action and Corresponding Benefits 2025-30 2031-50 10 Forestry 30 25 8 Emission reductions (MtCO2/yr) 20 US$ billions 6 Clean cooking 15 10 4 Urban transport 5 2 0 Water Security CA/OPEX Benefits CA/OPEX Benefits 0 Human capital Urban Transport Water Security 0 1 2 3 Clean cooking SWM Ag, Fish, and Forest CA/OPEX (US$ billion) Energy DRM and Coastal protection Source: Based on data from annex 1. Source: Based on data from annex 1. Note: CA/OPEX = capital expenditures and operating Note: CA/OPEX = capital expenditures and operating expenditures; MtCO2 = million tons of CO2 equivalent. expenditures. While the financing requirements are high in terms of additional investment, especially additional annual infrastructure expenditure, they are expected to bring significant benefits beyond climate adaptation and mitigation over time (figure 5.7). This is the case, for instance, in the primary sector, where climate-smart interventions enhance production (for example, crops, livestock, aquaculture, and sustainable charcoal), with positive impacts on food security, revenues of workers and communities, and job creation. Climate action also brings important health cobenefits such as those from improved water supply, sanitation, and hygiene (where health benefits alone account for 20 percent of needs) or from improved air quality—indoor (where health benefits from improved cooking services are about 10 times larger than needs) or outdoor (where measures to improve fuel quality, fuel efficiency, and traffic bring health benefits that far outstrip the large upfront infrastructure needs). In the context of the CCDR analysis, many benefits could not be properly estimated, hence accounted for, implying the returns from climate action are likely underestimated. Important benefits not valued include, for instance, enhanced ecosystems services from forestry and NBS in coastal zone management (for example, water regulation and fish nursery); continuous water availability for different productive uses (valued for irrigation under agriculture but not in other sectors); health improvements and revenue from the sale of sorted material and compost and energy production for modern waste management; improved road safety and time savings from reduced congestion from urban transport investments; or the complex benefits and returns from improved human capital (for example, long‑term benefits from education). Job creation has been estimated for some interventions, especially in the primary sector where activities in agriculture, aquaculture, and forestry could translate into 155,000 new jobs (80 percent in agriculture), highlighting the potential of these sectors to contribute fully to the economy. 90 West Bank and Gaza Country Climate and Development Report Table 5.1. Climate Action Cost and Benefits by 2030 and 2050 Mitigation 2025–30 2025–30 Total Total Sector Adaptation 2025–30 2025–50 (MtCO2e/yr) (US$ m) (US$ m) (US$ m) (US$ m) CA/OPEX Benefits CA/OPEX Benefits Forestry 9.3 + 231 99 349 638 132 (157) Fisheries and + 100 145 10 559 (45) (594) Aquaculture Agriculture 0.2 + 577 1,965 5 8,173 (1,388) (9,556) Water 0.4 + 2,599 471 1,700 963 2,128 2,865 Security Coastal Zone + + 424 104 62 294 321 89 Management Urban DRM + 661 457 190 1,067 204 (674) (flood) Solid Waste 1.6 207 156 - 207 363 Management Urban 1.7 + 1,848 9,494 5,266 15,612 (7,646) (17,992) Transport Energy 1.4 27 2,636 27 2,636 Clean 5.4 676 13,754 - - (13,078) (13,078) Cooking Social + 118 - 118 118 Protection Education + + 290 32 290 322 Human + + 473 151 473 625 Health TOTAL 20 8,231 26,489 10,557 27,306 (18,257) (35,033) Source: Based on data from annex 1. Note: Forestry: Afforestation and reforestation (including mangroves), conservation, community-based management activities, fire management, and monitoring and enforcement (covering 1.5 million ha over 2025–2050 and an additional 500,000 ha from 2035). Benefits include sustainable charcoal production (estimates based on PROGEDE 2 Implementation Completion and Results Report – ICR). Adaptation benefits (ecosystem services) and job creation not valued. Fisheries and aquaculture: Scaled‑up investment in aquaculture, fisheries comanagement initiatives (including resilient coastal infrastructure), and strengthened management of marine protected areas. Increased aquaculture production is the only benefit quantified. Other benefits such as ecosystem services (adaptation and mitigation), improved catch, and job creation not valued. Agriculture: On‑farm adaptation (for example, drought-resilient varieties and new practices, including agroforestry), efficient irrigation, livestock management, insurance development, and modern extension services (covering 2,215,000 ha over 2025–50). Benefits include sustainable charcoal production (estimates based on PROGEDE 2 ICR). Adaptation benefits (ecosystem services) and job creation not valued. Water security: Water source diversification, small-scale storage, access to sanitation (WASH), and policy support for strengthened coordination and improved decentralization. Benefits include human health improvements. Other important benefits (like managed continuous water availability for different productive uses) not valued (except for irrigation under agriculture). Coastal zone management: NBS (over 30,000 ha in rural areas) and brick-and mortar solutions (over 36 km in urban areas), together with support for coastal law adoption and enforcement. Benefits are only the value of land protected and underestimate benefits of NBS (including mitigation) and urban coastal defense. Urban DRM (flood): Drainage West Bank and Gaza Country Climate and Development Report 91 and flood protection in main urban centers, establishment of DRM framework and EWS, and climate-informed territorial and urban planning. Benefits include risk reduction (flood). Other benefits not valued. Solid waste management: Capping and rehabilitation of Mbeubeuss and addition of modern solid waste management infrastructure. Benefits (health improvements, sale of sorted material and compost, and energy production) not valued. Urban transport: Urban planning to support high modal share for public transit, improved fuel efficiency standards and fleet renewal, higher quality gasoline, and electrification of public buses and two- and three-wheeler fleet. Improved air quality is the only benefit valued. Other benefits (less congestion and improved road safety) not valued. Energy: Gas-to-power and deployment of RE. Benefits include fuel cost savings, accounted directly in OPEX change. Clean cooking: Reaching clean cooking targets in the 2020 NDC: Diffusing 8,000,000 improved cookstoves (ICS) by 2030, diffusing 27,000 biodigesters, promoting LPG and biochar. Benefits include improved indoor air quality, time saving, and lower GHG emissions, all valued except GHG emissions. Social protection, education, human health: Benefits not valued. CA/OPEX = CA/OPEX = capital expenditures and operating expenditures; DRM = disaster risk management. Achieving the transformation of the Senegalese economy towards a more productive, inclusive, and sustainable model will require substantial financial resources, particularly from the private sector, along with innovative approaches and policy reforms to ensure long-term sustainability. Investments will be needed from various sources, including the national budget, municipal finance, private sector, and increased access to international climate finance. While there are no definitive estimates of the share of investments covered in each sector by public or private finance, analysis for this CCDR estimates a 60/40 percent split. The additional cumulative cost is estimated at US$3.3 billion until 2030 and US$4.3 billion over 2031–50 for the private sector, and US$4.9 billion and US$6.3 billion for the public sector (figure 5.8). Actual private finance levels will depend on market preference, attractiveness of projects to investors, and business climate (see chapter 6). Furthermore, given the long-term horizon of climate investments, these will need to be complemented with financial and institutional measures, such as boosting decentralization and local government capacity, supporting the private investment climate with PPP practices based on international and competitive standards, and widening the use of climate-smart technologies. Figure 5.8. Expected Public/Private Shares in Costs, by Sector Agriculture Forestry Fisheries and Aquaculture Water Security CZM DRM (flood) SWM Transport Clean cooking Energy Social Protection Education Human Health Total 0 20 40 60 80 100 Private Public Source: Based on data from annex 1. Note: CZM = coastal zone management; DRM = disaster risk management; SWM = solid waste management. 92 West Bank and Gaza Country Climate and Development Report 5.3. Boosting Growth and Poverty Reduction through Adaptation (Modeling in Select Sectors) The macroeconomic analysis for this CCDR models the costs and benefits of potential adaptation interventions in four specific sectors. The modeling of adaptation in all sectors is not possible in the macroeconomic model used, as the benefits cannot always be readily quantified without layers of assumptions and linked back to variables in the macroeconomic model and the impact channels. This is particularly the case for the complex benefits and returns from improved human capital (for example, long-term benefits from education or from improved health outcomes). Therefore, these results should be interpreted as a lower bound estimate as benefits could be much larger. The costs and benefits of adaptation in these four sectors have been explicitly integrated in the macroeconomic model, based on estimates from the technical‑economic analysis in chapter 3 and summarized in table 5.1. y Forestry: Adaptation in the forestry sector will consist of developing agroforestry systems, restoring forest plantations, conservation, community-based management activities, fire management, monitoring, and enforcement. y Fishery and aquaculture: Adaptation in the fishery and aquaculture sector will include scaled‑up investment in aquaculture, fisheries comanagement initiatives (including resilient coastal infrastructure), and strengthened management of marine protected areas. y Agriculture: Adaptation measures in the agriculture sector include climate-resilient infrastructure to minimize the impacts of droughts and floods on existing priority crops, crop diversification, improved livestock management, efficient irrigation, insurance development, modern extension services and conservation of biodiversity, and afforestation. y Disaster risk management (flood adaptation): Flood adaptation assumes protecting urban and rural coastal areas from erosion. At the current trend, coastal erosion is expected to lead to the loss of about 51 ha of land per year (83 percent of which will be in rural areas and 17 percent in urban areas). Adaptation measures include drainage and flood protection in main urban centers, the establishment of a DRM framework and EWS, climate-informed territorial and urban planning. Benefits include flood risk reduction. The CCDR finds that the modeled adaptation actions can significantly reduce annual economic losses from climate change. While it is important to always interpret these results with caution, it is also important, as previously mentioned, to note that they represent a lower bound estimate of potential benefits. The modeling of adaptation in all sectors is not possible in the macroeconomic model used, implying benefits might be much larger (particularly in improved sanitary conditions). Such benefits would boost growth both directly (preserving and strengthening production factors) and indirectly (via enhanced productivity and resilience) while also reducing emissions. Together, adaptation investments in the four sectors considered (amounting to financing needs of about 0.9 percent of GDP in the period to 2030 and 0.1 percent afterwards) are estimated to bring GDP gains of about 2 percent by 2030, and between 0.5 and 1 percent on average afterwards. Of the sectors modeled,93 the agricultural sector is by far the one in which investment in adaptation will yield the most benefits, followed by fishery and forestry (figure 5.9), reflecting the socioeconomic importance of 93 It is important to note that the urban aspect, which is the salient one for half of the population of Senegal, is only indirectly present in this analysis through the infrastructure and productivity effects. The broader development aspects of urbanization (sprawl, slums, informality, and irreversibility in planning) are not considered. For more information on the benefits of adaptation for sustainable cities, refer to chapter 3. West Bank and Gaza Country Climate and Development Report 93 these key sectors. Policies directed towards sustainably addressing the impact of climate change offer an c to not only safeguard development gains but also accompany Senegal’s ambitious transformation journey to reach its development aspirations. Adaptation action could generate significant gains. Figure 5.9. A Snapshot of Potential Gains from Adaptation Action a. Combined b. Agriculture GDP, domestic demand GDP, domestic demand 4 3.5 3.0 3 % deviation from baseline % deviation from baseline 2.5 2 2.0 1.5 1 1.0 0.5 0 0.0 -1 -0.5 24 26 28 30 32 34 36 38 40 42 44 46 48 50 24 26 28 30 32 34 36 38 40 42 44 46 48 50 GDP Consumption Investment GDP Consumption Investment c. Fishery and Aquaculture d. Disaster Risk Management (Flooding) GDP, domestic demand GDP, domestic demand 0.30 0.004 0.25 0.000 % deviation from baseline % deviation from baseline 0.20 -0.004 0.15 -0.008 0.10 -0.012 0.05 0.00 -0.016 -0.05 -0.020 24 26 28 30 32 34 36 38 40 42 44 46 48 50 24 26 28 30 32 34 36 38 40 42 44 46 48 50 GDP Consumption Investment GDP Consumption Investment e. Forestry GDP, domestic demand 0.25 0.20 % deviation from baseline 0.15 0.10 0.05 0.00 -0.05 24 26 28 30 32 34 36 38 40 42 44 46 48 50 GDP Consumption Investment Source: MFMOD simulations. Note: Deviations from the baseline. 94 West Bank and Gaza Country Climate and Development Report Adaptation policies modeled would bring substantial social cobenefits, particularly for rural households. Figure 5.10 shows the social gains of adaptation policies. It measures how much the expected increase in poverty is softened when adaptation policies are put into place. For instance, according to the figure, in 2050, adaptation can reduce the damage of climate change under the dry/hot scenario by 2.9 percentage points at national level. Three conclusions emerge from this analysis. First, the impact of adaptation policies is very similar across different climate scenarios, suggesting that their benefits on productivity and growth are independent of climate change. Second, the benefits of adaptation compound over time, with benefits reaching a peak in 2050. Third, the adaptation measures implemented have a higher impact on reducing the effect of climate change on rural poverty, which suggests that these adaptation policies are more effective at reducing the direct effects of climate change that affect mostly rural households. Adaptation measures reduce poverty over time and particularly for rural areas. Figure 5.10. The Impacts of Adaptation Measures on Poverty Reduction Over Time 0 -1 -2 -3 -4 -5 2030 2040 2050 2030 2040 2050 2030 2040 2050 National Urban Rural Dry/Hot Wet/Warm Sources: Based on EHCVM 2018–2019 microdata and a consistent set of macroeconomic projections obtained from CC‑MFMOD and biophysical damage functions generated by IEc. Note: The figure reports the difference between adaptation and no adaptation for each period, climate scenario, and area. Negative values mean reduction in poverty due to adaptation, while positive values mean poverty increase due to adaptation. The poverty estimates include direct effects spatially and sectorally disaggregated and indirect effects modeled through climate change. 5.4. Opportunities in the New Hydrocarbon Sector Senegal’s ambitious development objectives could benefit from strategically leveraging the onset of oil and gas production.94 Real growth is projected to surge from 3.7 percent in 2023 to 7.1 percent in 94 Noteworthy oil and gas discoveries in Senegal from 2014 to 2017 reveal reserves exceeding 400 million barrels of oil and more than 40,000 billion cubic feet of gas. Among these discoveries, the GTA field, set to commence production in mid-2026, unveils reserves of approximately 1 billion barrels of oil and 40 trillion cubic feet of gas. The Sangomar field, set to begin production in mid-2024, boasts recoverable oil reserves of 560 million barrels, along with 2.4 trillion cubic feet of natural gas. The Yakaar Teranga field is expected to contribute to the domestic market with 150 million cubic feet of natural gas daily. Several other fields, particularly deep-sea water, remain under exploration, marking a significant stride in Senegal’s energy landscape. West Bank and Gaza Country Climate and Development Report 95 2024 and a further 9.7 percent in 2025. The fiscal revenues derived from oil and gas are expected to contribute an additional 1 percent of GDP, on average, over the production period from 2024 to 2045, significantly bolstering Senegal’s fiscal resources. Financed by these revenues, public investment is expected to substantially increase, allowing more investment in public infrastructures and human capital. Exports of hydrocarbons are anticipated to flourish, leading to a substantial improvement in the current account. On the supply side, in addition to the expected boom in the industry sector, the tertiary sector (including services, insurance, and transportation) may experience positive spillover effects from hydrocarbon exploitation. Furthermore, the agriculture sector could benefit from increased fertilizer production. Senegal © Mohammed alsdudi/Shutterstock Oil and gas discoveries could also contribute to the country’s goal of achieving universal access to energy. The gas from the Yakaar Teranga field is expected to serve the domestic market, strengthening the energy mix and allowing electrification extension networks in rural and peri-urban areas. It is also likely to fuel the implementation of the gas-to-power strategy, which should ultimately lead to cheaper electricity, increased competitiveness, and spurred growth. This can reduce energy subsidies, creating space for social policies and for the supply of reliable and cheaper energy to improve household living conditions, reduce inequalities, and improve education and health outcomes. It is important to note that while oil and gas revenues are a welcome development in the financing strategy for development needs in the short term, efforts should continue towards increasing efficiency in public spending and mobilizing domestic revenue beyond the oil sector. Moreover, investment priorities (such as in education and infrastructure development) should remain the focus of the development strategy in the near to medium term, which will require private sector investment to play a prominent role. While the expected increase in investment by 1  percent of GDP is beneficial, it may not be transformative on its own. A healthy private sector that invests in development remains indispensable. Finally, reducing inefficient and expensive energy subsidies remains a priority and an integral part of the much-needed fiscal consolidation strategy that the government should be pursuing. Strong governance and well-structured and transparent management of the hydrocarbon sector and revenues will be crucial to tap into the potential offered by this sector. Effective management of hydrocarbon revenues is essential for achieving Senegal’s development objectives, given that managing oil and gas resources can present challenges and exacerbate governance issues. While hydrocarbon 96 West Bank and Gaza Country Climate and Development Report production may initially boost real GDP growth, it may not automatically translate into increased inclusivity and income for most vulnerable populations, whose productivity often remains low. The government must strategically implement reforms to channel hydrocarbon resources into programs that create a new paradigm of benefits for factor productivity. Allocating these resources to investments in education, youth skills development, and technological advancement for SMEs can enhance labor productivity gains, contributing to higher long-term inclusive growth. Senegal has adopted a policy framework and strategies for effective hydrocarbon revenue management. The revenues will be divided between the state budget (90 percent) and the stabilization and intergenerational fund (10 percent). The funds allocated to the general budget will mainly finance priority investment expenditures aligned with the country’s development objectives, current spending (excluding wages), and debt service repayment. Transparent presentation of all funds related to oil and gas revenues in the fiscal tables is essential, ensuring coherence and transparency. West Bank and Gaza Country Climate and Development Report 97 Senegal © Mohammed alsdudi/Shutterstock 98 West Bank and Gaza Country Climate and Development Report Chapter 6: Financing Climate Action 6.1. Context: Climate Action Needs and Current Levels of Funding The present CCDR estimates the financing needs for climate action at US$1.36 billion per annum up to 2030 (in present value, discounted at 6 percent per year). Achieving water security and developing sustainable (urban) transport represent the largest share of costs (see chapter 5). This does not include the cost of climate change damages. While these costs are difficult to estimate, damages from past weather‑related disasters offer guidance. Damages from floods in Senegal, for example, were estimated at US$114 in 2002, US$108 in 2008, and US$104 million in 2009. A probabilistic risk assessment for Senegal in 2024 calculated that average annual losses from hydrometeorological events would be about 0.26 percent of national GDP for 2024 (0.2 percent for floods and 0.06 percent for drought) (World Bank 2023d), mostly from droughts (US$500 million per year) and flooding (US$28 million per year). Probable maximal losses from a severe event (1-in-25 years) could be about US$115 million.95 These damages would cause significant stresses on the public budget, adding to the stresses from rising debt levels and fiscal constraints. The climate financing received by Senegal between 2019 and 2020 averaged US$561 million per year. That was only 41 percent of the average annual needs (Meattle et al. 2022). Most of the funding (57 percent) went towards mitigation, with the largest shares going to energy (26.2 percent) and wastewater (22.0 percent); followed by agriculture, forestry, andfisheries (16 percent); and transportation (10 percent). Most funding (US$488 million) came from public sources such as bilateral and multilateral development financing institutions and governments, while a small portion (US$73 million) was received from private sources such as corporations (79 percent), households (12.7 percent), funds (4.2 percent), and institutional investors (3.97 percent). However, Senegal is the third largest recipient of private sector climate financing among ECOWAS countries (just behind Burkina Faso and Cabo Verde). The private financing is mainly in the energy sector, which is supported by technical and financial partners like the World Bank, the African Development Bank, and the Agence Française de Développement (AFD 2023). The banking sectors in West African Economic and Monetary Union (WAEMU) countries, including Senegal, have limited awareness of climate-related risks and do not consider them in their governance and risk management procedures.96 Neither the Central Bank of West African States (BCEAO) nor the WAEMU Banking Commission has mandates or specific objectives for considering risks from climate change. In addition, assessing the exposure of the banking sector to climate risks is difficult because of the lack of data and agreed nomenclature. However, several banks have applied successfully to become accredited entities to the Green Climate Fund (such as La Banque Agricole in Senegal). Businesses in Senegal are not prepared for climate change impacts. Only 34 percent are prepared to address climate shocks and only 12 percent have preparations in place, according to the business survey 95 The return period associated with a loss corresponds to the inverse of the annual probability of exceeding said loss. For instance, a 25-year return period loss has a 4 percent annual probability of being exceeded in any given year. 96 With a shallow regional capital market, the banking sector is the main source of lending for the private sector. At the same time banks also remain the main buyer of sovereign securities. Meanwhile, the regulatory framework of the financial sector allows banks to refinance government securities through the BCEAO, making sovereign instruments risk free to large extent. This setup crowds out the private sector by reducing banks’ appetite to lend to the private sector, which they perceive to be riskier and fragmented. As a result, banking sector credit to the private sector in the region is low (23.5 percent on GDP in 2022), compared to the SSA average of 35.8 percent of GDP the same year. Senegal stands out in the region with a banking sector credit to the private sector of 32.3 percent of GDP in 2022. West Bank and Gaza Country Climate and Development Report 99 commissioned by the IFC for this report (see chapter 2). Businesses in the most exposed sectors, such as agriculture, fisheries, transport, and retail services, are the least prepared. The reasons include financing constraints, high rates of informality, and knowledge gaps. Given Senegal’s large climate financing gap, FDI will be needed. Even with debt instruments and carbon markets, it will be difficult for Senegal to raise financing at the scale needed, given the country’s structural challenges and institutional capabilities (Belianska et al. 2022).97 Continued subsidies for fuel, gas, and electricity create barriers to clean energy investments and exacerbate income inequality. Energy subsidies added up to 4.4 percent of GDP in 2022, with subsidies for petroleum products and gas averaging 28.5 percent. These subsidies hamper clean energy development and provide incentives to overconsume fossil fuels, thus increasing CO2 emissions and air pollution and worsening health (Damania et al. 2023). The subsidies also disproportionally benefit high-income households because of their greater access to the electricity grid and higher energy consumption (since they can better afford cars, tractors, air conditioning, and other energy-intensive products). Seefigure 6.1. In 2022, for example, households in the top 10 percent of income received 32–39 percent of the energy subsidies, raising income inequality by 0.24 Gini points. While the government started phasing out energy subsidies in 2022, total subsidy spending increased from 2021 to 2022, adding to Senegal’s fiscal deficit. Figure 6.1. Inefficiencies in How Energy Subsidies are Targeted A: Effect of Subsidies on Poverty and Inequality B: Absolute Incidence of Fuel and Electricity in 2022 0.4 39.5 0.5 40 Percentage of total spending 0.24 Effect od energy subsidies 0.1 32.7 on energy subsidies 0.0 30 -0.5 20 -1.0 -0.9 -1.5 10 -1.4 -2.0 0 -1.9 1 2 3 4 5 6 7 8 9 10 Change in poverty Change in Inequality (Percentage points) (Gini points) Deciles of disposable income per-capita Electricity Fuel Total Source: Based on EHCVM 2021–22 and policy parameters available in November of 2023. Note: The figure shows how poverty and inequality change with energy subsidies on fuel and electricity and with value-added tax exemptions for electricity. Changes in poverty headcount use the national poverty line. 6.2. Key Opportunities: Review of Promising Climate Finance Sources and Instruments 6.2.1. Market-Based Instruments Senegal has access to both international capital markets and the WAEMU regional securities market. It currently has five Eurobonds that mature between 2024 and 2048, the latest having been issued in June 2021. Senegal also has issued financial instruments in the WAEMU regional securities market, with tenors 97 An IMF report on SSA climate change financing options identifies the following as main challenges for green bonds: inconsistent classification and reporting standards across the market, transparency hurdles as money is fungible, and costly monitoring and reporting on green bonds. For debt swaps: negotiations to set up swap agreement can be lengthy, monitoring and reporting on green efforts can be costly, and it can be difficult to relatably measure emissions reductions. 100 West Bank and Gaza Country Climate and Development Report of up to 15 years. While monetary tightening by large central banks had limited the available international capital, the recent easing of inflation is enabling WAEMU member countries to return to accessing the market. This section describes the types of instruments that Senegal could use for climate finance. Sustainability-linked bonds and loans and the Sustainable Finance Framework Sustainability-linked bonds (SLBs) and loans (SLLs) are a relatively new type of finance. Their financial performance (coupons or interest rates) is tied to the achievement of preestablished, agreed-upon “ambitious” sustainable performance targets (SPTs)98 such as levels of electricity access or educational achievement. Unlike thematic bonds or loans, sustainability-linked instruments are not earmarked for specific expenditures or projects. The most critical aspect is setting performance targets that are both ambitious and achievable. To help enable the use of these instruments, the World Bank has developed a proprietary methodology to evaluate the ambition and feasibility of the targets (Wang et al. 2023). Senegal adopted a Sustainable Financing Framework99 in 2023. It supports the issuance of both thematic bonds and sustainability-linked instruments in regional and international capital markets and complies with international best practices as set out by the International Capital Markets Association (ICMA) and the Loan Market Association. The Framework lays out seven expenditure categories related to social outcomes, such as primary school completion rate, and three expenditure categories related to the environment and climate action, such as electricity access.100 Proceeds from any bonds or loans could be used for projects in any of these categories. The targets set for the key performance indicators (KPIs) in the Framework are very ambitious (figure 6.2) but differ on feasibility (figure 6.3). The issuance amounts of SLBs and SLLs have increased rapidly to more US$100 billion globally in 2021.101 To date, almost all SLBs and SLLS have been issued by corporations, but sovereign and public sector entities are increasingly exploring their use because of their versatility and the ability of issuers to set performance targets. The SLB format can also be combined with other credit enhancement mechanisms to optimize the cost of financing, such as an SLB with a one-third credit enhancement with an International Development Association (IDA) loan issued by the Development Bank of Rwanda in October 2023 (see annex 8). Chile and Uruguay are the first two sovereign countries to have issued SLBs. A pilot project approved by the World Bank for Uruguay is particularly innovative because the US$350 million SLL has an interest rate that can decrease over the life of the International Bank for Reconstruction and Development (IBRD) loan if certain ambitious targets for reducing the intensity of methane emissions are met or exceeded. The World Bank hopes to replicate this idea of direct financial incentives embedded in the loan for climate- and nature‑focused bonds or loans in other countries. Senegal could use its new sustainable financing framework for customized SLBs or SLLs. The country is currently working to prepare additional nature-based KPIs, such as the share of renewable energy in the installed capacity or rates of deforestation. 98 Concepts of targets’ ambition and indicators’ materiality are defined in the Sustainability-Linked Bond Principles set by the ICMA. 99 Senegal’s Sustainable Financing Framework can be found here: https://www.finances.gouv.sn/publication/le-senegal-publie-un-document-cadre-de-financements-durables/. 100 The environmental categories are: access to low carbon, reliable, and affordable energy; preservation of forests and coastal areas and combatting desertification; and adaptation to climate change. 101 Data are from Bloomberg New Energy Finance. West Bank and Gaza Country Climate and Development Report 101 Figure 6.2. Evaluating the Ambition of Senegal’s Sustainability Targets KPI1 Primary School Completion Rate KPI2 Electricity Access in Rural Areas 100% Ambitiousness: HIGH 100% Ambitiousness: HIGH 2025 target range 90-95% 80% 80% 2025 target range 76-81% 60% 60% 40% 40% 20% 20% 0% 0% 1980 1985 1990 1995 2000 2005 2010 2015 2020 2025 1992 1996 2000 2004 2008 2012 2016 2020 2024 90% forecast interval 50% forecast interval Source: World Bank ESG Sovereign Data Portal Figure 6.3. Evaluating the Feasibility of Senegal’s Sustainability Targets KPI1 Primary School Completion Rate KPI2 Electricity Access in Rural Areas Feasibility: HIGH Feasibility: LOW a. Feasible performance ranges b. Feasible performance ranges 90 100 2025 target range 90-95% 90 80 80 2025 target range 76-81% 70 60 70 50 40 60 30 20 50 10 Base year +1 +2 +3 +4 +5 Base year +1 +2 +3 +4 +5 Median historical path 90% feasibility interval Median historical path 90% feasibility interval Linear target path 50% feasibility interval Linear target path 50% feasibility interval c. Closest peers with similar growth trajectories d. Closest peers with similar growth trajectories 85 100 2025 target range 90-95% 80 2025 target range 76-81% 80 75 70 70 60 65 60 50 55 40 Base year +1 +2 +3 +4 +5 Base year +1 +2 +3 +4 +5 Median historical path Linear target path Median historical path Linear target path Source: World Bank ESG Sovereign Data Portal Thematic Bonds Thematic bonds are fixed-income securities issued in the capital markets to raise resources to finance projects and activities related to a specific theme, such as climate change, education, housing, ocean and marine conservation, or the SDGs. They include green, social, and sustainable labeled bonds. Green bonds have a subcategory called blue bonds, while gender bonds are a type of social bonds. Green, social, and sustainable bonds are also known as “use-of-proceed bonds” because the resources raised through these securities are earmarked for specific projects designed to generate the intended impacts. 102 West Bank and Gaza Country Climate and Development Report One recent use of these bonds was in 2020, when WAEMU states issued a series of social bonds to finance expenditures related to the COVID-19 pandemic, called “bons social covid-19.” These were issued on the regional securities platform (l’Union Monétaire Ouest Africaine) UMOA-Titres as three-month Treasury bills at rates less than or equal to 3.75 percent. The total amount raised was US$5.26 billion, with US$69 million raised by Senegal. To encourage and enable greater use, the regional capital markets financial regulator, West African Monetary Union Financial Markets Authority (previously the Regional Council for Public Savings and Financial Markets), published a framework for green bonds in 2020 with the help of the World Bank’s Joint Capital Market program.102 In 2021, Ivorian property developer Emergence Plaza was the first in the region to issue a green bond under the framework. In addition, Benin, the West African Development Bank, and Ecobank Transnational (a pan-African retail banking group) have issued thematic Eurobonds. For example, Benin issued a 12.5-year €500 million bond earmarked to fund projects that make progress towards the United Nations’ SGDs. The first sustainable bond issuance for Senegal is expected in the second quarter of 2024 by Baobab Senegal, in the amount of about CFAF 20 billion (US$33.4 million) to support innovative MSMEs. Outcome-Based bonds These are bonds issued by the World Bank that allow private investors to support individual development projects and fund specific project outcomes. The return to investors is based on the outcome of the project. Investors can get either outcome payments from donors when projects succeed or returns from assets, such as carbon credits, generated by the project. Examples of such innovative instruments are the World Bank’s US$150 million Wildlife Conservation Bond in South Africa in 2022, the US$50 million Viet Nam Emission Reduction Linked–Bond in 2023, and the US$100 million Ghana Plastic Waste Reduction–Linked Bond in 2024. Debt for Development Swaps Debt for development swaps (including debt-for-nature and debt-for-climate swaps) are a mechanism in which a country obtains a reduction in its debt obligations in exchange for using the savings for specific development purposes. They can be undertaken with multilateral, bilateral, or private creditors. In bilateral swaps, a portion of the original debt service owed to creditors is redirected to development spending. In other cases, expensive commercial debt may be replaced by cheaper concessional debt, with the savings being directed towards development. In swaps with private creditors, bonds that trade at a discount are usually targeted and retired, effectively functioning as a sort of debt buyback. Debt swaps have high transaction costs and risks, so they have not been used often. There are transaction costs associated with identifying projects and with negotiations and coordination among swap stakeholders. Successful debt swap transactions also require countries to have strong capacities in debt management and project monitoring and evaluation to accurately assess the performance of projects supported by the swap. In addition, without credible enforcement mechanisms, there are risks in up-front debt swaps that the savings might not, in fact, be used for the promised nature or climate investments. These costs and risks, combined with the limited supply of institutions able to facilitate and implement swaps, make it challenging to scale up the use of debt swaps for global climate financing. However, debt-for-climate swaps can be more effective than loans or grants in countries with fiscal constraints and outstanding debt portfolios that are appropriate for swapping (such as having expensive terms or trading at a discount). Swaps can also be useful for smaller economies where these transactions can have greater impacts and can be preferable to other instruments if they provide higher savings in net present value (NPV) terms. For Senegal, careful cost‑benefit analysis and consideration of intangibles can help determine the feasibility and potential value of these swaps. 102 See https://www.brvm.org/sites/default/files/circulaire_sur_le_guide_des_obligations_vertes.pdf. West Bank and Gaza Country Climate and Development Report 103 Foreign Direct Investment (FDI) Senegal has a strong track record in attracting FDI, including so-called “climate FDI”103 targeted at climate change action. Dakar’s electric BRT system is a flagship case of how foreign investors can help support green technology projects. Senegal now has the potential to mobilize additional private capital and partnerships for mitigation or adaptation in key sectors, such as energy and transport. 6.2.2. Concessional Finance Multilateral and Bilateral Public Sources In addition to the aforementioned market opportunities, Senegal should take maximum advantage of available concessional and semiconcessional financing. As a gap country, Senegal is eligible for IDA loans on highly concessional terms with maturities of up to 30 years. It can also access some IBRD financing with maturities of up to 35 years. Currently, Senegal’s most important multilateral lenders and donors include the World Bank, the African Development Bank (AfDB), the EU, the International Fund for Agricultural Development, the Food and Agriculture Organization, and the Islamic Development Bank. Bilateral climate finance is currently provided by partner countries working in the environmental sector, namely France, Germany, Japan, Luxembourg, and the United States. IMF Resilience and Sustainability Facility In May 2023, Senegal and the IMF reached an agreement on IMF financing under the Resilience and Sustainability Facility or RSF (IMF 2023a). The financing package combines a new 36-month financing arrangement under the Extended Fund Facility (EFF) and Extended Credit Facility (ECF) of about US$1.526 billion, with the RSF of about US$327.1 million. The RSF will support Senegal’s climate change mitigation efforts, accelerate adaptation measures, and support work to mainstream climate change considerations into the budget process. Just Energy Transition Partnership In June 2023, during the Paris Summit for a New Global Financial Pact, Senegal and the International Partners’ Group (Canada, the EU, France, Germany, and the United Kingdom) launched a Just Energy Transition Partnership (JETP) to support Senegal’s energy access and decarbonization efforts (Pineau and Irish 2023). The partnership will provide Senegal with up to €2.5 billion (US$2.74 billion) over the next three to five years to help achieve the country’s target of 40 percent of installed capacity from renewable energies by 2030. This is the fourth JETP, following deals previously concluded with Indonesia, Viet Nam, and South Africa. International Climate Funds Despite their relatively small size, international climate funds are strategically important for Senegal. Not only do they provide direct benefits by supporting projects, they also can help attract private investment by enabling national and multilateral development banks to develop risk-sharing instruments, foster learning and demonstration, and develop key technical capacities. Senegal already has successfully accessed 103 The World Economic Forum (WEF) uses the definition of climate FDI to refer to investments in renewable energy, transportation and environmental technology and services. 104 West Bank and Gaza Country Climate and Development Report climate funds, such as the Green Climate Fund (GCF) and the Global Environment Facility104 for projects on mitigation and adaptation. There are two GCF-accredited entities in Senegal, the Centre de Suivi Ecologique (CSE) and la Banque Agricole (formerly Caisse nationale de crédit agricole du Sénégal). In addition, two public institutions that provide investment support to the private sector are involved in the GCF accreditation process: the FONSIS and the Fonds de garantie des investissements prioritaires (FONGIP). New Financial Institutions Several new financial institutions are expanding their activities to include Africa, creating the potential for new blended financing. One example is the recent launch of the European Investment Bank (EIB) Global in January 2022 to support climate action, economic growth, and development beyond the EU. Funding for such a facility could blend IDA grants and credits with funding and guarantees from other multilateral development banks, development institutions, and public sector funds to support new investment focus areas in Senegal, including nature and biodiversity conservation and climate-resilient infrastructure, transportation, and agriculture. In addition, new tools to measure and model the risks of projects can help leverage public sector financing to enable more private sector investment, enabling more efficient use of scarce public sector financing. Senegal can also explore deploying more innovative financial structures from these concessional and semiconcessional resources. For example, these sources of financing could be used as liquidity backstops for climate-focused projects (such as by putting a price floor under a power purchase agreement for renewable energy projects) to encourage more private sector investment. Such safeguards would also give added comfort to investors. 6.2.3. Dedicated Instruments Disaster Risk Financing Senegal is highly exposed to a wide range climate-related risks, including hydrometeorological hazards such as droughts, floods, and wildfires. Historical data show that between 1980 and 2022, 35 events were reported, affecting around 4.6 million people and causing around 300 deaths.105 Droughts and floods are the most important risks in Senegal, but while droughts have had the highest human impacts, floods have had the highest financial consequences. Over the last decades, the frequency and intensity of severe events have been increasing due to climate change. Droughts have a significant impact on agricultural production and the agriculture sector. As one-third of the population relies on agriculture for their income, any major climate shock can lead to significant economic shock through decreased consumption. Droughts also have major impacts on households’ livelihoods and food security levels. Floods increasingly affect coastal areas and urban centers, with the Dakar region particularly exposed. Several vulnerability factors exacerbate the risk: rapid urbanization, lack of coordination in urban planning and low drainage infrastructure, high water tables, and rising sea level. In such a context, Senegal has developed several financial protection mechanisms to enhance its resilience against disasters and climate-related shocks. The country has budgetary reserves and contingency funds for 104 Senegal was among the first countries to have an accredited entity to the GCF and an approved project (the third one to be approved). It now can boast 14 projects (including with participation in regional initiatives) for commitments totaling US$205.6 million. It is also well positioned in terms of accessing the resources of other climate finance funds, such as the Adaptation Fund (three projects). 105 The Emergency Database, Université Catholique de Louvain (UCL), accessible at: https://public.emdat.be. It is worth noting that the database does not systematically report events and is largely incomplete, particularly for low- to medium-severity events, and therefore only provides a partial view of historical events. West Bank and Gaza Country Climate and Development Report 105 lower-severity shocks as well as risk transfer instruments for high-severity shocks (table 6.1). However, these only cover drought risks. The country lacks financial instruments for high-level flood risks, such as public asset sovereign insurance, and instruments for moderate drought and flood shocks, such as a contingent line of credit. It also does not have an overarching strategy for enabling the different mechanisms to interact in a coherent and efficient way. Table 6.1. Existing DRF Instruments in Senegal Risk Retention Instruments Budgetary One to three percent of the annual state budget (totaling about CFAF 50 billion in 2023) can be allocated reserves to disaster response.106 In addition, ministries often keep a dedicated budget line for unforeseen events or specific disaster response (such as the ministry in charge of water management for floods, the Directorate of Forestry within the ministry in charge of environment for wildfire, Civil Protection within the Ministry of Interior for general emergency response, and the ministry in charge of agriculture and food security agencies107 for drought). However, these budget lines are not calibrated based on historical losses or risk modeling analytics. Contingency Contingency funds targeted to disaster risks include a Stability Fund to cushion the state budget against funds climate shocks; a National Solidarity Fund to finance emergency response activities for households, including the poorest; an Agricultural Calamity Fund” to protect the agricultural bank from nonperforming loans to farmers and agricultural small and medium enterprises (SMEs); and a “Flood Control Fund” to finance flood prevention and response. However, these funds often rely on annual or ad hoc allocations and are not calibrated based on historical losses or risk modeling analytics. Contingent Discussions were held in 2019 about a World Bank Development Policy Loan for a contingent credit line with credit line a Catastrophe Deferred Drawdown Option but never brought results because of COVID-19. Risk Transfer Instruments Sovereign Senegal is a member of the African Risk Capacity (ARC) risk pool and has purchased sovereign parametric insurance insurance policies for drought-related crop failure since 2014. The annual premium is US$3.1 million. Two payouts have been recorded: US$16.5 million in FY2014/15 and US$23.2 million in FY2019/20. In 2023, the government also purchased a parametric product for pastoral drought. The annual premium is US$1 million and it is subsided by KfW (Kreditanstalt für Wiederaufbau or Credit Institute for Reconstruction) at 100 percent in 2023, 80 percent in 2024, 60 percent in 2025, and 0 percent in 2026. There are no risk transfer solutions for flood. Microlevel The government created a national agricultural insurance company in 2008 under a public-private insurance partnership (PPP) scheme.108 Its capital is CFAF 3.2 billion (US$5.07 million) shared between local insurers and the government. It is expected to increase to CFAF 5 billion (US$7.92 million) in the future. The Senegal National Agriculture Insurance Company (Compagnie Nationale d’Assurance Agricole du Sénégal, CNAAS) is currently insuring 612,529 producers, offering parametric drought insurance, livestock insurance, and multiperil insurance for crops. Policies are subsidized at 50 percent by the government and benefit from value-added tax (VAT) exemptions. Since inception, total payouts from CNASS have reached CFAF 1.5 billion. While Senegal benefits from a solid insurance regulatory environment with the Inter-African Conference on Insurance Markets or Conférence Interafricaine des Marchés d’Assurances (CIMA) Code, penetration rate for insurance is low. Only 1.5 percent of the population and 3 percent of SMEs are insured. There are no mandatory covers, and flood risks are generally excluded. The Directorate of Insurance is currently exploring innovative schemes to expand household insurance to lower public contingent liability. Public assets are not insured, despite reports of high levels of historical losses. 106 Arrêté ministériel n° 008655 du 30 mars 2023 portant méthodologie de provision des risques budgétaires dans la loi de finances. 107 Comité de Sécurité Alimentaire et de Résilience, Comité de Lutte contre la Malnutrition, Secrétariat exécutif au Comité National à la Sécurité Alimentaire. 108 Compagnie Nationale d’Assurance Agricole du Sénégal. 106 West Bank and Gaza Country Climate and Development Report Carbon Markets Senegal has good experience with carbon finance through its participation in the Kyoto Protocol’s Clean Development Mechanism (CDM). Twenty CDM projects109 have been registered, primarily for renewable energy and energy efficiency. Together, they have reduced emissions by nearly 300,000 tCO2e. Senegal is also actively preparing for participation in Article 6 under the Paris Agreement.110 The country signed bilateral cooperation agreements with Switzerland in July 2021, Japan in August 2022, Norway in November 2023, and Singapore in December 2023, with an agreement with Korea under discussion. Four projects are being developed under the bilateral agreement with Switzerland, with a total emissions reduction potential of up to 1.5 million tCO2e.111 More projects are at the idea stage. Market mechanisms require a high involvement of national authorities under the Paris Agreement. Host governments must approve a mitigation activity and confirm that it contributes to the country’s sustainable development and approve the sale of Internationally Transferred Mitigation Outcomes to avoid double counting of the emissions reductions as both international transfer and progress towards their own NDC commitments. Senegal has adopted an Article 6 implementation strategy and is finalizing an arrêté on the governance framework for participation in the carbon market. The arrêté sets out the required actions for participation and the corresponding responsibilities at the national level, such as project sponsors and a designated national authority. Next steps will be creating policy, legislative, and institutional frameworks that are harmonized and synchronized with other national policies and the requirements of the UNFCCC. Subsidies Reforms Senegal is committed to reducing energy subsidies Figure 6.4. Stronger Compensation Measures to through a roadmap announced on January 7, 2023. Mitigate the Short-Term Effects on Poverty The six-step roadmap would gradually eliminate 0.8 0.70 energy subsidies by 2025, with a first step of Difference betweem reform and baseline increasing prices for both electricity and fuel. This 0.40 0.4 roadmap has two main pillars: setting domestic prices that better reflect international prices, and 0.0 protecting the most vulnerable from rising energy -0.15 prices with cash transfers. The increase in fuel and -0.4 -0.32 electricity prices that began in 2023 is expected Change in Poverty Change in Inequality (Percentage points) (Gini points) to be mitigated by a 30 percent increase in the Cutting down energy subsidies number of poor families (to 100,000 families) Cutting down energy subsidies + Compensation measuares receiving payments by 2025, with a 40 percent increase in the benefit amount. These measures Source: Based on EHCVM 2021–22 and policy parameters will reduce inequality, but will not fully compensate available in November of 2023. vulnerable households, leading to an estimated Note: The figure shows how national poverty and inequality 0.4 percent increase in poverty, or 77,000 more change across different scenarios. 109 A few voluntary projects have also been developed, including on cookstove adoption and mangrove restoration. 110 Article 6 of the Paris Agreement provides for three approaches to international voluntary cooperation between Parties, which offer the potential to mobilize financial flows and help achieve the objectives of the NDC: general cooperative approaches to be defined by Parties, resulting in CO2 emission reductions that can be transferred internationally (Article 6.2); a mitigation and sustainable development mechanism governed by the Conference of the Parties serving as the meeting of the Parties to the Paris Agreement, similar to the CDM (Article 6.4); a framework for non-market-based approaches (Article 6.8). 111 They mostly target the diffusion of domestic biogas digesters in rural and peri-urban areas, the greening of urban public transport, sustainable waste management, and battery storage from solar PV. West Bank and Gaza Country Climate and Development Report 107 people falling into poverty (figure 6.4). However, the additional cost of the expanded cash transfer system would amount to less than 15 percent of the reform’s expected fiscal gains, so there may be room for further mitigation measures going forward. Delaying the implementation of the subsidy reduction roadmap could be costly. The international track record of subsidies shows that while they can start with good intentions as a way to stabilize prices and protect low-income consumers from high or volatile prices, they can become entrenched and very difficult to remove, creating barriers to the energy transition (Inchauste and Victor 2017). Delaying the removal of subsidies in Senegal, for instance, could enable vested interests to quickly build up around the domestic gas supply, eroding the potential fiscal gains from the energy transition and setting back the broader resilience agenda. To prevent this from happening, a strong public communication effort and civic engagement, combined with a clear strategy to compensate the poor and vulnerable with social programs, could increase public support for subsidy reforms (Hallegatte et al. 2023), since most people would prefer to replace fossil fuel subsidies with spending on health, education, and key infrastructure, such as roads (Hoy et al. 2023). 6.3. Leveraging Sources and Instruments to Mobilize Financing at Scale 6.3.1. Making the Most of Debt and Derisking Instruments Market or Blended Financing Senegal can leverage the multilateral and concessional financing opportunities offered by its partners (such as the World Bank, AfDB, IMF, EIB, and so on) to crowd in more private sector capital. Opportunities exist for capital market sovereign issuances, such as SLBs, thematic bonds, and outcome-based bonds. IDA financing can be used to leverage these issuances, as Rwanda did recently in its SLB issuance (see annex 8). While current capital market conditions are challenging, Senegal could focus in the immediate or short term on sustainability-linked financing. Senegal expects to finalize the pending KPIs for the Sustainable Financing Framework in the first half of 2024 and should continue efforts to spur private investors’ interest under the Framework. Domestic Financial Sector The state-owned Banque Agricole and the subsidiaries of other international banks can expand ongoing initiatives for considering climate risk and providing climate finance. There are encouraging but still early-stage initiatives financing climate mitigation by MSMEs that should be scaled up, for example. Other promising ideas include partial credit guarantees by both banks and microfinance institutions to promote green finance opportunities using a dedicated green finance window by FONGIP and investments supported by FONSIS. An initiative to implement a green taxonomy, with support from GIZ (Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH), would help by reporting and tracking climate-tagged domestic financing. Banks can also use the web-based Climate Assessment for Financial Institutions platform to assess projects against internationally agreed-upon criteria and calculate their impacts (IFC n.d.). In addition, the BCEAO’s regional climate strategy, expected to be adopted by 2025, will have measures for climate risk reporting and promoting climate finance. It will be important that capacity be built for banks and microfinance institutions to identify, assess, develop projects, and report on green financing opportunities for both adaptation and mitigation. 108 West Bank and Gaza Country Climate and Development Report Foreign Direct Investment and Public-Private Partnerships To unlock further foreign mitigation and adaptation investments, Senegal can reform the enabling environment for FDI. Key measures would include better aligning investments with the NDC, providing fiscal incentives like tax rebates for emissions abated, and creating a pipeline of climate-smart PPPs that incorporate adaptation aspects. FDI also provides an important source of technical expertise that could help identify the most promising new technologies for investment. Senegal could develop a strategy to identify areas where foreign investors could play a role in bringing new, clean technologies or know-how (such as electric vehicles, resilient roads, energy-efficient data centers, or high-value sustainable tourism). Public‑private sector dialogues in Senegal could also help identify effective derisking tools, develop a capable domestic supplier base, match the interests of multinationals with Senegal’s climate priorities, and advance legal provisions to facilitate climate FDI (WEF 2023). 6.3.2. Tapping into Disaster Risk Financing Drawing on the DRF diagnostic being prepared by the World Bank, the following recommendations would help Senegal plan for, mitigate, and address the risks of disasters. These recommendations range from the national and country-wide levels down to the household level: y Develop a national DRF strategy: A DRF strategy could improve Senegal’s financial resilience. In particular, it could streamline stakeholder’s coordination, ensure complementarity between existing DRF instruments, and clarify strategic priorities and facilitate donor mobilization. The DRF strategy could be informed by the DRF diagnostic being finalized by the World Bank in partnership with the government, which has already informed the present CCDR. y Strengthen climate and disaster risk data infrastructure: Coordinate the existing disaster-related database initiatives being developed by the CSE, the DPC, and the Direction générale pour la gestion des inondations, and ensure that financial impacts—loss, damages, and postdisaster public expenditures—are systematically monitored. y Consolidate existing national contingency funds: International experience112 shows that streamlining or mutualizing budgetary instruments improves the capacity to respond, reduces administrative and transaction costs, improves funding sustainability, and avoids monetary waste. y Improve public sector and budgetary resilience: – Expand coverage against urban flooding and explore the feasibility of a sovereign flood protection insurance mechanism: Senegal has a well-established financial protection scheme for drought through its ARC insurance policies. However, it would benefit from addressing rising urban flood risk as well. The Senegal Integrated Flood Management Program113 is paving the way for the development of risk transfer instruments by developing advanced flood maps, mapping critical public infrastructure, and exploring catastrophe risk models. 112 Morocco, Mexico, Benin, Madagascar, Mozambique, and so on. 113 Programme de gestion intégrée des inondations. West Bank and Gaza Country Climate and Development Report 109 – Develop instruments for moderate shocks: Contingent credit lines can provide immediate liquidity to governments following moderate shocks, stabilizing the public budget with minimal impact on the country’s credit rating.114 y Improve household and social resilience: – Develop a private insurance scheme: This would provide insured homeowners with coverage against flood and earthquake damage. – Improve the level of coverage of the National Security Fund, through the development of a comprehensive financial strategy, including risk retention and risk transfer mechanisms. This could be a public scheme financed through a supplementary tax on nonlife insurance, with risk retention and risk transfer instruments. y Improve SME and economic resilience: Existing SME support mechanisms (for example, FONSIS and FONGIP) could be leveraged to incorporate a bridge lending window (facilitating emergency loans for SMEs following shocks) or a partial credit guarantee scheme (providing guarantees to financial institutions against disaster-related loan defaults). y Improve the resilience of the agricultural sector: Strengthen public financial management to facilitate annual premium payment process to ARC and accelerate payout disbursement, and support to the development of CNAAS through digitalizing subscription system. Develop additional product for fishing, forestry, aquaculture. Bundle insurance product with agricultural credit or other insurance products, and improve indexes. y Join regional DRF programs: Regional risk pooling would enable Senegal to lower premium prices because of portfolio diversification, increased numbers of insured, and economies of scale. y Complete the process to access the Global Shield Financing Facility Funding (GSFF): Managed by the World Bank, the GSFF is the flagship program on climate and disaster risk finance. It is one of the three financing vehicles of the Global Shield against Climate Risks, alongside the Global Shield Solutions Platform (hosted by the Frankfurt School) and the Climate Vulnerable Forum (CVF) V20 Joint Multidonor Trust Fund (an initiative launched by the G7 and the Vulnerable Twenty Group of Ministers of Finance). 6.3.3. Aligning (Carbon) Prices Carbon Markets The carbon market, as defined under the Article 6 of the Paris Agreement, is one of the major tools for the implementation of NDCs. Senegal has already taken important steps, but the following activities remain to be carried out for the country to maximize the carbon market’s potential: 114 The World Bank offers such solutions through the Development Policy Loans with a Catastrophe Deferred Drawdown Option (DPL Cat DDO) and Investment Project Financings with a Catastrophe Deferred Drawdown Option (IPF Cat DDO). Under a Cat DDO, IDA member countries can secure immediate access to financing up to US$250 million or 0.50% of GDP (whichever is less), provided they have an appropriate macroeconomic policy framework. Senegal had previously considered such instrument but discussions were abandoned due to COVID-19. 110 West Bank and Gaza Country Climate and Development Report y Strengthen the governance framework: To raise visibility and improve transparency, Senegal should issue a decree to consolidate the framework. It would include detailed steps for approving mitigation activities and issuing emissions reductions, fees and levies, timelines, and required templates. The country should also establish a carbon registry that would track carbon assets from issuance through transactions to ensure their integrity. y Assess key mitigation opportunities, in line with NDC commitments: This activity will help identify, for key mitigation opportunities, their potential for emissions reduction, the associated carbon price, and the share of the mitigation potential that could be realized and transferred via the carbon market while not undermining achievement of unconditional NDC commitments. y Continue capacity building on the opportunities offered by the carbon market: Key elements include building an understanding of additionality, making methodological choices depending on data availability, and identifying key parameters for monitoring. The target audience would include members of the carbon governance framework, potential project sponsors, and auditors or verifiers. y Identify eligible pilot projects and preparing project design documents: This would include identifying potential buyers and providing negotiation support. Energy Subsidies Reform Consistent with the government strategy as agreed upon with the IMF, the following are key recommendations for energy subsidy reforms: y Increase measures to mitigate the impacts of energy price increases on vulnerable households: The goal would be to keep overall energy subsidies within the 2023 budget envelope of 2.7 percent of GDP. Higher electricity prices should result in CFAF 99.7 billion of avoided subsidies (0.6 percent of GDP), while fuel price increases would reduce fuel subsidies by CFAF 158.5 billion (0.9 percent of GDP). These budgets savings should then be used to support poor and vulnerable households. y Review the fuel pricing formula and electricity rate structure: For fuel, the government should ensure that prices at the pump reflect developments in international markets. The review should address the price structure, the reference price, mechanisms to avoid large price variations, the frequency of price adjustments, and the composition and powers of the technical committee in charge of price setting. For electricity, the government should revise the tariff structure to gradually eliminate subsidies and complete a financial audit of Senelec to strengthen its financial situation. y Strengthen the cash transfer system: Key steps are recertifying the National Single Registry (RNU) data for the 558,000 households already registered, adding 412,000 vulnerable households identified through community-based targeting, and migrating to cash transfers using digital payments. y Eliminate subsidies by 2025: For fuel, the price adjustment mechanism will ensure that prices follow international trends and vulnerable households should be partially compensated by cash transfers set up within the RNU. For electricity, subsidies are to be removed and vulnerable households protected through cash transfers or cross-subsidization by other consumers. The government’s capacity to target subsidies to the most vulnerable through existing social protection programs is being strengthened. Furthermore, there is a renewed interest in leveraging modern technology, including by digitalizing the social registry and payment system for not only protecting households against climate shocks but also providing the government a platform to easily compensate vulnerable households with the increase in energy prices. West Bank and Gaza Country Climate and Development Report 111 y Launch an effective communication campaign in 2024. The success of the reform will hinge on public support for the need to remove energy subsidies. Senegal could go beyond the plan sketched out in the current roadmap by launching a comprehensive community outreach and awareness campaign. The campaign should begin well before subsidies are reduced or removed, giving customers time to change their behavior, and it should strongly highlight the measures that will be taken to mitigate the adverse impacts of higher energy prices. The campaign will be most effective if it incorporates citizen engagement and inclusive representation and clearly communicates how social protection systems will be strengthened (Marshall et al. 2018). 6.3.4. Strengthening the Role of Local Authorities in Climate Adaptation The Local Climate Adaptive Living Facility (LoCAL) is piloting the channeling of climate adaptation finance, planning, and implementation at the local level in Senegal. Since 2013, Senegal has been transferring responsibilities to local authorities in areas such as land use, environmental planning, and natural resource management. As a result, these collectivités are now in a position to implement tailored adaptation measures to address challenges such as increasing precipitation variability, rising temperatures, coastal erosion, and soil salinization. They can undertake small to medium-sized infrastructure investments and coordinate efforts among various stakeholders, including national institutions, civil society, the private sector, and decentralized government services. Nevertheless, local adaptation efforts have been hampered by multiple challenges, including lack of capacity and expertise, difficult access to resources, and absence of planning concerning climate-related investments. In this context, the ministry in charge of decentralization (Ministère de l’Urbanisme, des Collectivités territoriales et de l’Aménagement des territoires, MUCTAT), together with the ministry in charge of the environment (METE) have committed to work in synergy to pool their efforts to better support local authorities in strengthening communities’ resilience to climate change. With the support of the United Nations Capital Development Fund (UNCDF), the government has embarked on the process of setting up the LoCAL115 in Senegal. The February 2024 signature of a joint ministerial decree, setting up the coordination architecture for LoCAL, will soon allow Senegal to kickstart the effective implementation of a pilot (which should target three local governments) as a first step toward the potential rollout at national scale of a mechanism to channel climate adaptation finance for local authorities. 115 LoCAL is a standard (ISO 14093), internationally recognized mechanism designed and managed by UNCDF. LoCAL supports local government authorities in accessing climate finance, capacity building, and technical support to respond and adapt to climate change. It combines performance-based climate resilience grants (PBCRGs)—to program and verify climate change expenditures at the local level while offering strong incentives for enhancing resilience— with technical and capacity-building support. PBCRGs provide funds to cover the additional costs of making local investments climate resilient. 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