Financing Climate-Resilient Growth in Tanzania

Abstract

Climate change is a core development challenge in Tanzania, and the potential costs of inaction are significant. Current climate variability (including extreme events such as droughts and floods), already leads to major economic costs in mainland Tanzania and in Zanzibar. Individual annual events have economic costs in excess of 1 percent of GDP, and occur regularly, reducing long-term growth and affecting millions of people and livelihoods. Future climate change could lead to large economic costs, equivalent to a further 1 to 2 percent of GDP per year by 2030. Given this context, there is a clear need for strong and sustained effort by the government to help establish a growth pathway for the country that is resilient to climate variability and able to adapt to future change, as well as help Tanzania take advantage of external and domestic finance opportunities for sustained action on climate risks. This policy note responds to a request by the United Republic of Tanzania for technical assistance on next steps for implementing the National Climate Change Strategy (NCCS) and Zanzibar Climate Change Strategy (ZCCS). With strategies in hand, both mainland Tanzania and Zanzibar are at a crossroads where strategic actions have been identified, yet not yet supported with resources or adequate frameworks for implementation. Development partners are active in financing and supporting climate change activities in general, but more than one year after its adoption, a unified approach in support of the NCCS has yet to materialize. Tanzania has requested guidance for mobilizing additional funds, using funding sources more strategically, and delivering results on the ground.