Climate Change in Papua New Guinea:

A National Stocktake

Office of

Climate Change and Environmental Sustainability

and

World Bank

June, 2009

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Executive Summary

The Government of Papua New Guinea (PNG) wishes to prepare a strategy and action plan that provides an overall strategic framework and road map for how PNG will address the risk and opportunities climate change poses for the sustainable development of the country. Development of the strategic framework involves taking stock of existing understanding and initiatives as well as characterizing emerging risks and opportunities. In addition to proposing directions for how PNG will address climate change issues and opportunities, this current stocktake also helps to identify requirements for additional information and assessments that will underpin the preparation of a national climate change strategy and action plan. This national stocktake is an essential step to preparing the strategic framework and road map. These will set the broad directions and priorities for PNG, as well as the corresponding roles and responsibilities for those who will be the major players in addressing climate change issues and taking advantage of opportunities. The framework and road map will, in turn, provide the foundation for a national climate change strategy and action plan. Weather- and Climate-Related Risks and Vulnerabilities. Many parts of PNG are vulnerable to the effects of natural disasters. Weather- and climate-related disasters that have severe adverse effects on the lives of people as well as on the economy include cyclones, major landslides, flooding (from rivers as well as the ocean), erosion, droughts, and frost in the Highlands. In some areas the population accepts the impact of these hazards as part of daily life. Traditional coping strategies provide a measure of protection. However, evidence points to an increase in these impacts, which now often exceed the coping capacities of individuals, communities, natural ecosystems, infrastructure and other important assets. Recent observed changes are consistent with those expected to result from global warming. Into the near future temperatures and sea level are expected to rise steadily. Precipitation changes are less certain, but both floods and droughts are likely to increase. Regional climate modelling results suggest that, for PNG and the immediately adjacent ocean areas, tropical cyclone frequencies will decline from their already relatively low values. However, the intensities of cyclones are expected to increase. The most vulnerable sectors included the coastal zone, water resources, agriculture and biodiversity. All are considered vital to the ongoing welfare and livelihoods of communities. Since the major drought in 1997 - 1998, PNG has shifted from crisis management to planning and management. The National Disaster Office was created through the National Disaster Management Act, to coordinate disaster risk preparedness and response, in partnership with relevant government agencies and non-governmental organizations. Routine hazard risk monitoring is now undertaken by specialized government entities depending on the nature of the disaster. Monitoring and forecasting of droughts and floods is undertaken by the National Weather Service, while advice on the possible extent of damage is provided by the Disaster and Emergency Center. Energy Consumption and Greenhouse Gas Emissions. PNG has substantial deposits of hydrocarbons, mainly natural gas. Energy consumption has grown robustly in recent years, with the high rate of industrialization, growth in infrastructure and improved living conditions being the key driving factors. To support the economy‘s growing energy needs, PNG has intensified the exploration, development and exploitation of indigenous oil and gas resources, both on and off shore. Much of the growth in energy consumption has been from petroleum products and is being met by imports. However, with the

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commissioning of the first oil refinery in 2004, all petroleum product imports (excluding LPG) have now been replaced by domestic production from the new refinery. The growing awareness on oil dependency amid depleting reserves has prompted the country to seek other alternative energy sources. PNG has drafted a National Energy Policy Statement and Guidelines. These outline the country‘s future policy direction on energy. Energy production currently results in greenhouse gas emissions equivalent to 4.69 million metric tons of carbon dioxide. By way of contrast, it is estimated that 4,724 – 4,735 million metric tons of carbon were stored in PNG‘s primary forests in 2002. PNG is one of the last three major remnant tropical natural wilderness areas on earth. It holds over 7 percent of the world‘s total biological resources in its varied natural environments. Deforestation and Forest Degradation. While PNG is clearly not a significant producer of greenhouse gases from industrial or household energy consumption, either overall or on a per capita basis, one of the major contributing factors to the country‘s increased greenhouse gas emissions is the release of carbon in the biomass of tropical rainforests, including soils. This is as a result of deforestation, notably for conversion for agricultural production, and of forest degradation. Before independence, PNG boasted some 33 million hectares of natural forests. However, since independence, that area has been reduced to about 29 million hectares. Moreover, three million hectares is degraded forests, which leaves some 26 million hectares of intact forests. These 26 million hectares are continuously being deforested or degraded through logging, commercial agriculture, shifting cultivation, and mining and petroleum activities. Between 1972 and 2002 deforestation resulted in the release of a net 926.5 million tones of carbon (3,397 million tones of carbon dioxide), with an additional 76.39 – 88.83 Mt of carbon (280.1 -325.7 Mt of carbon dioxide) being released through logging related forest degradation. Over the last 30 years the main drivers of for the forest change in PNG have been logging and subsistence agriculture Renewable Energy. The country is rich in renewable energy resources suitable for power production, particularly hydropower. Other potential energy sources are geothermal, wind, solar, biomass and marine. Until the mid-1980s PNG was the region‘s leader in biomass energy for agro processing, biogas, biomass gasification, wood and charcoal cooking, ethanol production, solar photovoltaic, and resource assessments. Recently the private sector has largely driven renewable energy use. The coffee industry still uses wood-burning driers, the palm oil industry exploits wood waste for electricity, and Ramu Sugar plans to use wood for combustion in its bagasse boilers. At least several thousand new solar home lighting systems are expected to be installed in rural PNG, overwhelmingly through private initiatives. Yet barriers to successful long-term use of renewable energy technologies are considerable. About three quarters of mini/micro hydro systems installed are no longer in use, a large percentage of photovoltaic systems have failed, and the majority of C-centre power systems are operating poorly, or not at all. The technical potential for renewable energy sources in PNG is enormous but much of the resource is in remote locations, where there is limited demand and the energy resource is not readily exploitable. No systematic geothermal energy or wind energy assessments have been carried out recently. There are also limited hydrological surveys and thus hydroelectric potential is approximate. Solar energy is among the largest

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potential renewable energy sources in PNG. Although two thirds of PNG is covered with forest, much of it is inaccessible or unsuited for energy use. Almost 60% of land is subject to strong or severe erosion and 18% is permanently inundated or regularly flooded. The main practical biomass energy potential is in areas of logging or agricultural production, using either the crop output or residues. Coconut plantations are widely spread throughout PNG and may be a potential local source of power as coconut-based bio-diesel becomes a viable option. Widespread use of renewable energy will have environmental implications. For both greenhouse gas reductions and renewable energy production, the biggest impacts may come from large hydropower, ethanol, geothermal, biodiesel and small hydro, respectively. If poorly planned or implemented, any of these could have detrimental environmental impacts. Hydro projects above 10 MW can undermine moves toward sustainable development, and even energy security, especially where changes in weather patterns reduce rainfall. Smaller hydro can be environmentally and socially low-impact. For hydro projects to have low social and environmental impacts, they should be planned, built and operated in line with the recommendations of the World Commission on Dams. Analyses suggest that, in principle, PNG could reduce carbon dioxide equivalent greenhouse gas emissions through renewable energy investments by over 1,000 Gg per year, about 70% of total 2001 emissions. Almost all of this would be through renewable energy. The results of a more recent assessment of the benefits of energy substitution for reducing greenhouse emissions suggest that hydropower and the use of landfill gas provide significant opportunities. Reducing Emissions from Deforestation and Forest Degradation. With the growing recognition of the role of rainforests in storing carbon, and the extent to which forest clearance contributes to greenhouse emissions and climate change, PNG has been active in promoting the need to incorporate standing forests under post-Kyoto arrangements from 2012. This means extending emission trading and other arrangements beyond afforestation, as currently provided for with the Clean Development Mechanism (CDM) arrangements under the Kyoto Protocol. The hope is for a strengthened international agreement on climate change at conference of the Parties in Copenhagen at the end of 2009 including the principle of reducing emissions from deforestation and forest degradation (REDD). REDD is a component of the government‘s Environment Sustainable Economic Growth policy initiative. This aims to identify development options which are environmentally and ecologically sustainable, and which could provide long term income generation opportunities for landowners and revenue streams for the government. REDD will be coordinated from the Department of the Prime Minister though the Office of Climate Change and Environmental Sustainability (OCCES). The REDD strategy is continuing to be developed. This includes the Department of Environment and Conservation (DEC) preparing clear policies and effective legislation, with special consideration to communication, involvement and participation of key stakeholders, resourcing the REDD strategy, realistic benefit distribution, building efficient and effective capacity and establishing an accurate database. The OCCES is the Designated National Authority for the CDM. An office has been established, including a four person secretariat. Its function is to handle registration of CDM projects. Only one project has been registered to date, but several more are in the pipeline, including a biomass CDM

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project in New Britain and a reforestation project in Eastern Highlands. The OCCES is assigning officers to the provinces, to assist in information gathering and with coordination. DEC has developed a Management Arrangements and Strategy Development Framework for the seventh Millennium Development Goal and REDD policy initiatives, to ensure coordination across the forest and agriculture sectors, as well as for rural development. Within the past few years the forests of PNG have become important, internationally and nationally, due to issues and opportunities including mitigation of climate change, REDD and carbon trade. However, efforts to find a common ground on these issues have been somewhat ad hoc, and lack commitment. Within the forestry sector itself there are strongly divergent views regarding REDD - one group is defending the forest industry, while another group is defending the rights of indigenous people and protection of their forests. This separation of views has existed for over 20 years, making it difficult to take rational, neutral approaches to issues affecting the sector as a whole. The Climate Change Framework for Action for 2008 – 2015, prepared by the PNG Forest Authority, identifies the following areas related to climate change and REDD: implementing adaptation measures; contributing to migration of greenhouse gas emissions; improving decision making and good governance; improving the understanding of forestry and climate change; education and awareness; and partnership and cooperation. For REDD to effectively generate funding for forest protection through the carbon market, the private sector must be fully engaged. The private sector has the capacity for strong implementation of action on emissions reductions, but requires a framework to operate within and guidance if it is to be effectively engaged. REDD requires significant financial investment. The private sector is in the best position to make the required large scale investments, but local communities should also be engaged and benefit. The carbon market can work to engage local communities and drive private sector investment if designed correctly. As noted above, PNG will be affected by climate change, but it could also be a beneficiary from some of the measures to mitigate change, notably from the resource owners and the State potentially receiving payments for the service of retaining carbon stored in its existing, and perhaps restored and newly planted forests. To address the challenge of climate change, including the immediate victims, and for these potential benefits to be achieved, the government is moving quickly to establish credible and transparent policies and mechanisms for addressing climate change and carbon trading, plausible to PNG‘s forest resource owners, development partners, the international carbon market (including rigorous auditing/regulatory requirements) and the world community. REDD compensation mechanisms have two components, namely compensation for loss of revenue from activities that are driving an increased rate of deforestation and degradation, and compensation for implementing activities that reduce emissions under REDD mechanisms. There are non-carbon values from which the government and landowners can benefit, including protected areas fostering tourism, and maintaining

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cultural heritage and spiritual aspirations, and environmental services for communities, including clean water and coastal protection. The Cabinet has approved establishment of a Carbon Trade Trust Fund. It has the potential to be a significant source of funding for both adaptation and climate-related disaster risk reduction. The Trust will receive income through a levy on mitigation, to fund adaptation. The Trust will have an Independent Board and a Technical Advisory Board.

Disaster Risk Reduction. For disaster risk reduction, the coordination function is the role of the National Disaster Office, as part of its weakly mandated disaster risk management function. It is championed by the National Disaster Committee which is required to approve and report on the annual work plan of the Disaster Office. Since the functions of both the Committee and the Disaster Office have become marginalised in recent times, there is little coordination or promotion of this function across government agencies.

The conditions for the mainstreaming of risk reduction activities do not exist and the government is currently showing little commitment to this area of activity. There has been a lack of acceptance at the government level that disaster and climate change risk needs its attention. The recent establishment of OCCES creates an opportunity to address this. The initiative itself is not a sufficient driver. However, clear commitments and championing of risk reduction would provide a basis for starting. It is commonly understood that sustainable risk reduction cannot be achieved without engagement and commitment from the government. Exacerbating this situation is a largely dysfunctional disaster management arrangement under the National Disaster Committee. Until this issue is addressed the conditions for addressing disaster risk reduction do not exist. There is no evidence of the private sector filling these gaps and driving change in government thinking on climate change adaptation and disaster risk reduction. In the regulatory vacuum which exists around these issues the responsible departments report that the private sector is exploiting the weaknesses in the system rather than filling the gaps. Adaptation. A ―no-regrets‖ approach to adaptation to climate change, with a focus on least-cost options, is seen as a necessary first step to developing a national policy framework to raise awareness about the need for adaptation and mitigation actions. Development of anticipatory adaptation options, measures and strategies and capacity-building will be necessary for PNG to be able to enhance its adaptive capacity. The relevant policies for climate change adaptation are not yet in place. A possible mechanism for addressing this gap is the recently established OCCES. While there has been activity between departments on climate change mitigation and carbon credits, in recent years there has been little growth in capacity for adaptation and inadequate coordination between government agencies. Business can use the tools and mechanisms provided in order to address the growing harm being inflicted by climate change on the most vulnerable groups of people, and in a way that strengthens sustainable development. The private sector can play an important role through investment, financial flows, and technology development and deployment. In PNG, private sector adaptation and disaster risk reduction mainstreaming is of urgent importance. The need for such mainstreaming is reinforced by the private sector internationally giving increasing recognition to climate-related risks, as evidenced by the

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emergence around the world of several climate change investor groups to confront business losses attributed to climate change. Business can also make an important contribution to efforts to adapt to the impacts of climate change. A strong partnership between governments, international institutions and the private sector is needed in order to mobilize the capital and technology needed to prepare the world for the impacts of climate change. Despite mitigation efforts, PNG needs substantial investments in disaster risk reduction and climate change adaptation if it is to avoid an additional burden falling on its already strained development efforts. Led by governments, these investments represent a significant business opportunity. While government leadership on adaptation is emerging, and organizations have progressed in understanding the impacts of climate change as well as developing some tools and mechanisms to enable a strong response, much of the private sector has to date been standing on the sidelines, awaiting a strong policy framework to be put in place. However, a significant number of companies in PNG already undertake actions that enhance adaptive capacity and expand the coping range of communities. Responses. The situation described above highlights the urgent need for a well-articulated and integrated disaster risk reduction and climate change policy, including clarification of the respective roles of the existing entities as these functions become more of a continuum, rather than distinct activities. OCCES is currently preparing a Memorandum of Understanding between key government agencies (PNG National Forest Authority, DEC and the Department of Agriculture and Livestock) for collaboration to implement initial activities on addressing climate change issues in the country. The government is currently reviewing the climate change advisory boards (the National Climate Change Advisory Board, the Technical Advisory Board), in order to provide clarity on roles and responsibilities. In terms of disaster risk reduction there is a foundation to build on, though there continues to be a lack of commitment to a policy and institutional framework. A champion to promote risk reduction initiatives has only recently emerged, in the person of the Prime Minister. Thus there is more optimism now that the potential to facilitate development of the National Disaster Committee framework, including into the provinces, could soon be realised. The provincial arrangements should provide for both climate change adaptation and disaster risk reduction activities, in an integrated platform. Policy Considerations and Planning Implications. The Medium Term Development Strategy (MTDS) 2005−2010 has widespread internal and external support, following an extensive programme of consultation conducted throughout the country and with PNG‘s development partners. Given widespread concern over PNG‘s deteriorating economic and social development performance during the 1990s and the early part of the present decade, the MTDS consultations revealed strong agreement in PNG on the need to concentrate on the basic prerequisites for broad-based economic growth and improved services. The MTDS therefore reflects both a focus on the basics and general agreement in PNG on the highest priorities. Importantly, and unlike previous such plans, the MTDS enjoys strong Papua New Guinean ownership, encompassing politicians, government officials and civil society. The MTDS includes sound expenditure priorities and an ambitious but appropriate governance agenda. It also outlines key supporting policies and measures to create an

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enabling environment for development, focusing on political and policy stability, the rule of law, the business environment, protecting the vulnerable and disadvantaged, gender equality, and protecting the natural environment. A number of crosscutting governance strategies and programs are highlighted as being essential to effective MTDS implementation. However, the MTDS is essentially a policy document, without strong links to sector or thematic implementation plans or concrete targets or indicators. MTDS implementation is proving challenging, as it requires concentrated effort. Some progress has been made by the government to redirect expenditures toward priority areas. Currently plans and budgets are formulated at the business unit level and promoted through the budget process by their respective Departments. For cross-sector activities, individual departments are expected to budget for their separate components. There is little experience of cross-sector budget initiatives. In the future, promotion of cross-sector budget initiatives by Departments and Ministers will be important if funding allocations for disaster risk reduction and climate change adaptation initiatives are to be reflected in the national budget stream. In most cases, community control over development is minimal, and resulting benefits almost non-existent. Communities are looking for ways to retain control over their natural resources, to protect the subsistence base on which their survival depends and to find methods for raising cash without destroying their environmental capital. Many local communities are interested in using appropriate measures to safeguard the natural productivity and diversity of their lands and coastal sea areas. Increasingly, local communities in PNG are becoming frustrated with the perceived lack of effective development and progress in the rural areas and are demanding greater control of their own resources and local developments. Provincial and local government reforms have provided an opportunity to address this issue, and in the process initiate and establish sustainable development concepts in the planning and implementation framework of the country at large. Legislation and government policies concerning natural resource management place traditional resource owners and local communities in a central role. However, methods for planning and implementing local initiatives in natural resource management or conservation are poorly developed. For the past decade very little support has been given to local groups wanting to pursue some form of sustainable development or introduce locally important environment or biodiversity protection measures. The country‘s intended system of protected areas or conservation areas is not working, largely because there is inadequate response to community interest. Many opportunities to protect sites and species of high conservation importance are therefore lost. Capacity Building. Capacity building will be required to ensure that there is stable pool of experts who can carry out activities related to hazard assessment, risk management, adaptation, mitigation and REDD. Training programmes and career development paths will need to be considered in order to build a pool of national experts. This includes implementing training designed to enhance the capacity of the National Weather Service to understand and monitor climate variability and climate and generate useful seasonal predictions and disseminate these and other climate information to government and industry.

Over the years, the government has taken several steps to create legislation and agencies. In some cases it has established guidelines to implement, monitor and enforce

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relevant rules and regulations. In spite of these initiatives, it appears that there has been serious deterioration in the performance of many of the government entities, severe silo relationships, lack of clear overall policies to inform strategic directions, inability to utilize available instruments and tools, and continued difficulty with regard to coordinating funding, policy and institutional arrangements for natural hazard risk reduction and for mitigation, including REDD.

New and additional funding will be necessary to improve institutional capacity for implementing the REDD strategies, such that policy development, strategic planning and on-the-ground implementation can be effected quickly. PNG plans to establish a Forest Greenhouse Gas Inventory Unit that will coordinate actions to monitor area and carbon pool changes. The area change assessment will be realized mainly by a remote sensing laboratory. Preparation of the Second National Communication to the United Nations Framework Convention on Climate Change will require training on how to undertake a greenhouse gas inventory and climate change vulnerability assessments. At the basic level, there is quite good awareness of the disaster and climate change hazards in central and provincial government agencies. However there is a general sense that resources and skills available are inadequate to address them, and little appreciation of how they would impact a sector‘s activity or an individual‘s responsibilities. There is a need for a greater understanding of the relationship between hazards and the practical means for starting to deal with them. This is a fundamental capacity issue which needs to be dealt with at a pragmatic level. Core hazard understanding and the on-going monitoring necessary to inform risk reduction initiatives, whether from disasters or climate change, are considered to be seriously deficient. While this is clearly understood within individual agencies (both hazard agencies and line agencies which have a need of the information), there is poor acknowledgement of this issue at the whole-of-government, strategic level. Aid programs designed to strengthen monitoring networks will have little long-term impact if operational capacity, budgets, and information systems with associated decision support tools are inadequate. There is a need for institutional strengthening to ensure hazard and vulnerability information is available to inform future risk reduction decisions. With degraded monitoring and analysis capability across all hazards, including potential climate change impacts, it is difficult to prioritize the allocation of appropriate resources. There is significant historical data available which could provide in a relatively short time an overview to inform a minimal monitoring and vulnerability analysis programme. This is especially the case for the high and growing risk of drought conditions and the large population exposure to critical water shortages. Decision making is also hampered by the lack of a common database system (with geographical and terrain model capability) for storing hazard monitoring data, including access to analysis tools for identifying trends, vulnerabilities and risks. All hazard sectors report an inability to readily store and access monitoring data for analytical and mapping purposes. There is also a shortage of adequate data monitoring networks to meet future needs for vulnerability and risk assessments. Across the range of geophysical, hydrological and climatic hazards, the absence of data collection ensures that future efforts at disaster risk reduction and climate change adaptation will be unfocussed, unless concerted efforts are made to upgrade the networks.

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Donor Harmonization. The Development Partners Climate Change Task Force held its fourth meeting in May, 2009. Membership includes representatives of the PNG Forest Authority, OCCES, DEC, Department of Agriculture and Livestock and the following development partners: Asian Development Bank, Australia, European Union, Japan, United Nations Development Programme, the United Kingdom, the United States of America and the World Bank. In order to improve coordination, the development partners are currently undertaking an inventory of their climate change assistance initiatives in PNG. The output will be a climate change activity matrix. Performance Monitoring and Evaluation. Apart from the proposed monitoring and evaluation initiatives for REDD, and project-level monitoring and evaluation, the only formal policies, strategies or work programmes related to assessing the effectiveness and efficiency of PNG‘s climate change and disaster risk management initiatives are those specified in the OCCES Draft Corporate Plan 2009-2013. This includes 19 key result areas, each with planned outputs and performance targets. Proposed Outline for a Climate Change Strategic Framework and Road Map. A proposed outline for a climate change strategic framework and road map has been prepared. The main components are: Institutional and policy context; Understanding – science and anecdotal evidence; Principles; Key policy objectives and strategic priorities - Mitigation (including REDD), Adaptation, Financing and Technologies; Sector policies and linkages; Legal, institutional, planning and budgetary frameworks; Participation, ownership, partnerships and cooperation; Research, development and uptake; Capacity - needs and development, including information and education; Performance monitoring, evaluation and reporting; and a Road map leading to an action plan. Recommendations. The following recommendations arise from this stocktake report:

the needs for additional information and assessments be reviewed and addressed in a timely manner; and

indicative strategic priority responses to climate change be identified for each sector as well as nationally.

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Table of Contents

Executive Summary i Table of Contents x List of Abbreviations xii 1. Introduction 1 2. Analysis and Evaluation of Climate and Related Risks and Associated Vulnerabilities 1 a) Current Situation 1 b) Anticipated Changes 8 c) Vulnerabilities 9 3. Risk Reduction for Weather- and Climate-related Hazards 14 4. Carbon Emissions and Sinks 18 a) Background 18 b) Energy Sources 18 c) Energy Consumption 19 d) Energy Demand Drivers and Future Demand 21 e) Greenhouse Gas Emissions 22 f) Land Use, Land Use Change and Forestry 24 5. Mitigation of Greenhouse Gas Emissions 27 a) Energy Substitution 27 b) Avoided Deforestation 29 c) Co-benefits of REDD 30 d) Implementing REDD 31 6. Technical, Absorptive and Adaptive Capacities 32 7. Governance and Informed Decision-making 35 a) Policies, Strategies and Plans, and their Implementation 36 b) Legal Frameworks 46 c) Institutions 47 d) Coordination 53 8. Policy, Planning and Budgetary Processes 54 a) Funding 55 b) Mainstreaming Risk Reduction 55 9. Working with the Private Sector and Civil Society 57 a) The Private Sector 57 b) Participatory Planning 59 10. Harmonization of Donor Contributions 61 11. Monitoring and Evaluation 61

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12. Proposed Framework for a National Climate Change Strategy and Action Plan 62 13. Requirements for Additional Information and Assessments 65 14. Recommendations 66 Annex 1 Information on International Funding Sources for Mitigation and Adaptation 67

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List of Abbreviations

CO2 Carbon dioxide

CA Conservation Area

CDM Clean Development Mechanism

COP Conference of the Parties

DEC Department of Environment and Conservation

DPE Department of Petroleum and Energy

DPLLGA Department of Provincial and Local Level Government Affairs

ESEG Environment Sustainable Economic Growth

GDP Gross domestic product

Gg Gigagramme

GHG Greenhouse Gas

GW Gigawatt

GWh Gigawatt-hour

ICCC Independent Consumer and Competition Commission

KRA Key results area

ktoe Kilotonnes of oil equivalent

LNG Liquefied natural gas

Mt Million tonnes

Mtoe Million tonnes of oil equivalent

MDG Millennium Development Goal

MTDS Medium Term Development Strategy

MW Megawatt

NCCAB National Climate Change Advisory Board

NDC National Disaster Committee

NDO National Disaster Office

NEC National Environment Council

NGO Non-governmental Organization

NJP National Joint Programme

NWS National Weather Service

OCCES Office of Climate Change and Environment Sustainability

PIREP Pacific Islands Renewable Energy Project

PNG Papua New Guinea

PNGGS Papua New Guinea Geological Services

PNGFA Papua New Guinea Forest Authority

PPL PNG Power Limited

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PV Photovoltaics

RE Renewable energy

REDD Reducing emissions from deforestation and forest degradation

RET Renewable energy technology

SOPAC South Pacific Applied Geosciences Commission

TWh Terrawatt-hour

UNFCCC United Nations Framework Convention on Climate Change

UN-REDD United Nations Collaborative Programme on Reduced Emissions from Deforestation and Degradation in Developing Countries

WMA Wildlife Management Area

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1. Introduction The Government of Papua New Guinea (PNG) plans to prepare a strategy and action plan that provides an overall strategic framework and road map for how PNG will address the risks and opportunities climate change poses for the sustainable development of the country. Development of the strategic framework involves taking stock of existing understanding and initiatives as well as characterizing emerging risks and opportunities. In addition to proposing directions for how PNG will address climate change issues and opportunities, the current national stocktake helps to identify requirements for additional information and assessments that will underpin the preparation of a national climate change strategy and action plan. Such a stocktake is an essential step to preparing the strategic framework and road map. These will set the broad directions and priorities for PNG, as well as the corresponding roles and responsibilities for those who will be the major players in addressing climate change issues and taking advantage of opportunities. The framework and road map will, in turn, provide the foundation for a national climate change strategy and action plan. The framework used for the national stocktake is based on common elements of the following: the Disaster Risk Reduction and Disaster Management Framework for Action 2005–

2015: An Investment for Sustainable Development in the Pacific Island Countries in October 2005, adopted by the 36th Pacific Islands Forum;

the Pacific Islands Framework for Action on Climate Change (2006-2015), endorsed by Pacific island leaders at the 36th Pacific Islands Forum;

the Pacific Islands Energy Policy, affirmed at the 2004 Regional Energy Meeting held in Madang, PNG;

best practice in strengthening the enabling environment for climate change adaptation and mitigation and in ensuring optimal process outcomes.

2. Analysis and Evaluation of Climate and Related Risks and Associated

Vulnerabilities a) Current Situation PNG is highly exposed to climate variability and climate change and has regularly experienced extreme weather events. People have begun to notice differences in the climate. For example, rains are not coming when they should, islands are being flooded, and malaria is appearing in highland valleys where the temperature was previously too cool for mosquitoes. In combination, these changes and their consequences present a compelling reason to assess the situation in terms of the recent and anticipated changes in climate, the resulting impacts, the current responses and emerging needs for additional actions. At sector level, agriculture is a critical priority, as it underpins food security and supports 82% of the population. Even under current conditions agriculture is highly vulnerable to climate variability and extremes, including storms, floods and droughts. The additional adverse consequences of climate change are of great importance, highlighting the need for proactive responses by that sector. Many parts of PNG are vulnerable to the effects of natural disasters (Table 1). Weather- and climate-related disasters that have severe adverse effects on the lives of people, and on the economy, include: (i) cyclones, restricted to the extreme south of the country

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(Figures 1 and 2); (ii) major landslides, especially in Morobe and Highlands Provinces; (iii) flooding in most parts of the country; (iv) droughts, often associated with El Niño conditions; and (v) frost in the Highlands. In some areas the population accepts the impact of the hazards as part of daily life. Traditional coping strategies provide a measure of protection. It is therefore often difficult to raise more than polite interest in disaster prevention, reduction and preparedness measures in a culture where the struggle for existence is often difficult and the impact of hazards has been an accepted part of life for many generations. However, coping capacities are being exceeded with increasing frequency. Figure 1. Selected historical tropical cyclone activity, 1945 – 2007: left, in the PNG region; right, in

the South Pacific region. Source: Air Worldwide Corporation. 2008.

Figure 2. Tropical storm risk zones in the Pacific Islands Region. Source: OCHA, 2006.

Much of the terrain on the larger islands of PNG is very steep. Heavy rain or earthquakes frequently cause landslides that may occur over a wide area. Casualties and property damage from landslides are not unusual. Each year between May and October, the Highlands of mainland New Guinea experience frosts at altitudes above 2,100 meters. Where these remain infrequent, crops can recover from the temporary damage they cause. If the frequency or duration of the frosts increases, crops can be destroyed. As the staple root crops have a long growth period in cooler areas, this can lead to food shortages lasting many months.

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TABLE 1: DISASTER DATA - PAPUA NEW GUINEA

No of people affected Economic Damage

Disaster Date

Total

Affected Disaster Date

Damage

US$ (000s)

Drought Sep-97 500000 Volcano 19/09/1994 110000

Storm 12/11/2007 162140 Flood 23/04/1999 43228

Volcano 19/09/1994 152002 Flood Sep-83 11900

Flood Mar-92 90000

Earthquake

(seismic activity) 13/10/1993 5000

Flood 12/6/1993 54000

Earthquake

(seismic activity) 9/2/1987 2625

Storm 14/05/1993 40040 Flood 12/6/1993 2500

Drought Oct-80 40000

Earthquake

(seismic activity) 31/10/1970 1750

Flood 23/04/1999 38000 Storm 14/05/1993 1500

Volcano 15/10/1983 25000

Earthquake

(seismic activity) 11/5/1985 1000

Earthquake

(seismic activity) 13/10/1993 20200

Earthquake

(seismic activity) 24/06/1986 500 Source: "EM-DAT: The OFDA/CRED International Disaster Databasewww.em-dat.net - Université Catholique de

Louvain - Brussels - Belgium"/ Matrix created on: Jan-22-2009. - Data version: v12.07

Major droughts occurred in parts of PNG in 1896, 1902, 1914, 1941, 1972 and 1982, with less severe events in other some years. All of these years had periods during which the Southern Oscillation Index indicated El Niño conditions. In 1997 a national state of disaster was declared as a result of a drought, thought to have been caused by El Niño. Loss of hydroelectric power generating capacity and abnormal frosts and fires were also associated with this event. Other weather- and climate-related related hazards include sea-level rise, coastal erosion, saltwater intrusion and tidal surges. Table 1 highlights the significance of weather- and climate-related disasters (drought and floods), especially in terms of the people affected. While volcanic eruptions have caused considerably more economic damage, relative to other hazards, floods follow closely, due to the greater frequency of occurrence. A secondary result of the drought and frosts associated with the 1997 El Niño was the increased incidence of bush fires in many parts of the affected areas of mainland New Guinea. Initially these fires appear to have been started by landowners burning off the remains of their crops, so as to be ready to plant new crops when rain returned. Some of these fires got out of control in the unusually dry conditions and spread far beyond the originally planned areas. Later fires are reported to have been lit by many landowners in response to a belief that smoke would bring cloud, which would in turn bring rain. As the vegetation was even drier when these fires were lit, they often spread further. The associated calm conditions left much of the mainland shrouded in smoke haze. Figure 3F

1F shows monthly maximum, mean and minimum air temperatures recorded at

the SEAFRAME station at Manos Island. PNG‘s First National Communication to the United Nations Framework Convention on Climate Change showed that between 1960 and 1999 the country experienced significant increases for all three temperature

1 Longer term and more recent data were not available at the time this report was prepared.

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variables. Figure 4 shows temperature changes over a longer time frame. Such increases are consistent with, and likely linked to, the observed trend of increasing water temperature (Figure 5). The observed extreme high water temperatures threaten corals and other in-shore marine organisms. Figure 3. Monthly mean air temperatures for Manus Island, PNG. Source: Bureau of Meteorology,

2006.

1945 1949 1953 1957 1961 1965 1969 1973 1977 1981 1985 1989 1993 1997 2001

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-0.5

0

0.5

1

TE

MP

AN

OM

ALY

(DE

G C

) ANNUAL

5 YR RUN MEAN

VARIATION FROM NORMAL TEMP IN PNG SINCE 1945.

Figure 4. Temperature anomalies for PNG, 1945 to 2001.

5

Figure 5. Monthly mean water temperatures for Manus Island, PNG. Source: Bureau of

Meteorology, 2006.

Figure 66

2F shows annual rainfall totals for PNG from 1957 to 1999. While the annual

rainfall amounts do exhibit a slight trend towards drier conditions, the considerable year-to-year variation is of greater importance. It is mostly dictated by the prevailing monsoonal system patterns. The slight decrease in decadal rainfall is associated with more frequent episodes of drought, which are in turn related to a greater frequency of El Niño conditions in the 1980s and 1990s.

Figure 6. Annual rainfall totals and the decadal trend. Source: PNG First National Communication.

2 See footnote 1.

6

Figure 7 shows sea-level anomalies recorded at Manus Island. The sea-level anomalies have had tides, seasonal cycles and the trend removed from the sea-level observations. The lowest recorded sea levels occurred during the 1997/1998 El Niño. The most dramatic effects were observed along a band extending south-eastward from PNG to Samoa, as well as at the Marshall Islands, Nauru, Tuvalu and Kiribati. The band corresponds to the South Pacific Convergence Zone. El Niño‘s impact on sea level is mostly felt along this convergence zone because of changes in the strength and position of the trade winds, which have a direct bearing on sea level. It is also felt along the equator, due to related changes in ocean currents. Outside these regions, sea levels are also influenced by El Niño, but to a far lesser degree.

Figure 7. Sea-level anomalies for Manus Island, PNG. Source: Bureau of Meteorology, 2006.

Sea level has been measured at Manus for a relatively short term. As a result, sea-level trends are still prone to the effects of shorter-term ocean variability, such as El Niño and decadal oscillations. As the data sets increase in length, the trend estimates begin to reflect longer-term change rather than short-term fluctuations. Figure 8 shows how the sea-level trends observed at Manus Island have evolved from one year after the record began, to 2006. These trends will continue to stabilize. However, based on the available data, the observed trend in sea level is 8.1 mm/year. When the inverted barometric pressure effect (1.7 mm/year) and vertical movements in the observing platform (0.2 mm/year) are taken into account, the net relative sea level trend is 6.2 mm/year, as at June 2006. This is considerably greater than the estimated range of global sea-level rise over the past century, namely 1 to 2 mm/year.

Figure 8. Evolution of relative sea level (mm/year) at Manus Island. Source: Bureau of

Meteorology, 2006. The tide gauge that operated at Rabaul for over the 32 years, from 1966 to 1997, indicated that sea level had fallen at a rate of 2.21 mm/year over that period. However, the data had not been corrected for vertical movements in the observing platform.

7

Rabaul and adjacent areas are undergoing uplift due to tectonic activity in the Rabaul region. This could well be greater than 2.2 mm/year. Moreover, sea-level measurements using satellites indicate that global mean sea level has risen at a rate of 2.9 +/- 0.4 mm/year since late 1992, and that sea level has risen at higher rates in the southwest Pacific region. Thus the data from Manus are likely to provide the more reliable information on recent changes in relative sea level. From a risk perspective, short-lived periods of high sea level are more important than longer term trends. Such periods of high sea level can contribute to flooding and accelerated coastal erosion. Manus Island (Figure 9) and Rabaul (Figure 10) experience highest sea levels near the start of the year. At mid-year, the highest sea levels are typically about 10 cm lower. Importantly, this pattern does not occur every year, and the seasonal cycle is particularly disrupted during El Niño. Figure 8. Monthly sea levels at Manus Island. Source: Bureau of Meteorology, 2006.

Figure 10. As for Figure 8, but for Rabaul.

8

b) Anticipated Changes in Climate Climate projections for 2050 are shown in Table 2. Temperatures are expected to rise steadily in the early through to the middle of the 21st century, especially outside of the monsoon season. Precipitation changes are less certain, as indicated by a wider range of values, but floods and droughts may increase in intensity between now and the middle of the century.

Table 2

Projections of PNG Climate for 2050

(Sources: PNG First National Communication to UNFCCC, 2000; UNDP Country profile, ALM Project)

Temperature Rainfall Sea Level Weather Extreme Climate Extreme

HADCM2 + 1.2 C

CSIRO9M2 +1.3 C

-------------------------

Dec to Feb:

+0.8 to 1.6 C

Jun to Aug:

+0.75 to 1.75C

Mean annual:

HADCM2 2.2%

CSIRO9M2 8.9%

Dec to Feb:

-5 to +4%

Jun to Aug:

-4 to +6%

Best Guess 20 cm

High Est. 40 cm

Droughts and floods

effects intensified

Greater ENSO

influence on

extremes

There is considerable uncertainty in future projections of rainfall. Figure 11 shows how well 12 global climate models agree on future trends when used to estimate changes in the mean rainfall in the Pacific Region. The models used in the study validate well for the South Pacific. There is general agreement that the mean rainfall will increase along the tropical belt in the 21st century, and to a lesser extent for the South Pacific Convergence Zone. However, for the remainder of the South Pacific the certainty of change is much less. Compared to the rest of the South Pacific, the increased mean annual rainfall indicated in Table 2 is therefore relatively certain.

Figure 11. Number of models, out of 12, that show a decrease in mean annual rainfall between

1980-1999 and 2080-2099. Source: NIWA, 2008.

9

Box 1

VULNERABILITY ASSESSMENT (PNG, 2000)

Vulnerability information from the Initial National Communication

a) Approximately 4,500 km out of a total of 17,100km of coastline is expected to be moderately or

severely inundated affecting up to 30 percent of PNG’s population. Coastal inundation and loss

in being experienced already in the outer atoll islands of the Mortlock, Tasman and Duke of

York Islands. Their vulnerability is likely to be exacerbated by their exposure to extreme events,

such as tropical cyclones associated with erosions, coastal flooding, inundation and land loss.

b) PNG is highly susceptible to extreme climate events, such as, prolonged droughts associated

with the ENSO events and coral bleaching and a major tropical cyclone can cause severe damage

to agriculture and biodiversity

c) Most vulnerable sectors included coastal zone, water resources, agriculture and biodiversity,

which are considered vital to the welfare and livelihoods of communities.

Figure 12 shows simulated changes in annual average tropical cyclone occurrence for PNG and adjacent areas for 40-year time slices centred on 2030 and 2070, using a model with a 15-kilometer-grid spacing. For PNG and the immediately adjacent ocean areas the results suggest that tropical cyclone frequencies will decline from their already relatively low values. However, for the study area as a whole (Figure 12), there will be an increase of 60 percent and 140 percent in the intensity of the most extreme storms for 2030 and 2070, respectively. Projected changes in tropical cyclone characteristics are inherently tied to changes in the El Niño-Southern Oscillation, sea surface temperature, and other conditions, making tropical cyclone projections inherently uncertain.

Figure 12. Simulated changes in annual average tropical cyclone occurrence for PNG and

surrounding areas for 40-year time slices centred on 2030 and 2070. Blue regions indicate a decrease in tropical cyclone occurrence and red regions indicate an increase in occurrence. Source: CSIRO and Australian Bureau of Meteorology (2007).

c) Vulnerabilities

PNG‘s Initial (First) National Communication identified the general vulnerability of the country to climate change (see Box 1).

10

The anticipated impacts of climate change for specific sectors are briefly summarized in Table 3. Climate change continues to accelerate beyond scientific predictions. As a result, impacts are already being experienced in PNG, including bleaching of corals reefs and the associated decline in the productivity of inshore marine ecosystems as well as atoll communities being affected by rising seas, with erosion of beaches and destruction of food gardens and coconut groves. Malaria epidemics are becoming more prevalent in the highlands. The Carteret Islands and the Motlocks are already experiencing firsthand the impacts of sea-level rise. These atolls are very flat and most of their land is under water. As a result, coconut fruit have become increasingly important for survival.

Table 3

Summary of Climate Change Impacts for given Sectors (Source: First National Communication to the UNFCCC, 2000)

Sector Impacts

Agricultural Production and food security

- Reduced agricultural production due to: - Rapid post-harvest deterioration of crops; - Greater rate of water loss through evaporation, - Soil degradation - Humid conditions will favour increased incubation of pests and diseases; - Shorter time for crops to mature

Water Sector - Loss of Freshwater due to saltwater intrusion

Disaster risks - Flooding is likely to cause a loss of coastal and industrial infra, (e.g. roads, settlements and marine installations) particularly in low-lying areas.

Human health and safety

- Storms can damage and destroy health centres and related infra, thereby disrupting essential health services - Nutritional related disease arising from malnutrition and food shortages - Increases in the incidence of vector borne and other diseases

Malaria epidemics in the highlands of PNG are "now basically happening every year" as a result of global warming. The World Health Organization (2006) recorded 4,986 malaria cases in the Western Highlands province in 2005, compared with 638 cases in 2000. About 40% of Papua New Guineans live in the highlands, where there used to be "no malaria or low epidemic outbreaks". Research undertaken in PNG has shown that a small rise in temperature can increase significantly the size of mosquito populations.

If temperature increases three to five degrees, it is estimated that two million people would go from a low- or no-risk area to considerable risk. Other factors that can influence the spread of malaria include population movement, deforestation and inadequate health care systems. However, despite the known causal links between climate and malaria transmission, there is still much uncertainty about the potential impact of climate change on malaria at local and global scales. Analogue reasoning suggests that if climate change improves mosquito breeding conditions, the number of mosquitoes would increase, thereby increasing the transmission of malaria.

Vulnerability assessments have recently been undertaken as follows: Highlands region: Gumanch flood (WHP); landslides/landslips – Simbu (Gere) and

Daulo area (EHP);

11

Momase region: flooding - Morobe/Madang/East Sepik/West Sepik); high tides/ sea-level rise;

Islands region: food security/agriculture; high tides/sea-level rise - Duke of York (NIP)/ Carteret Islands (NSP)/several small islands in Manus; and

Southern region: flooding - Oro/Central Rigo/Milne Bay, Gulf and Western; High tides/sea-level rise - all coastal areas.

As a result of these and other studies several climate change ―hotspots‖ have been identified (Figure 13). Areas in PNG where agriculture, forestry, water resources, health and transport are highly vulnerable to climate change have also been identified (Figure 14). Figure 13. Climate change affected areas (―hotspots‖) in PNG. Source: OCCES.

Figure 14. Areas in PNG where agriculture, forestry, water resources, health and transport are highly vulnerable to climate change. Source: OCCES.

12

Figure 15 illustrates the exposure distribution for PNG. The exposure includes residential, commercial, industrial and public assets. Colour coding represents the concentration of the replacement value of all the assets in the area, and not the replacement cost of any single asset. Figure 15. Exposure distribution in PNG, by individual exposure location. Source: World Bank and

SOPAC, 2008).

Table 4 summarizes the risk profile for PNG due to future tropical cyclones. No allowance was made for the effect of global warming on cyclone frequency or intensity. The table lists the emergency losses as well as the direct losses. The latter reflect the funds needed to repair or replace the damaged assets. The emergency losses are the expenditures the PNG government may need to sustain in the aftermath of a cyclone in order to provide necessary relief and conduct repair activities such as debris removal, setting up shelters for the homeless, or supplying medicine and food.

Table 4

PNG’s Potential Risk to Cyclones Source: World Bank and SOPAC, 2008.

Mean Return Period (yr) 50 100 250

Direct Losses

USD (million) 46 58 76

%GDP 1 1 1

Emergency Losses

USD (million) 11 13 18

% total government expenditures

0.5 0.6 0.8

13

Outbreaks of plant and livestock disease can have a devastating effect on both staple and export crops in PNG. Quarantine laws are comprehensive, but resources for enforcement are limited. As a result, events such as the introduction of coffee rust, which devastated the coffee industry in the 1980s, could occur again in other crops. Insect pest infections can also have a major effect on crops. Locust swarms form regularly in the Markham Valley and infestations of other pests are experienced in certain seasons, such as the first rains after a dry period. Livestock diseases could also cause serious damage to the small livestock industry.

In rural PNG only 20% of the population has access to an improved water supply. This includes public standpipes, boreholes, protected wells or springs. For the rest of the population, water is directly taken from the source. In the urban areas which PNG Water Board Services, 91% of the population have access to treated and reticulated water. However, only 60% of these households receive piped water directly into their houses. Water resource available in a catchment is initially subject to natural climatic and other geophysical conditions. In addition, various land uses and waste disposal linked to population growth are also affecting the capacity to meet the need to provide water for a range of uses, in terms of both quantity and quality.

There are few catchments that are directly accessible to the main urban towns and cities in PNG. The development of these sources to sustain the demand is difficult. People settling in critical areas, such as headwaters, raise concerns such as pollution to the original source. Land uses, such as agriculture, including cultivating crops that consume large amounts of water, often prevent other users from benefiting from the same source. Catchments such as Laloki, Wahgi and Bumbu are already over stressed with poor quality water yields and high water demand from various users. Additionally, there are no catchment management plans that indicate appropriate land uses for the area and distribute water resources on an equitable basis. The constant increase in population has caused communities and settlements to move into catchments that cannot support the new land uses, causing stress to the environment and water resources. Clearing of riverbanks is causing increased erosion as well as build up of sediment in waterways. There is a need to develop a policy to regulate activities within such critical catchments, and provide for equitable distribution of the resources to all users

Increased frequency and levels of extreme high water events could affect the position and health of coastal ecosystems and pose a hazard to coastal development and human safety. Mangroves migrate landward as a natural response to a rising sea level. In some cases where this natural landward migration is not possible, e.g., because of the natural physiographic setting or due to the presence of seawalls and other obstructing development, the mangrove area reduces over time. Mangroves could experience serious degradation due to rising sea level. Low island mangroves may already be under stress. The responses of mangrove wetlands and other coastal systems to global climate change effects other than sea-level rise, such as increased air and sea-surface temperatures, changes in precipitation and salinity, and changes in storminess, are less certain and not well understood. In addition to climate change effects, mangroves and other coastal ecosystems face numerous other threats, including logging, filling for development and disease outbreaks.

14

Like other Pacific Islanders, Papuans value mangroves for a wide range of services and products, including protecting coastlines and development from coastal hazards, supporting water quality, providing fish breeding habitats, and providing materials used in traditional materials and practices, such as the dye from mangrove bark used in tapa and to treat textiles, nets, and fish traps. The annual economic value of mangroves, based on the value of the products and services provided by mangroves, have been estimated to be between USD 200,000 and 900,000 per ha. The range of reported costs for mangrove restoration is USD 225 to 216,000 per ha. The existence of functional links between coastal ecosystems, including mangroves, sea grass beds, and coral reefs, means that degradation of one habitat type will adversely affect the health of neighbouring habitats. UNEP (2007) estimated the mangrove area in PNG to cover 372,770 hectares [ranging from 353,770 to 391,770]. Applying the highest rate of sea-level rise projected by the Intergovernmental Panel on Climate Change, by 2100 the mangrove area could be reduced to 341,457 hectares. 3. Risk Reduction for Weather- and Climate-related Hazards Since the major drought in 1997 - 1998, PNG has shifted somewhat from crisis management to planning and management. The tsunami in Aitape was also a catalyst for an office to be established to deal with such disasters in the country. The National Disaster Office (NDO) was created through an Act of Parliament (The National Disaster Management Act), to coordinate disaster risk preparedness and response, in partnership with relevant government agencies and non-governmental organizations (NGOs). Routine hazard risk monitoring is now undertaken by specialized government entities depending on the nature of the disaster. Monitoring and forecasting of droughts and floods is undertaken by the National Weather Service (NWS), while advice on the possible extent of damage is provided by the Disaster and Emergency Center. Geotectonic monitoring for earthquakes, land subsidence, tsunamis and volcanic eruptions is conducted by the PNG Geological Services (PNGGS). Monitoring information is provided constantly to the NDO. That Office issues warnings when necessary, and activates its response procedures when a disaster takes place. In the case of water related disasters, the key government agencies involved are the NWS, PNGGS, Department of Health, Department of Provincial and Local Level Government Affairs (DPLLGA), Department of Environment and Conservation (DEC) and the relevant provincial government. PNG has a National Oil Spill Response Plan that is coordinated by the Department of Transport's Marine Transport Division, in close collaboration with NDO and DEC. Other agencies involved are PNG Ports Ltd. and the National Fire Service. The NDO is required to ensure that these processes and systems are functioning, reviewed and updated regularly. Effective communication of disaster response, relief, and rehabilitation and adaptation measures to the general public is absolutely critical in normal circumstances, but especially during a disaster. Unless the public is informed in a timely and accurate manner, the adverse consequences will not be minimized. Under normal situations, an effective campaign using appropriate media and targeting different gender and age groups should be formulated and implemented. It is important that the correct message is relayed so as to avoid unnecessary fear and panic.

15

PNG is participating current phase of the South Pacific Sea Level and Climate Monitoring Project. This runs to 2010. The project is designed to generate an accurate long-term record of sea level for the South Pacific and to establish methods to make these data readily available and usable by Pacific Island Countries. PNG participated in a Regional Project on the ―Development of Sustainable Agriculture in the Pacific‖, together with other Pacific Island Countries. This has been implemented since 2003, with funding from the European Union. The project promotes and implements sustainable agriculture that will improve food production, thereby enhancing food security and income generation. A ―no-regrets‖ approach to adaptation to climate change, with a focus on least-cost options, is seen as a necessary first step to developing a national policy framework to raise awareness about the need for adaptation and mitigation actions. Development of anticipatory adaptation options, measures and strategies and capacity-building will be necessary for PNG to be able to enhance its adaptive capacity. Some of the potential sectoral adaptation strategies are listed in Table 5 while Table 6 lists the national and donor funded activities that address adaptation to climate change.

Table 5

Selected Potential Sectoral Adaptation Strategies

(Source: First National Communication to the UNFCCC, 2000)

Water and Coastal

Sector

- Integrated Coastal and Water Management, (strategic) Policy and Planning

- Community based monitoring and management

- Integrated research, with stronger regional collaboration

- Micro credit and small business expansion

- Hard (e.g. sea walls) and soft measures (e.g. shoreline revegetation)

- Develop alternative water sources such as rainfall catchments devices as well as

saltwater and brackish water

- Fortify relevant sections of developed coastline.

- Protect public coastal assets and infrastructure

- Development of an effective enabling environment for mainstreaming

environment issues into forest use decision making processes

- Water harvesting: The following are some water resources in PNG that can be

harvested for economic and domestic use.

Surface fresh water from streams, rivers, lakes, ponds, reservoirs,

estuaries and swamps;

Subsurface freshwater from confined and unconfined aquifers;

Surface and subsurface brackish water showing varying degrees of

salinity; and

Effluent water, which can be treated and recycled.

Capacity Building

- Building capacity in provincial and national government agencies (to

implement laws and plans)

- Maintain gene pools through a system of connected protected areas

16

- Improve resources information and monitoring desalination plants

- Comprehensive disaster management Programmes

Health Sector

- Preventative health care through disease control and public awareness

programmes

- Improve medical and quarantine services

Table 6

National and Donor Funded Initiatives that Address Climate Change Adaptation

(Sources: GEF/C.33/9, March 20, 2008 and ADB Project Database)

Project Title Participating Pacific Island

Countries

Type

Pacific Adaptation to Climate

Change Project (PACC)

Cook Islands, FSM, Fiji, RMI,

Nauru, Niue, Palau, PNG,

Samoa, Solomon Islands, Tonga,

Tuvalu and Vanuatu

Adaptation, Climate Change

Coastal and Marine Resources

Management in the Coral

Triangle of the Pacific

PNG, Solomon Islands, Fiji,

Timor Leste, Vanuatu

Adaptation, climate change

Prevention, Control and

Management of Invasive Alien

Species in the Pacific Islands

Marshall Islands, Federate States

of Micronesia, Papua New

Guinea, Cook Islands, Kiribati,

Samoa, Tonga, Vanuatu and

Niue

Adaptation, Climate related

Demonstrating and Scaling Up

Sustainable Alternatives to DDT,

and Strengthening National Vector

Control Capabilities in Southeast

Asia and Pacific

PNG, Solomon Islands and

Vanuatu

Adaptation, climate related

Implementing Sustainable

Integrated Water Resource and

Wastewater Management in the

Pacific Island Countries

Cook Islands, Fiji, Kiribati,

RMI, FSM, Nauru, Niue, Samoa,

Solomon Islands, Palau, PNG,

Tonga, Tuvalu, Vanuatu

Adaptation

Participation in the Global Climate

Observing System - Specific

activities undertaken include:

a) Identification of end user needs

in nine Pacific island countries

through in-country workshops; b)

Renovation of several GUAN

stations in production and

circulation of three sub-regional

climate bulletins, for example

Island Climate Update;

c) Data rescue to safeguard paper

climate records in five Pacific

Island countries

d). Improved inter-island

communications

through RANET, MSG and VSAT

systems;

e) Upgrading tide gauge stations

a). The Cook Islands, Papua

New Guinea

b). Fiji, Kiribati, Vanuatu, Papua

New Guinea and the Solomon

Islands;

Adaptation

17

Project Title Participating Pacific Island

Countries

Type

and increased monitoring of sea

level rise;

f) Climatology and climate change

training; and, g) Database creation

and management.

Strengthening Marine and Coastal

Resources in the Coral Triangle in

the Pacific

PNG, Solomon Islands, Timor

Leste, Vanuatu and Fiji

Adaptation

Regional Partnerships for Climate

Change Adaptation and Disaster

Preparedness

Cook Islands, Fiji Islands,

Kiribati, Marshall Islands,

Federated States of Micronesia,

Nauru, Palau, Papua New

Guinea, Samoa, Solomon

Islands, Timor-Leste, Tonga,

Tuvalu, and Vanuatu.

Adaptation

Mainstreaming Environmental

Considerations in Economic and

Development Planning –

FSM, Kiribati, Palau, PNG,

RMI, Samoa, Solomon Islands,

and Vanuatu

Implemented since 2005;

sustainable development,

including those relating to

climate change

Community Relocation as an

Option for Adaptation to the

Effects of Climate Change and

Climate Variability in PDMCs

Cook Islands, FSM, Fiji,

Kiribati, Palau, PNG, RMI,

Samoa, Solomon Islands, Timor

Leste, Naur, Tuvalu and

Vanuatu

Implemented between 2005 and

2006; funded by New Zealand

and the United States via the

Asia-Pacific Network for Global

Change Research

Integrated Water Resource

Management –

in Cook Islands, FSM, Fiji,

Kiribati, Marshall Islands,

Nauru, Niue, Palau, PNG,

Samoa, Solomon Islands, Tonga,

Tuvalu and Vanuatu

Adaptation; Implemented by

SOPAC with EU funding

Pacific Islands Climate Prediction

Project (PICPP) –

PNG, Solomon Islands, Vanuatu,

Kiribati, Tuvalu, Fiji, Tonga,

Samoa, Niue, Cook Islands;

Funded by AusAID since 2005

and scheduled to close in 2009.

National Action Plan

Implementation Facility –

Cook Islands, Papua New

Guinea, Samoa, Solomon

Islands, Federated States of

Micronesia, Fiji, Kiribati, Nauru,

Niue, Palau, Tonga and Tuvalu,

with funding from AusAID;

Designed to enhance the

sustainable development of

Pacific countries through the

implementation of measures

identified in their National

Action Plans to reduce

underlying risks to disasters

caused by both natural and

human-induced hazards, and to

improve preparedness and

response to disasters caused by

such hazards.

18

4. Carbon Emissions and Sinks a) Background PNG has significant natural resources, including energy, but the country‘s formidable geography and the high cost of developing infrastructure have constrained their exploitation. The outcome is a dual economy and society, marked by a few enclaves of industrialization surrounded by widely diffused poverty. The high population growth rate (2.3% per annum) and increasing urbanization have increased difficulties for the country. The challenge is for PNG to use its energy resources to move the country toward more sustainable social and economic development. Currently, there is no national power grid (ADB, 2008). PNG Power Ltd. (PPL) operates three interconnected distribution systems, plus many provincial power systems. About a hundred small rural electricity systems, called C-centres, are operated by local authorities at government administration centres, using diesel generators, small hydro and occasionally solar photovoltaics (PV). Responsibility for financing, managing and planning rests with provincial authorities, but many systems are badly managed and not operating. The Independent Consumer and Competition Commission (ICCC) licenses electric power, establishes electricity tariffs and controls maximum prices of some petroleum fuels. There is a national power tariff for those served by PPL. Fuel prices are the same at the four main ports but are considerably higher, though still controlled, in remote areas. PPL has installed generation capacity of 300 MW (megawatt) (80 MW in Port Moresby). At least another 280 MW belongs to other entities, most of which is used for self-consumption. In 2005 PPL supplied 629 gigawatt-hours (GWh)—316 GWh in Port Moresby—to 73,500 customers. Many generating stations require overhaul and maintenance. Of PPL‘s 300 MW installed capacity, about 250 MW are capable of producing power. Energy system losses equal about 20% of energy input to the system. Losses continue to rise over time, from about 13% in the late 1990s, because of outdated transmission and distribution lines, and inadequate substation plants. PPL used to be the sole generator, transmitter, and distributor of electricity in the country. In 1999 an independent power producer, Hanjung Power Ltd., negotiated an agreement with PPL for the production and sale of power to the grid in a 15-year build-operate-transfer arrangement. The oil refining industry is expected to play an important role in the economy in the future. b) Energy Sources There are six known sources of energy in PNG: biomass, hydro, solar, geothermal, wind and hydrocarbons (REEP, 2004). Of the country‘s total 580 MW generating capacity, hydropower comprises 220 MW. A combination of light and heavy oil-fired diesel units comprises 60 MW, to supply Port Moresby. A 62 MW gas plant and a 54 MW geothermal plant each supply isolated mines. The remaining 184 MW generating capacity uses light diesel fuel, mainly in isolated centres scattered through the country. It is predicted that in 2030, oil will dominate the electricity generation mix (39%), followed by natural gas (30%), hydro (25%) and other RE sources (6%).

19

PNG has substantial deposits of hydrocarbons, mainly natural gas. The recoverable, proved and probable natural gas resources are estimated at 428 billion cubic meters (m3), equivalent to about 3 billion barrels of oil. Planning and design work are proceeding for the production of liquefied natural gas (LNG) for export. The pipeline carrying gas from onshore gas fields to the planned LNG plant may enable the supply of natural gas to domestic users, particularly power generators. The country is rich in renewable energy (RE) resources suitable for power production, particularly hydropower. PNG has more than 15,000 MW of hydropower potential. Coconut plantations are widespread throughout PNG and may be a potential source of power as coconut-based bio-diesel becomes a viable option. Other potential energy sources are geothermal, wind, solar and marine. There is no single preferred energy source - the geography of PNG calls for articulated power sector optimization based on small, disaggregated markets. PNG is a net energy exporter. The Asia-Pacific Economic Cooperation prepared an energy balance for PNG in 2000 (EDMC, 2005). The net primary energy supply was 573 kilotonnes of oil equivalent (ktoe). Light crude oil and petroleum accounted for 61%, natural gas 25% and hydro 14%. Almost 80% of indigenous commercial energy production (i.e. oil) was exported. The technical potential for RE sources in PNG is enormous but much of the resource is in remote locations, where there is limited demand and the energy resource is not readily exploitable. The University of Papua New Guinea, the University of Technology and the government‘s energy and forestry departments have assessed rural RE potential between the early 1980s and 1994. There is only limited information since then. No systematic geothermal energy or wind energy assessments have been carried out recently. There are also limited hydrological surveys and thus hydroelectric potential is approximate. Solar energy is among the largest potential sources in PNG. Site assessments showed that the best locations for solar PV are the offshore islands and the southern regions. In 1994, the World Bank estimated the gross potential for large-scale hydro as roughly 20,000 MW, with a technically feasible potential of 14,000 MW. The economically feasible sites could deliver about 4,200 MW. These estimates exclude micro- and mini-hydro for rural communities. These have a large exploitable potential. There is very limited knowledge of PNG‘s potential for ocean thermal energy conversion, tidal energy or wave energy. Despite recent developments, there are no commercially available proven technologies. Although two thirds of PNG is covered with forest, much of it is inaccessible or unsuited for energy production. Almost 60% of land is subject to strong or severe erosion and 18% is permanently inundated or regularly flooded. The main practical biomass energy potential is in areas of logging or agricultural production, using either the crop output or residues. c) Energy Consumption PNG‘s energy consumption is one of the smallest in the Asia Pacific region, at 1.4 Mtoe in 2002. Energy consumption grew robustly at 4.7 percent per year between 2002 and 2005. The high rate of industrialization, growth in infrastructure and improved living conditions have been the key factors for the rising energy consumption over the past years. The trends are shown in Table 7.

20

Oil consumption for new mines has exhibited the fastest growth, accounting for 5.3% of the total growth in energy consumption over the past three years. To support the economy‘s growing energy needs, PNG has intensified the exploration, development and exploitation of indigenous oil and gas resources (both offshore and onshore). As a result, a small new oil field at South East Mananda has commenced operation and is producing at about 7,000 barrels of oil per day, augmenting the economy‘s low oil production output. Much of the growth in energy consumption has been from petroleum products and is being met by imports. However, with the commissioning of the first oil refinery in 2004, all petroleum product imports (excluding LPG) have now been replaced by domestic production from the new refinery. The growing awareness on oil dependency amid depleting reserves has prompted the country to seek other alternative energy sources. PNG has drafted a National Energy Policy Statement and Guidelines. These outline the country‘s future policy direction on energy.

Table 7

Papua New Guinea Energy Data

(Source: Energy Information Administration, 2008)

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007

Petroleum (Thousand Barrels per Day) Total Oil

Production 100.0 103.

4 80.0

3 79.0

9 96.6

2 70.0

9 67.5

2 55.15 50.49 45.6 40.3 44.41 42.01

Crude Oil

Production 100 103.

4 80 79.0

6 96.6 70.0

6 67.5 55.15 50.49 45.58 40.28 44.39 41.99

Consumption 15 15 15 15 15 15 15 22 25 25 26 27 F 30

Net Exports

/Imports (-) 85 88 65 64 82 55 53 33 25 21 14 17 F 13

Total Oil Exports

to U.S. 5 9 4 1 13 2 2 4 2 NA NA NA NA

Refinery

Capacity 0 0 0 0 0 0 0 0 0 0 33 33 33

Proved Reserves

(Billion Barrels) 0.229 0.4 0.27

5 0.32

5 0.33

3 0.33

3 0.36 0.238 0.24 0.24 0.24 0.24 0.24

Natural Gas (Billion Cubic Feet) Production (Dry

natural gas.) 3.5 4.6 3.9 3.9 3.9 3.9 3.9 3.9 4.9 4.9 3.5 10.6 NA

Consumption (Dr

y natural gas.) 3.5 4.6 3.9 3.9 3.9 3.9 3.9 3.9 4.9 4.9 3.5 10.6 NA

Proved Reserves 1500

0 3000 1500 9000 5442 5442 7900 1223

0 1223

0 1220

0 1220

0 1220

0 1220

0

Electricity (Billion Kilowatthours)

Net Generation 1.5 1.7 1.6 2.1 1.9 2.1 2.6 2.8 3 3.3 3.7 NA NA

Net

Consumption 1.4 1.6 1.5 1.9 1.8 2 2.4 2.6 2.8 3.1 3.4 NA NA

Installed

Capacity (Gw) 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 NA NA

Total Primary Energy (Quadrillion Btu)

Production 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.1 0.1 0.1 0.1 NA NA

Consumption 0 0 0 0 0 0 0 0.1 0.1 0.1 0.1 NA NA

Energy Intensity (Btu /US$) (2000) 3906 3809 3845 3695 3670 3790 3812 5065 5576 5388 5279 NA NA

-- = Not applicable; NA = Not available; F = Forecast value

21

d) Energy Demand Drivers and Future Demand PNG‘s economic performance since the 1990s has generally been weak. Over the last two decades the gross domestic product (GDP) achieved modest growth of 2.6 percent, with GDP per capita increasing only at 0.1 percent annually. The export oriented economy and capital intensive mineral sectors were the major areas of growth, generating export revenues, particularly from oil and gas. With the strong growth in the industrial sector, the economy is expected to grow annually at 3.4 percent from 2002 to 2030. Expansion and development of infrastructure (in agriculture, mining, and industry) would result in a sustained growth in energy demand in the same period. High population growth has constrained the economy‘s development for nearly two decades. Half of the people in PNG are still poor and living below the poverty line. Over the outlook period, population is expected to grow moderately, at 1.8 percent per year, as living conditions improve. Population is expected to increase from 5.4 million in 2002 to 8.8 million by 2030. Increased agricultural and industrial activities, particularly in mining, oil, and gas exports, are expected to generate new and additional employment, improve living standards and encouraging urban migration. Urbanization therefore is expected to increase from 13 percent in 2002 to 20 percent in 2030, and grow at an annual rate of 1.6 percent until 2030, faster than the previous decades of 0.1 percent. Final energy demand is projected to grow annually at 3.5 percent from 1.0 million tonnes of oil equivalent (Mtoe) in 2002 to 2.7 Mtoe in 2030. The growth is mainly from the industrial sector. This will grow from 0.7 Mtoe in 2002 to 1.95 Mtoe in 2030 and will account for 74 percent of the total energy demand, followed by transport (15 percent), and residential and commercial sectors (11 percent). Energy demand in the industrial sector is projected to grow at an average annual rate of 4.0 % during the outlook period. The robust growth in industrial value-added of 4.0 % per year is due to the increased government promotion of local manufacturing industries, which is expected to contribute significantly to this projected growth in energy consumption. Energy demand in the transport sector is projected to increase from 0.27 Mtoe in 2002 to 0.44 Mtoe in 2030, growing at an annual rate of 1.7 percent. Despite the steady growth, per capita transportation energy demand will not show much change through 2030. Underdeveloped road transport infrastructure places limitations on the mobility of road transport. Along with moderate population and income growth and gradual expansion of the industry base, energy demand in the residential and commercial sectors is expected to grow at 3.6 percent per year throughout the outlook period, slower in comparison with the previous decade when it was 5.8 percent. Electricity is the dominant energy source in the residential and commercial sectors and is projected to grow at 4.6 percent annually, driven by moderate spending by consumers as incomes increase. The share of electricity in the total residential and commercial sectors is expected to increase from 62 percent in 2002 to 80 percent in 2030. Demand for petroleum products is expected to increase by 1.3 percent annually and account for 20 percent of the total residential and commercial energy demand in 2030.

22

Total primary energy demand is projected to grow by 3.6 percent annually over the outlook period. Oil will grow at 3.2 percent and will maintain the dominant share of total primary energy demand at 73 percent by 2030. Oil demand will increase from 1.2 Mtoe in 2002 to 2.8 Mtoe in 2030. Oil will maintain the largest share in total primary energy demand and the greatest share of the demand will be concentrated in the industry sector, followed by electricity and transport. The demand for natural gas will be driven by the electricity generation sub-sector. Electricity demand is expected to double from 3.0 terawatt-hours (TWh) in 2002 to 7.8 TWh in 2030, driven mainly by the industry and residential sectors. Electricity demand will be supplemented by hydro, natural gas (starting in 2010) and geothermal electricity generation. In 2030, oil will dominate the electricity generation mix at 39 percent, followed by natural gas (30 percent), hydro (25 percent) and renewable (6 percent). e) Greenhouse Gas (GHG) Emissions PNG‘s first GHG inventory was presented in its Initial National Communication, which highlighted some of the most pertinent problems and constraints in the inventory process. These included: (i) difficulties in accessing accurate data and the lack of a GHG database management system; (ii) difficulties in data collection and collation; (iii) lack of knowledge or expertise and lack of studies in particular categories of GHG emissions; (iv) the lack of quality data and poor data management; (v) lack of appropriate hardware and software for development and improvement of data management systems for the preparation of national communications; and (vi) lack of strong coordination of activities relating to the preparation of the GHG inventory. Table 8 presents estimates of commercial energy use and the associated GHG emissions, for 2001 and projected for 2011 while Table 9 shows how emissions have grown over time, largely as a result of increased energy consumption.

Table 8

Commercial Energy Use and Associated Emissions of Greenhouse Gases (Source: PNG National Report, Pacific Regional Energy Assessment, 2005)

23

Fuel Use Million L/y (except as noted)

Gasoline 120.1

Jet fuel 79.5

Kerosene 25.5

Distillate 724.7

Residual 481.0

LPGs 7.5

Unspecified 12.8

Natural Gas (M m3/y) 139.9

Coal (1000 tons/y)

EXISTING POWER SYSTEMS

Hydroelectric (MW) 224

Generation MWh 925

Availability 49%

Thermal (MW) 320

Generation MWh 2419

Availability 89%

Geothermal / other installed (MW) 56

Transmission & Distribution Losses 7.0%

Total GHG Emissions (M m ton CO2) 4.69

% of regional total 67.19%

% of global total emissions

Renewable Energy Potential (MW)** 238

Possible CDM Projects (MW except as noted)***

Biomass Power

Geothermal 50

Hydropower 315.7

Solar

Wind

Energy Efficiency (MW-hours)

Landfill gas (Tons/year CO2 equivalent) 14,760

Forestry (Tons/year CO2 equivalent) 339,699

Number of Small Scale Forestry Projects 494

Table 9

Carbon Dioxide Emissions (Million Metric Tons of CO2)

Total from Consumption of Fossil Fuels (Source: National Greenhouse Gas Inventory)

1990 1991 1992 1993 1994 1995 1996 1997 1998

2.46 2.43 2.55 2.58 2.47 2.6 2.66 2.66 2.56

1999 2000 2001 2002 2003 2004 2005 2006 2007

2.56 2.58 2.58 3.66 4.23 4.28 4.35 NA NA

Table 10 presents a recent estimate of fuel use and energy production and the resulting GHG emissions. These equate to 4.69 million metric tons of carbon dioxide (CO2). An estimate by the World Resources Institute (2008) indicates that landuse change and forestry contribute 96% to PNG‘s net GHG emissions.

Table 10

Fuel Use, Energy Production and GHG Emissions (Source: ADB, 2008)

CO2 emissions from the energy sector are projected to reach 9.1 million tons of CO2 in the outlook period which is 2.4 times higher than the absolute levels in 2002. In

24

comparison with other APEC member economies, the increase in CO2 emissions is minimal. f) Land Use, Land Use Change and Forestry PNG is one of the last three major remnant tropical natural wilderness areas on earth. It holds over seven percent of the world‘s total biological resources in its varied natural environments that range from the tropical oceans and seas to the high mountains above 3,000 meters. This equates to some 700,000 species, although there is extremely limited data on marine species. The biodiversity resource embodies the heart of sustainable livelihoods for both the urban and rural peoples of PNG. In 1996 the PNG Forest Authority (PNGFA) recorded a total remaining forest area of 39 million hectares. This total forest area can be further categorized into different uses, as shown in Figure 16.

Figure 16. Components of the PNG forest resource base. Source: PNG Forest Authority, 1996.

A 2002 assessment of the forests of PNG generated a land cover map which represents the most advanced information available to understand forest extension in PNG. The study mapped the extent of each of the major forest types for the three broad regions and each of the 19 provinces that make up PNG. Some of the key findings are summarized in Tables 11 and 12, and in Figure 17.

25

Table 11

Area Covered by Major Forest Types (Source: P.L Shearman et al., 2008)

Figure 17. Distribution of forest types between regions. Source: P.L Shearman et al., 2008.

26

Table 12

Change in Forest Cover in Papua New Guinea

TOTAL FOREST COVER PRIMARY FOREST COVER

Ha % ha %

Forest 1990 31,523,000 Primary 1990 29,210,000

Forest 2000 30,132,000 Primary 2000 26,462,000

Forest 2005 29,437,000 Primary 2005 25,211,000

Annual Change

1990-2000

(139,100)

0.44% Annual Change

1990 - 2000

(274,800) 0.94%

Annual Change

2000-2005

(139,000)

0.46% Annual Change

2000 - 2005

(250,200) 0.95%

Total Change 1990-

2005

(2,086,000)

6.62% Total Change 1990

- 2005

(3,999,000) 13.69%

Change in rate 4.54% Change in rate 0.50%

OTHER WOODED LAND

PLANTATIONS

Ha % ha %

Other 1990 4,474,000 31,523,000 Other 1990 4,474,000 63,000

Other 2000 4,474,000 30,132,000 Other 2000 4,474,000 82,000

Other 2005 4,474,000 29,437,000 Other 2005 4,474,000 92,000

Annual Change

1990-2000

- - Annual Change

1990 - 2000

1,900 3.02%

Annual Change

2000-2005

- - Annual Change

2000 - 2005

2,000 2.44%

Total Change 1990-

2005

- - Total Change 1990

- 2005

29,000 46.03%

Change in rate - - Change in rate 0.50%

TOTAL DEGRADATION/CONSERVATION

(= Forest area + Wooded Area - Plantations)

ha %

Forest 1990 35,934,000

Forest 2000 34,524,000

Forest 2005 33,819,000

Annual Change 1990-2000 (141,000) -0.39%

Annual Change 2000-2005 (141,000) -0.41%

Total Change 1990-2005 (2,115,000) -5.89%

Change in rate 4.08%

The study also resulted in the preparation of a series of maps (Figure 18) that show the expansion of logging activities from 1980 to 2005. Major deforestation areas were primarily found on the mainland, the New Britain Island and in Western Province. In summary, it was estimated that: 4,724 – 4,735 million metric tons of carbon were stored in PNG‘s primary forests in

2002; this does not include carbon in the forest soils; and

27

between 1972 and 2002 deforestation resulted in the release of a net 926.5 million tonnes (Mt) of carbon (3,397 Mt of CO2, with an additional 76.39 – 88.83 Mt of carbon (280.1 -325.7 Mt of CO2) being released through logging related forest degradation.

Over the last 30 years the main drivers of for the forest change in PNG were: (i) Plantations – 1%; (ii) Forest Fires – 4.4%; (iii) Subsistence agriculture – 45.6%; (iv) Logging – 48.2%; and (v) Mining - 0.6%. Thus logging and subsistence agriculture account for the highest loss of forest. Figure 18. Times series showing the sequential allocation of forest areas to the logging industry

between 1980 and 2005. Areas in red are allocated, while areas in green are designated as production forests. Source: P.L Shearman et al., 2008.

5. Mitigation of Greenhouse Gas Emissions a) Energy Substitution PNG has enormous RE resources, and a longstanding interest within its two universities to develop RE technologies. Until the mid-1980s PNG was the region‘s leader in biomass energy for agro processing, biogas, biomass gasification, wood and charcoal cooking, ethanol production, solar PV, and resource assessments.

28

Recently the private sector has largely driven RE use. The coffee industry still uses wood-burning driers, the palm oil industry exploits wood waste for electricity, and Ramu Sugar plans to use wood for combustion in its bagasse boilers. At least several thousand new solar home lighting systems are expected to be installed in rural PNG, overwhelmingly through private initiatives. Yet barriers to successful long-term use of renewable energy technologies (RETs) seem to be considerable. About three quarters of mini/micro hydro systems installed are no longer in use, a large percentage of PV systems have failed, and the majority of C-centre power systems are operating poorly, or not at all. The technical potential for energy production from RETs from local renewable resources in PNG is enormous. However, in practice much of this potential is far from locations with significant energy demand, and hence cannot be readily exploited. Many of the resource assessments for hydropower are a decade or two old. Even good knowledge of the national technical potential provides only limited information on practical short-term options. Accurately projecting future patterns of energy demand, and hence CO2 emissions, is difficult. For the analysis undertaken by the Pacific Islands Renewable Energy Project (PIREP), it was assumed that PNG‘s population and real GDP would each increase at 2.7% annually, while commercial energy use would grow slightly faster at three percent. If all energy growth was from fossil fuels, GHG emissions from commercial energy would increase from about 1500 gigagrammes (Gg) in 2001 to 2,060 Gg in 2011. If PNG invested massively in RE technologies that are already commercially available, in principle it could reduce these emissions (from the 2011 level) by about 1000 Gg per year. This estimate ignores various economic, financial, political, social, technical, environmental and other practical constraints and is thus only broadly indicative of possibilities. The bulk of potential reductions would come from hydropower, geothermal, and fuel ethanol (Table 13). Even a large PV or wind energy programme would provide only modest GHG reductions.

Table 13

Indicative Maximum Energy Savings and GHG Emissions Reduction in 2011 (Source: PNG National Report, Pacific Regional Energy Assessment, 2005)

Table 13 suggests, that in principle, PNG could reduce CO2 equivalent GHG emissions through RE investments by over 1,000 Gg per year, about 70% of total 2001 emissions.

29

Almost all of this would be through RE. If this level of RE was developed, energy efficiency efforts would reduce fuel consumption, but as this would displace RE, there would be no significant further GHG reductions. The indicative estimates in Table 13 were based on proven technologies and more-or-less known resources, but they do not consider economic, financial, political, social, technical, environmental or other practical constraints. They did not consider emerging applications such as fuel cell technology using some of PNG‘s vast natural gas resource as fuel. Although this is not RE, natural gas produces only about 60-70% of the emissions of liquid petroleum fuels, depending on the fuel displaced. The results of a more recent assessment of the benefits of energy substitution for reducing GHG emissions are presented in Table 10. They suggest that hydropower and the use of landfill gas provide significant opportunities. National and relevant regional mitigation projects are listed in Table 14.

Table 14

National and Donor Funded Mitigation Initiatives

(Sources: GEF/C.33/9, March 20, 2008 and ADB Project Database)

Project Title Participating Pacific Island

Countries

Type

Integrated solid and hazardous

waste and POPs management

Cook Islands, FSM, Marshall

Islands, PNG, Samoa, Tuvalu,

Palau, Tonga (the latter two

countries only if they ratify the

Stockholm Convention)

Mitigation

Regional Renewable Energy PNG, Solomon Islands, Fiji,

Vanuatu, and Kiribati, Niue,

Tuvalu and Nauru

Mitigation

Forest Management Project Fiji, Samoa, Niue and PNG Mitigation

Development of the Power Sector

Plan

PNG Mitigation

Mainstreaming Environmental

Considerations in Economic and

Development Planning –

FSM, Kiribati, Palau, PNG,

RMI, Samoa, Solomon Islands,

and Vanuatu

Implemented since 2005;

sustainable development,

including those relating to

climate change

b) Avoided Deforestation One of the major contributory factors to PNG‘s increased GHG emissions is the release of carbon in the biomass of tropical rainforests, including soils. This occurs as a result of deforestation, notably for conversion for agricultural production, and of forest degradation. The latter is prevalent with selective logging and lower intensity agriculture or gardening. While PNG is clearly not a significant producer of overall or per capita GHGs from industrial or household energy consumption, it does retain the largest area of remaining tropical rainforest in the Southeast Asian/Pacific region, and one of the largest globally. PNG and other rainforest nations recognized that they also have a major role to play, by continuing to sequester carbon in their forests and halting or even reversing deforestation and forest degradation.

30

Before independence, PNG boasted some 33 million hectares of natural forests. Since independence that area has been reduced to about 29 million hectares. However, three million hectares is degraded forests, which leaves us with some 26 million hectares of intact forests. Moreover, the 26 million hectares is continuously being deforested or degraded through logging, commercial agriculture, shifting cultivation, and mining and petroleum activities. The PNG government recognises that economic growth will be largely driven by the exploitation of natural resources. This brings a risk of unsustainable increases in logging, commercial agriculture, shifting cultivation, and mining and petroleum activities to satisfy the medium term development goal. Thus, although these activities are economically important for PNG, they pose a direct threat to the existence of natural forests and the associated biodiversity. With the growing recognition of the role of rainforests in storing carbon, and the extent to which forest clearance contributes to GHG emissions and climate change, PNG has been active in promoting the need to incorporate standing forests under post-Kyoto arrangements from 2012. This means extending emission trading and other arrangements beyond afforestation, as currently provided for with the Clean Development Mechanism (CDM) arrangements under the Kyoto Protocol. This initiative started at the Conference of the Parties (COP) in Montreal, where the Government of PNG initiated a discussion on tropical deforestation. This position was endorsed at the Climate Change Conference in Bali, and intended to lead to a strengthened international agreement on climate change at COP15 in Copenhagen at the end of 2009, and potentially including the principle of reducing emissions from deforestation and forest degradation (REDD). PNG proposed to start, on a voluntary basis, reductions of emissions through avoided deforestation. c) Co-benefits of REDD PNG will be a affected by climate change, but it could also be a beneficiary from some of the measures to mitigate change, notably from the resource owners and the State potentially receiving payments for the service of retaining carbon stored in its existing, and perhaps restored and newly planted forests. To address the challenge of climate change, including the immediate victims, and for these potential benefits to be achieved, the government is being urged, in close consultation with and support of the private sector, civil society and development partners (where needed and available), to establish credible and transparent policies and mechanisms for addressing climate change, including through carbon trading. The approaches should be plausible to PNG‘s forest resource owners, development partners, the international carbon market (including rigorous auditing/regulatory requirements) and the world community. REDD compensation mechanisms are seen as having two components: compensation for loss of revenue from activities that are driving an increased rate of

deforestation and degradation; and compensation for implementing activities that reduce emissions under REDD

mechanisms. There are also non-carbon values from which the government and landowners can benefit, including:

31

Expansion of

palm oil

plantation

Expansion of

palm oil

plantation

Expansion of

palm oil

plantation

Forest areas

(production forest,

conversion forest,

protection forest,

conservation

forest)

Deforested AreaDeforested Area

Degraded forestsDegraded forests

Increase

demand to

agriculture

land

(subsistence

farmers)

Increase

demand to

agriculture

land

(subsistence

farmers)

Increase

demand to

agriculture

land

(subsistence

farmers)

Exposed to

Repeated

fires

Exposed to

Repeated

fires

Exposed to

Repeated

fires

Illegal logging due to

high dependency of

wood supply from

mixed tropical

hardwood forests

and limited

alternative source of

incomes

Illegal logging due to

high dependency of

wood supply from

mixed tropical

hardwood forests

and limited

alternative source of

incomes

Illegal logging due to

high dependency of

wood supply from

mixed tropical

hardwood forests

and limited

alternative source of

incomes

Unsustainable

forest

management

practices by

forest

concessionaires

Unsustainable

forest

management

practices by

forest

concessionaires

Unsustainable

forest

management

practices by

forest

concessionaires

Identifying & assessing

strategies/options/

measures that can

reduce rate of DD

Assessing cost for the

policy interventions and

the implementation of

strategies/measures

including OC analysis

Assessing market for

REDD (sellers, buyers,

transaction regulation,

carbon price from

REDD, etc)

Team-2

Developing methods

for measuring and

monitoring carbon

stock change and GHG

emission from DD

Developing methods for

estimating historical GHG

emissions and carbon

stock changes and their

projection under the

absence of global policies

on REDD (no payment

mechanism for REDD)

Team-1

REDD Monitoring

Developing options/mechanisms and

institutional arrangements for payment

distribution from REDDTeam-3

PILOT PROJECTS

GET LESSON

LEARNT AND INPUTS

FOR COPs

protected areas – tourism, maintaining cultural heritage, spiritual aspirations, recreation and others; and

environmental services for communities – clean water; coastal protection; catchment protection for water supply; clean air; and biodiversity protection

d) Implementing REDD PNG‘s position and commitments to REDD include: reducing the rate of deforestation and degradation; and increasing the activities for converting non-intact forests and other land use to intact

forest. PNG‘s National Joint Programme (NJP) under the United Nations Collaborative Programme on Reduced Emissions from Deforestation and Degradation in Developing Countries (UN-REDD) was designed based on the Government of PNG‘s National Executive Council (NEC) Decisions, including the most recent on February 11, 2009. The NEC decision outlines the mandates of the Office of Climate Change and Environment Sustainability (OCCES), including coordinating all climate change work in PNG, such as REDD. The OCCES will prepare a NJP and REDD-Plan, and submit it to the National Climate Change Advisory Board (NCCAB), for review and recommendation. The NCCAB includes stakeholders from the public and private sectors and from civil society. PNG will establish a Forest GHG Inventory Unit that will coordinate actions to monitor area and carbon pool changes (Figures 19 and 20). The area change assessment will be realized mainly by a remote sensing laboratory. The laboratory will likely adopt an advanced version of the methodologies develop by the Brazilian Space Agency to monitor forest area change in the Amazon region. The system has been monitoring annual changes since 1988. The carbon pool changes will be assessed by two laboratories, one for carbon forest inventory and one for carbon soil inventory. Figure 19. REDD monitoring activities.

32

Baseline Reduced

Deforestation

Monitoring Carbon

markets ($)

Payment

distribution

mechanism

How much

forest will be

lost in the

future?

What can be

done to reduce

deforestation?

What would it

take to

implement it?

How much

would it cost?

Where to start

from?

How can we

prove that

reduced

deforestation

has really

taken place?

Who is entitled

to sell forestry

carbon?

Who are the

buyers?

How is the

price formed?

How should

carbon

transactions be

regulated?

How will

carbon

payments be

distributed to

provide

incentives to

reduce

deforestation?

Who has a

legal

entitlement to

receive

payments?

Figure 20. Monitoring as a component of REDD.

The lack of consistent data sets and national level analyses will pose a challenge to the REDD program and will require additional resources to build up a complete measurement, monitoring, and evaluation system. Understanding of the effort required to monitor carbon stocks is well developed but the limitation of the existing laws and policies in the forest sector is less well understood. PNG is undertaking an assessment of historical gross emissions from forest land adjusted in accordance with national circumstances, to serve as a reference threshold for measuring reductions in gross emissions. This will include the assessment of changes in all five pools of carbon in forests - above and below ground biomass, dead wood, litter and soil - through the development of permanent forest sampling plots. 6. Technical, Absorptive and Adaptive Capacities Capacity building will be required to ensure that there is stable pool of experts who can carry out activities related to hazard assessment, risk management, adaptation, mitigation and REDD. Training programmes and career development paths will need to be considered in order to build a pool of national experts. This includes implementing training designed to enhance the capacity of the NWS to understand and monitor climate variability and climate and generate useful seasonal predictions and disseminate these and other climate information to government and industry; PNG is gearing up to participate in implementing the REDD strategies. However, new and additional funding will be necessary to improve institutional capacity such that policy development, strategic planning and on-the-ground implementation can be effected quickly. Preparation of the Second National Communication to the UNFCCC will involve internal OCCES training on how to undertake a greenhouse gas inventory and climate

33

change vulnerability assessments. Capacity development is also identified in the National UN-REDD Programme for OCCES, especially on issues surrounding REDD. There are plans for the technical staff of the laboratory associated with the Forest GHG Inventory Unit to be trained in Brazil through a cooperation project. The system to monitor changes in carbon stocks in forest land will be based on both satellite remote-sensing technologies and field inventories techniques. The system will have the following attributes: scientifically sound; transparent; accurate; based on internationally accepted good practice guidance; and compliant to the requirements of the REDD Policy. Capacity development needs for removing the barriers to the successful uptake of RETs have been identified under PIREP. These include: fiscal - barriers to the development and commercialisation of RETs include petroleum

fuel pricing and cross-subsidies, electricity tariff policies, and lack of ‗green‘ interest rates or incentives;

financial - access to finance is a barrier because so many PNG people are largely outside the cash economy and government budgets for rural energy services are low;

legislative, regulatory and policy - lack of appropriate legislation, approved energy policies, guidelines and regulations form a significant barrier to the development of RE;

institutional - institutional issues requiring improved capacity, additional to those raised above, include: i) determination of the need, value and costs of developing a Rural Electrification Authority; ii) at the regional level, improved ability of regional organisations to address PNG‘s energy needs; iii) skills to assess PNG‘s RE resource (particularly, but not only hydro); iv) skills to evaluate and develop PNG‘s large-scale biofuel potential; and v) ability to develop easily understandable publicly-available reference materials on RETs;

market and private sector - market barriers include the lack of affordable transport to rural areas, small market size, dispersed population, and lack of productive demand for electricity;

knowledge and public awareness - effects of awareness campaigns on energy efficiency and RE are likely to be limited and temporary; ublic funds should not be used for public awareness materials on RE unless focused on implementation of a specific RET project; as noted above, improving knowledge of RETs requires training for NGOs and the private sector, not just government;

environmental and social barriers - key barriers in PNG are poor access to land with secure arrangements for the long term; and the lack of law and order with associated theft of, and damage to, RETs; and

hardware investments for removing barriers - large-scale hydropower offer the most practical opportunity for RE development in PNG followed by biofuels and geothermal; where GHG reduction is a priority, investments in environmentally appropriate large-scale RETs should be considered.

Widespread use of RE will have environmental implications. For both GHG reductions and RE production, the biggest impacts may come from large hydropower, ethanol,

34

geothermal, biodiesel and small hydro, respectively. If poorly planned or implemented, any of these could have detrimental environmental impacts. Hydro projects above 10 MW can undermine moves toward sustainable development, and even energy security, especially where changes in weather patterns reduce rainfall. GHG emissions can come from rotting matter in reservoirs. Smaller hydro can be environmentally and socially low-impact. For hydro projects to have low social and environmental impacts, they should be planned, built and operated in line with the recommendations of the World Commission on Dams. Nearly 60% of PNG‘s land area is subject to severe erosion and nearly 20% is regularly flooded. Environmental issues for ethanol as a fuel in PNG are those of biomass use in general, namely conversion of forests to biomass plantations, encouraging clear cutting, nutrient draining, use of toxic chemicals, increased erosion, and possible loss of wetlands. Despite possible hydrogen sulphide emissions, geothermal is relatively environmentally friendly, producing about 0.1% of the GHG emissions of fossil fuelled power plants for the same energy output. If carelessly developed, there can be negative impacts from drilling wells. It is generally assumed that only 10% of vegetable oil production in PNG might be used for fuel. As a result, the impact should be no more severe than current agricultural practices. Vegetable oils are low in emissions, containing almost no sulphur or hazardous materials, and readily biodegrade. At the basic level, there is quite good awareness of the disaster and climate change hazards in central and provincial government agencies. However there is a general sense that the resources and skills available are inadequate. There is also little appreciation of the ways in which natural disaster and climate change could impact a sector or an individual‘s ability to fulfil their responsibilities. Exceptions exist within the hazards monitoring areas, the National Agricultural Research Institute and the National Water Board, where frustrations were expressed at the lack of resources to address the issues. There is a need for a greater understanding of the relationship between hazards and the practical means for starting to deal with them. This is a fundamental capacity issue which needs to be dealt with at a pragmatic level. Core hazard understanding as well as the on-going monitoring necessary to inform risk reduction initiatives, whether from disasters or climate change, are both considered to be seriously deficient. While these shortcomings are clearly understood within individual agencies (hazard agencies and the line agencies which are end users of the information), there is poor acknowledgement of this issue at the whole-of-government, strategic level. Aid programmes designed to strengthen monitoring networks will have little long-term impact if operational capacity, budgets, and information systems and their associated decision support tools are inadequate. There is a need for institutional strengthening to ensure hazard and vulnerability information is available to inform future risk reduction decisions. Specific capacity needs for disaster risk management and climate change adaptation include: strengthen early warning systems; increased education and awareness; training on new technologies; and human resources development in general.

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Relevant key issues in the area of forest law enforcement and forest sector governance in PNG are: (i) need to strengthen capacity to exercise the functions of the Forestry Act; (ii) all aspects of the planning, acquisition, and allocation process; (iii) assistance to local and provincial interests, primarily through field support and servicing the Provincial Forest Management Committees; (iv) improvement in PNG‘s forest research capacity to provide contemporary applied scientific support to the development and management of forest resources; (v) need for increased input from the resources owners and provincial interests in co-ordination, along with reliable investors to engage in better developed resource access, protection and sustainability of forest based industries; and (vi) maintenance of a transparent, stable and strong institutional resource management environment that attracts and retains private investment willing to support environmental sustainability policies. 7. Governance and Informed Decision-making PNG has a population of 5.2 million people, growing at 2.7% annually with 85 percent of its people living in the rural areas of the country. It is a country comprised of more than 10,000 tribes and a rich ethno-linguistic characteristic that is defined by 832 living languages. Constitutionally, these rural communities own the local resources and depend largely on subsistence agriculture and fishing for their livelihood. With such a significant biodiversity base, PNG faces many environmental, economic and socio-cultural challenges. At present, around 97% of the total land area in PNG is legally owned and controlled by indigenous communities. Further, over 80% of the population of PNG is still directly dependent on the local environment for their subsistence and livelihoods (2000 Census). As such, and unlike many counties in the world, the biodiversity on the land is owned by indigenous individuals and by clans. These individuals and clans are legally in control of, and responsible for, the management of their land. Given this constitutionally secured indigenous ownership, it is critical that the rightful individuals and clans are involved when developing location-specific activities, such as those related to REDD. There is a well-established and effective legal process to verify legal tenure and land rights. Landowners have not benefited enough from past projects, despite the promises. Climate change is seen by many as an opportunity to erase the past injustices from their minds, and for promises to be delivered. In recent years, the economic climate in PNG has improved and economic growth is projected to continue over the next five years. This growth has been accompanied by significantly improved macro-economic management, including prudent monetary policy, improved budgetary performance, lower interest rates and an appreciation in the exchange rate. These improvements were apparent in the recent budget, with ongoing reductions in debt repayments and increases in funding for the key 2005-2010 Medium Term Development Strategy (MTDS) priorities. PNG now faces challenges in maintaining these improvements. The challenges include accelerating longer-term structural reform to offset forecast declines in government revenue as a percentage of GDP, and implementing the government‘s programmes of public sector and expenditure reforms to ensure budgetary discipline. Other key development challenges include: (i) dysfunctional service delivery systems; (ii) confusion over functional and financial responsibility for service delivery resulting in weak delivery of basic services to the people; (iii) HIV/AIDS; (iv) high population growth

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(population has almost doubled since independence, with over 40% of the population now under 15 years of age); (v) unplanned urbanisation; and (vi) impediments to land utilisation.

Over the years the government has taken several steps to create legislation and relevant agencies. In some cases it has established guidelines to implement, monitor and enforce rules and regulations. In spite of these initiatives, it appears that there has been serious deterioration in the performance of many of the agencies, severe silo relationships, lack of clear overall policies to inform strategic directions, inability to utilize available instruments and tools as designed, and continued difficulty in coordinating funding, policy and institutional arrangements for natural hazard risk reduction and for mitigation, including REDD.

a) Policies, Strategies and Plans, and their Implementation The MTDS is the PNG Government‘s overarching plan for social and economic development and provides the broad policy framework for the Strategy. The MTDS is based on PNG‘s Program for Recovery and Development and its three objectives: (i) good governance; (ii) export-driven economic growth; and (iii) rural development, poverty reduction and empowerment through human resources development. PNG faces many adverse external circumstances, such as geographical isolation and the relatively frequency of natural disasters, compounded by political instability, law and order problems, and deteriorating social/poverty indicators. The MTDS identifies seven core sectoral expenditure priorities: (i) transport infrastructure maintenance; (ii) promotion of income-earning opportunities; (iii) basic education; (iv) adult learning; (v) primary health care; (vi) HIV/AIDS prevention; and (vii) law and justice. These underpin the following development targets: (i) eradicating extreme poverty and hunger; (ii) achieving universal primary education; (iii) promoting gender equality and empowering women; (iv) reducing child mortality and improving maternal health; (v) combating HIV Aids, malaria and other diseases; (vi) ensuring environmental sustainability; and (vii) promoting global partnerships. As a framework to guide the allocation of resources in both the development and recurrent budgets, the MTDS, together with the Medium Term Financial Strategy, also has an important role to play to support fiscal governance and the objectives of the Strategic Plan for Public Sector Reform. The MTDS recognises the central responsibility of government to provide a number of core functions necessary to improve basic living standards and social cohesion, including law and justice, primary health care, basic education and infrastructure. Capacity building and support for the delivery of these functions is a priority of the Strategy. Figure 21 illustrates the relationships between the PNG government‘s overall strategies, especially the Millennium Development Goals (MDGs), and the sustainable development framework, and the PNG MTDS. In May, 2009, OCCES conducted four regional climate change conferences, covering all provinces of PNG. The conferences were in recognition of the need for the national government to develop a comprehensive policy approach that contributes towards global climate change mitigation while also seeking to adapt to the ongoing effects of climate change. To successfully deal with the long term effects of climate change, PNG must contribute to international efforts to delink carbon emissions and economic growth.

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Figure 21. Relationship between the Millennium Development Goals and the Medium Term

Development Strategy. Source: Adopted from the Department of National Planning and Monitoring presentation by Koney Samuel.

The key elements of a comprehensive climate change policy response which were discussed at the conferences were: an empowered, well-managed and participatory OCCES; a comprehensive analysis of climate change options, focused on key sectors such

as forestry, energy, transportation and agriculture; an active and informed government strategy for UNFCCC negotiations, leading to a

equitable and effective post-2012 international agreement on climate change; a well-governed and transparent Climate Change Trust Fund designed to

thoughtfully manage the intake, investment and distribution of international and domestic financial resources for the benefit of existing stakeholder and future generations; and

a legal framework to address climate change risks, beginning with a climate change legislation that includes a statutory authority to oversee the development and implementation of climate change policy.

The proposed National Climate Change Strategy (NCCS) would provide a new direction as to how PNG can meet its obligation to the UNFCCC and its Kyoto Protocol while at the same time ensuring that national and provincial sustainable development goals are realised through the implementation of the National REDD Strategic Plan, the Adaptation Strategic Plan and the CDM Strategy. The NCCS would provide the framework within which climate change issues would be dealt with through programmes for reducing of emissions from deforestation and degradation (REDD), and provide the basis for which core principles for reduction of emissions would be addressed to reduce the net emissions of GHGs. For adaptation to the adverse effects of climate change, strategic principles would be addressed through the National Strategic Plan on Adaptation, by focussing on vulnerability parameters in order to build the resilience of communities to adapt and respond effectively to adverse effects of climate change. Key issues raised at the conferences included important policy matters that need to be considered in the NCCS, such as:

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clarity of mandates, roles and responsibilities of the office of climate change and

environment sustainability; clarity across institutions on the climate agenda; information sharing and dissemination by OCCES with stakeholders improving consultation with key stakeholders; benefit sharing mechanism for revenue generated from carbon trade; trust accounts established for all REDD projects; research requirements for on climate change science and data collection; procedures, processes and methodologies CDM; education curriculum for climate change for PNG; clarity of national climate change policy; mechanisms to control and prevent unsustainable development practices; human lifestyle and practices; establishment of a dedicated watchdog to monitor the establishment and

implementation of climate change policy and legislation on carbon trade; land-use policy; gender equity in the National Climate Change Advisory Board; clarity in benefit sharing opportunities from reforestation/afforestation cdm

projects from REDD and logging projects; dispute resolution mechanism; climate change day for PNG; climate change offices in provinces; need for clarity on REDD and logging projects; sectoral economic opportunities through forestry, land & agriculture and mining and

petroleum/gas; eligibility criteria of REDD projects; identification & validation of carbon trading participants; OCCES provincial representatives; indigenous knowledge; active awareness on carbon trading, CDM and REDD; resettlement programme; soil erosion control; and population control. In summary, participants on the climate change conferences held divergent views on the policy framework from each region. However, overall there was strong emphasis on the benefit sharing from carbon trading and REDD opportunities, while all participants shared the same sentiments on climate change mitigation and adaptation issues. The Highlands region reacted very strongly on REDD and the benefit sharing aspects of REDD in carbon trading. It is apparent that little awareness on REDD has actually reached the people. The Momase region also shared similar sentiments, with a strong focus on benefit sharing from REDD and carbon trading. The Southern Region and New Guinea Islands demonstrated a fair understanding of REDD and climate change mitigation and adaptation issues, as well as the opportunities that can be secured to address the impacts of climate change. The two regions are classified as climate vulnerable areas due to their geographic locations – they have many smaller, low-lying inhabited atolls, with much of the population at risk of the adverse effects of climate change. The conferences in the Southern Region and New

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Guinea Islands showed that more emphasis needs to given to education and awareness programmes to educate people to understand carbon trading, REDD and CDM, their processes, and the procedures to enter into these projects. While emphasis has been given to land-use and land-use change forestry, population and food security issues are also major concerns in the two regions. Overall, the four conferences identified key policy issues that need to be dealt with in addressing the climate change issue in the context of PNG. Climate change is a crosscutting phenomenon, and its effects can be devastating as it places the lives of many people at great risk, especially in areas categorised as vulnerable to climate change. Accommodating the view expressed at the conferences in the national climate change policy framework will help OCCES to devise a national climate change policy framework that is more suitable in the PNG context and environment, and representive of the views of all stakeholders. Three recommendations came from the conferences, namely: OCCES to take note of the issues that raised at the four regional conferences and

incorporate them in the national climate change policy framework; all stakeholders to take note of the issues raised and provide necessary inputs and

support in the preparation of the new policy framework; and OCCES to take note of the inputs from the stakeholders and make necessary

adjustments to the policy framework for submission to the Cabinet for screening and further deliberation on the new policy framework on climate change.

Agriculture Policies and Plans. Agriculture is the predominant occupation in PNG, with 82% of the population engaged in agriculture, including animal and fishery work. It is the source of sustenance, food security and income generation for most households. The agricultural sector is an important contributor to PNG‘s economy. In export terms, agriculture contributes on the average K1,200 million to PNG‘s economy, while food production for subsistence, food security and income generation is estimated at K5,000 million. The agricultural population is the one that is being, and will be, most affected by climate change. Agriculture sector is already feeling the impacts of climate change, and the agriculture sector agencies have combated or contained some of these impacts through adaptive interventions including in relation to the 1997 drought, potato blight in highlands regions in the late 1990s, cocoa pod borer in 2007/2008, coffee berry borer in 2008, the sweet potato scab, ongoing problems with fruit flies, New Castle poultry disease in 2007/8, increases in other pests and diseases, and erratic weather patterns, including rainfall. The agricultural population can also contribute to reducing the effects of climate change in PNG, if it is well informed and meaningfully engaged in responses to climate change.

The overall goal of the National Agriculture Development Plan (NADP) is to stimulate economic growth in the agriculture sector in all districts, through well-coordinated planning and implementation which promotes food security, income generation and poverty alleviation. It should be interactive and effective, and involve the full participation of the stakeholders. The NADP objectives are to: reduce costs of production and improve the quality of agricultural produce for both

domestic and international markets; increase income earning opportunities of those dependent on agriculture;

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allocate resources based on priority areas; ensure that development is socially, economically, and environmentally sustainable;

and improve the recognition of women‘s contributions to rural industries and increase

opportunities for women‘s decision making in agriculture. The NADP has six components, namely: (i) agriculture research, extension, information and training; (ii) food and horticultural crops development; (iii) tree and industrial crops development; (iv) livestock, apiculture and aquaculture development; (v) spice and minor crops development; (vi) gender, social and HIV/AIDS related issues; and (vii) regulatory and technical services. Many of these components are relevant to adaptation and/or mitigation. The National Food Security Policy is now a component of the NADP. Its goal is to ensure that all people of PNG at all times have access to safe and nutritious food in adequate quality and quantity to maintain a healthy and active life. The goal is to be achieved from food production and/or income generation from food as well as from non –food crop sectors, and it to be pursued through intensification of food production systems, diversification of production systems - crops, livestock, fruits and aquaculture systems; introduction of small irrigation systems and analysis and resolution of constraints to food security The Department of Agriculture and Lands is involved in adaptation. Along with its sector partners it is taking initiatives to contain and limit the effects of crop and plant diseases and insects such as potato blight, taro beetle, cocoa pod borer, coffee berry borer, New Castle disease of poultry and fruit flies. Activities include breeding for pest and disease resistance and tolerant crops, including drought tolerant crops. Agronomic practices are being targeted for high yields and post harvest technologies for quality and long term storage are being promoted along with new varieties and crops such as rice, African yam and potato. Health Sector Policies and Plans. Current Department of Health policies, plans, manpower, standards, guidelines and resource allocations in the National Health Plan 2001-2010 are focused towards addressing the present day health issues. Some of the issues or factors that currently burden health resources are: cultural and traditional practices - e.g. diarrhea, typhoid; modernization and urbanization - e.g. diabetics; and industrialization and development – e.g. injuries. Climate change is now recognised as an additional issue for the health sector – for example, changes in temperature and weather patterns can impact on the growth of microorganisms, as well as on natural disasters. As a result, emerging or re-emerging diseases can occur. Changes in temperature make it more conducive for the host of certain diseases to migrate to new locations, as is the case for malaria. The movement of certain poisonous snakes will be encouraged by temperature variations, leading to more snake bites. High temperatures result in more deaths associated with heat stress, the most vulnerable being children, the elderly and the infirm. Food scarcity allows for increased malnutrition problems as well as to increases in social problems such as stealing and tribal fights. Increases in food borne disease could be attributed to poor water supplies or no water.

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The health sector is responding as part of a restructuring initiative and will include climate change considerations in the National Health Plan 2011-2020. The Department of Health is also working closely with Provincial Health Authorities to monitor the issue and fostering cross-disciplinary partnership with stakeholders. This includes raising awareness and promotion of climate change and its implication for health. Existing infrastructure will be strengthened and staff numbers will be assessed to ensure adequate human resources are available to attend to climate-related issues such as natural disasters. Electricity Sector Policies and Plans. For some considerable time the electricity industry in PNG has been operating without an appropriate policy framework to guide its development. The provision and availability of electricity throughout PNG has been unreliable, and inadequate to meet demand. The issues of access, reliability and affordability in electricity supplies for the bulk of the population living in rural areas as well as for many urban dwellers have been long outstanding. As a result, electricity services have never reached the bulk of the population, especially in the rural areas. Rural electrification policy guidelines were developed in 1993 to address the low rate of rural electrification, high costs and subsidies to C-centres, high costs of grid connections, and the relative effectiveness of mission station electrification compared to government initiatives. The guidelines advocated decentralised diesel generators, very small hydro and PV. Despite these and more recent policy initiatives, rural electrification remains ad hoc and C-centres perform very poorly. The Energy Division Strategic Plan for 2004-2008 called for creation of a Rural Electrification Authority, with enabling legislation. A decision was made by NEC for the Electricity Industry Policy Task Force to be set up to develop and formulate an Electricity Industry Policy. The Task Force was charged with the responsibility of developing and recommending an appropriate Electricity Policy framework that would provide a clear direction on how electricity services can be provided effectively and efficiently throughout PNG. Following extensive consultations with the public and private sectors an Electricity Industry Policy was drafted. It reflects the fact that the situation in regard to production and consumption of electricity has changed along with the changes in the economy and the resulting changes in the electricity markets. This necessitated new policies for the electricity sector, to guide its development and its contribution to sustainable development for PNG, in harmony with other policies of government. The Policy is designed to address three strategic objectives of government: (i) improving access in the provision of electricity services; (ii) improving reliability of electricity supply; and (iii) ensuring that power is affordable for consumers. Access to electricity services in PNG is very low and essentially limited to major load centres only, which are mostly urban areas. In contrast, 90% of PNG‘s population live in the rural areas, and this portion of the population has very limited access to electricity. Access has been further constrained with the once long standing power regulation that mandated only PPL to sell electricity commercially. As a monopoly, PPL had little incentive to improve efficiency and increase output. Increasing the provision of electricity will reduce poverty, partly because the lack of access to electricity is a dimension of poverty in its own right, and partly because of follow on effects on other determinants of living standards, e.g. learning opportunities (through electrification of rural schools and dwellings), adequate health services (through powering of health centres), and increased income-earning

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opportunities (which are often dependent on access to power). The government‘s intention through this Policy is to increase the share of the population having access to electricity up to 70% by the year 2050. This policy objective is tied strongly to the level of general infrastructure development - roads and bridges, schools, aid posts and health centres, business investments, and so forth, and therefore the Policy will be implemented in accordance with the broader developmental policies of the government. The Policy also sets a minimum reliability benchmark at 98.5 per cent for electricity supplies in PNG. The benchmark represents PPL‘s normal performance for reliability across the system before the level of reliability fell in recent times. In addition, the Policy aims to address the problems of inefficiency and high costs of service provision to make electricity supplies affordable for all citizens and consumers of electricity in PNG. Thus the aim of the Electricity Industry Policy for PNG is to put in place structures and processes to achieve the government‘s goals of equity and efficiency in the supply of electricity and, thereby, assist in attaining the development goals of PNG. The goal of equity requires an electricity industry that provides affordable power to as many citizens as possible, while the goal of efficiency requires the supply of electricity in PNG in the most reliable, cost-effective and expeditious manner, to enhance affordability for low-income consumers; reduce cost for businesses which use electricity as an input; and, thereby, encourage broad-based economic growth to improve living standards at grass-roots level in PNG. REDD Policy and Plans. REDD is a component of the government‘s Environment Sustainable Economic Growth (ESEG) policy initiative which aims to identify development options that are environmentally and ecologically sustainable, and could provide long term income generation opportunities for landowners and revenue streams for the government. Relevant strategies include: (i) DEC New Strategic Direction 2007; (ii) DEC Reduced Emissions from Deforestation and Degradation Program Framework 2008; (iii) PNG National Biodiversity: Strategy and Action Plan 2007; (iv) Protected Areas Initiative 2006; (v) National Forest Development Guidelines 2008; and (vi), PNG Forest Authority Forestry and Climate Change Framework for Action 2008 – 2015. DEC‘s REDD Programme Framework covers five key work steams for development of an effective enabling environment for the REDD initiative, namely: (i) carbon assessment and monitoring; (ii) policy, legal and planning; (ii) communication, education and awareness; (iv) capacity development; and (v) national and sub-national demonstration activities. These general work streams are being developed into many sub-activities, each with budgets, milestones and timeframes. A national programme monitoring and evaluation framework will be put in place to assess all aspects of the REDD Program and provide lessons learned to improve implementation as the programme moves forward. The Climate Change Framework for Action for 2008 – 2015, prepared by the PNG Forest Authority, identifies the following areas related to climate change and REDD: implementing adaptation measures; contributing to migration of greenhouse gas emissions; improving decision making and good governance; improving the understanding of forestry and climate change; education and awareness; and

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partnership and cooperation. The Framework acknowledges a number of very important policy and related documents, including the PNG Road to Bali, the National Forest Policy and its Act (1991), the New Forestry Development Initiative and the Establishment and Operations of State Marketing Agency. The DEC New Strategic Direction 2007, provides a Management Arrangements and Strategy Development Framework for the MDG7 and REDD Policy. Since other government agencies need to participate in the development of the REDD strategies, interdepartmental coordination will be provided by OCCES. This is especially important in relation to integration of strategies designed to address the concerns of land users and resource owners. Fisheries. The PNG fishery is guided by the National Tuna Fishery Management Plan, which establishes an overall management structure and an application framework for the long line, purse-seine and pole and line fisheries, including license limits and total allowable catches. PNG has embarked on onshore investments in the tuna fishery. As a result, foreign and domestic access by purse-seine vessels is increasingly linked to commitment to onshore investment, notably in the form of tuna processing.

Water Sector. Water issues relate generally to drinking water supply and environmental maintenance, as there is no systematic irrigation and no current plans for hydropower investment. Water supply has received considerable attention in terms of review, policy development and law, but water resources management in general is badly neglected, despite the efforts of the Bureau of Water Resources. Water resources management in the broad sense receives limited resources and attention, as does management of flood hazards, catchment areas, forests and wetlands. Water quality degradation is severe in places, and water supply projects are attempting to react to this, but regulations with regard to wastewater treatment and effluent discharges are not effectively administered. Management practices are better in other areas, including handling environmental and social effects of projects, and allocation of water to consumptive use.

Water services are restricted to urban water supply, in which some good progress has been made. Major providers generally are autonomous and accountable, with private sector or commercially-based state enterprises in several towns. Service coverage and quality have been low, but are improving due to significant investment projects. Tariff structures are set to cover costs rather than manage demand; there is considerable cross-subsidization, and cost-recovery is only partial. Marginal profitability means that facilities may deteriorate without externally-funded investment; in many places, though, there are no subsidies, no revenues, and no service. General levels of education are low, so that there is little education about water issues, including the need for conservation. Regulation of wastewater discharge is provided for, but seldom implemented. As a result, conservation of water quality is adversely affected. Transport Sector Policy and Planning. The Department of Transport is the lead agency in transport sector. It has prepared the National Transport Development Plan 2006-2010 and stated its vision - to strive for excellence by working in partnership with the community to facilitate a well integrated and sustainable transport system for PNG – as well as its mission - to administer and facilitate the formulation of relevant policies and legislations to achieve safe, social, economic and environmentally sustainable transport

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outcomes for PNG. The Department has also prepared an Investment Plan for the same period. The core functions of the Department are to provide transport policy across all three modes, coordinate and monitor the implementation, and administer relevant legislation. The Department of Works and sector agencies implement the transport policies. Specific challenges in PNG include the growth in freight and passenger traffic; demand for transport services; cost of transport infrastructure, some of which is influenced by climate and weather related; degradation through road land use; and regulation to guard against transport pollution. The vision of the Department of Works is to provide and maintain a priority road network that will contribute to a holistic quality of life that can be embraced and enjoyed by the people of PNG with access to opportunities available in a modern global village. Its mission is to provide and maintain an adequate and safe road network in an accountable, transparent and environmentally sustainable manner in consultation with stakeholders to facilitate national development and embrace the standard of living as embodied in the constitution of PNG. Relevant policy documents are the MTDS and the National Transport Development Plan. Potential impacts of climate change on roads and bridges include the effects of rising temperatures. Increased precipitation and moisture in the air can cause softening of the road surfaces, allowing water penetration which leads to potholes and to faster deterioration of road surface. Variability of weather patterns in terms of wet/dry and cold/hot times throughout the year also impacts on the road structure in many different ways, leading to its deterioration and increases the cost of maintenance and other road related works. Sea-level rise will lead to inundation of coastal roads. This can be very disruptive to land transportation. More flooding and higher flooding peaks creates the need to raise roads above flood levels as well as the building of drains and cross drainage structures to accommodate the floods in terms of volumes of water. This influences the size of culverts and the height of bridges. Soil erosion and sediment build up during floods may result in the failure of road structures while scouring leads to the collapse of bridges. Sedimentation blocks drains and causes the collapse of cross drainage structures such as culverts. Increased wind speeds in coastal areas, mountainous and highlands areas can cause major problems for road transportation. Civil Aviation Sector Policy and Planning. The Civil Aviation Authority is a State-owned entity enacted under the Civil Aviation Act 2000. It operates as a business in civil aviation and provides a service as a contribution to the economic and social development of PNG, and in particular: (i) to promote and regulate civil aviation safety; (ii) to enhance safety, security, efficiency and service quality in the civil aviation system in a sustainable manner; (iii) to facilitate access to the air transport network; and (iv) to contribute to the safe, smooth flow of passengers, aircraft and cargo within the civil aviation system. The Authority plans to establish a section that will address climate change issues more effectively and develop clear policy guidelines on aviation in PNG. This would include monitoring and reporting, to ensure that there was full information collected on a consistent basis, including about fuel consumption and passenger and cargo miles flown. There is a need for a transparent system so that stakeholders have confidence that they are operating in an equivalent environment with their competitors. A concerted effort is

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needed to examine the GHG emissions issues in the aviation industry and to develop this work in the context of a global strategy. Disaster Risk Management. The NDO‘s National Disaster Management Plan has a nationwide response network and implementation strategy. However, this Plan lacks the communication component including disseminating information to the general public. An alarm in early 2007 triggered by the tsunami in the Western Province of the Solomon Islands clearly displayed the inadequacy of communication in PNG for disaster preparedness. Information is not readily available for NDO to use in informing the public on types of disasters and when it is expected. The communication between the provinces and Port Moresby also requires considerable improvement. The NDO is not equipped to predict disasters because the office is not adequately supported with trained personnel in this respect. However, information is collected from other responsible agencies for subsequent dissemination. This is a concern as it delays the process. Information sharing is also a concern especially when respective government agencies dealing with disasters operate separately from the NDO. The NWS is tasked to predict weather extremes and climate variability. However, it does not have direct links with the DEC's hydrological database to complete the predictions. This is especially important for flood forecasting as floods are a common disaster in PNG. The National Disaster Committee is tasked to: (i) supervise the national state of preparedness for emergencies and to report on it to the NEC; (ii) maintain the National Emergency Plan of the NEC; (iii) to assign responsibilities for disaster-related activities to departments and other bodies; (iv) coordinate departmental relief actions and collate national relief requirements; (v) advise the NEC if an appeal for international assistance is required; (vi) lay down guidelines for the preparation and format of provincial disaster plans; (vii) examine and where necessary approve all grants from national funds for emergency relief; (viii) raise public awareness at the effects of natural phenomena and measures which can be taken to prevent them; (ix) supervise the establishment of stock-piles of relief supplies; and (x) in the case of a disaster, to advise the NEC of all the circumstances and on the advisability of declaring a National Emergency under the Constitution The roles of the National Disaster Management Centre are defined by the Disaster Management Act 1984 (Amended 1987). The Centre acts as a Secretariat to the National Disaster Committee and undertakes all actions requested by the Committee. This includes coordinating stakeholders for all natural-caused disaster/emergency related matters, including assessments and relief supplies. It also collaborates with technical agencies to undertake studies and assessments related to hazard mapping, vulnerability assessment, risk analysis, mitigation and adaptation measures. Its functions related to funding, implementation, policy formulation, community-based disaster risk management interventions and regional disaster risk management interventions.

The South Pacific Applied Geosciences Commission (SOPAC) process of the High Level Advocacy Team has so far reportedly been unable to engage through the National Disaster Committee to initiate support for the Disaster Risk Management National Action Plan. This is because the internal conditions are not yet appropriate for this initiative. When either disaster risk reduction or climate change adaptation initiative is commenced, the opportunity should be taken to promote the concept of integrated risk reduction with a single focus on hazard and climate change risk management. Given the separation of the external funding streams for these activities over the past 10 years, this concept will

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require a significant adjustment in donor attitudes as well as an integrated internal cross sector commitment.

Current flood and drought warning systems overseen by the NWS are too general and need to be fine tuned through the development of river specific flood and drought analysis with assessment, prediction and warning systems. Appropriate adaptive measures can then be devised and implemented. There is a need for DEC to improve its water resources assessment system in order to collect near real time data to produce flood management manuals that are updated every five years. This has to be done in collaboration with the NWS, using its rainfall data. The reduction of personnel in the Water Resources Management Branch and especially in the Hydrological Unit of DEC has also contributed to the loss of data where in the past, this section collected tidal data from all major sea ports managed by the PNG Harbours Board (now referred to as PNG Ports Limited). b) Legal Frameworks Table 15 lists the Executive and Administrative Orders and Enacted Laws related to climate change, including disaster risk management. The ICCC regulates the energy sector. It licenses electric power, establishes electricity tariffs and controls maximum prices of some petroleum fuels. There is a national power tariff for those served by PPL. The ICCC is the only national regulatory body that acts as a consumer and business watchdog. The provisions of the ICCC Act apply to all businesses in PNG including government, where it engages in trade. The ICCC Act also applies to conduct outside PNG which affects the PNG market.

Table 15

List of Executive and Administrative Orders and Enacted Laws

Document Description

Disaster Management Act 1987

The National Disaster Centre was established by an Act of Parliament to coordinate all disaster situations and surveillance matters.

Regulatory controls for hazard management

i) Land-use planning and zoning; ii) Building codes and Performance standards; and iii) Land-use and building standards.

Letters or Memoranda of Agreement

Coordination between inter-governmental agencies and its network of agencies is often facilitated by formal letters or memoranda of agreement (or understanding). These define each agency‘s role in relation to the other and set out sphere of joint activity as well as areas of sole responsibility.

Forestry Amendment Act.

The streamlined laws will help the sustainable management of forests whilst maximising revenues.

Independent Consumer and Competition Commission Act

The objective of the ICCC Act is to enhance the welfare of Papua New Guineans through the promotion of competition and fair trade in the market, protection of consumer interests and regulation of prices and service delivery standards in respect of State owned entities.

Environment Act 2000

An Environmental Impact Assessment and pollution regulatory system to regulates developmental activities to avoid man-made disasters.

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ENVIRONMENT

REGULATORY FRAMEWORK

Proponent

Notification of Intention to Carry Out Preparatory Work

DEC

Confirmation of Criteria Level

LEVEL 1 LEVEL 2 LEVEL 3

Submission of Permit

Application

Submission of EIR

Environment

Inception Report

Environment Permit

Application

Assessment of EIR

Approval of EIR

Submission of EIS

Environment Impact

Statement

Environment

Guidelines, Code

of Practice, etc.

Assessment of Permit

Application

Assessment of EIS

(Referral, Advertise,

Public Conference)

Approval of EIS

Environment Permit

Minister’s

“Approval In

Principle”

E N F O R C E M E N T

Figure 22. The environmental regulatory framework.

c) Institutions The Department of National Planning and Monitoring endeavours to make a difference to national development, by adding real value through strategic planning through a mission which is to lead, plan, coordinate and facilitate sustainable development presenting a clear vision and direction for PNG‘s future. The Department has a role assist government to articulate, implement and realize its development objectives, through various development processes and systems. The organizational structure of the Department is shown in Figure 23. Recently the position of Programme Officer for Climate Change was established within the Social and Administration Division (Figure 24). OCCES was established to facilitate and coordinate a whole-of-government and all stakeholders approach to address the adverse effects of climate change, maximize the opportunities available from the global trade in carbon, and work in concert with the global community to reduce GHG emissions through a variety of international commitments, especially the UNFCCC framework. NEC Decision No. 147/2008 identified the following responsibilities for OCCES: provide sound and relevant advice to government of PNG on climate change,

environment sustainability, and carbon trading; devise appropriate policy frameworks consistent with government policy and PNG‘s

international commitments and obligations under the UNFCCC and related agreements, and implement the same to reduce emission from deforestation and degradation, and maximize benefits from carbon trading;

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Figure 23. Organisational structure of the Department of National Planning and Monitoring.

Figure 24. Institutional arrangements for the Climate Change Programme Officer within the Social

and Administration Division of the Department of National Planning and Monitoring.

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Figure 25. Institutional framework for the OCCES.

work horizontally and vertically with other government agencies to develop,

implement and coordinate mitigating strategies in REDD and related areas; and lead development, commercialization and management of carbon trading rights for

the government and people of PNG. NEC Decision No. 11/February 2009 stressed the need for clarity on climate change institutional process, and called for a national climate change strategy, national climate change legislation, a national REDD framework, a national adaption framework, and establishment of advisory boards, a climate change trust fund and a development partners forum. The institutional framework for the OCCES is shown in Figure 25. REDD will be coordinated from the Department of the Prime Minister though the OCCES. The REDD strategy is continuing to be developed. This includes DEC developing clear policies and effective legislation, with special consideration to communication, involvement and participation of key stakeholders, resourcing the REDD strategy, realistic benefit distribution, building efficient and effective capacity and establishing an accurate database. The OCCES is the Designated National Authority for the CDM. An office has been established, along with a four person secretariat. Its function is to handle registration of CDM projects. Only one energy project has been registered to date, but two more are in the pipeline (biomass CDM project in New Britain and a reforestation project in Eastern Highlands). One waste management is under development while two are under consideration. One transport project has been proposed. Eleven afforestation

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and reforestation project have also been proposed. The OCCES is assigning officers to the provinces, to assist in information gathering and with coordination. OCCES recognises the need to keep five important commitments, namely: to work collaboratively with the PNG community, other public agencies and

stakeholders, and the Government in addressing global warming or climate change and developing mitigation strategies to reduce GHG emissions domestically;

to be at par with global leaders in social infrastructure investment and working with global community in reducing GHG emissions as required of PNG by its international commitments and obligations;

to provide robust leadership and cohesive relationship with landowning communities, development partners and the government of PNG in developing and commercialising carbon trading for the benefit of all parties;

to be responsible, transparent, and accountable to the government and its stakeholders; and

to be performance driven, delivering the kind of results we are expected to deliver in their required quantity, quality and timeliness.

The mission of OCCES is to ensure the sustainable and environmentally friendly use of PNG‘s natural, industrial and economic resources in order to achieve its vision. Providing professional advice to the government and acting in concert with PNG‘s domestic and global partners, OCCES encourages, propagates and employs the use of safe and eco-friendly strategies aimed at reducing GHG emissions and protecting the Earth, while at the same fully maximising the opportunities and benefits derived from carbon trading. OCCES recognises the importance of performance targets in fulfilling its mission and achieving its future vision. Therefore it has set performance targets that it will work towards and use to measure its performance. The long term targets are to reduce 50 % of GHG emissions from deforestation and degradation while at the same time contributing 250 % to the GDP through carbon trading by 2025 and achieving carbon emission neutrality while at the same time contributing 1000 % to the GDP through carbon trading by 2050. It will also inform, educate and enlighten the people of PNG by utilizing all communication mediums to help them better understand and appreciate the adverse impacts of climate change on aspects of people‘s lives, particularly social relationships, cultural values, land use, food security, water use, agriculture and health. The Office will also enable the people of PNG to always live in a state of preparedness to quickly adapt in the face of arduous social, economic and physical challenges brought on by unpredictable and hostile weather patterns and systems. OCCES has established a number of key result areas (KRAs), namely: KRA 1: Establishing Overall Permanent Capacity; KRA 2: Establishing the Operational Capacity of the DNA; KRA 3: Strengthening Communication and Dissemination of Information on Climate

Change and Carbon Trading; KRA 4: To formulate a National Strategic Plan on Climate Change and

Environmental Sustainability; KRA 5: Draft a Climate Change Act and submit for NEC endorsement for approval

by Parliament;

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KRA 6: Create linkages with other core Divisions within the Office to prepare policy submissions, formulate mitigation and adaptation strategies, carbon trading and accounting strategies, and all other policy responsibilities;

KRA 7: Developing a National REDD Strategy for Carbon Emissions Mitigation; KRA 8: Establishing a National Carbon Assessment and Monitoring System; KRA 9: Developing and Strengthening Climate Change Adaptation Measures; KRA 10: Developing and Strengthening the Use of Clean Technology and Industrial

Practices; KRA 11: Securing and Consolidating Finance for Mitigation and Adaptation; KRA 12: Preparing and Consolidating PNG‘s position in the Post-2012 UNFCCC; KRA 13: Preparing and Consolidating PNG‘s Position in International Carbon Trade

Negotiations; KRA 14: Development of a Benefit Distribution Regime for Carbon Trading; KRA 15: Developing Designated Projects for Carbon Trading; KRA 16: Marketing and Promoting PNG‘s Carbon Stocks; KRA 17: Establishing and Strengthening Financial Management; KRA 18: Establishing and Strengthening Human Resource Management; KRA 19: Establishing Information Technology Systems Support; The NWS transmits valuable weather data and information twice a day to clients by fax, and e-mail is most often used as a secondary transmission mode. This has been very costly in staff time dedicated to faxing and e-mailing weather data and other information, as well as being expensive in terms of long distance telephone charges. As a result, the NWS is developing a web site to serve clients such as newspapers, radio and television stations, local and international aviation and maritime offices and agricultural agencies. Having information accessed by clients via the Internet is cost efficient and sustainable. As with many other meteorological services in the Pacific, the PNG NWS has very limited financial resources. Staff are presently working at having a web site fully established. The NWS strategy for addressing climate change calls for: (i) credible and relevant hydrological and meteorological information in order to support better resource management, planning and decision making; (ii) advocate for improved capacity and capability for monitoring, prediction and timely dissemination; (iii) improved data coverage and adequate networks to address the impacts of present day extreme weather and climate events; and (iv) an appropriate data collection network for improved management of natural resources of coastal habitats, land and water resources, and measures such as disease vector control and improved spatial planning. The Energy Division of the Department of Petroleum and Energy is responsible for energy policies and plans, data collection and analysis, and advice to the government on energy sector issues, including oil and natural gas exploration and development. A 36,000 barrel per day refinery began producing fuel for the local market in 2004, with some exports planned to neighbouring countries. In practice the Division concentrates on electric power, although PPL, the national electricity utility, undertakes most power sector planning. Extremely limited resources have seriously hampered data collection and analysis. Data collection for RE all but ceased in the mid 1980s. The Division is also responsible for the rural electrification programme. The provincial governments have responsibility for maintaining the government‘s stand-alone rural generation facilities (C-Centres), although most of these centres have fallen into poor condition and disuse since their inception.

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DEC was established in 1985 and vested with the powers to protect the environmental values of air, water, soil and biodiversity and the sustainable use of the natural resources as mandated by the Fourth Goal of the National Constitution - PNG‘s natural resources and environment to be conserved and used for the collective benefit of all and are replenished for the benefit of future generations. DEC‘s mission is to ensure PNG‘s natural resources are managed to sustain environmental quality, human well being and support improved standards of living. DEC is responsible for management and protection of the country's water resources, pollution control, and water related laws and regulations, and their enforcement. Its hydrological survey branch is responsible for monitoring surface water and rainfall stations. DEC's activities are severely constrained by lack of funds. Figure 26 presents DEC‘s organisational chart.

Ministry

Secretary

Environment Protection

Regulatory Services

Industry Services

Sustainable Environment

Programs

Marine Ecosystems

Terrestrial Ecosystems

Policy Coordination

and Evaluation

PolicyInformation and

Science

Figure 26. Organisational chart of the Department of Environment and Conservation.

The mandate of the PNGFA is to manage PNG‘s forest resources, undertake acquisition of forest resources for development, to distribute benefits through royalties and levies with 95% going to landowners, and the replenishment of the forest resource through plantation establishment, enrichment planting and assisted natural regeneration.

The following institutions are responsible for forest monitoring and forest inventories: (i) the PNG National Forest Authority; (ii) the Forestry Research Institute; (iii) the University of PNG, through the UPNG Remote Sensing Centre; and (iv) DEC. In the area of forest law enforcement, the PNG National Forest Authority is responsible for implementing the Forestry Act. This Act enabled preparation of the National Forest Development Guidelines. These give strong guidance to the National Forest Plan which underpins all forest-based activities. The PNG National Forest Authority and DEC are responsible for forestry and forest conservation, including creation of forest reserves under the Forest Act, wildlife management areas, National Parks, reserves, sanctuaries under the National Parks Act, the Fauna (Protection and Control) Act and the Conservation Areas Act.

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MINISTER

Co-opted

Members

National

Disaster

Committee

Provincial

Disaster Com

NEC

Sub

Committees

NDCentre

Provincial

D/Centre

PNG is rich in natural resources including water. However, due to a lack of both human resources and political interest, and also to underlying financial constraints, it has not been able to achieve sustainable development in the water sector. The water sector in PNG is fragmented and poorly coordinated. The Water Resources Act (1982) regulates the use of water. Water supply is administered by the Water Board, which has legal authority for cross-sector activity. It is a statutory organization responsible for water supply and sewerage in 11 towns throughout the country, though not the capital city. Since 1987 development and management of rural water supplies and sanitation have been delegated to the Department of Health. The Geological Survey of the Department of Mineral Resources is responsible for providing advice on groundwater exploration, assessment, management, and protection of resources.

The organisational structure for disaster management is shown in Figure 27. The National Disaster Office was created through an Act of Parliament (The National Disaster Management Act) to coordinate disaster risk preparedness and response, in partnership with relevant government agencies and NGOs. The Office is administered by the NDC, chaired by the Secretary for the DPLLGA. Figure 27. Organisational structure for disaster management. In 2005, NDO launched a National Disaster Mitigation Policy. This policy is based on the ―One Step Ahead‖ approach, promoting proactive planning and implementation of mitigation in disaster and risk management. The Policy will be implemented by stakeholders, including the NDC, the National Disaster Office and disaster management stakeholders at the national, provincial and community. d) Coordination DEC has developed a Management Arrangements and Strategy Development Framework for the MDG7 and REDD Policy Initiatives, to ensure coordination across forest and agriculture sectors as well as rural development (Figure 28). The Framework was approved by NEC in 2007.

For disaster risk reduction, the coordination function is the role of the National Disaster Centre (as part of its weakly mandated disaster risk management function), championed by the NDC which is required to approve and report on the National Disaster Centre

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annual work plan. Since the functions of both the National Disaster Centre and the NDC have become marginalised in recent times, there is little coordination or promotion of this function across government agencies.

Figure 28. Management arrangements and strategy development framework for the MDG7 and

REDD policy initiatives adopted from the DEC New Strategic Directions.

The relevant policies for climate change adaptation are not yet in place. A possible mechanism for addressing this gap is the recently established OCCES. While there has been activity between departments on climate change mitigation and carbon credits, there has been no capacity for adaptation activity and no coordination between government agencies in recent years.

The situation described above highlights the urgent need for a well-articulated and integrated disaster risk reduction and climate change policy, including clarification of the respective roles of the existing entities as these functions become more of a continuum, rather than distinct activities. OCCES is currently preparing a Memorandum of Understanding between key government agencies (PNG National Forest Authority, DEC and the Department of Agriculture and Livestock) for collaboration to implement initial activities on addressing climate change issues in the country. The government is currently reviewing the three climate change advisory boards (the National Climate Change Advisory Board, its Technical Advisory Board, and the Technical Advisory Board of the Carbon Trade Trust) in order to provide clarity on roles and responsibilities. 8. Policy, Planning and Budgetary Processes The MTDS 2005−2010 has widespread internal and external support, following an extensive programme of consultation conducted throughout the country and with PNG‘s development partners. These took place amidst widespread concern over PNG‘s deteriorating economic and social development performance during the 1990s and the early part of the present decade. The MTDS consultations revealed strong agreement in PNG on the need to concentrate on the basic prerequisites for broad-based economic

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growth and improved services. The MTDS therefore reflects both a focus on the basics and general agreement in PNG on the highest priorities. Importantly, and unlike previous such plans, the MTDS enjoys strong PNG ownership, encompassing politicians, civil servants, and broader civil society. The MTDS includes sound expenditure priorities and an ambitious but appropriate governance agenda. It also outlines key supporting policies and measures to create an enabling environment for development, focusing on political and policy stability, the rule of law, the business environment, protecting the vulnerable and disadvantaged, gender equality, and protecting the natural environment. A number of crosscutting governance strategies and programmes are highlighted as being essential to effective MTDS implementation. A medium-term fiscal strategy and medium-term debt strategy outline the government‘s approach to funding the MTDS. The public expenditure review and rationalization process is seen as a vehicle for generating the savings and cost-efficiencies necessary for successfully implementing the MTDS. However, the MTDS is essentially a policy document, without strong links to sector or thematic implementation plans or concrete targets or indicators. MTDS implementation will be challenging, requiring concentrated effort. Some progress has been made by the government to redirect expenditures toward priority areas. Three key implementation measures being undertaken by government, with support from development partners, are: (i) implementing a whole-of-government performance-management framework that is owned by the PNG Government and that donors can support and adopt; (ii) developing clear sector and thematic operational plans linked to medium-term expenditure frameworks; and (iii) further strengthening government–development partner coordination toward effective MTDS implementation. The Department of National Planning and Monitoring is making progress with identifying development indicators for the MTDS, while the Department of Prime Minister and the NEC are moving ahead on institutional performance and reform. Currently plans and budgets are formulated at the business unit level and promoted through the budget process by their respective Departments. For cross-sector activities, individual departments are expected to budget for their separate components. There is little experience of cross-sector budget initiatives. In the future, promotion of cross-sector budget initiatives by Departments and Ministers will be important if funding allocations for disaster risk reduction and climate change adaptation initiatives are to be reflected in the national budget stream. a) Funding The Cabinet has approved establishment of a Carbon Trade Trust Fund. It has the potential to be a significant source of funding for both adaptation and climate-related disaster risk reduction. The Trust will receive income through a levy on mitigation, to fund adaptation. The Trust will have an Independent Board and a Technical Advisory Board. Annex 1 provides information on international funding sources for mitigation and adaptation. b) Mainstreaming Risk Reduction The conditions for the mainstreaming of risk reduction activities do not exist and the government is currently showing little commitment to this area of activity. There has

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been a lack of acceptance at the government level that disaster and climate change risk needs its attention. The recent establishment of the OCCES creates an opportunity to address this. The initiative itself is not a sufficient driver and clear commitments and championing of risk reduction would provide a basis for starting. It is fundamental that sustainable risk reduction cannot be achieved without engagement and commitment from the government. Exacerbating this situation is a dysfunctional disaster management arrangement under the NDC. Until this is addressed the conditions for addressing disaster risk reduction do not exist. There is no evidence of the private sector filling these gaps and driving change in government thinking on climate change adaptation and disaster risk reduction. In the regulatory vacuum which exists around these issues the responsible departments report that the private sector is exploiting the weaknesses in the system rather than filling the gaps. The 2006 World Bank Policy Note, ―Not If But When‖, defines mainstreaming of risk management as the inclusion of natural hazards and climate change considerations into: national development plans and strategies and sectoral and spatial (including

community level) plans – with budget commitment; policies, regulations and codes of practice – with enforcement; and programmes and projects – with appropriate hazard assessment and design. It identifies pre-requisites for mainstreaming natural hazard risk reduction through: a strengthened national enabling environment with:

o accountable performance budgeting; o inter-sectoral coordination mechanisms; o appropriate institutional frameworks; o staff capacity and national champions ; o enforceable legislation, standards and codes; and

supporting decision-making with: o public awareness to support initiatives; o context specific information targeted at decision-makers; o relevant analysis, mapping and risk evaluation instruments; and o implementation support tools.

In PNG, the separation or silo effect between departments and agencies, and lack of co-ordination, provide a challenge for mainstreaming risk reduction. For example, the NDC appears to be marginalized within governmental operations. Both government and non-government sector bodies note that there is no current co-ordination mechanism for climate change adaptation. As a result, mainstreaming of risk reduction from disasters and climate change is not occurring. For example, while land use legislation requires consideration of hazards and environmental impacts, these inputs are not sought from the government hazard agencies or DEC, in either national or provincial land-use planning initiatives. As another example, design manuals for roads and infrastructure derive from the 1980‘s and are in need of upgrading for local conditions. The Department of Works advises that consultants make their own interpretation of design parameters, often without reference to local hazard information. The Water Resources Management Branch of DEC noted they have not been approached by infrastructure consultants for hydrological data in the past two years. There are reports of new roading developments being washed out by rainstorms or landslides – even for donor funded

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projects which are specified to be risk and climate proofed. It appears that in the provinces design manuals are not used at all. Achieving mainstreaming by following the guidance in the Policy Note is clearly going to be a long term and multi-faceted process, with a number of possible starting points. Any starting point should include strong national government support, some level of existing capacity and enthusiasm to build on and a commitment to a policy framework on which to build or enhance an institutional set-up. In PNG there is currently no policy framework within the disaster risk reduction or climate change adaptation areas to develop the planning and institutional arrangements to support these conditions for mainstreaming. Most of these needs were identified in the PNG Initial National Communication in 2000. None of them were explicitly identified in the MTDS 2005-2010 and there are no coordinated initiatives in current sector budgets. This represents an important gap to be addressed by the proposed national climate change strategy. In terms of disaster risk reduction there is a foundation to build on. A champion to promote risk reduction initiatives has only recently emerged in the person of the Prime Minister, though there has been a lack of commitment to a policy and institutional framework. Thus there is more optimism now that the potential to facilitate the development of the NDC framework, including into the provinces, could be realised. The provincial arrangements should provide for both climate change adaptation and disaster risk reduction activities, in an integrated platform.

The obstacles identified above are not insurmountable. They can be reasonably readily addressed, given the political and strategic commitment to do it. However, it is also important to recognise that without that commitment the situation is unlikely to improve – even if all of the funding aspects are addressed. Initiatives should therefore pursue a broader-based area.

9. Working with the Private Sector and Civil Society PNG has tremendous potential to harness the benefits of a resilient civil society with strong social capital based on enduring cultural and social traditions, and drawing on bountiful natural resources. Yet, the country remains significantly underdeveloped and faces considerable challenges in achieving these ends. It is largely a rural society and many of the country‘s residents do not enjoy access to basic services. Rather, they face great economic and social hardship and are offered few opportunities to improve their own situation. a) The Private Sector While the private sector in PNG is made up of many very small and informal enterprises, it nonetheless accounts for 80 percent of consumption and fixed investment, 95 percent of gross domestic savings, and more than 90 percent of employment. More than 90 percent of private enterprises are micro- and informal enterprises. Their main economic activity is subsistence and market-based agriculture. These enterprises supply almost all domestically produced food, about 70 percent of coffee, 65 percent of cocoa and copra, and 35 percent of palm oil. They also dominate the livestock sector (pigs and chickens). The formal private sector has two parts - large, foreign-owned natural resource firms that operate on an enclave basis in the mining, petroleum, and forestry sectors, and a non-

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mining private sector consisting mainly of small enterprises. Most of the small enterprises are engaged in manufacturing, construction, and trade in urban areas. Rural enterprises and natural resource companies account for more than 65 percent of private output. Within the non-mining formal private sector, manufacturing activities account for about 10 percent of private sector output. More than 80 percent of private sector jobs are in rural areas, mainly in non-wage agricultural activities. About 35 percent of these jobs involve subsistence non-cash farming and fishing activities and a few local shops trading household goods and farm tools. Wage employment accounts for just 12 - 13 percent of total employment. Within the private sector more than 50 percent of wage employment is in agriculture, while construction, trading, and manufacturing each account for about 14 percent. Most wage employment is in small enterprises. The extractive sectors and rural enterprises that produce cash crops are export oriented. The cash crop sector has a well-organized, private supply and marketing chain. Outside the cash crop sector, rural production is oriented exclusively toward meeting household and local demand. Inter-island and inter-provincial trade in non-exported agriculture are limited. Foreign ownership is extensive among medium-size and large private firms and is fairly widespread across all economic sectors. Most minerals, manufacturing, wholesale, and transport and distribution activities are managed by foreign-owned enterprises. Large-scale retailing is also dominated by foreign enterprises. Australia is the dominant source of foreign direct investment, but recently some East Asian countries have shown interest in developing PNG‘s natural resources. In general, the economy is highly dependent on imports for manufactured goods. The industrial sector - exclusive of mining - accounts for only 9 percent of GDP and contributes little to exports. Small-scale industries produce beer, soap, concrete products, clothing, paper products, matches, ice cream, canned meat, fruit juices, furniture, plywood, and paint. PNG is a challenging environment in which to do business and is likely to remain so for some time. Many of the most important constraints cited by businesses themselves, such as the poor condition of transport and communications infrastructure, law and order problems, corruption, administrative inefficiency, small domestic market, relatively high wages and high transport costs, will require years of sustained effort to overcome. Improved systems for the economic use of customary land can proceed only slowly on the basis of focused PNG leadership and extensive consultation. Nevertheless, specific reforms to the business environment can have a material impact in the short term, as shown by the reforms to PNG‘s financial sector in 2000, which improved commercial bank performance and expanded credit to the business sector. Further specific reforms could make a positive impact. A future challenge for the government is therefore to set out and implement a medium term roadmap for improving PNG‘s business environment, with development partner support as necessary. Scope for private sector participation in delivering public goods and services is limited at present, except in association with enclave industries such as mining. Policy in this area is somewhat unclear, as are plans for the future ownership, investment, and management arrangements for PNG‘s major utilities. REDD. For REDD to effectively generate funding for forest protection through the carbon market, the private sector must be fully engaged. The private sector has the capacity for strong implementation of action on emissions reductions, but requires a framework to

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operate within and guidance if it is to be effectively engaged. REDD requires significant financial investment. The private sector is in the best position to make the required large scale investments, but local communities should be engaged and benefit. The carbon market can work to engage local communities and drive private sector investment if designed correctly. Adaptation and Disaster Risk Reduction. Society has been equipped by science with the knowledge needed to avoid serious harm being inflicted by climate change on the most vulnerable groups of people. Business can use the tools and mechanisms provided in order to address this growing threat and in a way that strengthens sustainable development. The private sector can play an important role through investment, financial flows, and technology development and deployment. In PNG, private sector adaptation and disaster risk reduction mainstreaming is of urgent importance. Public services are increasingly being privatized, but without the introduction of requisite risk management considerations. The need for such mainstreaming is reinforced by the private sector internationally giving increasing recognition to climate-related risks, as evidenced by the emergence around the world of several climate change investor groups to confront business losses attributed to climate change. Business can make an important contribution to efforts to adapt to the impacts of climate change. A strong partnership between governments, international institutions and the private sector is needed in order to mobilize the capital and technology needed to prepare the world for the impacts of climate change. Despite mitigation efforts, the impacts of climate change are already being felt by PNG, and will worsen in the future. PNG needs substantial investments in disaster risk reduction and climate change adaptation if it is to avoid an additional burden to fall on its already strained development efforts. Led by governments, these investments represent a significant business opportunity. While government leadership on adaptation is emerging, and organizations have progressed in understanding the impacts of climate change as well as developing some tools and mechanisms to enable a strong response, much of the private sector has to date been standing on the sidelines, awaiting a strong policy framework to be put in place. However, a significant number of companies in PNG already undertake actions that enhance adaptive capacity and expand the coping range of communities. b) Participatory Planning The biodiversity of PNG makes up at least 5% of the world total, making it one of the most significant countries in the Asia-Pacific region for conservation action. It has extensive, high quality natural habitats and ecosystems, ranging from alpine grasslands to lowland rainforest and coral reefs. Over 70% of the country is under relatively unmodified forest cover and its inshore marine systems are unparalleled in their quality and diversity. While PNG's environment remains relatively intact, it is under increasing threats from a range of sources. Industrial logging has trebled since 1993; current concession allocations total three times sustainable cutting levels. A growth in mining operations has left many rivers polluted and social patterns dramatically changed. Unsustainable fishing

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is undermining subsistence fisheries. Plantation agriculture, particularly oil-palm, is increasing pressure to clear community-owned forest lands. In most cases, community control over development is minimal and benefits almost non-existent. Communities are looking for ways to retain control over their natural resources, to protect the subsistence base on which their survival depends and to find methods for raising cash without destroying their environmental capital. Many local communities are interested in using appropriate measures - site-specific, species or habitat-based - to safeguard the natural productivity and diversity of their lands and coastal sea areas for sustainability. In the 1970s some national parks were gazetted, meaning local communities were generally excluded. Management neglect and community resentment has resulted in degradation of park areas. This model is now seen as unviable in all but a small number of cases. Wildlife Management Areas (WMAs) and Conservation Areas (CAs) are now seen as more acceptable to landholders, while being useful for conservation and sustainable development. These two types of conservation area allow communities to develop regulations and management structures for protection and sustainable use of their own lands, with support from outside agencies. The government of PNG has a target of placing 20% of the country under some form of conservation management. Twenty four WMAs have been declared, covering 9,869 sq km (2% of the country). DEC received many requests from local groups wanting to establish WMAs or similar schemes. Increasingly, local communities in PNG are becoming frustrated with the perceived lack of effective development and progress in the rural areas and are demanding greater control of their own resources and local developments. Provincial and Local government reforms have provided an opportunity to address this issue, and in the process initiate and establish sustainable development concepts in the planning and implementation framework of the country at large. However, there are large differences in the value placed on natural resources, as illustrated in Table 16.

Table 16

Estimated per ha values for Various Forest Uses in PNG Source: WWF

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Legislation and government policies concerning natural resource management place traditional resource owners and local communities in a central role. However, methods for planning and implementing local initiatives in natural resource management or conservation are poorly developed. For the past decade very little support has been given to local groups wanting to pursue some form of sustainable development or introduce locally important environment or biodiversity protection measures. The country‘s intended system of protected areas or conservation areas is not working, largely because there is inadequate response to community interest. Many opportunities to protect sites and species of high conservation importance are therefore lost. Harmonization of Donor Contributions The Development Partners Climate Change Task Force held its fourth meeting in May, 2009. Membership includes representatives of the PNG Forest Authority, OCCES, DEC, Department of Agriculture and Livestock and the following development partners: Asian Development Bank, Australia, European Union, Japan, United Nations Development Programme, the United Kingdom, the United States of America and the World Bank. In order to improve coordination, the development partners are currently undertaking an inventory of their climate change assistance initiatives in PNG. The output will be a climate change activity matrix. Papua New Guinea's management, planning and aid coordination systems are facing a huge growth in the volume of assistance being received and the number of organizations requiring coordination around the priorities articulated by government in the MTDS. In order to help align aid inflows with the priority needs the Department of National Planning and Monitoring has established a Development Assistance Database, against the background of the recent local commitment of the Paris Declaration. The database will be used to track regular development projects. The database is an aid management solution promoting good governance, public accountability and transparency. The information provided by the database is supplied by the many donors and implementing partners assisting the development of PNG. The existence of the data and information in the database is a form of social responsibility and accountability of all parties involved in the development of PNG, to the people of PNG and the international community. The Department of National Planning and Monitoring is encouraging all Development Partners and implementing partners to ensure that their data is current and accurate to the database will provide a true and fair picture of the development process of PNG. The database is currently being populated by Development Partners. 11. Monitoring and Evaluation Across PNG on-going monitoring necessary to inform risk reduction initiatives, whether from disasters or climate change, is considered to be seriously deficient. While this is clearly understood within individual agencies (both hazard agencies and client agencies who have a need for such information), there is poor acknowledgement of this issue at the government strategic level. Identified aid programmes to strengthen monitoring networks (e.g. the European Union funded project for seismic and hydrologic monitoring) will have little long term impact if shortfalls in operating capacity and requirements for funding and information systems (including tools for analysis) are not also addressed.

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There is a need for institutional strengthening to ensure hazard and vulnerability information is available to inform future risk reduction decisions. With degraded monitoring and analysis capability across all hazards, including potential climate change impacts, it is difficult to prioritize the allocation of appropriate resources. There is significant historical data available which could provide in a relatively short time an overview to inform a minimal monitoring and vulnerability analysis programme. This is especially the case for the high and growing risk of drought conditions and the large population exposure to critical water shortages. Decision making is hampered by the lack of a common database system (with geographical and terrain model capability) for storing hazard monitoring data, including access to analysis tools for identifying trends, vulnerabilities and risks. All hazard sectors reported an inability to readily store and access monitoring data for analytical and mapping purposes. There is also a shortage of adequate data monitoring networks to meet future needs for vulnerability and risk assessments. Across the range of geophysical, hydrological and climatic hazards, the absence of data collection ensures that future efforts at disaster risk reduction and climate change adaptation will be unfocussed, unless concerted efforts are made to upgrade the networks. Apart from the proposed monitoring and evaluation initiatives for REDD, and project-level monitoring and evaluation, the only formal policies, strategies or work programmes related to assessing the effectiveness and efficiency of PNG‘s climate change and disaster risk management initiatives are those specified in the OCCES Draft Corporate Plan 2009-2013. This includes 19 KRAs (see above), each with planned outputs and performance targets. OCCES uses its corporate strategies to achieve specific outputs necessary to achieve the KRAs. It monitors performance using these strategies and uses the performance indicators to determine whether the outputs pursued through those strategies have been achieved. 12. Proposed Framework for a National Climate Change Strategy and Action Plan The preceding stocktake suggests a proposed outline for a climate change strategic framework and road map. These are the next step in a process leading to a national climate change strategy and action plan. The proposed content of the Framework is as follows: Executive Summary A succinct summary of the report, including highlighting the key elements of the Framework, its current strengths and weaknesses, information gaps and other issues that have acted as barriers and recommendations. Introduction Background to the strategy formulation process, as well as an outline of the content of the Framework and details of the stakeholders and processes involved in its preparation.

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Policy and institutional context – international, national, provincial Description and analysis of the broader policy environment within which the responses to climate change will operate. Examples include the UNFCCC and the CDM at international level and the planning and budgetary frameworks at national and provincial levels. The related, high-level institutional frameworks will also be described, and evaluated in terms of their relevance to responding to climate change. Understanding – science and anecdotal evidence A robust climate change strategy must be built on a sound knowledge base; this section will show that the issues of climate change are both pervasive and urgent. Climate change has the potential to destabilise economic growth, exacerbate food and water shortages, erode recent hard won gains in poverty reduction and hinder progress towards the Millennium Development Goals. It is already having repercussions for PNG society, the economy and for the country‘s natural ecosystems. This section will present PNG-focused information on recent and projected changes in climate, trends in greenhouse gas emissions, opportunities to increase carbon sinks along with the financial, economic, ecological and social co-benefits, current and anticipated impacts of climate change, the resulting vulnerabilities, and coping experiences at national and community levels. In each case the policy implications will be explored. Principles A series of principles that might help frame the eventual preparation of the national climate change strategy will be presented, along with reasons why each principle might be adopted, as well as the policy implications. A possible example is ―responding to climate change requires a whole-of-government as well as whole-of-stakeholder approach‖. Key policy objectives and strategic priorities This and the following section are at the core of the Framework. This section will draw on the understanding and principles documented earlier to inform identification of possible key national policy objectives and strategic priorities related to mitigation (including REDD), adaptation, financing and identification and uptake of appropriate technologies. Identification of possible objectives and priorities will also be influenced by higher-level national policies and plans as well as the content of the draft ―National Climate Change Policy Framework for Papua New Guinea‖ and other documentation. The policy options will be assessed from the perspectives of global environmental benefits, national interests, and community needs, among others. This will include assessing the potential for reducing emissions of GHG in sectors such as energy and mining and further developing renewable energy resources, as well suggesting options for performance targets and indicators that might be used to assess implementation of the national climate change strategy. The section will elaborate options for an overall goal and long term objectives for the government in addressing climate change. One such objective could be the integration of climate change concerns into national development planning and related processes.

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Sector policies and linkages As noted above, this section is the second main area of emphasis for the Framework. The sector-by- sector analysis will focus on how best to ensure each sector develops high resilience to climate change as well as how it can take advantage of any opportunities climate change presents to the sector. This will include assessing the potential for emissions reduction in sectors such as energy and mining as well as identifying renewable energy options and potential. Where a sector, such as forestry, already has a well developed framework for action, emphasis will be on identification of opportunities to improve alignment with the overall national policy (including performance targets and indicators) and to minimize any adverse consequences of policy implementation for other sectors, as well as for the country as a whole. Where a sector, such as health, is just beginning to develop a climate change policy, the main areas of climate sensitivity for existing policies and plans will be identified, along with how these might be strengthened in order to increase the resilience of the sector to the anticipated changes in climate. Actions that might be taken to exploit any benefits of climate change will also be identified and assessed. Suggested measures will be consistent with national policy, including avoiding adverse effects on other sectors. Again, possible performance targets and indicators will be identified and assessed. In terms of planning for climate change, most sectors are further advanced than health, but not as well prepared as forestry. In these instances the focus of the Framework will be on identification of the main needs and measures to further increase the resilience of the sector to climate change as well as how any benefits of climate can be captured by the sector. For these sectors the Framework will also identify areas needing improved alignment with the overall national policy (including performance targets and indicators) and where adverse consequences of policy implementation for other sectors need to be addressed. Legal, institutional, planning and budgetary frameworks This section will address the key requirements of the enabling environment if responses to climate change are to be effective and efficient. For example, harmonization of both the planned and actual responses with the national legal, institutional, planning and budgetary frameworks national is critical to ensuring strong coordination across sectors, as well as between national, regional, provincial and community initiatives. Thus the focus of this section will be on how to maximize the alignment between development and implementation of the climate change strategy and the wider development planning and related processes. Participation, ownership, partnership and cooperation The stocktake report identified numerous challenges and opportunities related to the full, effective and equitable engagement of government, the private sector and civil society in formulating and implementing responses to climate change. These will be explored in a more comprehensive and strategic manner, with the key issues and options being identified.

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Research, development and uptake The challenges and opportunities presented by climate change are continually evolving. As a result, ongoing efforts are required to ensure that reviews of, and decisions related to revisions and implementation of policies and plans are always well informed. Mechanisms must be in place to ensure the effective flow and application of targetted and user friendly information and advice, both from the international community to stakeholders in Papua New Guinea, as well as between stakeholders and key players at all levels within the country. A similar case exists for identifying and addressing technology needs for more effective mitigation and adaptation interventions. The Framework will identify options for the identification and uptake of imported, locally developed and traditional technologies. Capacity - needs and development, including awareness, education and training The need for effective responses to climate change places increasing demands on existing capacities, especially those related to human resources. Climate change also brings requirements for new knowledge and skills, as well as motivation to take the required actions. This section will build on the findings of national capacity assessments and identify how shortfalls in current and future capacities might best be addressed. Performance monitoring, evaluation and reporting Monitoring and evaluation are both key to being able to assess the success of responses to climate change, relative to national, sector and other goals and objectives. This provides an opportunity to upscale and replicate the successful intervention and to modify or halt those activities where achievements are inadequate. This section will outline the options for a fully integrated performance assessment system that operates at national, sectoral and provincial levels and is closely aligned with national planning and budgetary processes. Road map action plan Finally, guidance will be offered on how to move beyond the Framework to preparation of a national climate change strategy and action plan. Emphasis will be placed on activities, roles and responsibilities, rather than on a timetable. The latter is the responsibility of Government. 13. Requirements for Additional Information and Assessments The following requirements for additional information have been identified as a result of the stocktake: weather data (e.g. hourly rainfall, monthly maximum temperatures, monthly maximum

wind gusts) for the available record for selected stations with a long observing history, in order to make improved quantitative assessments of trends and risk levels;

climate projections based on the models used in the Fourth Assessment by the Intergovernmental Panel on Climate Change, in order to make improved assessments of future risks;

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maps similar to Figure 15, but showing exposure of people; current information on disaster risk reduction, climate change adaptation, mitigation

and REDD activities, including nationally and donor-funded projects; current information on GHG emissions and sinks; copies of the National Capacity Self Assessment reports; and copies of Technology Needs Assessment reports.

14. Recommendations The following recommendations arise from this stocktake report:

the needs for additional information and assessments be reviewed and addressed in a timely manner; and

indicative strategic priority responses to climate change be identified for each sector as well as nationally.

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Annex 1

Information on International Funding Sources for Mitigation and Adaptation Source: http://www.climatefundsupdate.org/listing

Name and link Type Administered by

Areas of focus

Number of projects

Total funds disbursed to date (US$ millions)

Adaptation Fund Multilateral Adaptation Fund Board

Adaptation 0 $0.0

Clean Technology Fund

Multilateral The World Bank

Mitigation - general

0 $0.0

Cool Earth Partnership

Bilateral Government of Japan

Adaptation, Mitigation - general

0 $0.0

Environmental Transformation Fund - International Window

Bilateral Government of the United Kingdom

Adaptation, Mitigation - general

0 $0.0

Forest Carbon Partnership Facility

Multilateral The World Bank

Mitigation - REDD

0 $0.0

Forest Investment Program

Multilateral The World bank

Mitigation - REDD

0 $0.0

GEF Trust Fund - Climate Change focal area

Multilateral The Global Environment Facility (GEF)

Adaptation, Mitigation - general

591 $2,388.7

Global Climate Change Alliance

Bilateral The European Commission

Adaptation, Mitigation - general, Mitigation - REDD

0 $0.0

International Climate Initiative

Bilateral Government of Germany

Adaptation, Mitigation - general

128 $347.2

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Name and link Type Administered by

Areas of focus

Number of projects

Total funds disbursed to date (US$ millions)

International Forest Carbon Initiative

Bilateral Government of Australia

Mitigation - REDD

0 $0.0

Least Developed Countries Fund

Multilateral The Global Environment Facility (GEF)

Adaptation 62 $47.5

MDG Achievement Fund – Environment and Climate Change thematic window

Multilateral UNDP Adaptation, Mitigation - general

16 $85.5

Pilot Program for Climate Resilience

Multilateral The World Bank

Adaptation 0 $0.0

Scaling-Up Renewable Energy Program for Low Income Countries

Multilateral The World Bank

Mitigation - general

0 $0.0

Special Climate Change Fund

Multilateral The Global Environment Facility (GEF)

Adaptation 14 $59.8

Strategic Climate Fund

Multilateral The World Bank

Adaptation, Mitigation - general, Mitigation - REDD

0 $0.0

Strategic Priority on Adaptation

Multilateral The Global Environment Facility (GEF)

Adaptation 22 $50.0

UN-REDD Programme

Multilateral UNDP Mitigation - REDD

0 $0.0

18 entries