The SEB tool is designed to support a key objective of ClimSA, which is to enhance the capacity of OACPS Regional Climate Centres (RCCs) to utilise climate-informed decision-support tools and facilitate the integration of climate services into policy processes at regional and national levels. The development of the SEB tool began in March 2022 and was completed in September 2024. It holds significant potential for embedding climate services into policy frameworks and decision-making processes. The SEB tool covers eight economic sectors that contribute to a country's gross domestic product (GDP) and are directly or indirectly sensitive to climate change.
The African Development Bank’s projection of the economic outlook of the African continent is expecting a positive growth, increasing from 3.7 percent in 2024 and reaching 4.3 percent in 2025. This underscores the strong resilience of African economies, with growth recovery underpinned by expected improvements in global economic conditions and effective policy responses. With these results, Africa will remain the world's second-fastest growing region, with 40 countries expected to post higher growth rates than in 2023. However, the projections not take into account the quantification of the climate threat to the economy, which would provide a more objective outlook by considering the impact of climate change on the socio-economic sector.
The Caribbean region is also set to experience economic growth, with regional institutions and multilateral banks forecasting an expansion in GDP driven by tourism recovery, renewable energy investments, and digital transformation. The Caribbean Development Bank (CDB) anticipates that growth will accelerate in 2024 and 2025, though challenges such as high debt levels, vulnerability to natural disasters, and external economic shocks remain significant concerns. While investments in climate resilience, sustainable tourism, and blue economy initiatives are seen as critical for long-term stability, the increasing frequency of hurricanes and rising sea levels could offset these gains if not adequately mitigated.
Similarly, the Pacific region, comprising small island developing states (SIDS), is projected to experience moderate economic growth over the next two years. The Asian Development Bank (ADB) forecasts that expanding fisheries, infrastructure development, and digital connectivity improvements will contribute to this positive trend. However, the region remains highly exposed to climate change-related risks, particularly cyclones, rising sea levels, and coral reef degradation, which threaten livelihoods, food security, and overall economic stability. While strategic investments in climate adaptation, sustainable fisheries, and resilient infrastructure can support long-term development, the economic gains could be severely affected by extreme weather events and the increasing cost of climate adaptation.
Across Africa, the Caribbean and the Pacific, targeted investments in key Sustainable Development Goals (SDGs) areas such as education, energy, productivity-enhancing technology and innovation, and productive transport infrastructure, will be critical in driving deep structural transformation. However, while these investments have the potential to change the economic landscape, extreme climate events pose a significant threat, potentially reversing progress and requiring stronger policy interventions for climate resilience. An effective climate resilience strategy must be underpinned by a quantitative assessment of the costs of climate impacts and their relative benefits, using a scientifically robust approach such as system dynamics modelling.
The OACPS Secretariat, in partnership with the European Union, has funded the development of the Socio-Economic Benefits (SEB) tool to assess the impact of climate change on economic production systems. This tool has come at a crucial time, enabling Member States to quantify the potential socio-economic impacts of climate change. This, in turn, can strengthen their position in climate negotiations by providing well-documented evidence of the financial needs required to address the losses under the Loss and Damage Fund.
The SEB tool is designed to support a key objective of ClimSA, which is to enhance the capacity of OACPS Regional Climate Centres (RCCs) to utilise climate-informed decision-support tools and facilitate the integration of climate services into policy processes at regional and national levels. The development of the SEB tool began in March 2022 and was completed in September 2024. It holds significant potential for embedding climate services into policy frameworks and decision-making processes. The SEB tool covers eight economic sectors that contribute to a country's gross domestic product (GDP) and are directly or indirectly sensitive to climate change.
The methodology behind the SEB tool is rooted in a combination of Economic Input-Output (EIO) models and system dynamics. The eight economic sectors included in the analyses are the following: agriculture & fishing; energy; water; infrastructure; transportation; health; industry; and services.
The outputs of the model describe three scenarios encompass the normal climate, that represents the baseline scenario for the model, warming climate that depicts the IPCC sea level rise and temperature change projections, and the adjusted scenario based on the induced Nationally Determined Contribution (NDC) climate action from the adaptation and abatement projects. The level of adaptation and abatement efforts is influenced by the availability of RCC Climate Information Services (CIS), which demonstrate the added value of climate data and insights. The systems thinking approach follows this logic: increased CIS leads to improved climate policies, strengthening the business case for adaptation and abatement funding. This, in turn, results in increased financial support, leading to tangible adaptation and abatement measures that reduces the impact of climate change. The resulting mitigation outcomes further justify the expansion of CIS, creating a continuous cycle of increasing benefits.
The findings highlight the critical need to integrate climate services into national development strategies. The potential of CIS to transform decision-making, strengthen resilience and secure socio-economic gains is evident, particularly when aligned with long-term investments and adaptation policies.
The model outputs present GDP projections under the three scenarios (Normal Climate, Warming Climate, NDC Climate) with CIS capacity set to level 1 (basic CIS services). At this level, there is minimal net SEB, and the NDC Climate values are nearly undistinguishable from the Normal Climate values. When CIS capacity is set to the maximum level (4), the model indicates that advanced CIS services are available and have influenced policy and funding decisions, leading to substantial adaptation and mitigation investments. The Net SEB results demonstrate the value of enhanced CIS capacity, showing a significant difference when compared to the economic costs of a warming climate with no adaptation or mitigation measures.
The SEB tool not only provides a robust framework for assessing climate risks but also equips policymakers with actionable insights to navigate the complexities of climate change. Its role in guiding sustainable development across OACPS regions is both timely and indispensable.
More on the SEB tool:
- The SEB Tool at COP29 - The SEB Tool for the Pacific
- SEB Presentations
To learn more about the SEB tool and request for a training, please contact: Dieudonne Nsadisa Faka – nsadisa.faka@acp.int