Economic Assessment of the Impacts of Climate Change in Uganda

The report assesses climate change risks for the Mpanga River catchment, focusing on the AEMS-Mpanga hydroelectric plant and water supply for domestic, industrial, and agricultural use. It finds that energy production is more vulnerable than water supply, with potential annual welfare costs from electricity shortages reaching US$98 million by 2035-2040. While water shortages in the Rushango area could cause annual losses up to US$188,000, the energy sector's losses dominate. Adaptation measures, such as improved water resource regulation and catchment protection, are deemed cost-effective, requiring only marginal reductions in losses to yield positive returns. However, implementation is hindered by funding gaps, lack of political will, and poor river flow data.

• Climate change is projected to cause significant economic losses in the energy sector, specifically affecting the AEMS-Mpanga hydro power plant. Annual welfare costs by 2035 to 2040 are estimated between 62,733 and 246,795 million shillings (US$25 million to US$98 million).
• The Rushango area of the catchment is most susceptible to water supply deficits. Annual average economic losses for non-energy uses (mining, industry, and livestock) are estimated between 114 and 198 million shillings (US$45,400 to US$78,900) by 2035, potentially rising to 472 million shillings (US$188,000) based on higher per capita GDP scenarios.
• Climate modelling for the Mpanga basin indicates a trend of rising temperatures and mixed rainfall patterns. Average annual temperatures are expected to increase by between 3 and 4.8 degrees Celsius depending on the scenario.
• Energy generation at the AEMS-Mpanga plant is expected to decline due to reduced river flow rates. A projected loss of approximately 115 GWh is estimated over the period 2046–2050, representing about 26% of average production.
• Adaptation measures in the energy sector are considered highly cost-effective. To be justified under a 10% discount rate, interventions would only need to offset between 2.8% and 32.8% of estimated losses.
• The most effective local adaptation strategies for the region are identified as the better management of water for hydropower production and the promotion of water catchment protection.
• Several barriers impede effective water policy and adaptation, including a lack of funding for Community Development Officers to enforce laws, insufficient political will, and low educational levels in river communities.
• There is a critical deficiency in hydrological data for the Mpanga River, as gauging stations are not functioning correctly, which hinders accurate policy making and risk management.

APA

Taylor, T., Markandya, A., Mwebaze, T., Sebbit, A., & Rautenbach, H. (2015). Economic Assessment of the Impacts of Climate Change in Uganda. Climate and Development Knowledge Network. https://cdkn.org/sites/default/files/files/Uganda_CC-Economics_MPANGA_Case-study2.pdf

Chicago

Taylor, Tim, Anil Markandya, Tom Mwebaze, Adam Sebbit, and Hannes Rautenbach. Economic Assessment of the Impacts of Climate Change in Uganda. Climate and Development Knowledge Network, 2015. https://cdkn.org/sites/default/files/files/Uganda_CC-Economics_MPANGA_Case-study2.pdf.

Wikipedia

{{cite report |last1=Taylor |first1=Tim |last2=Markandya |first2=Anil |last3=Mwebaze |first3=Tom |last4=Sebbit |first4=Adam |last5=Rautenbach |first5=Hannes |title=Economic Assessment of the Impacts of Climate Change in Uganda |publisher=Climate and Development Knowledge Network |date=October 2015 |url=https://cdkn.org/sites/default/files/files/Uganda_CC-Economics_MPANGA_Case-study2.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{taylor2015economic, author = {Taylor, Tim and Markandya, Anil and Mwebaze, Tom and Sebbit, Adam and Rautenbach, Hannes}, title = {{Economic Assessment of the Impacts of Climate Change in Uganda}}, institution = {Climate and Development Knowledge Network}, year = {2015}, month = oct, url = {https://cdkn.org/sites/default/files/files/Uganda_CC-Economics_MPANGA_Case-study2.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }