IWA Publishing

Climate risk case study : Bulleh Shah paper mills - packages, Ltd. Kasur, Pakistan

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This report assesses the risks posed by climate change to International Finance Corporation's(IFC's) investment in packages' new Bulleh Shah Paper Mills (BSPM) at Kasur, Pakistan, and identifies potential adaptation (risk management) measures that can be used to 'climate-proof' the investment. A number of conclusions can now be drawn regarding climate risks at BSPM. Packages Limited is Pakistan's premier pulp and paper packaging company, and has been an IFC client since 1964. The company produces paper and paper board, writing and printing paper, tissue products, and flexible packaging products. It uses wheat straw, recycled and waste paper, and imported pulp in its production lines. The newly-established BSPM has allowed the company to relocate existing pulp and paper production facilities from its headquarters in Lahore to the new plant. This has enabled the company to increase production of higher margin products at Kasur, and to upgrade and expand production lines at the existing plant. This report presents a groundwater recharge analysis (using two different modeling methods) showing that a majority of climate models suggest an increase in natural recharge in the future. These modeled changes to future recharge indicate that it is unlikely that supply of groundwater resources will be depleted as a result of climate change over the lifetime of BSPM. For this analysis, however, it was not possible to estimate the abstraction rates of other users (if any), or whether these rates might change in future. Recent research in nearby locations shows unsustainable groundwater depletion levels in recent years, and climate change is likely to increase demand for freshwater resources, particularly in semi-arid areas. Other studies indicate that small changes in precipitation as a result of climate change can be magnified into larger changes in groundwater recharge levels. The uncertainty associated with current availability and future projections of groundwater underlines the need for investment in integrated groundwater resources research. This assessment has looked at how climate change could affect Packages' operations in the near to medium-term (the 2020s through 2050s). Though these shorter timescales are more relevant to the private sector, much of the standard climate change projections concentrate on end-of-century changes.

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