Joyeeta Gupta

Climate change and development cooperation

2

Messages

Development and climate change are closely linked;

However, the politics in both arenas are highly charged on a North-South basis;

Linking climate change to development cooperation is possible, but mainstreaming is a problem.

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Climate change and development

Mitigation• Development generally coupled

with increased emissions; wise policy can change that especially in sectors that are less productive and less efficient. Beyond that there are trade-offs

• Mitigation can have ancillary benefits for development

Adaptation• Development can exacerbate

adaptation through (mal) development

• Development may have synergies with enhancing resilience

• Adaptation activities can have ancillary benefits for development

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The Evolution of the Right to Development

Year Event Item 1948 Universal Declaration on Human Rights Sets the stage for human rights issues (western perspec-

tive) 1960s Developing countries seeking NIEO Sets the stage for demanding a change in the global or-

der (southern, non-aligned movement perspective) 1966 Covenant on Political Rights Rights Legally binding, first generation rights (western demand) 1960s Covenant on Social-Economic Rights Legally binding, second generation rights (Communist

and developing countries) 1970s Articulation of the concept by developing and

developed country experts Articulation of the Right to Development – third genera-tion rights

1981 Banjul Charter Adoption of the Right as the right of peoples by African countries

1986 UN Declaration on the Right to Development Adoption by UN Human Rights Commission, Opposed by US, 8 states abstained from voting; mentions NIEO

1993 Vienna Declaration and Programme of Action (#10)

Adopted by 172 countries at World Conference on Hu-man Rights

1998 Working group on the Right to Development Monitors progress made at UN level on this right. 2000 Millennium Declaration (#11) Adopted by 147 countries 2001 Durban Declaration and Programme of Action

(#19, 28) Discussed the right to development in the context of ra-cism and

2008 UN Human Rights Council Establishment of a process to study the human right with respect to climate change, water and sanitation.

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Global governance: The evolution of the 0.7% target

Year Venue/Proposer Percent of national income 1958 World Council of Churches 1% (included private income) 1960 General Assembly Resolution 1% 1964 UNCTAD meeting 1%; 1965/8 OECD DAC reaffirm support for UNCTAD target 1% 1967 G-77 asks for separate minimum target for official flows 1968 Tinbergen, chair UN Committee on Development Planning

proposal 0.75% (including only official con-cessional and non-concessional flows) by 1972

1969 World Bank - Pearson Commission Report: Partners in Development, based on new OECD definitions, methods and data:

0.7% (including only official conces-sional flows (ODA)) by 1975 –1980

1970 International Development Strategy for the Second United Nations Development Decade

1%/ 0.7% (although DCs kept argu-ing for 1%)

1970 UNGA 2626 1% 1975 UNGA 3517 0.7% 2002 International Conference on Financing for Development 0.7% 2002 World Summit on Sustainable Development 0.7% 2005 EU-15 agreed 0.7% by 2015. 2005 Gleneagles 0.7% 2008 UN Summit 0.7% 2009 G20 Respective ODA commitments

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Development cooperation

The Right to Development: • Accepted but under-emphasized

The 0.7 percent target:• Accepted, emphasized but not achieved

The link between the right to development and the 0.7 percent target:• Contested

The MDGs and development cooperation:• New emphasis on achieving MDGs; but resources have to double if

these are to be achieved.

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Period Context Development theory Goals Solutions

Development cooperation Focus

1950s Post-war reconstruction

Increase GDP Government important Develop infrastructure Economies of scale Import substitution

Reconstruction Technical assistance Community Development

1960s UNDP, IDA, OECD/DAC

Increase GDP & employment; promote balance of payment equilibrium

Pricing policy, Balanced growth Export promotion Regional integration Sectoral plans

To fill trade and investment gaps

1970s North South dialogue

Increase per capita GDP Improve entrepreneurship Minimize governments Integrated rural devp. Employment strategies Redistribution of wealth Governments and markets

Development assistance Bridge savings investment and balance of payment gap Basic human needs

1980s Debt crises of developing countries

Increase macroeconomic stability and fiscal discipline

Improve policies and instruments Privatisation & liberalisation

Conditional aid: Structural adjustment & debt relief; “Washington consensus”

1990s Fall of the Berlin Wall

Enhance human development & reduce poverty Increase entitlements and capability Enhance freedom

Enhance social capital Improve institutions Promote good governance Stakeholder participation Improve markets Deregulate

Humanitarian assistance Democratic governance Good governance Greening of aid

2000 Environmental crises

Promote sustainable development

Generate ideas No simple solutions

Country ownership of policies emphasised Aid only to countries with good governance; Aid for developmental & environmental issues

2008 Credit crises ? ? Reduced resources for aid

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Development and development cooperation

Donors have had multiple objectives;

Delivery was often based on simple theoretical formulae

Aid recipient do not respond in predictable manners (e.g. conditionality);

Aid evaluation through quantitative indicators is questionable

Aid coordination has been donor driven.

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Challenges in the aid process

Donor: decision-making, instrumental,planned

Partner:Poor governanceSubstitution effectPolicy substitution

Donor recipient process

Mismatch between priorities and partnersPoor diagnosisTechnical assistanceAdministrative burden

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Development and Development Cooperation

Lessons from aid:• Goal: broaden objective• Nature of aid: Not necessarily catalytic• Indicators: not just macro, but also micro• Aid aligned to country type• Aid should be demand driven and not lead to distortions: Not

conditional• Form of assistance should match need• Aid to NGOs subject to caveats• Quantity of aid: avoid dependency• Balanced aid: poor and other sectors• Donors need to take partnership seriously

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Development and Development Cooperation

Lessons from aid:• Goal: broaden objective• Nature of aid: Not necessarily catalytic• Indicators: not just macro, but also micro• Aid aligned to country type• Aid should be demand driven and not lead to distortions: Not

conditional• Form of assistance should match need• Aid to NGOs subject to caveats• Quantity of aid: avoid dependency• Balanced aid: poor and other sectors• Donors need to take partnership seriously

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Linking climate change to other issues

Environmental mainstreaming

Environmentaldestruction

Gender mainstreaming

Gender neglect

Includingmainstreaming

disasters

Environmental mainstreaming

Environmentaldestruction

Gender mainstreaming

Gender neglect

Includingmainstreaming

disasters

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Climate change: Classical North-South issue

Formal divisions in Convention that both recognizes differences and fosters differences

Structural differences:• In emission levels between average Northern and average Southern

country especially in the past – and this is the most serious determining factor for climate impacts until 2050.

• If emission levels are to be kept within safe levels – the world budget for the 21st century is over by 2032.

• Impacts more severe in the South – both location wise; and because vulnerability is the greatest.

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Climate change: The North-South deal

Leadershipparadigm

NS

N helps S via CDM

Leadership sans US

EU

S

CEITS

USJSCaNZ

Development

N

S

Pollutio

nInverted U-curve may

be a zig-zag curve

Conditional leadership

US EU

S

N mainstreams cc help in development cooperation

US

Leadership competition

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The context of the North-South deal

1992: North reduces emissions and helps developing countries (tech transfer and aid) with new and additional resources (above existing aid)

1997: North reduces emissions partly via help to developing countries (new and additional?)

1997: Adaptation funding comes from a tax on North-South cooperation

2007: North reduces emissions partly via help and climate change is mainstreamed in ODA

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Ideological level

- ODA subsidizesmarket mech.- ODA levels below 0.7%;

Organization level

+ ODA helpscap. buildingesp. in poorestcountries;- ODA diverted from DCpriorities to help ICpurchases

CDM and ODA

Project level

+ ODA leveragesSD; synergy- ODA diverted

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CDM and SD: An Illusion?

An illusion• When SD is dependent on host

country approval and there is competition between host countries;

• When contract success is not based on achievement of the SD component;

• When SD component is not verified:

• When IC buy CERs without checking SD component;

• When SD component is vague and all-encompassing

A fact:• When SD is translated into

quantitative goals that can be measured??

• When contract success and CER approval is based also on achievement of SD component;

• When ICs purchase CERs that have a clear SD component;

• When a percentage of the project costs are used for the SD component;

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Climate Change Regime: Paradigm Shift

1990s• Abstract• Global• Future issue• Economic and technical issue

2000s• Real, interfering with daily

activities and needs (MDGs)• Multi-level• Current issue• Development issue: Climate

change is the defining development issue of our generation (UNDP 2007)

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Policy evolution towards mainstreaming

Development • 2002: Donor report• 2005: Gleneagles plan• 2005: EU• 2006: World Bank- CEIDF• 2007: OECD Declaration

Climate change regime• 1995: AIJ includes national

priorities• 1997: CDM includes sustainable

development• 2000: IPCC links cc with sd• 2007: IPCC links cc with sd

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Mainstreaming: Driving Converging Forces

Mainstreaming CCIn devp. coop

Academics

NGOs UNDAF

OECD

EUAid

agencies

Devp. Banks

DCs

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Mainstreaming defined

“Mainstreaming of climate change into development cooperation is the process by which existing development processes are redesigned and reorganized, improved, developed and evaluated from the perspective of climate change mitigation and adaptation. Mainstreaming implies involving all social actors – government, civil society, industry, local communities - into the process. Mainstreaming calls for changes in policy as far upstream as possible.”

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From Ad hoc approaches to mainstreaming

Ad hoc -------------------------------------------------- fullFrom ad approaches to mainstreaming

Inte-gration

Focus onwin win

Climate proofing

Ad hoc projects

Politically Easy Difficult

Climate change taken into account

Climate change ignored

Dev

elop

men

tag

enda

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

Main-streaming

Climate change taken into account

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Climate change and international cooperation

International cooperation is needed to help developing countries:• Adopt modern technologies and policies to avoid taking the past

emission route of the North;• Adopt measures that will enhance the ability of the South to adapt to

the impacts of climate change

International cooperation includes:• Climate cooperation• Development cooperation

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Practical arguments in favour of mainstreaming cc in aid

Efficiency of use of development resources enhanced since climate change affects development and development affects climate change

There is aid fatigue and no extra money is politically very feasible

Money is clearly needed for climate change and it is more easily justified to spend developed countries on climate change than on development per se

Transaction costs lower if mainstreamed

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The link between development paradigms and development aid

Pollu

tion p

er c

apita

GDP per capita

DC

IC

Pollu

tion p

er c

apita

GDP per capita

DCDC

ICIC

Pollu

tion p

er c

apita

GDP per capita

DC

IC

Pollu

tion p

er c

apita

GDP per capita

DCDC

ICIC

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The link between development paradigms and development aid

Pollu

tion p

er c

apita

GDP per capita

DC

ICPo

llution p

er c

apita

GDP per capita

DCDC

ICIC

11

2

3

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Resources needed

Current ODA

Additional ODA needed for MDGs

ODA needed for Agenda 21

Aid for climate change

Total

USD billion

100 60-135 125 40-250 315-611

Comment <0.4% of donor GNI

Clemens et al. 2007

Ch. 33, Agenda 21

Lit. Overlaps Assump-tions

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Political sensitivities

Development cooperation Climate assistance

1.0% of GNI

0.7% of GNI

Tim

eMainstreaming

Actual climate assistance

Expectations/ needsActual assistance

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Diverging beneficiaries of assistance

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Mainstreaming: the stages of mainstreaming

Ad hoc -------------------------------------------------- fullThe stages of mainstreaming

Inte-gration

Focus onwin win

Climate proofing

Ad hoc projects

Politically Easy Difficult

Climate change taken into account

Climate change ignored

Dev

elop

men

tag

enda

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

Main-streaming

Climate change taken into accountUS aid OECD EU

PL IT DK, NL UK

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Conclusion - 1

Mainstreaming of climate change in development cooperation does not make sense; it will lead to a diversion of resources. However, mainstreaming of climate change in development does make sense!

Instead, a search for win win options, climate proofing and climate integration make more sense in relation to development cooperation. This is not the case for development.

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Conclusion – 2: If Mainstreaming is inevitable ….

Concern Nature Conditions of success Political Will mainstreaming avoid the new

and additional argument? 1. Additionality: Increase ODA to 0.7% and raise new and additional re-

sources above this amount and mainstream all assistance subject to conditions below

Who controls the aid? 2. Partnership between OECD DAC countries and partners in all relevant forums – UNDG, OECD/DAC, EU, in C&D decision-making processes

3. Ownership by developing countries of C&D agenda at programme and project level.

4. Joint accountability of partners: The system should promote mutual accountability in terms of both appropriate provisions and use of cli-mate change funds.

Development economics

If ODA does not reach the poor, will mainstreaming do so?

5. Prioritise the poorest: In recent years, development cooperation has tried to focus on helping the poorest.

Will mainstreaming in ODA distort markets and create perverse in-centives?

6. Avoid market distortion where appropriate, consider cash transfers to compensate for climate impacts as a substitute for mainstreamed ODA projects

7. Design mainstreamed projects with as little market distortion as possi-ble.

Sustainability Will mainstreaming make aid de-pendency worse?

8. Limit ODA dependency: Ensure that ODA to countries is below a cer-tain % of partner GNI;

9. Climate aid should be seen independent of this. Will mainstreaming within existing

development paradigm create structural sustainability problems?

10. Ensure tripartite decision-making between stakeholders, private parties and governments of both ODA countries and partners to design con-text relevant, locally owned policies. Avoid focus on formulae, effi-ciency, rationality and conditionality and accept clumsy solutions.