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Opinion Overseas Development
Institute
Overseas Development Institute
ODI is the UK’s leading independent think tank on international develop-ment and humanitarian issues.
ODI Opinions are signed pieces by ODI researchers on current develop-ment and humanitarian topics.
This and other ODI Opinions are avail-able from www.odi.org.uk
Governments worldwide are debating how best to respond to the many challenges set by climate change. Within this debate there is growing
recognition that national funding efforts need to be complemented by additional finance at the international level. Over the past year, a whole range of traditional donor countries have created new funds to support climate change programmes in developing countries. These include the governments of Australia, Germany, Japan, Spain and the UK, together with the European Union (Box 1), with pledges totalling $2.7 billion per year over the next few years. The impetus behind these new financial mechanisms has been, partly, a frustration with existing frameworks for technology trans-fer and investment that are not sufficiently responsive to the global challenges of climate change. However, these initiatives raise some important questions about the underlying rela-tionship between the North and South.
Recent ODI research into these new funding mechanisms (see useful resources) has raised a number of issues that need addressing. Four key questions can be highlighted.
First, what will these proposed new environ-mental funds support? This question should be seen in the context of climate change mitigation being, primarily, a northern agenda, while adaptation to climate change is of more immediate concern in the south. They are quite different responses to climate change itself. Mitigation focuses on policies and practices that aim to reduce greenhouse gas emissions, or remove gases already in the atmosphere,
which have been generated through indus-trial development in the northern economies. Adaptation, on the other hand, refers to the activities in which all countries must now invest, to deal with the consequences of climate change. Many developing countries lack the resources to implement adaptation programmes and new international funding is needed. Yet, of the six bilateral funds studied, not one focuses on adaptation – rather, all of them have multiple objectives, with support for mitigation efforts predominating. Greater clarity of fund objectives is needed, with more emphasis on adaptation funding, despite the continuing uncertainty over what adaptation is actually required.
Second, is the scale of funding that is being proposed enough to do the job? For these ini-tiatives to be credible, their contribution needs to respond to the level of need. Unfortunately, this is where substantial uncertainty exists. The World Bank estimates the incremental costs for developing countries to adapt to the projected impacts of climate change to range from $9 billion to $41 billion per year, and that appears to be little more than a ‘back of the envelope’ calculation. Such estimates need to be made in a more rigorous manner. The predictions about the level of funding that might be required has led to calls to scale-up current finance levels by two orders of magnitude (from hundreds of million to tens of billion dollars per year). Among the six bilateral initiatives, it is only the Japanese Cool Earth Partnership that appears to offer resources at this scale, with $10 billion pledged over the next five years – yet most
Recent bilateral initiatives for climate financing: Are they moving in the right direction?
Opinion 112September 2008
Neil Bird and Leo Peskett
‘The apparent haste to create new funding
mechanisms may be at the expense of conceptual thinking
on how the funds should be delivered.
Providing more of the same will not do.’
Box 1: Six new bilateral environmental funds announced since December 2006
• The Cool Earth Partnership of Japan• The Environmental Transformation Fund (International Window) of the UK• The International Climate Protection Initiative of Germany• The Global Initiative on Forests and Climate of Australia• The Global Climate Change Alliance of the European Union• The UNDP-Spain MDG Achievement Fund – Environment and Climate Change Thematic Window
Overseas Development Institute
111 Westminster Bridge Road, London SE1 7JD
Tel +44 (0)20 7922 0300
Fax +44 (0)20 7922 0399
Email [email protected]
Readers are encouraged to quote or reproduce mate-rial from ODI Opinions for their own publications, but as copyright holder, ODI requests due acknowledge-ment and a copy of the publication.
© Overseas Development Institute 2008
ISSN 1756-7629
Opinion
of this money is intended to support mitigation – rather than adaptation – activities.
The third question that remains unresolved is whether these new funds represent a new response to tackling climate change or whether the funds are simply the continuation of official develop-ment assistance. There are two possible starting points to the debate over financing actions to address climate change. The first is rooted in the longstanding relationship between donors and recipient countries, involving the transfer of finan-cial resources between the North and South as part of the development process. The second proposes a new global response to human-induced climate change, in which industrialised countries should respond by applying the principle of ‘common but differentiated responsibility’. Northern countries should be expected to assist where countries in the South are unable to meet present financing needs, but not through a donor-recipient relationship, but rather in terms of proportionate payments for dam-age already inflicted on global public goods. In this model, there is no question of aid conditionality. The resource transfer is a payment to the develop-ing country – to do with as it pleases.
However, traditional donors appear to be stuck in the mode of development spending. The evidence of the six bilateral funds studied is unequivocal: all the funds announced are considered official devel-opment assistance. The question to raise is whether this is the right basis on which to move forward; and whether the development agencies of these coun-tries are the best institutions to provide the neces-sary leadership.
Finally, a fourth question that warrants more investigation is how these funds will be disbursed. There are at least two aspects to this question: whether the financial flows will incur costs for the recipient country and what methods of financial
transfer will be employed. On the former, it is tell-ing that the terms of the two bilateral funds of any scale – namely the Japanese Cool Earth Partnership and the UK’s Environmental Transformation Fund – are offered largely as concessional loans. So, not only are these funds considered part of devel-opment assistance, but they are loans not grants, which means they will have to be repaid at some point. This is at odds with the alternative response to financing climate change actions under the prin-ciple of ‘common but differentiated responsibility’ and might possibly end up making it harder to find appropriate responses to climate change.
The experience of development assistance also suggests that project-based support will not deliver the funds in the amounts required. In addition, the proliferation of multiple projects and donors would likely result in additional burdens on already over-stretched ministries, and run counter to the Paris Declaration principles that the same donor countries have already signed. There is much to learn from recent lessons with development finance and the move away from project assistance to more programmatic forms of support, including budget support in aid-receiving countries.
The proliferation of funding initiatives over the past year represents an important statement of intent by northern countries to support global actions on climate change. However, the apparent haste of these developments appears to have been at the expense of conceptual thinking on how this finance should be delivered. Providing more of the same will not do – the opportunity to establish a new global accord on financing climate change is in danger of being missed.
Written by Neil BIrd, ODI Research Fellow ([email protected]) and Leo Peskett, ODI Research Officer ([email protected]).
Useful resources
The new global environmental funds: http://www.odi.org.uk/fecc/resources/reports/s0178_final_report.pdf
Overseas Development Institute
Overseas Development Institute
ODI is the UK’s leading independent think tank on international development and humanitarian issues.
Understanding the political economy of climate change is vital to tackling it
Opinion 92December 2007
Climate change has reached the top of the international agenda even while debates about its causes, conse-quences, timing, trajectory and rem-
edies continue. Technologists and planners are devising ways of mitigating and adapting to climate change in advance of its full impact. Financial experts are exploring the impact of cli-mate change on trade and investment, the cost of climate change and the cost of addressing it. Development specialists are beginning to plan for the impact that climate change will have on social services and public goods. Meanwhile defence specialists are studying the security threat that climate change poses – labelled by the UK Chief Scientist as ‘more serious than even the threat of terrorism’. Post-conflict ana-lysts are linking peacebuilding and adaptation to climate change.
But there are two problems with many of these discussions. First, they tend to run in par-allel, with experts talking past one another, and many not listening to those outside their own disciplines. Second, discussions about how to address climate change at local levels are often devoid of politics. For instance, delegates attending a UN debate on climate change ear-lier this year focused almost exclusively on the expected developmental impact and the need for financial support to tackle it.
Not mentioned were elite-resource cap-ture, nor resource constraints that develop-ing countries already face, nor the conflict that frequently results from such constraints. None of the diplomats spoke about the likeli-hood of transboundary disputes arising from water shortages, or the movement of environ-mental refugees. Suggested solutions were almost naïve in their simplicity — for exam-ple, the proposition to transfer money and technology (generally from developed to developing countries) that did not acknowl-edge that this practice has done very little to alleviate poverty in many poorly performing
countries. Similarly they failed to acknowledge that even now, when there is still relatively lit-tle stress arising from scarcity, many treaties intended to govern the sharing of resources such as rivers, are not observed.
Lessons from development expertsDiscussion about diminishing the socio-eco-nomic threats posed by climate change must include the sort of analysis used to design aid interventions in conflict-ridden and particularly difficult to develop countries. Four key lessons learned in the past decade or so by develop-ment specialists are particularly relevant:1. The problems of fragile states – Climate
change is already recognised as a threat multiplier, but analysis would be improved if the discussion were placed within the context of fragile states. Why fragile states — which are variously defined as poor per-formers, conflict and/or post-conflict states — function differently from other countries, and why they have trouble absorbing and using aid effectively are key questions that should be considered by anyone planning to assist communities that are already weak, or are being weakened by climate change. Analysts working on resilience and climate change are furthest ahead, but even they acknowledge that issues of power and social equity are being given insufficient weight. It does little good to say that peacebuilding is necessary and that communities should participate, unless there is an understand-ing of the long-standing constraints upon both. How to tackle problems related to strengthening weak capacity, state-building, sequencing of assistance, and addressing conflict have already been thought through by fragile-state specialists, and their lessons should be considered by those working on climate change.
2. Understanding informal governance – It is now understood by governance specialists
Diana Cammack
‘Discussion about how to address climate change
at local levels is often devoid of politics.’
Opinion
Overseas Development Institute
111 Westminster Bridge Road, London SE1 7JD
Tel: +44 (0)20 7922 0300
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ODI Opinion Papers
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© Overseas Development Institute 2007
that decision-making around the use of state resources in many poorly performing states is driven by informal relations and private incen-tives (including patronage, clientelism, and ethnicity), rather than formal state institutions that are underpinned by equity and the rule of law. These actions are rooted in domestic social structures and therefore undermine political systems and structures that appear to function according to rational-legal rules. Because outsid-ers (e.g. donors) have relatively little influence over those deep social forces that induce or hinder change, adoption of reforms is dependent on domestic institutions and incentives being in place that motivate states, leaders and citizens to take action. Political economy analysis (such as DFID’s Drivers of Change, or Sweden’s Power Analysis) have provided insights into the under-lying systems that determine whether new initiatives are likely to work. Similar studies can identify the entry points for intervention that are the most likely to be successful.
3. The difficulty in effecting social change – Underdevelopment is often linked to long-term collective-action problems, where societies are incapable of working together to address issues that affect their wellbeing and hinder progress. Also, communities under pressure are less likely to develop the technical and social ingenuity needed to solve problems; as conditions dete-riorate, there is less scope for finding solutions. Many communities are resistant to change, rejecting innovation and new ways of thinking. Developmental change is painfully slow mostly because cultural change is required, and this is incremental. Analysts therefore look to the developmental state to create incentives to pro-mote transformation. But in many of the least developed and most fragile states the regimes and institutions in place are anything but devel-opmental. How then, can we expect them to take on board the urgency of the climate-change agenda, to assume a facilitative role, and to find the will to design appropriate interventions, to use funding honestly, and to implement an adaptation agenda?
4. Changes in aid delivery – Finally, because poverty has been so persistent in some parts of the world, and because aid has often been ineffective in addressing it, the donor com-munity has undertaken reform of it its own aid-delivery mechanisms. This culminated in the Paris Declaration on Aid Effectiveness in 2005. It promotes recipient-country ownership of the development agenda, donor alignment with both the priorities and goals set by aid-receiving coun-tries, an increased reliance on national adminis-trative systems, more streamlined and harmo-nised actions among donors in a country, as well as mutual accountability and an emphasis on management-for-results. The profound changes
to aid delivery being shaped by this agenda need to be transferred to the mechanisms for provid-ing aid to combat climate change. Also relevant are discussions about scaling-up aid — how to double aid to Africa, for instance, while develop-ing the local absorptive capacity to use it well, and without harming domestic fiscal stability. Studies on aid architecture are meaningful for those designing rational and effective methods for delivering massive amounts of climate change funds. Ensuring that all state activities support similar outcomes is also vital.
Technical solutions are not enoughEvaluation frameworks are being designed to assess the resilience and adaptability of countries and populations to climate change. These will be used by scientists to tell us what affected nations must do, and how outsiders can help. But technical solutions alone will simply not work in many poorly performing countries.
Political economists must study the deeply-rooted, domestic socio-political constraints to change; the capacity (or lack of capacity) of societies and governments to absorb resources; the impact of incomplete nation-building and state-building processes; the collective-action problems that make communities resistant to development; and the links between underdevelopment, state fragility and climate change.
Aid specialists need to design methods of deliv-ering aid to climate change-affected states that avoid the shortcomings of existing development assistance. Only then will climate change interven-tions have a chance of being successful.
Written by ODI Research Fellow Diana Cammack ([email protected])
Prepared for UN Climate Change Conference in Bali, December 2007. For more ODI resources on climate change, visit:http://www.odi.org.uk/climatechange
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Delegates discuss way forward in UNclimate talksBy KATY DAIGLE and ARTHUR MAX, Associated Press WritersFri Nov 6, 10:53 am ET
BARCELONA, Spain – U.N. climate negotiators said Friday that, despite low expectations for settinglegally binding emissions targets next month, it is still possible to conclude a strong, 192-nation deal todefine future work in fighting global warming.
Countries most vulnerable to climate change said they were incensed that rich nations were rethinkingthe timetable for concluding a legally binding treaty.
Delegates were spending the final day of U.N. climate talks in Spain hammering out a draft accord inwhich rich nations would make hard pledges to reduce emissions and to finance aid to help the world'spoorest cope with the effects of Earth's rising temperatures.
The idea of next month's U.N. climate conference in Copenhagen ending with a political deal, rather thana legally binding agreement, disappointed developing nations already suffering severe droughts, floodsand other catastrophes blamed on rising temperatures.
The shift follows acknowledgment that several countries, including the United States, may not bepolitically ready to sign a legal pact by next month.
Yvo de Boer, the U.N. official who is shepherding the talks, assured that negotiators were still aiming toachieve a significant deal that would set specific goals.
Nations would agree to stick to their promises while negotiating the details of the treaty, taking as long asanother year.
"Governments can deliver a strong deal in Copenhagen, and nothing has changed my confidence inthat," de Boer said.
While he said he could not guarantee promises would not be broken, it would be difficult for developedcountries "to wiggle out" of written commitments they make in a Copenhagen deal.
The deal may take the form of consensus decisions, including an overarching statement of long-termobjectives, along with a series of supplemental decisions on technology transfers, rewards for haltingdeforestation, and building infrastructure in poor countries to adapt to global warming, delegates said.
De Boer said he was looking to the United States to announce a clear emissions target for 2020. "Anumber from the president of the United States would have huge weight," de Boer said.
Legislation is making its way through the U.S. Congress that set slightly different goals for reducing
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carbon emissions, and Jonathan Pershing, the chief U.S. delegate to the U.N. talks, declined to saywhether the U.S. will be ready to submit a target for the Copenhagen accord.
At the same time, he said President Barack Obama has the authority to make a commitment withoutcongressional approval, "but a decision on whether or not we will do it has not yet been made."
The Copenhagen deal now expected would carry the authority of world leaders who would sign it. DeBoer suggested 40 heads of government would be attending the Copenhagen summit, though theDanish government said that number was not yet been confirmed.
The head of the bloc of developing nations criticized rich nations for failing expectations after two years oftough negotiations for a legal treaty.
"Nonperformance, nondeliverance and noncommitment by the developed countries is acting as a brakefor any meaningful progress," Sudanese delegate Lumumba Di-Aping said. "We need a real change ofheart and mind by the developed countries," which he accused of seeking to "relieve themselves of thecommitment by asking the poorest of the world and the most vulnerable and the most underdeveloped tosubsidize their high standard of living."
Di-Aping also complained that rich nations so far were offering too little in emissions cuts. Scientists sayindustrial countries should reduce emissions by 25 to 40 percent from 1990 levels to avoid climatecatastrophe. Di-Aping said their pledges amounted to 11-15 percent.
The head of the Indian delegation, Shyam Saran, said Copenhagen's success would depend on richnations presenting significant reduction targets, but that an agreement by all 192 nations could still bebinding.
"We don't share view that it is no longer possible. If it were no longer possible, we would rather pack upand go home," Saran said.
The delegate from Sweden, which holds the rotating EU presidency, downplayed the tumult innegotiations and said a serious deal can still be reached next month.
"We are going to change the fundamentals of industrial civilization, so it's no wonder there is a lot ofactivity going on in a negotiation like this," Anders Turresson said.
Some delegates warned, however, that a watered-down deal could face trouble at Copenhagen.
"We look forward to Copenhagen with optimism, but we will not accept a weak, green-wash outcome,"said Alf Wills, the chief negotiator for South Africa.
A bloc of 43 island nations urged leaders of the world's industrial nations to double efforts towardconcluding a legally binding pact during the December summit.
"Weak political declarations are not the solution," said a statement by the chairman of the Alliance ofSmall Island States, Grenada delegate Ambassador Dessima Williams.
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The charity group Oxfam International said the outrage was "understandable."
"Rich countries must recognize that tens of thousands of forced climate migrants, increased foodshortages and spiraling climate debt is not just a reality faced by poor nations, but will ultimately affect usall," said Oxfam climate adviser Antonio Hill.
A Copenhagen deal would hinge on decisions that can only be taken at the top political level. Theyinclude: carbon emission reduction targets by 2020 from industrial countries; firm plans by developingcountries to reduce the growth of their emissions; specific short- and long-term financial commitments topoor countries to adapt to climate change; and a mechanism for distributing the funds that will becontrolled by the developing countries.
Even an interim deal would clear the way to mobilize funds to help poor countries. The EU has saideuro5 billion to euro7 billion ($7.4 billion to $10.4 billion) would be needed in the next three years fordeveloping nations to begin planning their first steps toward controlling their emissions and protectingthemselves against the effects of climate change.
By 2020, the EU says, $150 billion (euro101 billion) a year is needed to fight climate change in thedeveloping world.
The delay in brokering a legally binding document is significant. The only instrument for controllingcarbon emissions, the 1997 Kyoto Protocol, expires in 2012. Unless a new treaty is in place by then, noregulations will exist, threatening chaos among industries relying on predictable rules for their businessdevelopment.
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Opinion Overseas Development
Institute
Overseas Development Institute
ODI is the UK’s leading independent think tank on international develop-ment and humanitarian issues.
ODI Opinions are signed pieces by ODI researchers on current develop-ment and humanitarian topics.
This and other ODI Opinions are avail-able from www.odi.org.uk
ODI has launched a new meetings series on climate change, asking about the trade-offs and comple-mentarities between climate change
and poverty reduction. The discussions can be framed as three ‘calls’: a call to act; a call to col-laborate; and a call to values.
A call to actThe call to act is directed to all those in the field of international development who do not currently work on climate change. Nobody can stand aside from this issue. It requires the combined multi-sectoral and multi-disciplinary attention of every one of us – urban and rural, national and international, development and humanitarian. Our urgent priority is to main-stream action on climate change. Attempts to mainstream gender or poverty have shown us how difficult this can be. The lessons from those experiences need to be learned.
Why can’t we stand aside? Because hold-ing carbon dioxide in the atmosphere to 450 or 500 parts per million, and temperature rise to 2 degrees, will be a massive task. By 2050, the average carbon ‘ration’ per person on the planet will be 2 tons per year. This compares with a figure for the US today of 20 tons, for the UK of 10 tons, for China of 5 tons and for India of 2 tons. Only the very poorest countries fall below the thresh-old – Ethiopia, for example, emits only 0.1 tons per person per year, one hundredth of the level of the UK. The richer countries need to reduce their carbon emissions by at least 80%. The world as a whole needs to reduce emissions by half. It is impossible to imagine this being done without paradigm-shifting changes in technology, pricing and social organisation. With rising population, the load cannot be carried by developed coun-tries alone. All must play their part in mitigation. All will have to adapt to higher temperatures.
Whether we are talking about adaptation to the reality of climate change, or mitigation to address the root causes, both require a long-term perspective. It may or may not be true that contemporary natural disasters are climate-related, but the worst effects are still to come. In the meantime, economies are changing. For example, the world’s population will rise by 1.45 billion people between 2005 and 2025, of whom 1.3 billion will live in towns and cities in developing countries. Planning growth and
resilience for the long term requires a clear-sighted vision of the climate-change resilient city of the future. We should not be afraid of scenario-planning: the very nature of develop-ment, after all, is long-term transformation.
In the short-term, the biggest impact on poor people is less likely to be climate than policies adopted to mitigate climate change. ODI research shows that attempts to reduce deforest-ation can disrupt the livelihoods of 400 million people around the world who depend on forest resources. Similarly, the rush to biofuels in the US and the EU contributed at least 25% to the rise in food prices which caused such turmoil in 2007. Not surprising, when the US alone consumed 80 million tons of maize to produce bio-ethanol.
Mainstreaming needs to infuse every part of development thinking. Countries and aid agen-cies will need to ensure that climate change continues to have a high profile and exhort planners to think through the implications. Exhortation is unlikely to be sufficient, how-ever. Compliance procedures will be necessary, similar to environmental impact assessments. And regulation will be needed to establish for-ward prices for carbon.
A call to collaborate Climate change needs to infect development thinking. But by the same token, develop-ment needs to infect climate change thinking. Mitigation and adaptation are becoming spe-cialist disciplines, with professional climate change negotiators locked into a sequence of meetings – from Kyoto to Bali to Poznan to Copenhagen. The professionals need to look out of the window and open the door: they need the specialist skills of development disciplines.
Reduced Emissions from Deforestation and Degradation? Highly necessary, since forest destruction contributes 18% of global carbon emissions. Climate change negotiators should work to protect forests. But they need develop-ment people to understand the politics and institutional complexities of forest tenure and forest management in often fragile developing countries; and development people to map the complex livelihoods of forest-dependent people.
Biofuels? Yes, but not at the expense of either the nutrition status of the poorest, or of virgin forest cut down to make space for palm oil plantations. Development specialists under-
A triple call on climate change
Opinion 122January 2009
Simon Maxwell
‘Climate change needs to infect
development thinking. By the
same token, development needs
to infect climate change thinking. And both need values . . .’
Overseas Development Institute
111 Westminster Bridge Road, London SE1 7JD
Tel +44 (0)20 7922 0300
Fax +44 (0)20 7922 0399
Email [email protected]
Readers are encouraged to quote or reproduce mate-rial from ODI Opinions for their own publications, but as copyright holder, ODI requests due acknowledge-ment and a copy of the publication.
© Overseas Development Institute 2009
ISSN 1756-7629
Opinion
stand about the impact of trade rules on production incentives in different countries, and about how demand shifts will impact on prices.
New financing mechanisms? Highly desirable, and especially important if the need for additional funding is not to crowd out traditional development aid. UNDP estimated last year that adaptation alone could cost $ 86 billion a year by 2015. But, please, let’s avoid the frenzied creation of new funding mechanisms, which has resulted in 14 new envi-ronmental funds being established in the past 18 months. The current aid orthodoxy favours simpli-fication, encouraging country ownership, and chan-nelling funding wherever possible to the core budg-ets of developing countries. The ‘Paris Principles’ rule, and the Accra Agenda for Action provides the road map. Climate negotiators take heed.
And the negotiation framework? For development specialists, climate change negotiations are just the latest in a long series – the law of the sea, nuclear non-proliferation, above all international trade. How can trust be built at an early stage? How can nego-tiations be structured to ensure representativeness and accountability? What kinds of financial and non-financial incentives swing deals? How can the temptation to abandon multilateral processes and strike out bilaterally be avoided?
The message to the climate change community from the development community is clear: you need us; you know where to find us; we want to help.
A call to values Finally, action on climate change will be contested and highly political, at national level and interna-tionally. There will be winners as well as losers, not least between the generations. Decision-making needs to be principled – and principled decision-making needs principles. What are they?
Environmental sustainability on its own is not suffi-cient. People’s welfare is at stake and social justice is in
play. Douglas Alexander, the UK’s Secretary of State for International Development, has talked of global social justice, a useful paradigm for climate change. Building on UK discourse, that could mean four things:• Equal citizenship and equal rights; • Equal opportunities; • A social minimum; and • Reasonable equity in outcomes.
This is a challenging agenda. It puts human rights and human development squarely at the centre of the discussion. It insists on legally binding frame-works and accountabilities. It imposes obligations to increase the level of social protection, especially in the face of climate-induced natural disasters. And it emphasises equity in outcomes, so that the his-toric polluters in rich countries do not bank all the gains and exclude poor people and poor countries.
All these values are central to development, famil-iar from our work on poverty, human development and capabilities. They play well to current preoccu-pations with partnership, accountability and voice.
They provide a template within which the poor can exercise their voice. And within which we can exercise ours.
Written by Simon Maxwell, ODI Director ([email protected]).
Useful links and references
ODI climate change events series, http://www.odi.org.uk/events/series-details.asp?id=65&title=climate-change-international-development
ODI Climate change, forests and environment programme, http://www.odi.org.uk/ccef/index.html
ODI ‘Food’ theme page, http://www.odi.org.uk/themes/food/index.asp
ODI ‘Rights’ theme page, http://www.odi.org.uk/themes/rights/default.asp
ODI ‘Social Protection’ theme page, http://www.odi.org.uk/themes/social-protection/index.asp
ODI ‘Trade’ theme page, http://www.odi.org.uk/themes/trade/index.html
ODI on… Third High Level Forum on Aid Affectiveness, Accra 2008, http://www.odi.org.uk/odi-on/accra2008/index.asp
Bird, N. and Peskett, L. (2008) ‘Recent bilateral initiatives for climate fnancing’, ODI Opinion 112. London: ODI.
Brown, D. and Bird, N. (2008) ‘The REDD road to
Copenhagen: Readiness for what? ODI Opinion 118. London: ODI.
Foresti, M. and Sharma, B. (2007) ‘Voice for accountability: Citizens, the state and realistic governance’, ODI Briefing Paper 31. London: ODI.
Maxwell, S. (2008) ‘Global social justice as a new focus for development policy?’, ODI Opinion 96. London: ODI
Nicol, A. and Kaur, N. (2008) ‘Climate change: getting adaption right’, ODI Opinion 116. London: ODI
Peskett, L. et al. (2007) ‘Biofuels, agriculture and poverty reduction’, Natural Resource Perspectives 107. London: ODI
Stern, N. (2008) ‘Key elements of a global deal on climate change’. London: London School of Economics and Political Science
1
Presentation of Mr. Mutsuyoshi Nishimura, Special Advisor to the Cabinet of the Government of Japan and Senior Fellow at JIIA,
at the IISS-JIIA Conference 2-4 June 2008
Hotel Okura, Tokyo, Japan “Climate Change and Asia”
As a former climate negotiator, I am capable of indulging in alerting you with facts and statistics about the dire consequences of climate change. However, today I won’t do that. Instead I would like to open up a broader perspective for you as I believe it might interest you more. My key topics today are how to stop a climate catastrophe and what the role of the Asia-Pacific region is in doing so. The IPCC Fourth Assessment Report (SPM) indicates that short and near-term action aimed at getting GHG emissions to peak and decline is just as important as long-term reduction for climate stability. In order to stabilize the concentrations of GHG in the atmosphere, emissions would need to peak within of the next 10-15 years and decline thereafter. The lower the stabilization level, the more quickly this peak and decline would need to occur. Rajendra Pachauri, Chairman of the IPCC, who had gone through tons of scientific studies and large numbers of discussions, had this to say (Nov. 17, 2007 at Valencia, Spain): “The world would have to reverse the growth of greenhouse gas emissions by 2015 to avert a global climate disaster. If there’s no action before 2012, that’s too late. What we do in the next few years will determine our future. This is the defining moment.” Well, if the Nobel Prize-winning Indian scientist is eloquent and compelling, the facts are more so. The US and China together produce 40 percent of global greenhouse gas emissions. China is increasing its emissions and is about to overtake the US. Yet, if you go back over the past 150 years, the US is by far the largest emitter in the world, and those gases will remain hundreds of years and cause damage. Therefore, in a nutshell, without acquitting all the other major emitters, including Japan, from responsibility, the climate and energy actions of the US and China will determine the fate of the planet. These two countries are to bear major responsibilities in saving the planet. If these two nations act to curb emissions, the rest of the world can more easily coalesce on a global plan. If either fails to act, the mitigation strategies adopted by the rest of the world will fall far short of averting disaster. So the United States and China must agree and make accommodations to curb
2
greenhouse gas emissions. Yet both countries demand that the other take responsibility first. There is a quarrel and it continues. In my view, first, of course, the US must join us this time. It’s so evident. Yet the US is still insisting that US participation be accompanied by Chinese and Indian participation. Developing countries, on the other hand, argue that, because of their historical responsibilities, the US and all rich countries take the lead. From my perspective, vision and pressure will solve the stalemate eventually and I am optimistic about the outcome. I am optimistic because I trust in the good collective judgment of the US leadership on this issue. This is a new global battle to save the planet that can be assimilated with another important battle, the battle to win freedom and democracy decades ago. We finally won the last one largely because of strong and consistent American leadership. I believe the US after those long tortuous debates will come out with a new sense of leadership that I hope is consistent, robust and unchanging as in the case of the battle for freedom. A consistent approach by the US leadership is most important. What bothers me and the rest of the world is that the big elephant tends to change its direction every now and then. The abrupt turning of this elephant in 2002 rejecting Kyoto caused havoc. The world cannot tolerate anymore the US going in one direction today and another the next day. A large elephant must fully fathom the impact of its weight as it steps into action. Now, turning to China, I believe I am optimistic because, as far as I see, China’s vision is positive and pragmatic. They are really serious on all this. This I can tell you from my long experience with them. They are virtually tearing down dirty coal-fired power plants one by one. They are forcibly withdrawing old cars. They are giving money out for people to change light bulbs to the right ones. So all in all, if I deliberately go from a cautious statement as a former diplomat and jump into an unambiguous statement, I am absolutely sure China will come forward more positively in the post-2012 regime for climate cooperation if indeed the US comes on board. Having said all this, let me offer you yet another perspective that is serious. We tend to point our fingers at major emitters such as the US and China. And increasingly more so at China rather than the US. Yet the fact is immensely clear that Chinese emissions are due to our consumption. China is the elephant in the room. It is easy to bash China for all those problems, but we
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are not terribly legitimate in that regard because many of the problems that we blame China for we have participated in creating and benefited from, as we use China as an industrial platform. So the finger pointing is a small, simplistic and wrong answer to the big problem of the planet we inhabit. We are living in a world of global interdependency and of global subcontracting networks. It is global production in which we use China as an industrial platform. What does this mean? It means that we have to move from the nation-state concept as our mode for understanding. We are talking about global issues but we continuously promote ideas from the perspective of Japan, China, the US and so on. A nation-state analysis, if we limit ourselves to that, limits our vision of what the answer might be. It also limits our responsibilities and complicity and it highlights our hypocrisy. On many global issues, a nation-state analysis, a nation-state approach, is no longer legitimate or valid. Issues relating to climate change are a case in point. To save the planet, and to preserve a cooler and pristine earth climate-wise, to create a safer world security-wise, we need a newer vision, a broader perspective that transcends borders. Therefore, climate change is not an issue for a bunch of negotiators like me, it is indeed an issue for you and for all of us as the nature does not make distinction whether it comes from the US, China and Japan. END
MAURICE STRONG: CLIMATE CHANGE IN ASIA AND
PACIFIC: A DEVELOPMENT CHALLENGE
(MaximsNewsNetwork)
UNITED NATIONS - / MaximsNews Network / 15 September 2009 - The
following is the full-text of the Keynote Speech by Maurice Strong at High-
Level Dialogue on Climate Change in Asia and Pacific: A Development
Challenge, ADB Headquarters in Manila, Philippines in Manila on June 16-17,
2009:
"Many of you have participated, as I have, in the many conferences and negotiations
which produced commitments by governments on principles, declarations, treaties
and conventions which for the most part have remained unfulfilled. There is yet no
system of enforcement or accountability for the commitments that have not been
met. As one who has been deeply involved in the evolution of the climate change
issue I feel privileged to participate in this dialogue in with so many of those I have
worked with and learned from over more than 40 years. I am here because I am still
active and still learning and like most of you I am convinced that this time the
commitments required to address climate change must be radical and must be met.
This dialogue could not be more important or more timely as it addresses the issues that
will literally determine the future of life as we know it. That future will be decided
primarily in Asia which has not only the world’s largest population. It also has its most
rapidly growing economies, is the most rapidly growing contributor to the risks of
climate change and potentially its most vulnerable victim.
It is therefore appropriate
that this meeting be
organized under the aegis
of the World Sustainable
Development Forum
established by TERI on
the initiative of my
esteemed friend, Dr. R.
K. Pachauri, who also
heads the Nobel Prize
winning
Intergovernmental Panel
on climate change, and is
one of the world’s
leading and most
influential voices in the
field.
The fact that this dialogue
is hosted by the Asian
Development Bank, the
principal development
organization of the region
in conjunction with its
Clean Energy Forum
underscores both its
importance and the key
role of ADB in fostering
the transition to
sustainable development
in Asia and the Pacific.
MAURICE STRONG AND AL GORE
(MaximsNewsNetwork)
Maurice Strong and Al Gore following Strong's
Keynote Speech at the High-Level Dialogue on
Climate Change in Asia and Pacific: A Development
Challenge, ADB Headquarters in Manila, Philippines
in Manila on June 16-17, 2009.
The future of the entire human community will be largely, indeed decisively determined
by what this region does — or fails to do — in response to this challenge. The theme of
this session is “Innovation of Climate Change Technology in the Asia and Pacific –
Changing The Way We Live”. Innovative technologies are clearly an essential source of
solutions to the climate crisis.
However it is only one source and cannot be understood or addressed in isolation from
the complex of measures required to avert this unprecedented threat to the human future.
Innovative technologies must not be seen as miracle solutions that will provide us with an
easy way out of this crisis. If the risks of climate change are to be averted we must
change and change radically — in our allocation and deployment of our resources,
economic, human and institutional — in our mindsets and our behavior.
Every sector of human activity is already caught up in the processes of change which
affect human welfare and its prospects, notably those of the poor and disadvantaged —
food, water, tropical forests, biological diversity, deterioration of urban areas, to name
but a few. It is clear that the risks of climate change and the urgency of action to avoid its
catastrophic consequences requires massive mobilization of resources to develop the
innovative technologies and support the deployment and use of all the best technologies
and expertise.
Transportation is one of the most important areas now been widely acknowledged as a
priority for technologies which eliminate or reduce carbon dioxide emissions. Important
progress has already made in improving battery technology and hydrogen while reducing
vehicle emissions through use of liquefied or compressed natural gas and liquefied
petroleum gas. A particularly critical priority is reduction of the emissions generated by
the production of electric power, which is now highly dependent on fossil fuels,
particularly coal. This will take time. In the meantime priority must be given to
technologies that produce cleaner fossil fuels while accelerating the transition to
alternatives, particularly solar and wind.
The Economic Crisis
The economic crisis which began in the United States and now extends to virtually all
countries has exacerbated the poverty of millions of people, mainly in developing world,
who have long been suffering from economic crisis beyond anything experienced by the
“new” poor in the more developed countries. There is universal recognition of the need
to reform and remake our economy. The poor and disadvantaged must be fully and
equitably engaged in this process and their interests a primary motivator and beneficiary
of the new economy.
Governments must take the lead in mobilizing the resources this requires and providing
the incentives to the private sector to develop new and innovative technologies and make
them universally available and affordable. For the private sector is the main source of the
entrepreneurship, the expertise and capabilities requires as well as massive financial
resources. Private foundations are today a more and more important source of innovative
support and leadership. Governments must give to this crisis the same kind priority they
accord to the threats to their security they face in wartime, treating this is the greatest
threat ever to global security.
This region has become the world’s main source of carbon emissions while still much
less on a per capita basis than the U. S. and other major industrial countries. It will also
unfortunately be one of the most severely affected by climate change. The costs of
reducing its carbon emissions have been greatly reduced by the credits available to
developing countries of the region under the Kyoto Protocol of the U.N.’s Climate
Change Convention. While far from perfect this has made possible major reductions in
emissions and remedying its deficiencies will be a key issue in negotiations of the new
Kyoto regime.
A Package of Commitments
The financial measures that must be devoted to the successful achievement of climate
security go beyond anything yet being seriously considered by the main more developed
governments and demanded by China and developing countries. This will not simply be
one lump sum, but a package of firm commitments over time initially adding up to an
order of magnitude of at least 1 trillion dollars (US). It would include carbon taxes,
replacing subsidies to fossil fuels and other sources of carbon emissions with subsidies
for reduction of emissions, levies on the use of the global commons for air and ocean
transport, sale of permits under an approved cap-and-trade system and incentives to
improve energy and overall industrial efficiency. Redeployment of the massive resources,
financial and human now devoted to the military could itself meet most of the need — in
effect giving priority to improving living power rather than killing power.
If the figure of trillion dollars and beyond seems unrealistically high under today’s
conditions, we must be reminded that it is only a portion of what the United States alone
has spent in wars in Iraq and Afghanistan and in current attempts to bail out its major
financial institutions and revive its flagging economy. The climate change crisis is in
even greater need of a bailout than the economic and financial crisis, though both are
inextricably related. Deploying the financial and institutional resources required for this
purpose will also make a major contribution to economic recovery and a new era of
progress and opportunity. Clearly these resources are available if we are prepared to give
the need for them priority.
It would be wrong to regard these as costs but rather as essential investments in climate
security as well as economic security. How will the resources be used? First and foremost
is the need for an order of magnitude increase in support for the sustainable development
and relief from poverty of developing countries. They are dismayed and distressed that
prior commitments remain unfulfilled while their suffering has become more acute as the
main victims of the current crises. Massive development and dissemination of innovative
technologies and for projects and programs which will enable them to employ the best of
existing as well as new technologies.
Wealthiest Civilization
We are the wealthiest civilization ever. Can we really accept we can not afford to save
ourselves and future generations?
Knowledge is the principal resource on which the future growth, development and
governance of our modern civilization will be based. Technology as manifested in a
galaxy of new products and services. It offers the main ingredient for the transition to
sustainability through patterns of production and consumption that are less physical in
nature, and less materials- and energy-intensive.
There is good news in the promising and positive dimensions of the technological
progress that our knowledge society has produced. Increasingly sophisticated information
technology provides tools which enable us to understand and manage the complex
systems which determine the functioning of our civilization. There is no other field in
which new and innovative technologies are being developed so rapidly and promise to
contribute more to our capacity to control the advance of climate change.
The most economically successful countries of Asia, notably Japan and the Republic of
Korea, neither of them well-endowed with natural resources, have built their success on
the development of advanced technologies and high rates of investment in educational
and research capacities. China is now making impressive progress in becoming a
knowledge and technology based economy as are other countries of this region in varying
degrees. A principal byproduct of these measures which improve energy and overall
industrial efficiency is substantial environmental improvement and reduction of carbon
emissions as the experience of Japan, and a number of European countries has
demonstrated.
New Economics
Despite the progress we are making, we are still at an early stage in establishing the
institutional structures through which we manage them. What will we have to do? First of
all we need a new economic paradigm which integrates the disciplines of traditional
economics with the new insights of ecological economics. This “new Eco-nomics” must
provide the theoretical underpinnings for a system that incorporates into economic
pricing and national accounts the real values of the environment and services which
nature provides. It must include fiscal and regulatory regimes with positive incentives for
the achievement of economic, social and environmental sustainability.
People’s actions and their priorities depend on their motivation. While we are all
motivated by self-interest, at the deepest level, ethics, morality, and spiritual values
provide the underlying basis of our motivation. Much of the today’s conflict, violence
and “terrorism” arises not from economic motivation but from extreme ideologies and
deep-seated prejudices.
I especially commend to you the Earth Charter – a statement of basic principles to guide
the conduct of people and nations towards the Earth and each other which has now been
embraced by growing numbers of people and institutions around the world of diverse
religions and ideologies. Time precludes my reciting these principles here, but I refer
you to the Earth Charter’s website. You will find, I am sure that it can make a unique
contribution to motivating the fundamental changes we must undertake.
Shifting the Tax Burden
In a market economy which drives the processes of globalization, the market provides the
signals that motivate sustainable development. This means shifting taxes to products and
practices which are environmentally and socially harmful from those which are least
harmful. In effect, getting the prices right. No nation can do this alone without
disadvantaging its own economy; it can only be effectively done within an internationally
agreed framework.
Effective management of these issues cannot simply be a matter of placing our bets on
the predictions of experts, however plausible they may be. A survey by the American
Association for the Advancement of Science in the 1930s of new technologies that may
impact on society did not identify a single one of the main technologies that now
dominate our life. We have to have a view of the future, but we must prepare for a future
that we cannot reliably predict.
Already we are experiencing the effects of increased climactic turbulence, extremes of
droughts and floods, warming of the polar regions and the melting of glaciers in high
mountain ranges, including the Himalayas threatening the great rivers of India and China
on which so many millions of people depend for their water.
A recent study by the Global Humanitarian Forum headed by former UN Secretary
General Kofi Anan, postulates that the economic and human costs of climate change
could now amount to some 125 billion dollars per year and the loss of 300,000 lives.
Many more are being increasingly affected, mainly the poor. Much too little has been
done up to now to accommodate and prepare for the impacts of changes that have already
occurred and are not reversible. Especially vulnerable are low-lying islands, like the
Maldives, and coastal areas, notably Bangladesh, where so much of the world’s
population is concentrated.
Indispensible Key
Technology is the indispensible key to the transition from the fossil fuels era which is far
from over. Indeed, the lower the price of oil, the less incentive to invest in alternatives.
This transition is as much a financial as a technological issue. Japan and key European
nations have demonstrated that investments in energy and industrial efficiency contribute
significantly to reductions in greenhouse gas emissions.
I need not to stress this group that the forthcoming meeting of the parties to the Climate
Change Convention in Copenhagen will be one of the most important and one of the most
difficult international agreements ever attempted. Most challenging will be the need to
bridge the deep differences and divergent positions of the main parties. It is an ominous
paradox that as our future depends on unprecedented levels of cooperation we are
experiencing growing competition and division. Especially difficult will be agreement on
commitment to the massive resources required to develop innovative technologies and to
make all the best technologies universally available. Without this, the prospects of a
breakdown in Copenhagen are very real. The danger to the prospects for survival and
well being of life as we know it on the Earth is so dire that it must drive the incentive to
reach binding agreements. The interests of the entire human community must transcend
the differences amongst the parties.
Copenhagen will be a critical, perhaps decisive, milestone on the road to the fundamental
changes we must make to ensure the climate security that is essential to our survival as
well as the sustainability and progress to which we aspire. Time is clearly running out
and we cannot afford to miss this opportunity. At the same time we must realize that
there is still all too little evidence that governments are prepared to undertake the kind of
commitments that will lead us to this new era. The countries, the organizations and the
people participating in this dialogue will clearly have a critically important, indeed I
would say decisive, role to play in Copenhagen. Let us all give this the highest priority in
our own lives that we expect from governments."
~~~~~
Maurice Strong globalized the world environment. He was the Secretary
General of the 1972 United Nations Conference on the Human Environment,
first Executive Director of the United Nations Environment Programme
(UNEP), and Secretary General of the 1992 United Nations Conference on
the Human Environment. For more information, see:
http://www.mauricestrong.net.
AP
Developing countries and global warming
A bad climate for developmentSep 17th 2009From The Economist print edition
Poor countries’ economic development will contribute to climate change. But they are already itsgreatest victims
IN LATE April Mostafa Rokonuzzaman, a farmer in south-western Bangladesh, gave an impassioned speech ata public meeting in his village, complaining that climate change, freakish hot spells and failed rains wereruining his vegetables. He didn’t know the half of it. A month later Mr Rokonuzzaman was chest-deep in aflood that had swept away his house, farm and even the village where the meeting took place. Cyclone Aila(its effects pictured above) which caused the storm surge that breached the village’s flood barriers, was itselfa plausible example of how climate change is wreaking devastation in poor countries.
Most people in the West know that the poor world contributes to climate change, though the scale of itscontribution still comes as a surprise. Poor and middle-income countries already account for just over half oftotal carbon emissions (see chart 1); Brazil produces more CO2 per head than Germany. The lifetimeemissions from these countries’ planned power stations would match the world’s entire industrial pollutionsince 1850.
Less often realised, though, is that global warming does far moredamage to poor countries than they do to the climate. In a report in2006 Nicholas (now Lord) Stern calculated that a 2°C rise in globaltemperature cost about 1% of world GDP. But the World Bank, in itsnew World Development Report*, now says the cost to Africa will bemore like 4% of GDP and to India, 5%. Even if environmental costswere distributed equally to every person on earth, developing countrieswould still bear 80% of the burden (because they account for 80% ofworld population). As it is, they bear an even greater share, thoughtheir citizens’ carbon footprints are much smaller (see chart 2).
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As December’s Copenhagen summit on climate change draws near,poor countries are expressing alarm at the slow pace of negotiations toreplace the Kyoto protocol. Agreed (partially) in 1997, this bound richcountries to cut their greenhouse-gas emissions by 5.2% from 1990levels by 2012.
Counting the cost of globalwarming is hard because no onereally knows how much toattribute to climate change andhow much to other factors. Butone indication of its rising costsis the number of people aroundthe world affected by naturaldisasters. In 1981-85, fewerthan 500m people requiredinternational disaster-assistance; in 2001-05, thenumber reached 1.5 billion. Thisincludes 4% of the population ofthe poorest countries and over 7% in lower-middle-income countries (see chart 3).
In all, reckons the World Health Organisation, climate change caused a loss of 5.5m disability-adjusted lifeyears (a measure of harm to human health) in 2000, most of it in Africa and Asia. Estimates by the GlobalHumanitarian Forum, a Swiss think-tank, and in a study in Comparative Quantification of Health Risks, ascientific journal, put the number of additional deaths attributable to climate change every year at 150,000.The indirect harm, through its impact on water supplies, crop yields and disease is hugely greater.
The poor are more vulnerable than the rich for several reasons. Flimsyhousing, poor health and inadequate health care mean that naturaldisasters of all kinds hurt them more. When Hurricane Mitch sweptthrough Honduras in 1998, for example, poor households lost 15-20%of their assets but the rich lost only 3%.
Global warming aggravates that. It also increases the chances ofcatching the life-threatening diseases that are more prevalent inpoorer countries. In many places cities have been built just above aso-called “malaria line”, above which malaria-bearing mosquitoescannot survive (Nairobi is one example). Warmer weather allows thebugs to move into previously unaffected altitudes, spreading a diseasethat is already the biggest killer in Africa. By 2030 climate change mayexpose 90m more people to malaria in Africa alone. Similarly,meningitis outbreaks in Africa are strongly correlated with drought.Both are likely to increase. Diarrhoea is forecast to rise 5% by 2020 inpoor countries because of climate change. Dengue fever has beenexpanding its range: its incidence doubled in parts of the Americasbetween 1995-97 and 2005-07. On one estimate, 60% of the world’spopulation will be exposed to the disease by 2070.
Next, as Mr Rokonuzzaman’s story showed, poor countries areparticularly prone to flooding. Ten of the developing world’s 15 largestcities are in low-lying coastal areas vulnerable to rising sea levels orcoastal surges. They include Shanghai, Mumbai and Cairo. In Southand East Asia the floodplains of great rivers have always been home tovast numbers of people and much economic activity. Climate change isoverwhelming the social and other arrangements that in the pastallowed countries and people to cope with floods. National budgets canill afford the cost of improving defences. The Netherlands is also affected and is spending $100 per person ayear on flood defences. In Bangladesh that sum is a quarter of the average person’s annual income.
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The biggest vulnerability is that the weather gravely affects developing countries’ main economicactivities—such as farming and tourism. Global warming dries out farmland. Since two-thirds of Africa isdesert or arid, the continent is heavily exposed. One study predicts that by 2080 as much as a fifth of Africa’sfarmland will be severely stressed. And that is only one part of the problem.
Global warming also seems to be speeding up the earth’s hydrologic cycle, causing both floods and droughts(more rains fall in shorter periods, with longer gaps between). In addition, by melting glaciers, global warmingreduces nature’s storage capacity. Two-thirds of the world’s fresh water is stored in glaciers. Their meltingleaves poor countries with less of a buffer to protect farmers against changing weather and rainfall patterns.
This kind of increasing unpredictability would be dire news at the best of times: hit by drought and flood, theland becomes less productive. It is compounded by another problem. The higher-yielding, pest-resistant seedvarieties invented in the 1960s were designed to thrive in stable climes. Old-fashioned seeds are actuallybetter at dealing with variable weather—but are now less widely used. Reinstituting their use will mean lessfood.
In India the gains from the Green Revolution are already shrinking because of local pollution, global warmingand waning resistance to pests and disease. A study for the Massachusetts Institute of Technology forecastthat yields of the main Indian crops would decline by a further 4.5-9% over the next 30 years because ofclimate change. A recent assessment based on a large number of studies of what might happen in the long runif carbon continues to be pumped into the atmosphere found that world farm production could fall by 16% bythe 2080s, and possibly by as much as 21% in developing countries. Although the timescale makes suchfigures no more than educated guesses, there is not much doubt that climate change is undermining the gainsfrom intensive farming in developing countries—at the very time when population growth and greater wealthmean the world will need to double food production over the next three or four decades. By 2050 the worldwill have to feed 2 billion to 3 billion more people and cope with the changing (water-hungry) diets of a richerpopulation. Even without climate change, farm productivity would have to rise by 1% a year, which is a lot.With climate change, the rise will have to be 1.8%, says the bank.
If these myriad problems have a silver lining, it is that they give developing countries as big an interest inmitigating the impact of climate change as rich ones. As the World Bank says, climate-change policy is nolonger a simple choice between growth and ecological well-being.
Sideways to Copenhagen
In principle that shift should make a climate-change deal in Copenhagen more likely, by increasing thenumber of countries that want an agreement. But two big problems remain. First, the poor countries wantlarge amounts of money. To keep global warming down to an increase of 2°C, the World Bank calculates,would cost $140 billion to $675 billion a year in developing countries—dwarfing the $8 billion a year nowflowing to them for climate-change mitigation. The $75 billion cost of adapting to global warming (as opposedto trying to stop it) similarly overwhelms the $1 billion a year available to them.
Second, poor countries see a climate-change deal in fundamentally different terms. For rich countries theproblem is environmental: greenhouse gases are accumulating in the atmosphere and must be cut, preferablyusing the sort of binding targets recommended by the Intergovernmental Panel on Climate Change. Fordeveloping countries the problem is one of fairness and history: rich countries are responsible for two-thirdsof the carbon put into the atmosphere since 1850; to cut emissions in absolute terms now would perpetuatean unjust pattern. Poor countries therefore think emissions per head, not absolute emissions, should be thestandard.
Moreover, targets set at national level have little effect in poor countries where public administration worksbadly. So rich and poor also disagree about the conditions attached to any money for mitigating or adapting toclimate change. The rich see this as a sort of aid, designed for specific projects with measurable targets,requiring strict conditions. Poorer countries see the cash as no-strings compensation for a problem that is notof their making.
The cost of climate change gives developing countries a big interest in a deal at Copenhagen. But what sort ofdeal they want—and how hard they push for it—is another matter altogether.
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Copyright © 2009 The Economist Newspaper and The Economist Group. All rights reserved.
* “World Development Report 2010: Development and Climate Change”. World Bank.
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Copyright © 2009 The Economist Newspaper and The Economist Group. All rights reserved.
Investors and climate change
Green backingSep 17th 2009 | NEW YORKFrom The Economist print edition
How can private capital be unlocked for green projects in poor countries?
NEITHER rich countries nor poor ones can tackle climate change alone. The rich bear most of the responsibilityfor the greenhouse gases in the atmosphere. But if they make cuts while the poor go on a carbon-heavygrowth binge, the climate will suffer anyway. Rich-to-poor aid has thus been a big part of the discussionsahead of December’s climate conference in Copenhagen, which is meant to hammer out a successor to theKyoto protocol.
Public money will only go so far. The cash on the table for the rich world to help the poor world amounts totens of billions—nowhere near enough to meet the needs of surging economies like those of China and India,which are both adding heavily polluting coal-fired power-stations at an alarming rate. Hundreds of billions willbe needed for greener growth in this part of the world. How then to turn tens of billions of public dollars intohundreds of billions in private finance? Pension funds have a duty to guarantee their members’ retirementbenefits, after all, not cut carbon.
New thinking on this problem is emerging. In a forthcoming paper the World Economic Forum (WEF) suggestshow public money can be used to guarantee, at least partially, rich-world investment in developing countries’greenery. Currency and political risk are among the factors currently keeping European pension funds, say,from investing in Indian renewables. The WEF calls for negotiations in which development banks—the WorldBank or regional ones like the Asian Development Bank—would use public funds from the rich world toguarantee investors against these sorts of country risks.
Investors are also putting forward ideas of their own. On September 16th a group of 181 institutionalinvestors, together representing $13 trillion in assets under management and including national, state andprivate pension funds, called on world leaders to agree stringent carbon-cutting targets at the Copenhagenmeeting. Emissions must fall by 50-85% by 2050, said the group, and cap-and-trade systems like the oneEurope has (and America’s Congress is considering) must be a big part of the plan. Predictability of futurepolicy is vital for these large, would-be green investors.
To turn private capital into green projects in the poor world, the group floated the idea of government-guaranteed bonds for climate-related investment, as well as more direct public support for specific greenfunds, in the form of loss-sharing agreements and debt guarantees. Some investors, like CalPERS, a hugeCalifornian public pension fund, have already experimented with government-hedged green bets at a locallevel. Now to convince leaders to do it globally.
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