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March 2011

Can East Asia do for Green what it’s done for Growth?

Andrew Steer's picture

East Asia has shown us how economies can grow at a pace unparalleled in human history. What made it happen? Key ingredients included high savings rates and a willingness to invest them for the long term in people and infrastructure, leaders who kept their eyes on the long-term transformation of the economy, and a lot of serious attention to how investors respond to incentives.

But aren’t these some of the same ingredients we’ll need to make growth green?

This was one of the topics we discussed this week at the first Annual Conference on East Asian Development in Singapore organized by the Bank’s East Asia Pacific region and Singapore’s Institute for Policy Studies.  This brought together senior policymakers and academics from throughout the region. Is it possible that the Region that brought us growth, could also be the leader in making that growth green?

But first, just how green has East Asia’s growth been so far? To over-simplify, the region has made pretty good progress in reducing the environmental damage per unit of output, but this hasn’t been able to keep up with the astonishing growth of the output. So, real GDP is up by near 400% since 1990, while energy use is up by 150%, sulfur dioxide emissions up by about 60%, and carbon dioxide up by nearly 200%.

This is a lot better than it might have been – but the environment is still getting worse at a serious rate. And this says nothing about water stress, loss of biodiversity and a host of other issues. (On a positive note, particulate emissions are down by 50%, and lead in fuel has almost disappeared).

Does East Asia need to lower its growth to ensure that the environment doesn’t deteriorate further?  No, but it will require the same degree of commitment and long term focus that inspired the strong growth in the first place – but this time by internalizing environmental costs.   

The revival of cookstove research

Daniel Kammen's picture

It may come as a surprise to know that half of the global population uses biomass (wood, agricultural wastes and dung) and coal for cooking.  For Sub-Saharan Africa where electrification rates outside of South Africa are only 28%, biomass and coal are the primary cooking fuels for over three fourths of the population. Combustion of unprocessed biomass fuels, especially in open or poorly ventilated stoves, emits high concentrations of pollutant mixtures – particulates, and carbon dioxide, methane, and carbon monoxide – associated with a number of respiratory and other diseases and is the leading cause of death among infants and children worldwide.

 

Since the task of cooking is mainly done by women and girls, it is they who face daily exposure to levels of pollution which are estimated to be the equivalent of consuming two packets of cigarettes a day (Kammen, 1995; Ezzati and Kammen, 2001).

 

Smoke from domestic fires kills nearly two million people each year, and sickens millions more. This places indoor air pollution as almost as critical a health threat as poor sanitation and AIDS, and a greater threat than malaria. Without systematic changes, household biomass use will result in an estimated 8.1 million Lower Respiratory Infection (LRI) deaths among young children in Sub-Saharan Africa alone, between 2000 and 2030 (Bailis, Ezzati, Kammen, 2007).

 

All of these factors highlight the critical need to evaluate the effectiveness of cookstoves at not only reducing emission, but in impacting health.

Three 'tribes' within development can work together

Robin Mearns's picture

Social protection, disaster risk reduction, and climate change adaptation – how do they relate to one another? Are they still largely separate communities of practice or ‘tribes’ within development or humanitarian contexts? Are there signs that they are beginning to work together to help us deal with the increasingly risky and uncertain world in which we live – one in which life comes at you fast?

 

The devastating earthquake and tsunami in northeast Japan have reminded us just how precarious people’s lives and well-being can be, even in the world’s richest countries. But in the world’s poorest countries and communities, the threat of drought, floods and other climate risks looms large in everyday life, and is a major reason why many people are held back from transforming their livelihoods and permanently escaping poverty.

 

Rehabilitating degraded lands by water  harvesting in Lemo Woreda, Ethiopia. Picture by Cecilia Costella

Last week in Addis Ababa, 120 people from 24 countries gathered in UNECA’s historic Africa Hall – an architecturally significant symbol of African independence and optimism – to learn from each other how best to make social protection work for pro-poor disaster risk reduction and climate change adaptation. Ethiopia was the ideal venue for this international workshop. One in three people in Ethiopia lives in poverty, largely dependent on rain-fed agriculture for a living, and is highly susceptible to droughts, floods and other climate vagaries.

 

As the President of Ethiopia, H.E. Girma W/ Giorgis, remarked in his welcome address, Ethiopia is also proud to be breaking new ground in social protection for climate risk management through the flagship Productive Safety Nets Project (PSNP). In his video message to the workshop, the World Bank’s Special Envoy for Climate Change, Andrew Steer, applauded Ethiopia for its part in being a “pioneer in the revolution that is under way in social protection programs for the poor”. Ethiopia also displays global leadership in the ongoing climate change negotiations under the UN Framework Convention on Climate Change. As Andrew Steer observed, just as the Government of South Africa is determined that the Durban Conference of the Parties (COP) in December this year be seen as “Africa’s COP – just like the World Cup”, the agenda discussed in this workshop was very much “Africa’s agenda, and the agenda of all vulnerable countries everywhere”.

What has carbon got to do with kids going to school?

Idah Z. Pswarayi-Riddihough's picture

Last week, I headed to Ibi Bateke plateau in the interiors of Democratic Republic Republic of Congo (DRC) to see the country’s first project approved and registered under the Kyoto Protocol.  We set off on a long winding road taking us quickly from Kinshasa to the Ibi plateau – 150 kms away from the daily hustle of the over 9 million inhabitants of Kinshasa. Ibi is characteristically thinly forested, partly a result of the poor porous soils. Despite the vast lands, the majority of the land is uninhabited with villages dotting the landscape.

 

The community is replanting its degraded forests with trees like acacia, pines and eucalyptus that absorb carbon from the atmosphere, allowing the project to generate carbon credits which are purchased by the World Bank’s BioCarbon fund. This project is a trail blazer as some of the revenue from the sale of carbon credits is providing basic health care and schools, offering an integrated vision of development.

 

As we entered the village, we met a group of children walking home. Among them was one older kid who chaperoned the smaller ones - the youngest must have been about five. They chattered enthusiastically about their new school. The school was negotiated as one of the benefits for the participatory management of the plantation. Gautier Tschikaya a resident who was accompanying us told us that one day they were driving around on the plantation and found a whole bunch of kids squatting in an abandoned building so that they would not have to walk the 10+ km every day to get to school. At that point, they built a dormitory for those kids and we visited it - situated just below the school now. 

Your local power source may be responsible for climate change but it gets impacted by it too

Daniel Kammen's picture

Brazil relies heavily on its abundant hydropower resources to meet electricity demand, which is rising by about 5% a year. These resources have helped Brazil hook up more than 2.4 million rural homes since 2003, in addition to delivering electricity to its big cities. But hydropower is vulnerable to drought too, and the Brazilian Amazon—home to most of the country’s hydropower potential—has had two devastating droughts since 2005.

 

That’s just one example of the exposure of the energy sector to climate impacts. Up to now, most of the focus for the discussion of the energy-climate nexus has been on the impact of fossil-fuel energy use on climate change, the need to mitigate it, and the shift to renewable energy sources. This week, two World Bank colleagues of mine have just launched a new study that looks at the issue from the opposite side of the equation: climate impact on energy systems.

 

The study is entitled Climate Impacts on Energy Systems, Key Issues for Energy Sector Adaptation, by Jane Ebinger and Walter Vergara. It provides a framework for further analysis of vulnerability indicators for climate impacts on hydropower, wind, solar, wave and tidal energy. It also offers analytical tools that experts and policymakers can use to construct vulnerability and impact metrics for their energy sectors, along with a review of emerging adaptation practices.

To address climate change, we need to measure poverty better

Otaviano Canuto's picture

Increasing food and oil prices are making life miserable for millions of people. According to our World Bank estimates, the food price hike since last July has already pushed another 44 million people around the globe into extreme poverty –those living on less than US$1.25 a day. But beyond these latest shocks, the truth is that poverty reduction overall had continued in most countries, even after the financial, food, and fuel crises of 2008-2009.

In 1981, for instance, the percentage of the world population living below $1.25 a day was 52 percent. By 2005, that rate had more than halved to 25 percent. However, a growing concern is that climate change could slow or possibly even reverse progress in poverty reduction. Why? Because most developing countries are highly dependent on agriculture and natural resources. And also because poor countries lack sufficient financial and technical capacities to manage climate change.

 

For example, climate change may have a negative effect on agricultural productivity, particularly in tropical regions, and also affect poor people’s livelihood through its effects on health, access to water and natural resources, homes, and infrastructure.

So as long as we are unable to measure the poverty impact of climate change better, we run the risk of either overestimating or underestimating the resources that will be needed to face it.  So that’s why at the World Bank we are exploring new approaches to measure how current climate variability affects poverty, as my colleagues do in this week’s Economic Premise. According to The Poverty Impacts of Climate Change, different estimates project the poverty increase between 9 and 10 million people by 2055, as the result of climate change.

 

These numbers might not seem like much, considering the catastrophic scenarios that have been portrayed by some. But  climate change will indeed slow the pace of global poverty reduction. And much of the poverty expected to occur will be concentrated in Africa and South Asia. In addition, the “modest” numbers of the poverty increases mentioned above correspond to baseline scenarios –they could be much higher if more extreme climate change damage occurs. So in light of all of this, more efforts have to go into measuring the poverty impacts of climate change better. Otherwise, we will certainly pay the consequences.

 

(This was originally posted on the World Bank Institute's Growth and Crisis blog)
 

A bond for climate solutions

Laura Tlaiye's picture

Why would a group of large investors care about climate change when their primary concern is ensuring adequate returns for their investment portfolio to meet their future financial obligations? This group includes pension funds, insurance companies or foundations. Pension funds alone are estimated to hold over US$25 trillion globally

 

As Alan Miller indicated in his recent blog, a report published by Mercer (a well-known investment advisor) estimates that uncertainty around climate policy could contribute as much as 10% to overall portfolio risk for investors to manage over the next 20 years. So, investors are beginning to pay attention. Choosing to support investments that help address climate change or increase climate-resilience also helps reduce the exposure of portfolios to this risk. 

 

Green bonds issued by the World Bank is one such instrument. Funding raised through green bonds is earmarked for eligible low-carbon and adaptation projects financed by IBRD in its member countries. For example, the money could be used for funding an eco-farming project in China, or improving the solid waste management in Amman, Jordan. On the mitigation side, eligible projects could include solar and wind farms. On the adaptation side, it could be protection against flooding or droughts.

 

Earlier, this month, a 'Green Bond Summit' gathered about 110 representatives of the investment community. The event was hosted by State Street Global Advisers -- an asset manager with over $2 trillion under management in different asset classes. The goal was to discuss how green bonds could attract greater participation from large investors to scale-up financing of climate solutions through the capital markets. The World Bank, a pioneer of the green bond, and other issuers such as ADB, EIB, and IFC deliberated with the participants on prospects for common green bond standards, the financial characteristics investors expect, and the policy issues that underlie the demand for climate investments.  

 

Benefits to the poor from clean and efficient energy use

Daniel Kammen's picture

The December 2011 Climate Conference (COP 17) in Durban, South Africa, presents a tremendously important opportunity to advance both the globally critical goal of climate protection, and to do so synergistically with a local agenda of sustainable development and poverty alleviation. 

 

The COP 16 meeting in Cancun last year, while in many ways an important step forward, particularly on the role of energy efficiency, did not result in decisions on the global accord, and much remains to be done. One remedy for this situation may be to achieve local successes that demonstrate how climate protection and clean and efficient uses of energy can directly benefit the poor.

 

The fact that the COP will take place in Africa, which has the highest unmet need -- and demand for reliable and affordable energy access – brings to a head the need to find new tools and paths that can meet both goals. As the plans for the Durban Conference evolve, there must be a premium on action that implements this strategy.

 

A new multi-donor program which is part of the Climate Investment Funds and is managed by World Bank Group and Regional Development Banks, may be an ideal component of that plan:  the new Scaling up Renewable Energy in Low-Income Countries (SREP) program, provides an exciting avenue to meet both goals. Six pilot countries, Ethiopia, Honduras, Kenya, the Maldives, Mali and Nepal, were selected for initial blocks of funding to bring clean energy technologies rapidly to meet the unmet demand for energy. Discussions are underway to bring in funding to double this pilot group.

 

Last month in South Africa, I had the opportunity to see just how a program like the SREP could build on both local innovative capacity, and the political attention that COP17 can bring to climate and development needs. The World Bank office in Pretoria hosted a meeting of African Ambassadors to South Africa, where I had the opportunity to discuss with them (see picture above) both market changes taking place in the region, and technology options to rapidly bring clean energy to the poor.