South Asia

Why Investors Support a Price on Carbon

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By Stephanie Pfeifer, Institutional Investors Group on Climate Change (Europe); Nathan Fabian, Investor Group on Climate Change (Australia/New Zealand); Chris Davis, Investor Network on Climate Risk (North America); and Alexandra Tracy, Asia Investor Group on Climate Change.

The British economist Lord Nicholas Stern has labelled climate change “the greatest market failure the world has ever seen.” Failing to put a price on carbon emissions leaves the market with no way to address the harm created by these emissions. And with no cost attached to a harmful activity, participants in the market have no incentive to pursue less harmful alternatives. Thankfully, this is changing.

About 40 national and more than 20 sub-national jurisdictions globally have implemented or are scheduled to implement carbon pricing schemes. The world’s emissions trading schemes are valued at about $30 billion, with China home to the world's second largest group of carbon markets, covering the equivalent of 1,115 million tons of carbon dioxide emissions, after the 2,309 million tonnes covered by the EU’s Emissions Trading Scheme.

This progress is good news, and furthering the spread of carbon pricing is essential. Putting a price on carbon reduces emissions and the costs associated with these emissions, costs that end up being borne by everyone, including companies and societies, through an array of impacts resulting from climate change.

Curt Carnemark/World Bank

A good friend of mine recently returned from her mother’s funeral in Germany. She had died of lung cancer after spending the last eight years of her life in a slum in New Delhi where she taught orphaned children.

I can’t help but wonder if breathing the dirty indoor and outdoor pollution in New Delhi contributed to her cancer. My friend has the same question.

In new estimates released March 25, the World Health Organization (WHO) reports that in 2012, about 7 million people died - one in eight of total global deaths – as a result of air pollution. Indoor air pollution was linked to 4.3 million deaths in households that cook over coal, wood and biomass stoves. Outdoor air pollution was linked to 3.7 million deaths from urban and rural sources worldwide. (As many people are exposed to both indoor and outdoor air pollution, mortality attributed to the two sources cannot simply be added together.)

South and East Asia had the largest number of deaths linked to indoor air pollution.

The WHO finding more than doubles previous estimates and confirms that air pollution is now the world’s single largest environmental health risk. In particular, the new data reveal a stronger link between both indoor and outdoor air pollution exposure and cardiovascular diseases, such as strokes and ischemic heart disease, as well as between air pollution and cancer. In the case of both indoor and outdoor air pollution related deaths, 6 percent were attributed to cancer.

Thinking that my friend’s mother perished as result of pollution may not be so far-fetched.

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A construction worker finishes sealing glass at a building construction site. Trinn Suwannapha / World Bank

What generates 70 percent of the greenhouse gases emitted from cities like New York, Beijing, or New Delhi? Not long ago, I might have answered “cars.” But the real culprit is buildings – our homes, offices, schools, and hospitals. Many of which use electricity, water, and fuel extremely inefficiently because of the way they were initially designed.

In fact, about 40 percent of the world’s electricity is used to cool, light and ventilate buildings, even though much more efficient technology exists.

The longevity of buildings is why we need to think much more about them at the new construction phase. Decisions about building materials, insulation, and plumbing live on for decades or longer. That’s why IFC, the private sector-focused arm of the World Bank Group, is working to help builders and developers in emerging markets lock in climate-smart choices at the early design stage.

Our new certification tool EDGE, which stands for Excellence in Design for Greater Efficiencies, was designed specifically for emerging markets, where housing needs are set to grow exponentially as a result of urbanization pressures. It is Internet-based and easy to use, offering developers a range of inexpensive design choices that might otherwise be overlooked in the rush to build.

Buildings certified by EDGE use 20 percent less energy than their peers, offering long-term emissions savings and lower utility bills – a major benefit in affordable housing.

Curt Carnemark/World Bank

Last week, the Telegraph newspaper in the United Kingdom reported that snow in the Himalayas was melting because of religious activity on the Indian subcontinent. The report, based on research by American and Indian scientists, found that burning of wood for cremations and incense sticks for religious ceremonies and marriages leads to emissions of black carbon and other compounds. This, in turn, accelerates the melting of ice and snow-covered surfaces.

There is a growing body of research looking at how black carbon is accelerating snow and glacial melting. A scientific paper published in India early this year associated forest fires and other biomass burning to the accelerated melting of one of the Himalayan glaciers. Scientists have even implicated black carbon emission from increased industrial activity in Europe for the retreat of glaciers in the Alps in the mid-19^th century.

Wutthichai/Shutterstock

Bangkok is a vibrant, cosmopolitan city, home to more than eight million people. However, a new report released by the World Bank today paints a grim picture for the Thai capital. It notes that, without adaptation, a predicted 15cm sea-level rise by the 2030s coupled with extreme rainfall events could inundate 40% of the Thai capital and almost 70% of Bangkok by the 2080s. While I certainly hope it doesn't happen, words cannot describe the impact this would have on the lives and livelihoods of people residing in this city. And Thailand isn’t the only country that could be affected by rising temperatures.

The report - Turn Down the Heat: Climate Extremes, Regional Impacts, and the Case for Resilience - was commissioned by the World Bank’s Global Expert Team on Climate Change Adaptation and prepared by a team of scientists at the Potsdam Institute for Climate Impact Research and Climate Analytics. It looks at the latest peer-reviewed science and with the aid of advanced computer simulations looks at the likely impacts of present day (0.8°C), 2°C, and 4°C warming across three regions – Sub-Saharan Africa, South Asia, and South East Asia. It focuses on the lives and livelihoods of people in the developing world by analyzing the risks to agriculture and food security in sub-Saharan Africa; the rise in sea-level, bleaching of coral reefs and their impact on coastal communities in South East Asia; and the impact of fluctuating rainfall patterns on food production in South Asia. The poor and the vulnerable are the ones that will be most affected by the impacts of climate change.

Participants at the first Community Practitioners Academy meeting, which was held ahead of the Fourth Global Platform for Disaster Reduction in Generva. - Photos: Margaret Arnold/World Bank

Communities are organized and want to be recognized as partners with expertise and experience in building resilience rather than as clients and beneficiaries of projects. This was the common theme that emerged from the key messages delivered by grassroots leaders at the Fourth Global Platform for Disaster Reduction taking place in Geneva this week, organized by the UN International Strategy for Disaster Reduction (UNISDR). The Global Platform is a biennial forum for information exchange and partnership building across sectors to reduce disaster risk.

Ahead of the Global Platform, 45 community practitioners from 17 countries - Bangladesh, Chile, Ethiopia, Guatemala, Haiti, Honduras, India, Indonesia, Japan, Kenya, Nicaragua, Peru, Philippines, Samoa, Uganda, Venezuela, and the United States - met for a day and a half to share their practices and experiences in responding to disasters and building long-term resilience to climate change, and to strategize their engagement in around the Global Platform. I had the privilege to participate in this first Community Practitioners Academy, which was convened by GROOTS International, Huairou Commission, UNISDR, the World Bank, Global Facility for Disaster Risk and Reduction (GFDRR), Act Alliance, Action Aid, Japan NGO Center for International Cooperation (JANIC), Cordaid, and Oxfam, and was planned in partnership with the community practitioners from their respective networks.

A tiny green oasis stands out amidst acres of dry arid land. As many as 12 different crops—including a wide variety of pulses, fruits, vegetables, and flowers—as well as a farm pond constructed through the Employment Guarantee Scheme and a vermicomposting pit are all seen on this one acre farm in the drought-ridden village from Warangal district of Andhra Pradesh. Suhasini, a young Dalit woman who decided to experiment with the only acre (0.4 hectares) of land she owned, asserts confidently “Next year, most of this surrounding land would be green as well—the other farmers will definitely follow me.”

Suhasini is one among over 1.2 million farmers across 9000 villages that are practicing a cheaper and more sustainable method of agriculture across 1.2 million hectares in the state, even as more farmers are becoming part of what is termed a farmers’ movement for sustainable agriculture in Andhra Pradesh. The program named Community Managed Sustainable Agriculture (CMSA) is essentially an alternative to the conventional-input intensive-agriculture model. It promotes the use of locally available, organic external inputs—including cow dung, chickpea flour, and palm sap—and the use of traditional organic farming methods such as polycropping and systems of rice intensification (SRI).

Early this year, I visited several households in the small village of Bela located in the Kavre district of Nepal, about 50 kilometers from the capital Kathmandu. Mr. Niranjan Sapkota’s house was located on a steep mountain surrounded by forests. I had to walk along narrow mountain paths, grabbing on to bushes and sometimes hands of accompanying local staff. I was going to verify if the biogas plant Mr. Sapkota had constructed in the February of 2005 was still in operation. I turned the brass valve in the kitchen and with a hissing sound, gas flowed and the family pointed to the meal that they had just cooked using biogas from cattle dung that they had in plenty.

There are 225,000 such families in Nepal who now have easy-to-operate biogas plants in their backyards. Bela is considered a model biogas village with almost every house equipped with a biogas plant.

Last month, the Nepal’s Biogas Program reached an important milestone: the United Nations Framework Convention on Climate Change (UNFCCC), for the first time approved and issued carbon credits to two Nepalese biogas projects. To date, this is the largest worldwide issuance of carbon credits, or Certified Emission Reductions (CERs), in a Least Developed Country (LDC). Two more similar projects from Nepal are now at an advanced stage of being registered with the UNFCCC. Together, these projects are expected to generate about 170,000 carbon credits per year, which is equivalent to avoiding emissions from approximately 60,000 cars every year.

For most women living in this mountainous region of Nepal, looking for firewood every morning was a daily ritual. This program reduces the time spent collecting firewood and, since they are no longer exposed to the indoor smoke from burning of firewood in traditional stoves, it also dramatically improves the health of these women and their children. Other important benefits of the program are lessening the pressure on deforestation and reducing greenhouse gas emissions.

Charting a course among the long, narrow fishing boats that plied back and forth across the river, the ferryboat pulled in to Chila market. Election posters fluttered in the breeze. A young man pedaled past on a rickshaw, his distorted voice blaring out campaign slogans from a large megaphone. Flashes of electric blue caught the eye where women, men, boys and girls drag-netted the river banks in search of shrimp. A day and a half’s drive, river-ferry crossing and boat-ride to the south-west of the capital, Dhaka, Chila is one of the last villages on Bangladesh’s mainland before you reach the Sundarbans – the world’s largest area of mangrove forest and an essential protective barrier against floods and storm surges which climate change is only expected to exacerbate. We had come to see for ourselves how local communities are adapting to some of the changes that climate change is expected to bring.

This week in Dhaka, over 350 people from 60 countries met to exchange knowledge on ways to meet the challenge of scaling up community-based approaches to climate change adaptation. This was the fifth such international conference, organized by the Bangladesh Center for Advanced Studies (BCAS) and the International Institute for Environment and Development (IIED), and supported by 37 other international NGOs and bilateral and multilateral development agencies including the World Bank. In her inaugural address, the Prime Minister of Bangladesh, Sheikh Hasina, called upon participants to come together in a spirit of mutual learning, not just from each other, but also from the communities that a number of us visited during three days of field visits.

The trip I joined to Chila took place on an historic day. Over the holiday weekend marking this young country’s 40^th anniversary since independence, local elections were also taking place for the first time in 12 years. On the way to the ferry, our bus driver took us on an unannounced detour so he could go and vote. Once in Chila, we talked with community members at the local market and in their homes, often precariously balanced between shrimp ponds, stretching as far as the eye can see, where not so long ago there were only rice paddies.

Almost 400 million Indians—about a third of the subcontinent’s population—don’t have access to electricity. This power deficit, which includes about 100,000 un-electrified villages, places India’s per capita electricity consumption at just 639 kWh—among the world’s lowest rates.

The access gap is complicated by another problem: more than three-quarters of India’s electricity is produced by burning coal and natural gas. With India’s rapidly-growing population— currently 1.1 billion—along with its strong economic growth in recent years, its carbon emissions were over 1.6 billion tons in 2007, among the world’s highest.

This is unsustainable, not only from a climate change standpoint, but also because India’s coal reserves are projected to run out in four decades. India already imports about 10% of its coal for electricity generation, and this is expected to reach 16% this year.

India’s national and state governments are taking action to correct this vicious circle of power deficits and mounting carbon emissions. The national government has set a target of increasing renewable energy generation by 40 gigawatts (GW) by 2022, up from current capacity of 15 GW, itself a threefold increase since 2005. Still, renewable sources account for just 3.5% of India’s energy generation at present, so the scale of the challenge is formidable. The cost of meeting it will be high unless the tremendous innovative capacity of India and market reforms can be coordinated to make India a clean energy leader.

South Asia

Why Investors Support a Price on Carbon

When Breathing Kills

Green Buildings Offer Lasting Development Impact

Soot is Soot, No Matter the Circumstance!

New Climate Report Emphasizes Urgency

Grassroots Leaders: Empowering Communities is Resilience Building

Paving the way for a greener village

From cow dung to biogas to carbon credits for Nepal

Scaling up community-based adaptation

Is the renewable energy target for India within reach?

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