Every year, the World Development Report focuses on a different topic of global importance, and, as part of its preparatory activities, consults with various groups around the world. The 2010 World Development Report on Development and Climate Change is no exception. This report has required unique attention to varying points of view because climate change affects different countries in drastically different ways. Over the past year, as we approached the task of putting together a report on such a significant topic, we sent our team of authors all over the world to consult with representatives from over 40 countries. We listened to stories about how climate change is affecting them, and sought their views on our report’s evolving messages, which I described in an earlier blog post. We compiled this feedback as it was received, and have posted summaries of these consultations on our website.
|Photo © iStockphoto.com|
While people are largely well adapted to the ‘natural’ climate variability of their region (of which drought is one half of the equation, and abnormally wet periods the other), droughts can pose very serious risks when their severity exceeds expected levels, or when they strike in areas which are not used to coping with them. And this is likely to happen more frequently with climate change.
|Photo © Yosef Hadar/World Bank|
The Amazon basin harbours the largest contiguous tropical forest on the planet, spread over eight countries. Over the past four decades the Amazon has been subjected to deforestation, forest degradation, global warming, and vegetation fires. However, the model for development of the Amazon—which is based on replacing forests with agriculture and cattle ranches—can be criticized on more than just environmental grounds. It can be faulted on economic grounds too. For example, the gross agricultural product of the Brazilian Amazon represents less than 0.5% of the Brazilian GDP. Sadly, fifty years of deforestation have brought neither wealth nor quality of life for most Amazônidas.
Proposals aiming to boost innovative climate change solutions often include some form of publicly-supported global venture capital (VC) fund. The rationale for such a fund is that government funding is generally available for R&D and private financing is available for the commercialization of mature technologies; but funding is unavailable for entrepreneurial activities—such as proof-of-concept, piloting, firm-building, and marketing—that happen between these two stages. Given this situation, a global climate change VC fund could have a decidedly stimulating effect. Of course, it would also be important for governments not to put all their eggs in this basket, since the VC instrument could quickly reach its limits.
The financing gap is particularly severe for climate change mitigation and adaptation technologies for a number of reasons. Not only is the market for these technologies still at a very early stage of development but it is also driven by regulation. Both of these factors represent significant risks for investors. In addition, low carbon technologies tend to be more capital-intensive and require much more start-up financing than other typical VC investment sectors like information technology. The funding gap is particularly deep in the developing world, which presents a riskier business environment and a more fragmented market for investors.
Several VC-style climate-change funds have recently been launched. The Carbon Trust, established by the British government, already invests in clean-technology firms based in the UK. In partnership with the Qatar Investment Authority, the Carbon Trust plans to set up a £250 million fund called the Qatar-UK Clean Technology Investment Fund, to be supported by both governments. The fund will primarily invest in the UK, but also to some extent in continental Europe and the Gulf Region. This will be the first major publicly-supported climate change VC fund of its size involving more than one country.
I grew up in a small village in South-Western India, which is known for evergreen forests, wildlife, and spectacular landscapes. That was in the 1970s and 1980s. My interests in forests began then, as I spent many hours wandering off into the woods on my way back from school. When I was six years old, my father bought five acres of pristine forest land and converted them into a coffee plantation. He wasn’t the only one. In just three decades, much of the forest around where I grew up has been either converted to crop lands or cleared for logging.
This loss grieves me. Although I have worked on a broad range of issues as a professional economist, my concerns for forests and the environment remain high. In a recent note, I’ve tried to show the complex links between deforestation, climate change, and food security with a simple diagram. The note can be easily downloaded and is meant for students.
The author, Kwasi Owusu Gyeabour, won third place in an international youth essay competition sponsored by the World Bank and other partners. He answered the question “How can you tackle climate change through youth-led solutions?” The awards were announced in Seoul in June, 2009.
“There is never a time in the future in which we will work out our salvation. The challenge is in the moment, the time is always now.” -James Baldwin (1924 - 1987) Nobody Knows My Name, "Faulkner and Desegregation”
It is a privilege to be called on to share ideas on issues of our time, issues that can be solved through youthful action. In my essay, “Greening the Ghanaian Youth” I proposed several ideas that would help tackle climate change. Here is a sample of the ones I consider most practical.
Youth action at the community level is the most potent force in our fight against rapid climate change. So I proposed the establishment of a Green Sector Mutual Fund. This community-based fund will invest in firms that operate in the green/environmental sector. Now I consider this feasible because I have friends who have established mutual funds such as the University of Ghana Campus Mutual Fund which have turned out successful. The success of a fund mostly depends on factors such as advertising and the prestige and market reach of the fund managers. Most asset management firms these days would jump at the opportunity to manage something ethical just to create a sense of social responsibility and goodwill.
The author, Guillermo Recio Guajardo, won second place in an international youth essay competition sponsored by the World Bank and other partners. He answered the question “How can you tackle climate change through youth-led solutions?” The awards were announced in Seoul in June, 2009.
|Photo by Guillermo Recio Guajardo|
Over the years, several multinational companies and global groups have entered the ancestral territories of indigenous communities in Mexico, and the process of modernization has often damaged the environment.
For example, both legal and illegal logging are now common in the Sierra Tarahumara in Mexico’s Chihuahua state. This territory is home to about 84,000 Rarámuris or Tarahumara Indians who depend on forest conservation for their livelihood and preservation of their culture. But deforestation and loss of biodiversity are a severe threat—with almost 90 percent of the wood for the forest industry in Chihuahua coming from the Sierra Tarahumara—and are increasing an irreversible ecological imbalance.
Illegal logging has also been causing upheaval in Mexico’s climate system. Without enough trees in our tropical and temperate forests, it is impossible to capture carbon dioxide. According to recent research, "Mexico has deforested more than one-third of its forests and jungles, thereby reducing its original woodland area of 52 percent of the country to 33 percent in the year 2000."1