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Farewell World Bank. You’re on the Right track. And you have a Big Job Ahead!

Andrew Steer's picture

Andrew Steer in Indonesia

Today is my final day at the World Bank.

When I first entered the doors of 1818 H Street three decades and seven Presidents ago, the big buzz in the cafeteria was Cost Benefit Analysis and Basic Needs. President McNamara had  demanded that every project document identify in detail how many of the poorest 25% it would directly and indirectly benefit, and how. The secret to rapid career progress was expertise in shadow pricing (which was appropriate in light of the massive distortions in goods, labor, currency and capital markets in most of our client countries).

But those shadow prices certainly didn’t include the value of environmental externalities. The entire cadre of environmental specialists for the whole institution consisted of one person. (It wasn’t me.)

Last week at the Rio+20 Conference I met up with an old friend, Emil Salim, who for many years was the longest serving Environment Minister in the World, and is still, well into his eighties,  chief environmental advisor to President Yudhoyono of Indonesia. We reminisced about a meeting he and I were at in 1982, when he asked the President of the World Bank for help in dealing with the acute environmental problems associated with Indonesia’s rapid growth. The polite reply he received was “The World Bank is a development agency, not an environment organization. We don’t do this kind of work.”

The wisdom of children...and prophets

Andrew Steer's picture

UN Photo/Maria Elisa Franco

We’re changing planes in Panama on our way to the Rio+20 Earth Summit.  As we taxi out to take off the pilot tells us that we’ll need to wait for 15 minutes while we burn off 300 pounds of fuel, since the plane may be too heavy to take off.

My 11 year-old daughter, who is sitting next to me, says “Isn’t this very silly? It’s wasteful and bad for the climate. Why do they do it?” 

We’ve brought Charlotte, together with her 10 year old brother, Ben, on this trip so they can see how country leaders struggle with the big issues, and also because they ask the right questions, and help keep us grounded. I explained to her that the fuel on international flights is totally untaxed by international agreement, and that subsidies on fossil fuels amount to over $400 billion each year, including over $70 billion in rich countries. And that governments spend more than 20 times more paying people to consume more fossil fuels than they spend on research to develop renewable energy.

“That’s stupid”, says Ben, who is not as polite as his sister. It’s like telling your kids not to smoke, and then paying them each time you see them smoking.

They’re right, of course. And one of the rare bright spots in Rio was the airtime given to fossil subsidies by civil society and the private sector. The B20 (the business shadow of the G20) Working Group on Green Growth, of which I am a member, urged G20 leaders to publish subsidy levels each year, and set a time-bound schedule for their elimination. Not so easy for political leaders to grasp this nettle, of course, having seen several countries, most recently Nigeria, find their efforts to raise energy prices hit with violent opposition. I discussed with Charlotte how smart politicians, such as in Indonesia and Iran, have found ways to use a share of the revenues saved to provide cash compensation to the poor. “Makes sense”, she said.

What a waste in a changing climate

Dan Hoornweg's picture

Let’s talk trash, just for a few minutes. In the time it takes you to read this pithy blog, more than 14,000 tonnes of waste will be generated: that’s enough to fill the Pentagon in less than a day. More than 1.5 billion tonnes of trash will be generated this year alone. And if you’re inclined to read this blog again in 2025, the amount will have increased to 23,000 tonnes. The annual trash generated at that time will be more than 2.2 billion tonnes a year. That’s enough garbage to fill the Roman Coliseum 730 times, or a line of garbage trucks 900,000 km long, 23 times around the world. Last week’s release of What a Waste: A Global Review of Solid Waste Management summarizes the issue.

Our cities generate enormous amounts of waste, and they’re just getting started – volumes will likely to increase beyond 2100, and we should plan for about a peak volume, four times what we have today. In today’s dollars, annual waste management costs will eventually exceed $1 trillion, and this cost is almost entirely borne by cities (this amount, for example, eclipses any sort of financial contributions to deal with climate change now being discussed within UNFCCC negotiations). Clearly we have a problem. But why is this particularly relevant to the climate change community?

Travelling by bus, car, boat and elephant in Indonesia

Robin Mearns's picture

Last week, a group of around 30 made a transect from West to East across Sumatra, Indonesia, to learn about forests, trees, landscapes, and the people whose livelihoods depend on them. We were often shocked by what we saw. After camping overnight in Tesso Nilo National Park, Riau province, we lumbered slowly on the backs of elephants through tracts of newly logged and burned forest land, some planted with rubber, and learned that over half the park area of 83,000 hectares was encroached and deforested. Tesso Nilo has the highest biodiversity index for vascular plants in the world, and is the last remaining habitat in Riau for elephants and the Sumatran tiger. With their habitat shrinking, elephants often stray into surrounding villages, causing significant economic damage. Villagers retaliate by poisoning the elephants. With support from the Worldwide Fund for Nature (WWF)-Indonesia, an elephant ‘flying patrol’ has been established within the park, staffed by skilled mahouts who have trained six elephants to help chase wild elephants away from villages and back to the park, thereby reducing conflict with the local population.

A new `Climate Normal' needed

Alan Miller's picture

The impact of climate change on investment and development is fundamental but is yet to be appreciated, or some in cases even understood. One related issue is a seemingly obscure technical calculation, the use of “Climate Normals” – a standard way of estimating the weather expected in a particular location for any given day. Such estimates have enormous significance for planning power plants, ports, water systems, roads, and long-lived infrastructure.

The difference between temperatures in the ‘70s (a cool period) and the ‘00s (the warmest decade on record) can mean large increases in summer peak demand. The planning of water supply and demand will similarly be dramatically affected with change in temperature and precipitation. Getting it wrong can mean serious under or over investment, with social as well as economic disruption.

The concept of Climate Normals was originally mandated by the WMO and IMO in the 1930s, initially calculated and updated every 30 years. In 1956, the same organizations recommended updates more frequently, every decade. In 2011, the leading US center for archiving and summarizing climate data, National Climate Data Center (NCDC), released the new Climate Normals that cover the period between 1981 and 2010, replacing the previous 1971-2000 installment. 

Be afraid. Be very afraid

Dan Hoornweg's picture

Earlier this week, I read an article in Scientific American that had an ominous warning ‘global warming is close to becoming irreversible’. In typical cautionary climate-speak there’s a hope stated that “we can cap temperature rise to two degrees”. This is followed by a more subtle message, “we are on the cusp of some big changes”.

‘On the cusp of changes’ is an understatement. There are a half-dozen possible tipping points, crossing any of which gets us into scary unchartered territory. Ocean acidity and coral die-off; drying the Amazon rainforest; run away growing fossil fuel use; loss of ice sheets; large scale melting of permafrost: and the biggest tipping point of all – our amazing inability to come anywhere near an agreement limiting global GHG emissions and warming.

The article argues that unless we seriously curb the rate of growth of GHG emissions within the next 10 years, we will cross tipping points that lead to significant and irreversible global warming. And yet, all that was agreed at COP17 in Durban last year is for countries to reach an agreement by 2015 for action that will not start until 2020. Too little too late, according to the science.

The world will likely only see 450 ppm CO2 concentrations from our rear-view mirror as we hurtle down the express lane to at least 550 ppm CO2 and a 5 degree warming. What the article doesn’t say is that we will need to figure out how to geo-engineer some sort of amelioration. Good luck with that. We can’t agree on the much easier aspects of limiting GHG emissions; how will we ever agree on something as complicated as managing the planet’s climate?

Giving oceans a fighting chance

Mary Barton-Dock's picture

Last week I went swimming with manta rays, sharks and dolphins along some of the world’s most spectacular reefs. Well at least, it felt like I was swimming among them. With my special 3D glasses on, it was as if I was flying across coral atolls, plunging through clouds of jellyfish and darting in and out of brightly colored corals alongside hundreds of thousands of tropical fish.

In a new film by Luke Cresswell and Steve McNicholas – The Last Reef 3D: Cities Beneath the Sea – viewers embark on a worldwide journey to explore coral reef habitats from Palau and French Polynesia in the Pacific to the Bahamas in the Caribbean.

As visually stunning as the film is, it carries a very sobering message: human activity is having a significant negative impact on the world’s oceans.

Many of us who work on climate change and oceans have known about the threat from ocean acidification and warming for a long time. Increasing carbon dioxide emissions have resulted in rising surface and air temperatures. Moreover, ocean acidity is rising owing to an increased absorption of carbon dioxide from the atmosphere. Increasing acidity levels in turn make it harder for corals to grow and for shell-forming animals like mussels to build their protective housing, leading to knock-on effects of biodiversity loss in ocean called “dead zones”.

The movie’s message is reinforced by a recent report published in Science Magazine which says the oceans are acidifying at a pace not seen in 300 million years. Historically, ocean acidification has led to mass extinctions. What makes today’s situation particularly alarming is that the rise in CO2 is not due to volcanic eruptions or other natural occurrences but is the direct consequence of human behavior over the course of the last century or so.

Disruptive Innovation needed, submit your ideas now

Jean-Louis Racine's picture

Henry Ford once famously said that if he had asked his customers what they wanted they would have asked him for a faster horse. If he had listened to his customers, the Ford Motor Company may never have existed, or would be called the Ford Faster Horse Company. The automobile became what is called a “disruptive innovation” meaning that it radically displaced the incumbent technology (the horse and carriage) by not listening to the demands of mainstream consumers, but trying to uncover their real needs.

This is the approach the World Bank is now prototyping in Indonesia: Trying to uncover the real clean energy needs of rural communities by understanding their underlying energy-related problems rather than simply asking them what technologies they want. The Indonesia Green Innovation Pilot Program is prototyping a new approach to fostering green disruptive innovation. The first stage of the program is being launched this week, and consists of identifying possible challenges – or problems – linked to energy in rural communities. In keeping with the logic of disruptive innovation, the program does not start with a market demand study, or a survey of clean energy solutions in the market, but with uncovering stated and unstated needs that affect the population of a rural community in their everyday lives. This is being done in three ways: One is through field research by a team of designers from Inotek and Catapult Design, a second way is through consultative workshops in Jakarta and in the rural communities,  and a third is through a “call for challenge” where the program is using a crowdsourcing approach to collect problems linked to energy in rural Indonesian communities. If you are in any way familiar with rural Indonesia and its energy challenges, the program invites you to submit a challenge through this website.

Crystal gazing with McKinsey on resources for the future

Alan Miller's picture

In 1980, the biologist Paul Ehrlich and business school professor Julian Simon famously wagered on the likelihood of resource scarcity over the coming decade. Based on his expectation that population growth would lead to a rapid growth in demand for basic resources, Ehrlich bet that the prices of five commodity metals would increase; Simon, argued that rising prices incent human innovation and consequently that resource prices should be stable or declining. In the decade that followed, despite population growth of 800 million, the prices of all five commodities chosen by Ehrlich declined and he paid the bet. In July 2011, the investor Jeremy Grantham noted that if the bet had been extended to 2011, Ehrlich would have won – by a lot. 

McKinsey Global Institute, a research arm of McKinsey & Company, recently revisited the debate about economic growth and resource scarcity with the release of a major study, “Resource Revolution: Meeting the world’s energy, materials, food, and water needs”. One of the lead authors, McKinsey partner Jeremy Oppenheim, recently visited the World Bank in Washington DC to describe the report’s conclusions and discuss its implications for development strategy, particularly for the World Bank. His presentation captivated a large audience and provoked a lively discussion.

The key findings of the report can be summarized in two categories – challenges and opportunities. The former starts from the projected increase of up to 3 billion more middle class consumers in the next 20 years, driving up demand at a time when finding and extracting resources is becoming increasingly difficult and expensive, while also resulting in enormous environmental pressures.

The good news is the existence of sufficient technically and economically feasible efficiency improvements and alternative technologies to meet nearly 30 percent of predicted demand and offset much of the projected growth. Some of these measures are already identified and well understood, such as improving the efficiency of buildings and irrigation – a “resource productivity revolution”. These measures would, however, not be sufficient to alleviate poverty and avoid global warming in excess of the two degrees Centrigrade widely considered the threshold.

To meet these goals, McKinsey outlines an additional level of ambition with respect to clean energy and carbon sequestration.

A view from the top: mountain forests

Klas Sander's picture

“Mountain Forests – roots to our future”. That was the headline for this year’s International Mountain Day celebrated by the UN every 11th of December since 2003. This year especially emphasized the interdisciplinary implications of sustainable mountain development. Whenever I have the opportunity to spend time in mountains, I realize how strongly the different elements in that landscape depend on each other and how fragile it all is. Earlier this year, for example, I had the privilege to visit the mountain gorillas in Rwanda. The experience of seeing these amazing animals in their natural habitat was incredible and it wasn’t just the climb up the Virunga Volcanoes that was breathtaking.

But the conservation of this ecosystem does not only provide benefits in terms of biodiversity conservation. Adjacent communities and the Government of Rwanda as a whole benefit from the income streams the tourism sector generates. Protecting the ecosystem also helps to assure sustainable flow of water from these “water towers” benefiting agriculture and lowland ecosystems alike. Not only are the Virunga gorillas and other mountain species threatened by climate change but there are also consequences for the communities that depend on them.

Covering 24% of the Earth’s surface, mountain ecosystems play a critical role in maintaining a sustainable flow of resources to the plains below. Mountains are the source for nearly 50% of the world’s freshwater for direct consumption, agriculture, and energy. Also, mountain tourism accounts for 15-20% of the world’s tourism industry, totaling an estimated $US70-90 billion per year. Mountain regions are also severely impacted by climate change, which only magnifies existing development challenges. Ecosystems will experience a vertical shift, as climates warm, generally flora and fauna will move towards higher altitudes. Fragile alpine ecosystems systems and endemic flora and fauna are likely to change resulting in significant negative ecological and socio-economic implications.