Up in Smoke

June 15, 2004—While the blockbuster The Day After Tomorrow is Hollywood's interpretation of the consequences of climate change, scientists predict we will experience very real, dramatic changes in the next 50+ years:

Environmental Changes:

• More droughts and floods worldwide due to changing climate patterns
• Rise in sea level
  Irreversible damage or even loss of fragile ecosystems, such as coral reefs, mangroves, high-altitude forests
• Possible extinction of many vulnerable plant and animal species

• More frequent heat waves will cause more heat stress deaths (remember last summer's sudden heat wave in France, which killed more than 3,000 people)
• Decrease in water quality and quantity
• People will become more susceptible to vector borne diseases, such as malaria or dengue, and water borne diseases, such as cholera
• A significant rise in temperature level (more than 2-3° C) could lead to a global decrease in food production, and even small increases in temperature will lead to decreased agricultural production in the tropics and sub-tropics, where there is hunger and famine today

Most of the warming is caused by emissions from burning fossil fuels, the major energy source throughout the industrialized world. However, global energy needs will only increase as 2 billion people are added to the world by 2030, mostly in developing countries.

While we can't stop climate change, we can slow it down and adapt to this inevitable occurrence, says Bob Watson, World Bank Chief Scientist and Senior Advisor.

• produce and use energy from fossil fuels more efficiently or without emitting carbon dioxide into the air
• produce energy from renewable energy technologies such as wind and the sun
• streamline energy use in all aspects of society, from home appliances to commercial consumption

While we need to reduce emissions on a global basis, it may in some instances be cheaper to reduce emissions in developing countries. "The globe doesn't care where emissions come from," says Watson. Therefore, the World Bank's challenge is to get clean, cost-effective energy to developing countries in both rural and urban areas. "Energy is crucial to help people climb out of poverty," says Watson.

Currently, 1.6 billion people have no access to electricity. Some 2.4 billion people rely on burning traditional biomass (dung, grasses or felled trees) for cooking on primitive stoves. Smoke inhalation causes respiratory diseases that kill 2 million people each year, mostly women and children.

Renewable clean energy's commercial appeal has been limited, however, due to its slightly higher cost and the availability of government subsidies for fossil fuels. As a result, less than 2 percent of current energy is from renewable sources like wind, solar and geothermal energy, hydropower or modern biomass (growing trees or grasses plantations burning them for fuel).

Yet, as Watson points out, fossil fuel subsidies are rarely effective in getting energy to the very poor. This distortion in fossil fuel policy, along with the costs associated with addressing the health and environmental impact of local and regional pollution, adds urgency to the need for development of a renewable energy market.

"In the beginning we need to provide some incentives," says Watson to get the renewable energies market off the ground and lower initial transaction costs associated with its creation.

As part of its response, the Bank last week announced that it will increase its annual commitment for renewable energy and energy efficiency projects by an average of 20 percent per year over the next five years. In addition, the Bank is helping developing countries access grants to make the switch to clean energy from IDA-lending, the Global Environmental Facility (GEF) or the Emerging Carbon Market.

"We've just redoubled our commitment for renewable energy, but have come under tremendous criticism from non-governmental organizations that we should be doing much more," says Watson.

The Bank is also starting to help poor countries adapt to climate change by devising solutions to reduce their vulnerability and sensitivity to changes in temperature and extreme weather events, such as floods or drought. The Bank is working with countries in the Pacific, Caribbean islands and Bangladesh, and has just initiated discussions with the Indian government, says Watson.

The World Bank is helping to create the emerging carbon market that will allow industrialized and developing countries to help each other reduce emissions and clean up the environment.

Most industrialized countries have agreed through the Kyoto Protocol to reduce their emissions by 2008-2012. But if domestic actions aren't enough to achieve their reduction targets, then a country can buy carbon credits on the international market by investing in climate friendly projects in a developing country.

For example, a rich country can pay a developing country not to build a coal power plant but rather a gas plant or a renewable energy plant where the resulting emissions would be reduced.

It's a win-win solution. The developed country gets reduced emission credits for these investments and meets its obligations, while the developing country reduces its emissions and acquires the latest clean technology. These technologies often also create less local and regional pollution.

Today, industrialized countries produce 80 percent of all greenhouse gasses emitted due to human activity. But in some 20-30 years developing countries' emissions will catch up and eventually surpass those from industrialized countries.

However, per capita emissions from industrialized countries will remain much higher since they account for only 20 percent of the world's population.

What's fair, to count total emissions per country or per capita emissions?, asks Watson. The first way would benefit the rich world and the second the large developing countries, such as China and India.

"This is a highly politicized issue. If you believe that the environment is a global public good, then everyone should have the same right towards per capita emissions. But some people say why should there be an equal right to the environment when we don't have an equal right to anything else in the world.

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