Developing countries fear new agreements could penalize them.
Bank Group seeks to meet needs of developing countries, including poorest.
Strategies to fight climate change offer opportunites for growth.
Combating climate change called less costly than doing nothing.
December 3, 2007—Can the world put the brakes on global warming and climate change without threatening economic growth that has lifted millions out of poverty?
UN Secretary-General Ban Ki-moon says a “real breakthrough” is needed in Bali, where the UN-sponsored climate change conference is being held, to ensure the agreement is in place by 2012, when the decade-old Kyoto Protocol – an attempt to establish limits on greenhouse-gas emissions – is up for renewal.
Timing is critical, say Ban and climate-change experts, because UN-produced scenarios project that if an agreement on emissions isn’t reached soon, global temperature increases from non-action would produce flooding, droughts, and other devastating consequences around the world with increasing frequency.
UN Report Warns of Impact on Developing Countries
But developing countries are concerned about the implications of any new global pact.
The Bali meeting comes on the heels of a United Nations report that warns that climate change is pushing the world toward an ecological “tipping point” that could lock the world’s poorest countries in a downward spiral and bring “unprecedented” reversals in poverty reduction, nutrition, health, and education.
Many developing nations are expected to be disproportionately affected by global warming, which, according to UN scenarios, would flood low-lying land where hundreds of millions of people live and disrupt agriculture that feeds additional hundreds of millions. But developing nations fear that the expensive efforts to combat climate change will divert international assistance from their economic and social development.
Fast-growing, middle-income countries like India and China also argue they should not be penalized for carbon dioxide buildup in the atmosphere mainly caused by the G-8 and other industrialized nations.
Bank Plan Would ‘Mainstream’ Climate Change Strategies
In response, the World Bank Group is bringing its low-carbon growth message to Bali, along with a plan to significantly step up assistance to international efforts to address climate change.
The plan involves helping developing countries “mainstream” climate change strategies into their development plans, as well as develop renewable energy resources, support energy conservation, and increase energy efficiency.
“Climate change should not be the frosting on the cake of development—it has got to be cooked into the recipe,” says World Bank Group President Robert B. Zoellick.
“We need to focus particularly on the interests of developing countries, so that we can meet the challenge of climate change without slowing the growth that will help overcome poverty.”
“Climate is not just an environmental issue, it’s a development issue,” adds Kathy Sierra, Vice President of the Sustainable Development Network at the World Bank. “Any agreement has to take into consideration the need for developing countries to be able to grow, to create jobs, as well as to deal with local and global pollution.”
“What we’re hoping to do is position this issue as a development issue of great importance to our clients, to showcase the types of new innovations that can help find solutions.”
Such innovations include a new Forest Carbon Partnership Facility to prevent deforestation – which is responsible for almost a fifth of all greenhouse gases – by compensating developing countries for preserving their forests.
Developing Nations Could Earn Money From Carbon Reductions
Another innovation is the Carbon Partnership Facility, which will allow developing countries to earn money and obtain clean technology in exchange for greenhouse gas emission reductions sold to developed countries. Unlike similar exchanges allowed under the Kyoto Protocol, emission reductions could come from several projects in a country or region, rather than individual projects, and continue trading even after the Kyoto agreement has expired.
The UN is proposing that a new climate change agreement include a Climate Change Mitigation Facility that would mobilize US$25-50 billion annually to finance low-carbon energy investments in developing countries.
The World Bank is also working to fully integrate climate change adaptation into zero-interest loans and grants from its concessional lending arm, the International Development Association. IDA’s clients include the world’s least-developed countries.
“The IDA countries are the most affected by a changing climate,” says Sierra. “If you look at a map of the world and see where you’re likely to get more droughts, more floods, more impacts, it maps perfectly and unfortunately with the IDA map. That means adaptation needs to be high on the agenda for IDA countries. It means mainstreaming resilience into our programs, no matter what sector.”
The World Bank estimates developing countries will need investments in the neighborhood of US$100 billion per year over the next 25 years to meet their energy needs through low-carbon means—far more than public sector resources can provide, notes Zoellick.
Doing Nothing Called Far More Costly
He will also speak on the economic magnitude and consequences of climate change at a special meeting of finance ministers in Bali on December 11. That meeting will, among other things, encourage ministers to use policies and fiscal means to create incentives for reducing greenhouse gases and preparing for and adapting to climate change.
Such efforts are expected to be costly, but not as expensive as doing nothing. A major UK government study last year by former World Bank Chief Economist Nicholas Stern estimated the world will end up losing 5 to 20 percent of GDP per year if nothing is done to slow climate change. In contrast, the annual costs of stabilizing greenhouse gases in the atmosphere would be a “significant but manageable” 1 percent of GDP by 2050.
“Climate change is a very big problem that’s going to be affecting people,” says Sierra. “What we’re hoping to accomplish at Bali is for people to agree on a roadmap for solving the problem.
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