Development v Climate Change: a new UN report tries to square the circle

September 11, 2009

     By Duncan Green     

September is the start of report season, an avalanche of global roundups from UN agencies, thinktanks etc that seems to grow in number every year. As it coincides with the party conference season, start of the college year in the Northern hemisphere etc etc, it all makes for a horrific backlog.

So to ease the collective bottleneck, here’s some highlights of one that may CC Bali polar bearshave escaped you. Last week, as part of the warm-up (sorry, bad choice of words) for the Copenhagen climate summit in December, the UN’s under-rated Department of Economic and Social Affairs published its World Economic and Social Survey 2009, entitled ‘Promoting Development, Saving the Planet’. It’s taking on the big ‘how do we square development and climate change’ challenge, as will the World Bank’s much higher profile ‘World Development Report 2010’ which is released next week (see what I mean about an avalanche?).

WESS’ starting point is that squaring the development-emissions reduction circle is an absolute necessity: ‘even if advanced countries begin to match their words with deeds, their efforts are, by themselves, unlikely to be sufficient to meet the climate challenge. The active participation of developing countries is now required and such participation can occur only if it allows economic growth and development to proceed in a rapid and sustainable manner.’

cc equivocal language cartoonHow to do this? The report comes up with a line somewhat similar to some of the thinking on trade – the policies required in developing countries are different from those in the rich ones. ‘While there will be similarities between the two groups of countries in terms of a subset of national policy instruments (smarter incentives, stronger regulations), developing-country Governments would need to steer resources mobilized for large-scale investments into new production sectors and new technologies. While the emphasis in developed countries is on the development of the carbon market, the preferred option for developing countries should be an emphasis on active industrial policies.’

And much more than just aid will be needed to make the system as a whole deliver the emissions reductions needed on the timescale required. The UN sets out three possible approaches: ‘the first approach means that developing countries follow the example of developed countries, either voluntarily or through some form of coercion, by adopting emissions reduction targets. Under the second option, either setting targets or undertaking actions is conditional on the availability of finance and technology from developed countries. Under the third option, developed and developing countries jointly adopt both climate and development targets.’

The Survey’s conclusion is that the first approach is bound to fail, the second approach is a necessary one, but focusing attention on financial transfers won’t deliver change at the scale or speed required. At the moment, the negotiations seem to be heading for a divisive stalemate somewhere between 1 and 2. Instead something more systemic and collaborative is needed.

Read the WESS overview yourself for its shopping list for this climate change ‘third way’ (urrgghh). The bits that jumped out at me were:

On energy: ‘developed economies may need, and will be able to afford, a substantial increase in the price of energy, especially fossil-based energy, in order to provide the right market signal to potential consumers and investors. In contrast, all developing countries face the urgent challenge of expanding the energy infrastructure and making energy services widely available at affordable prices. The estimated number of people lacking such access ranges between 1.6 billion and 2 billion, mainly in rural areas. At least for the foreseeable future, developing countries will need to subsidize energy for their middle- and lower-income groups in order to make these services affordable.’ [hmm, subsidies have a nasty way of benefiting the elites, funding damaging megaprojects, or encouraging the use of particularly nasty fuels like kerosene. Maybe a more comprehensive industrial policy type approach is needed here, combining targeted subsidies with promoting decentralized energy systems especially for rural areas]

And on financing for developing country mitigation and adaptation, where the report proposes two interesting new (for me) ideas:

A global clean energy fund. to address climate change mitigation in developing countries, established outside the existing multilateral financing institutions and with a governance structure acceptable to all parties to the United Nations Framework Convention on Climate Change

A global feed-in tariff regime. A global feed-in tariff programme could provide guaranteed purchase prices to producers of renewable energy in developing countries over the next two decades. The programme should be accompanied by provision of support to local renewable components industries to ensure that national production capacities are spurred and countries are able to satisfy a growing share of the increased demand for renewable energy locally

As well as two more standard recommendations for:
A reformed Clean Development Mechanism.  [good luck with that] Forest-related financing mechanisms

Every effort will be needed to keep development on the table as the climate change talks pick up speed, and this is a helpful contribution from the UN.

September 11, 2009
Duncan Green