Integrating Development into the Global Climate Regime

EDITOR’S NOTE: This essay is from the Spring 2010 Perspectives on Development publication by the World Bank. It argues that an effective climate regime entails simultaneously addressing multiple goals concerning equity, the climate, and social and economic development. A few excerpts: The past two decades have seen the creation and evolution of an international climate regime, with the United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol as the main pillars. Kyoto set binding international limits on the greenhouse gas emissions of developed countries. It created a carbon market to drive private investment and lower the cost of emission reductions. And it prompted countries to prepare national climate change strategies. But the existing global regime has major limitations. It has failed to substantially curb emissions, which have increased by 25 percent since Kyoto was negotiated. It has delivered only very limited support to developing countries. Its Clean Development Mechanism (CDM) has so far brought little transformational change in countries’ overall development strategies. The Global Environment Facility has invested $2.7 billion in climate projects, well short of the flows needed. The global regime has so far failed to spur countries to cooperate on research and development or to mobilize significant funding for the technology transfer and deployment needed for low-carbon development. Aside from encouraging poor countries to prepare National Adaptation Programs of Action, it has delivered little concrete support for adaptation efforts. And the Adaptation Fund, slow to get started, falls far short of the projected needs. In 2007 the Bali Action Plan launched negotiations to achieve an ‘agreed outcome’ during the UNFCCC 15th session in Copenhagen in 2009. These negotiations present an opportunity to strengthen the climate regime and address its shortcomings. Building the climate regime: Transcending the tensions between climate and development If we are to meaningfully address climate change, there is no option but to integrate development concerns and climate change. The climate problem arises from the joint evolution of economic growth and greenhouse gas emissions. An effective regime must thus provide the incentives to reconsider trajectories of industrialization and unravel the ties that have bound development to carbon. However, for ethical and practical reasons, this rethinking must include meeting development aspirations and forging an equitable climate regime. Until recently, climate change was not seen as an opportunity to rethink industrial development. The climate debate was isolated from mainstream decision making on financing, investment, technology, and institutional change. That time has substantially, if not entirely, passed. Awareness of climate change among leaders and publics has grown to the level that there is now readiness to integrate climate change into development decision making. Turning this readiness into an effective climate regime requires simultaneously addressing multiple goals involving equity, climate, and social and economic development. It would be naïve to suggest that there are no tensions among these objectives. Indeed, the very perception of tradeoffs can prove a potent political barrier to integrating climate change and development. Differences in perceptions and conceptual frameworks across high-income and developing countries can and do get in the way of a meaningful discussion on how climate action can be integrated with development. Many of these tensions emerge along North-South lines. To ensure a climate regime that speaks to development concerns, it is useful to identify and engage opposing perspectives and then seek to transcend them. This chapter discusses four points of tension between a climate perspective and a development perspective: environment and equity; burden sharing and opportunistic early action; a predictable climate outcome and an unpredictable development process; and conditionality in financing and ownership. These points of tension are characterizations using broad brush strokes to bring out the disagreements and their possible resolution, knowing that in practice individual country positions, in both the North and the South, are far more nuanced than the extremes described here. The second part of the chapter explores alternative approaches to integrating developing countries into the international architecture. Adaptation efforts under the current climate regime Under the UNFCCC all parties commit to undertake national adaptation measures and to cooperate in preparing for the impacts of climate change. Special consideration is given to the least developed countries for their special needs to cope with adverse effects of climate change. The least developed countries are encouraged and supported under the convention to prepare a National Adaptation Program of Action identifying priority activities that respond to their urgent and immediate needs to adapt to climate change. To date, 41 least developed countries have submitted national action programs. The five-year Nairobi Work Program adopted in 2005 aims to help these countries improve their understanding and assessment of the impacts of climate change and to make informed decisions on practical adaptation actions and measures. Current funding for adaptation under the UNFCCC process is mainly through the Global Environment Facility’s Strategic Priority on Adaptation initiatives; additional funding will come from the UNFCCC Adaptation Fund when it is fully operational. The international effort to date has delivered some information and capacity building on adaptation, but it has yet to facilitate significant implementation at the domestic level, access to technology, or the building of national institutions to carry the adaptation agenda forward. The effort is constrained by limited funding and the limited engagement of national planning and development agencies. The UNFCCC process has traditionally involved environment agencies; its focus on climate change may not easily lead to a comprehensive, multisectoral effort addressing adaptation. Strengthening action on adaptation under the UNFCCC Working through the national development process is essential to encourage early planning to strengthen climate resilience and discourage investments that heighten climate vulnerability. The UNFCCC process can complement and facilitate this process by - Supporting comprehensive national adaptation strategies in vulnerable countries. These strategies would establish frameworks for action and strengthen national capacities. They would build on the National Adaptation Programs of Action, which target urgent priorities, to map out comprehensive long-term plans identifying climate risks, existing and needed adaptation capacities, and national policies and measures to fully integrate climate risk management into development decision making. In addition to organizing national adaptation efforts, the strategies could serve as a basis for targeting implementation assistance through the climate regime or through other channels. - Exchanging experiences and best practices, and coordinating programmatic approaches to support national, regional, and international systems for adaptation and resilience. This effort would provide guidance to countries on vulnerability assessments and on how to integrate adaptation activities into sectoral and national development planning and policies, as well as help in accessing technology for adaptation. The universal membership of the UNFCCC provides a unique forum for countries, organizations, and private entities to exchange experiences and learn from each other. Bringing national development agencies to participate in this process is essential to success. Apart from using the UNFCCC process to disseminate information, it may be useful to establish regional centers of excellence for catalyzing local, national, and regional activities. The direct impacts of climate change are felt locally, and response measures need to be tailored to local circumstances. Regional centers, with international support, can promote capacity building, coordinate research activities, and exchange experiences and best practices. - Providing reliable funding to assist countries in implementing high-priority measures identified in their national adaptation strategies. Funding for adaptation largely relies on public financing. Finding additional sources of adaptation finance and packaging them with existing development finance are essential for effective adaptation. Funds could come from donors, a levy on the CDM, and the tax or auction revenues from emission allowances. Equally important are defining criteria for allocating funds and setting up institutional arrangements to manage them. Efficient and equitable allocation and use of adaptation finance is in everybody’s interest, and wasteful use of resources can undermine public support for the whole climate agenda. A new body under the UNFCCC may be needed to provide guidance to the parties, assess national adaptation strategies, and develop criteria for allocating resources. Such a body would need to coordinate closely with other international development agencies and have enough independence to credibly assess national strategies and resource allocation. The current UNFCCC regime does not include adequate provisions for adaptation. The Bali Action Plan presents a great opportunity to streamline the adaptation process and mobilize adequate funding to support adaptation. Re-published with permission by the World Bank. Visit the original article.