for a new global agreement to address climate change enter the final
stages before the Copenhagen Climate Change Conference this December,
the United Nations is issuing a report today that analyzes the growing
demands on developing countries as threats from a warming world
are added to longstanding development challenges.
The report, The World Economic and Social Survey 2009: Promoting
Development, Saving the Planet, published by the UN Department
of Economic and Social Affairs, sees little benefit in ad hoc incremental
actions, spelling out instead the potential of a big investment
push to deliver on both reducing greenhouse gas emissions and helping
communities to cope with climate change, and calling for more truly
integrated policy responses to development and climate challenges.
It does not shy away from describing the enormity of the adjustments
that will have to be undertaken by countries at all levels of development
if progress is to be made; or from insisting that the advanced countries
will have to deliver resources and leadership on a much larger scale
than has been the case to date.
According to the report, active participation of all countries in
tackling the climate challenge will only come about if developing
countries can maintain rapid economic growth. This will require
satisfying the growing energy needs of developing countries: the
energy-generating capacity of developing countries is projected
to double that of developed countries in the coming decades. This
raises the question for climate change negotiators of how poor countries
can pursue low-emissions, high-growth development.
The technologies from low-energy buildings, to new drought-resistant
crop strains and more advanced primary renewables that would
allow developing countries to make the switch to a sustainable development
path presently do exist. But they are often prohibitively expensive
and, the report says, such a transformation would require a
level of international support and solidarity rarely mustered outside
a wartime setting.
The report challenges the thinking that the climate problem can
simply be addressed by across-the-board emission cuts by all countries
from their present levels or by relying exclusively on market-based
solutions to generate the required investments.
Developing countries, the report finds, are facing vastly
more daunting challenges than those confronting developed countries
and in a far more constrained environment. Economic growth
remains a priority for them, not only to reduce poverty but also
to bring about a gradual narrowing of the huge income differentials
with wealthy countries. The idea of freezing the current level
of global inequality over the next half century or more (as the
world goes about trying to solve the climate problem) is economically,
politically and ethically unacceptable, the report states.
UN Secretary-General Ban Ki-moon, writing in the reports preface,
says that the Survey makes the case for meeting both the climate
challenge and the development challenge by recognizing the links
between the two and proceeding along low-emissions, high-growth
pathways. There is no single blueprint for achieving these goals.
The Survey examines the key building blocks in order to assess the
best possible options available to countries at different levels
A failure to match
words and deeds
The race to keep global temperatures within safe bounds is now a
race against time. According to the Intergovernmental Panel on Climate
Change, there needs to be a cut in global emissions by 2050 by between
50 and 80 per cent, which is equivalent to a reduction in carbon
dioxide (CO2) levels from roughly 40 gigatons
(Gt) per year (at present) to 8-20 Gt.
But as the Survey
suggests, increased scientific understanding and greater public
awareness have not translated into a focused policy response. This
is particularly true in todays advanced industrialized countries,
whose two centuries of carbon-fuelled growth lie behind the present
warming of the earth. Since 1950, the advanced countries have contributed
as much as three-quarters of the increase in global emissions, despite
accounting for less than 15 per cent of the worlds population.
The failure of wealthy countries to honour long-standing commitments
of international support for poverty reduction and adequate transfers
of resources and technology remains the single biggest obstacle
to meeting the climate change challenge, the Survey contends.
Different economies, different energy outlooks
It is in developing countries that the impacts of climate change
are most keenly felt and where the greatest impacts are forecast
- more severe droughts in some areas, more intense precipitation
in others will wreak havoc with the worlds water supplies
and agricultural capacities. Melting glaciers and retreating ice
in the Polar regions are contributing to sea level rise, threatening
the very existence of small island nations and coastal communities
that do not have the resources to adapt.
Estimates cited in
the report show that for every 1°C rise in average global temperatures,
annual average growth in poor countries could drop by
2-3 percentage points, with no change in the growth performance
of rich countries. At the same time, the report notes that developed
countries have per capita emissions that are still on average 6
to 7 times greater than those in developing countries.
One of the most overlooked
aspects of the climate debate, the report argues, is that the energy
needs of developing countries are very different from those of developed
countries. The latter have adequate - even excessive - energy services
and infrastructure available. Most developing countries, on the
other hand, struggle to provide even basic energy services from
inadequate infrastructure. Globally, between 1.6 and 2 billion people
lack access to electricity, and connecting those people to energy
services will cost an estimated $25 billion per year over the next
Because of these stark
differences, rich and poor countries require different mitigation
strategies to address climate change. While a rise in the price
of fossil fuels, or changes in lifestyles, may result in the increased
use of renewable energy in developed countries, higher fuel costs
in developing countries would simply place any modern energy services
beyond the means of many more people.
The cost of meeting
the needs of the energy destitute is still small, the
report estimates, particularly when compared with the billions pledged
by many developed country governments to rescue their financial
sectors and automotive industries. In comparison, the cost
of bringing 2 billion people into the modern energy service system
would appear to be a real bargain, the report suggests, noting
that the amount of development aid presently spent on energy is
only about $4 billion annually, where at least tens of billions
A big investment
push towards a sustainable future
Still, the challenge of providing everyone with access to some modern
form of energy is small in comparison with that of meeting steep
rises in energy demand in developing countries to fuel catch-up
growth and to provide energy services to growing urban communities.
energy services to meet this rise in demand is technologically feasible.
However, such a shift, the Survey argues, is neither inevitable
nor inconsequential. Recognizing that such a switch would
entail unprecedented and potentially very costly socio-economic
adjustments in developing countries, the Survey argues that
achieving such a transformation hinges on the creation of a global
new deal capable of raising investment levels and channeling
resources towards lowering the carbon content of economic activity
and building resilience with respect to unavoidable climate changes.
To realize scale economies
and the benefits of technological learning, the Survey argues that
large upfront investments will need to be made, particularly by
the public sector, in new energy infrastructure and in complementary
research and development to bring down costs. But these efforts
will be hampered by constraints on domestic resource mobilization
and the limited ability of many developing countries to raise capital
in international markets, particularly bond markets. If investment
spending is to go towards ensuring cleaner growth pathways, it will
require massive international support by means of a global investment
How much will action
There are widely varying estimates for how much additional financing
is needed to address the mitigation and adaptation aspects of climate
change, often depending on any number of factors, including the
range of the greenhouse gas reduction target. These estimates can
range anywhere from as little as 0.2 to about 2 per cent of World
Gross Product (WGP), or between $180 billion and $1.2 trillion per
year. However, in most projections the big spending would not be
required until 2030. The report goes against conventional wisdom
by suggesting that significant additional investments in mitigation
and adaptation need to take place sooner rather than later, to the
tune of at least 1 per cent of WGP annually, between $500 billion
and $600 billion. A failure to think in these bolder terms runs
the real danger of locking in dirtier investments for several more
decades. But by continuing in the present business-as-usual scenario,
or making only marginal changes, the permanent loss of projected
WGP could be as high as 20 per cent.
By any measure, the
Survey says that the amounts from bilateral and multilateral sources
currently promised and expected to be available for meeting the
climate challenge in the near term are woefully inadequate.
More than half of the incremental costs of greenhouse gas abatement
are expected to fall on developing countries, whose energy investments
over the coming decades are projected to grow much faster than those
of developed countries.
Currently, it is estimated
that about $21 billion in official development assistance is dedicated
each year to addressing climate change, much of this for mitigation.
The total amount of climate financing that is required is a large
multiple of that figure. If the international community is serious
about a global new deal, the Survey suggests, it should
be just as serious about committing resources on the same scale
as was needed to tackle the financial crisis and defeat political
According to the report,
the difficulty of reaching even the current levels of aid commitments
suggests that global financing for climate change will require a
much more determined effort on the part of advanced countries to
provide bold leadership on the climate issue and bolster international
cooperation. But it will also require an effort on the part of developing
countries to mobilize a larger share of their resources for cleaner
investments along a new, sustainable growth path.
A way forward
Addressing the climate change challenge requires different approaches
in developed and developing countries, the Survey suggests. Market
solutions, including the development of a carbon market, through
cap and trade mechanisms or taxation schemes in developed
countries, are not the solution for developing countries. Perhaps
the more sensible, forward-looking view, the report states,
is to recognize that carbon markets will continue to expand
but that the pace and scale will not be sufficient to help developing
countries break the financial constraint on proceeding along a low-emissions
Rather, the Survey
says the preferred option for developing countries should be a combination
of large-scale investments and active policy interventions. This
would require strong and sustained political commitment by developing
country Governments and, as critically, sizeable and effective multilateral
support with respect to both finance and the transfer of technology.
The report sets out
a range of possible multilateral measures in support of a global
investment programme, including a global clean energy fund, a global
feed-in tariff regime in support of renewable energy sources, a
climate technology programme and a more balanced intellectual property
regime for aiding the transfer of clean technologies.
Along with strong
domestic government interventions, these can provide guidance to
the private sector, the report states, commending developing countries
for initiatives moving in this direction, such as Brazils
ethanol programme and Chinas renewable energy programme. An
earlier success story cited was the United States Tennessee
Valley Authority, which helped provide the energy that transformed
an entire region after World War II.
According to the Survey,
the big difference this time around is that the new investment
deal that is needed to meet the climate challenge must be recognized
as a truly global project.