WORKING TITLE: Development in a Changing Climate

orA Changing Climate for Development

World Development Report

2010

A call to action

Climate change is one of many challenges facing developing countries…

..but unless it is tackled soon, it will reverse development gains and exacerbate inequalities.

“Climate-smart” development is needed and can be achieved.

Rich countries must take leadership on climate action now, but we can’t succeed without the active cooperation of middle-income countries.

The science is incredibly strong and verified

Surface and tropospheric temperatures increasing Atmospheric water vapour increasing Ocean heat content increasing … … sea level rise directly linked and probably cyclone/hurricane intensity Glaciers and snow cover decreasing Greenland and Antarctic ice sheets losing mass with … … Arctic Sea ice extent decreasing—VERY RAPIDLY!!!! Area of seasonally frozen ground decreasing More intense and longer droughts Frequency of heavy precipitation events and floods increasing Extreme temperatures increasing Monsoon patterns changing

Unequivocal

Manning, IPCC, WGI, 2007

Why Climate Change is a Serious Development Issue

In this decade over 3 billion people in developing countries are likely to be affected by climate related disasters

People in developing countries are affected at more than 20 times the rate of those in developed countries

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All countries are vulnerable to climate change but the poorest countries and the poorest people within them are most vulnerable. They are the most exposed and have the least means to adapt.

Source: World Bank analysis based on CREDA data.

Climate Change and the Bank

Climate Change and the Bank

Carbon Finance– Prototype Carbon Fund (PCF) in 1999 – capped at $180M– Now 10 funds and over $2 billion under management– Carbon Partnership Facility (CPF) – go programmatic

Engage both buyers & sellers – target $5 billion

Clean Energy Investment Framework (CEIF)– A call for the Bank’s engagement in three climate pillars

Energy Access Clean Energy for Development Climate Resilient Development (Adaptation)

Climate Change and the Bank

Forest Carbon Partnership Facility (FCPF)– Pilot REDD – c. $0.5 billion

IDA Replenishment– Argued that increased resources were need to

move to climate resilient development

– Accept that not all of these initiatives meet the demand that all funding come under the UNFCCC process

Climate Change and the Bank

Climate Investment Funds– Clean Technology Fund

c. $5 billion for transformational change in currently viable technologies

– Strategic Climate Fund Pilot Program for Climate Resilience – c. 0.5 billion Forest initiative Renewables initiative

Strategic Framework for Climate Change and Development (SFCCD)

The SFCCD is about development in the context of climate change

Priority of growth, poverty reduction and MDGs

Importance of meeting energy needs of developing countries

Role of development in helping to adapt to climate risks

Resource mobilization in addition to the current ODA levels

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SFCCD Pillars

1. Make effective climate action – both adaptation and mitigation - part of core development efforts

2. Address the resource gap through existing and innovative instruments for concessional finance

3. Facilitate the development of innovative market mechanisms

4. Create enabling environment for and leveraging private sector finance

5. Accelerate the deployment of existing and development of new climate-friendly technologies

6. Step-up policy research, knowledge management and capacity building

Sustainable Development @ The World Bank

Climate Change Matters for Development

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Stabilizing CO2 concentrations means fundamental change to the global energy and land use systems.

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1850 1900 1950 2000 2050 2100 2150 2200 2250 2300

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Historical EmissionsGTSP_750GTSP_650GTSP_550GTSP_450GTSP Reference Case

Fossil Fuel Carbon Emissions

Historic & 2005 to 2100

1750-2005 300 GtC

GTSP Ref 1430 GtC

750 ppm 1200 GtC

650 ppm 1040 GtC

550 ppm 862 GtC

450 ppm 480 GtC

Projected Impacts of Climate Change

Stern, 2006

Climate change cannot be tackled without developing countries

Development matters to climate change

The past…rich countries responsible for about 60% of GHGs stocks

The future…half GHGs flows are now from middle-income countries and that share will grow.

Costs of controlling emissions rise if we delay; the sooner all countries participate, the lower the total costs

The basis for a global deal

GHG stabilization costs for 550 ppm target, relative to ‘first best’

ScenarioGlobal

costnon-Annex I

share of costs

Annex Ishare of

costsnon-Annex I

costAnnex I

cost

Immediate action by all $1.00 0.72 0.28 $0.72 $0.28

Delayed action for developing countries:

2020 $1.47 0.38 0.62 $0.56 $0.91

2035 $1.69 0.34 0.66 $0.57 $1.12

2050 $2.39 0.28 0.72 $0.67 $1.72

The precautionary principle

The case for (in)action is not just about discount rates…

Also about irreversibility, tipping points, extreme events and sustainable development

– 50% chance of warming above 2oC even with concentrations at 450 ppm CO2e

– Above 2oC, real danger of irreversible changes

Danger is real, particularly for poorer countries…

Objectives and Value Added of the WDR 2010

Objectives

Inform development policy: Climate change does represent a changing climate for

development

Inform climate policy: Unless development realities are integrated into climate

change agreements, such agreements will fail

Refocus the vision of sustainable development: Increase understanding of how development policy should be designed in a greenhouse world

Value added

Focus on development

Integrate adaptation and mitigation

Present evidence that the elements of a deal exist

Highlight development opportunities in the changing competitive landscape – and how to seize them

Proposed Outline

Part I. Climate-Smart Development Policy

The land and water challenge - Managing competing demands and creating new opportunities

The energy challenges - Managing competing objectives and creating a new comparative advantage

Managing human vulnerability - helping people help themselves

Where we are headed – crop yield by 2080

Agro-Economic Vulnerability to Future Climate Change

Nature, 2008Water: More crop per drop" (E. Marris, 3-21-08)

INTERNATIONAL FOOD POLICY RESEARCH INSTITUTE

Emissions Mitigation ScenarioEmissions Mitigation Scenario

Page 27Source: Gurgel et al. 2007

Policy Scenario includes a cumulative reduction of emissions of 40% Policy Scenario includes a cumulative reduction of emissions of 40% from 2012 to 2100, where limits on fossil fuel usage spurs biomass from 2012 to 2100, where limits on fossil fuel usage spurs biomass conversion.conversion.

Part II. Development-Smart Climate Policy

An International Architecture for Climate change and Development

Harnessing Finance and Market Instruments for Mitigation and Adaptation

Harnessing Innovation and Technology Diffusion for Mitigation and Adaptation

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6

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150

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Total R&D (left axis) Energy R&D (right axis)

Development public R&D expenditure (in OECD)

in b

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Source: DoornboschSource: Doornbosch, 2006, 2006

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The near-term challenge of scale

CO2 Storage—550 ppm Stabilization Case

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Monitored CO2 Storage Today 2020 (550 ppm)

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Monitored CO2Storage Today

2020 (550 ppm) 2050 (550 ppm) 2095 (550 ppm)

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The mid- and long-term the challenge

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Monitored CO2 Storage Today 2020 (550 ppm)

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CO2 Storage—550 ppm Stabilization Case

Cross cutting themes

• Changes in ecosystem composition• Wetland migration• Invasion, extinction and simplification

• Purchase of insurance

• Construction of house on stilts• Water conservation

• Changes in farming practices• Changes in insurance premiums• Purchase of air conditioning

• Early-warning systems• New building codes, design standards• Incentives for relocation

• Compensatory payments, subsidies• Enforcement of building codes• Beach nourishment

Natural Systems

Human Systems

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Source: Based on Klein 1998: IPCC 2001

Anticipatory Reactive

Adaptation

• Manage for resiliency• Conserve gene pools• Manage for change

• Changes in ecosystem composition• Wetland migration• Invasion, extinction and simplification

• Purchase of insurance

• Construction of house on stilts• water conservation

• Changes in farm practices• Changes in insurance premiums• Purchase of air conditioning

• Early-warning systems• New building codes, design standards• Incentives for relocation

• Compensatory payments, subsidies• Enforcement of building codes• Beach nourishment

Natural Systems

Human Systems

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Source: Based on Klein 1998: IPCC 2001

Anticipatory Reactive

Adaptation and Surprise

Complex systems: inherently hard to predict “Data sparse, theory limited, surprise normal” Climate change will interact with multiple stressors in

unexpected ways Increasing global prosperity Demographic and Public health challenges Urbanization and Rural-urban migration Coastal vulnerability (floods, storm surge, sea level)

Part III Achieving climate-smart decisions

Global problem, local action: effective national and community-level actions

Getting to decisions - Managing the politics and social-psychology of climate change

Getting to good decisions – institutions and information; Adaptive policies and governance

Recent “Climate Governance and Development Conference” in Berlin will be a key input

Characteristics of adaptive policies:Characteristics of adaptive policies:- in-built adjustment mechanisms- in-built adjustment mechanisms- interactive decision-making and learning- interactive decision-making and learning- decentralized (subsidiarity)- decentralized (subsidiarity)- encourage self-organization and - encourage self-organization and

networksnetworks- provision of review mechanisms- provision of review mechanisms

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When two elephants fight…

…it is the grass that gets hurt

Feedback Sought

Storyline & key messages Doom & gloom or vision & opportunity

Climate change as an opportunity: REDD, land-based emissions

Bottom-up adaptation approaches; top-down incentives

Case studies – good and bad

HOW TO MAKE IT HAPPEN, AND IN TIME…. Where “IT” is adequate, acceptable and achievable?

Can (should) the WDR be neutral to the negotiations?

Some other ‘food for thought’

How can the emissions cuts be achieved while leaving space for development and time for technological and lifestyle changes?– Role of CDM – Global 2 tCO2/person cap and trading of these

rights

Should we keep working for a 450ppm stabilisation (2ºC) while also preparing for a 550+ppm (3 to 4ºC)?

Some other ‘food for thought’

Can a momentum for change be sustained in the face of other pressures (e.g. food and finance crises)

If there are so many win-wins out there for climate change and development, why haven’t they been taken up already?

Some other ‘food for thought’

What is the best role for the WDR with respect to the UNFCCC process and Copenhagen?

What constitutes a fair outcome?– Natural debt of the North v financial debt of the

South– Within nation equity

Is ‘Adequate, Achievable and Acceptable” a more pragmatic approach?

Thank you

www.worldbank.org/environment World Bank environment website

www.worldbank.org/climatechange World Bank climate change website

www.carbonfinance.org World Bank carbon finance website

www.worldbank.org/climateconsult Global Consultations towards a Strategic Framework on Climate Change and Development for the World Bank Group

www.worldbank.org/cif Climate Investment Funds dedicated website

www.worldbank.org/EnvironmentMatters Environment Matters 2007 focuses on theimmediate necessity for developingcountries to begin adapting to climate change

www.worldbank.org/devoutreach Development Outreach on climate change

www.worldbank.org/idaandclimatechange IDA and Climate Change paper

Advisors

J. Schellnhuber (PIK) N. Nakicenovic (IIASA) JC. Hourcade (France) G. Heal (Columbia) J. Weyant (Stanford) Zhou Dadi (China) C. Nobre (Brazil) C. Juma (Harvard) N. Adger (East Anglia) S. Huq (IIED) J. Holdren (Harvard) R. Watson (DEFRA, UK Govt)