53077 world development report +3° +2° Development and Climate Change +1° 1000 1500 2000 2100 Headed toward the danger zone Human activity is warming the planet. For data for the past 150 years or so docu- minimal vegetative cover and light greens the past millennium the Earth's average ment a global temperature increase of through dark greens indicating ever more temperature varied within a range of less nearly 1°C since the preindustrial period. dense vegetation. Biological processes on than 0.7°C (shown in green); however, Global climate models that estimate the land and in the oceans play a key role in man-made greenhouse gas emissions effect of different future emission sce- regulating Earth's temperature and car- have resulted in a dramatic increase in narios on Earth's climate predict a range bon cycle, and information such as pre- the planet's temperature over the past of possible global temperatures for this sented in these global maps is essential century (shown in yellow). The projected century. These estimates show that even to manage limited natural resources in an future increase over the next 100 years the most aggressive mitigation efforts increasingly populous world. (shown in red) due to growing emissions may lead to warming of 2°C or more (a could possibly warm the planet by 5°C level already considered dangerous), and Sources: relative to the preindustrial period. Such most models project that less mitigation Jones, P. D., and M. E. Mann. 2004. "Climate warming has never been experienced would lead to warming of 3°C or even Over Past Millennia." Reviews of Geophysics by mankind and the resulting physical up to 5°C and beyond (though with less 42(2): doi:10.1029/2003RG000143. impacts would severely limit develop- certainty around these higher amounts of Jones, P. D., D. E. Parker, T. J. Osborn, and ment. Only through immediate and warming). K. R. Briffa. 2009. "Global and Hemispheric Temperature Anomalies--Land and Marine ambitious actions to curb greenhouse gas The three globes on the cover are com- Instrumental Records." In Trends: A Com- emissions may dangerous warming be posites of data collected by satellites dur- pendium of Data on Global Change. Carbon avoided. ing the summer months of 1998 through Dioxide Information Analysis Center, Oak The evolution of the planet's tempera- 2007. The colors of the ocean represent Ridge National Laboratory, U.S. Depart- ture for the past 1,000 years is based on chlorophyll concentration, which is a ment of Energy, Oak Ridge, TN. doi: 10.3334/ a range of proxy estimates (such as tree measure of the global distribution of CDIAC/cli.002 ring analysis or ice core sampling) that oceanic plant life (phytoplankton). Deep IPCC (Intergovernmental Panel on Climate Change). 2007. Climate Change 2007: Synthe- define the envelope of long-term tem- blue colors are areas of low chlorophyll sis Report. Contribution of Working Groups I, II perature variation. With modern weather concentration while green, yellow, and and III to the Fourth Assessment Report of the observations starting in the nineteenth red indicate ever higher concentration. Intergovernmental Panel on Climate Change. century, global temperature could be The colors on land show vegetation, with Geneva: IPCC. estimated more precisely; thermometer whites, browns, and tans representing Temperature relative to the preindustrial era (°C) 5 Historical Observed 4 Future 3 2 1 0 ­1 1000 1100 1200 1300 1400 1500 1600 1700 1800 1900 2000 2100 Year 2010 world development report Development and Climate Change 2010 world development report Development and Climate Change © 2010 The International Bank for Reconstruction and Development / The World Bank 1818 H Street NW Washington DC 20433 Telephone: 202-473-1000 Internet: www.worldbank.org E-mail: feedback@worldbank.org All rights reserved 1 2 3 4 13 12 11 10 This volume is a product of the staff of the International Bank for Reconstruction and Development / The World Bank. 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Contents Foreword xiii Acknowledgments xv Abbreviations and Data Notes xvii Main Messages xx Overview: Changing the Climate for Development 1 The case for action 4 A climate-smart world is within reach if we act now, act together, and act differently 10 Making it happen: New pressures, new instruments, and new resources 18 1 Understanding the Links between Climate Change and Development 37 Unmitigated climate change is incompatible with sustainable development 39 Evaluating the tradeoffs 48 The costs of delaying the global mitigation effort 55 Seizing the moment: Immediate stimulus and long-term transformations 58 Focus A: The Science of Climate Change 70 Part One 2 Reducing Human Vulnerability: Helping People Help Themselves 87 Adaptive management: Living with change 89 Managing physical risks: Avoiding the avoidable 90 Managing financial risks: Flexible instruments for contingencies 101 Managing social risks: Empower communities to protect themselves 105 Looking ahead to 2050: Which world? 111 Focus B: Biodiversity and Ecosystem Services in a Changing Climate 124 v vi CONTENTS 3 Managing Land and Water to Feed Nine Billion People and Protect Natural Systems 133 Put in place the fundamentals for natural resource management 134 Produce more from water and protect it better 137 Producing more in agriculture while protecting the environment 145 Produce more and protect better in fisheries and aquaculture 156 Building flexible international agreements 158 Reliable information is fundamental for good natural resource management 162 Pricing carbon, food, and energy could be the springboard 166 4 Energizing Development without Compromising the Climate 189 Balancing competing objectives 191 Where the world needs to go: Transformation to a sustainable energy future 195 Realizing the savings from energy efficiency 209 Scaling up existing low-carbon technologies 217 Accelerating innovation and advanced technologies 220 Policies have to be integrated 222 Part Two 5 Integrating Development into the Global Climate Regime 233 Building the climate regime: Transcending the tensions between climate and development 233 Options for integrating developing-country actions into the global architecture 240 Support for developing-country mitigation efforts 245 Promoting international efforts to integrate adaptation into climate-smart development 246 Focus C: Trade and Climate Change 251 6 Generating the Funding Needed for Mitigation and Adaptation 257 The financing gap 259 Inefficiencies in existing climate-finance instruments 263 Increasing the scale of climate-change finance 267 Ensuring the transparent, efficient, and equitable use of funds 276 Matching financing needs and sources of funds 278 Contents vii 7 Accelerating Innovation and Technology Diffusion 287 The right tools, technologies, and institutions can put a climate-smart world well within our reach 289 International collaboration and cost sharing can leverage domestic efforts to promote innovation 293 Public programs, policies, and institutions power innovation and accelerate its diffusion 303 8 Overcoming Behavioral and Institutional Inertia 321 Harnessing individuals' behavioral change 322 Bringing the state back in 330 Thinking politically about climate policy 335 Climate-smart development starts at home 341 Bibliographical Note 349 Glossary 353 Selected Indicators 361 Table A1 Energy-related emissions and carbon intensity 362 Table A2 Land-based emissions 363 Table A3 Total primary energy supply 364 Table A4 Natural disasters 366 Table A5 Land, water, and agriculture 367 Table A6 Wealth of nations 368 Table A7 Innovation, research, and development 369 Definitions and notes 370 Symbols and aggregates 374 Selected World Development Indicators 375 Data sources and methodology 375 Classification of economies and summary measures 375 Terminology and country coverage 376 Technical notes 376 Symbols 376 Classification of economies by region and income, FY2010 377 Table 1 Key indicators of development 378 Table 2 Poverty 380 Table 3 Millennium Development Goals: eradicating poverty and improving lives 382 Table 4 Economic activity 384 viii CONTENTS Table 5 Trade, aid, and finance 386 Table 6 Key indicators for other economies 388 Technical notes 390 Statistical methods 396 World Bank Atlas method 396 Index 399 Boxes 1 All developing regions are vulnerable to the impacts of 2.10 The Caribbean Catastrophe Risk Insurance Facility: Insurance climate change--for different reasons 6 against service interruption after disasters 105 2 Economic growth: Necessary, but not sufficient 7 2.11 Workfare in India under the Indian National Rural 3 The cost of "climate insurance" 8 Employment Guarantee Act 109 4 Safety nets: From supporting incomes to reducing 2.12 Migration today 110 vulnerability to climate change 13 FB.1 What is biodiversity? What are ecosystem services? 124 5 Promising approaches that are good for farmers and good FB.2 Payment for ecosystem and mitigation services 128 for the environment 17 FB.3 Excerpts from the Declaration of Indigenous Peoples on 6 Ingenuity needed: Adaptation requires new tools and new Climate Change 128 knowledge 19 3.1 Robust decision making: Changing how water managers 7 Cities reducing their carbon footprints 21 do business 140 8 The role of land use, agriculture, and forestry in managing 3.2 The dangers of establishing a market for water rights climate change 25 before the institutional structures are in place 142 1.1 Empowered women improve adaptation and mitigation 3.3 Managing water resources within the margin of error: outcomes 43 Tunisia 143 1.2 The basics of discounting the costs and benefits of climate 3.4 Palm oil, emission reductions, and avoided change mitigation 49 deforestation 148 1.3 Positive feedbacks, tipping points, thresholds, and 3.5 Product and market diversification: An economic nonlinearities in natural and socioeconomic systems 50 and ecological alternative for marginal farmers in the 1.4 Ethics and climate change 53 tropics 152 FA.1 The carbon cycle 71 3.6 Biotech crops could help farmers adapt to climate change 155 FA.2 Ocean health: Coral reefs and ocean acidification 78 3.7 Biochar could sequester carbon and increase yields 2.1 Characteristics of adaptive management 90 on a vast scale 156 2.2 Planning for greener and safer cities: The case 3.8 Policy makers in Morocco face stark tradeoffs on cereal of Curitiba 93 imports 160 2.3 Adapting to climate change: Alexandria, Casablanca, 3.9 Pilot projects for agricultural carbon finance and Tunis 93 in Kenya 172 2.4 Fostering synergies between mitigation and 4.1 The financial crisis offers an opportunity for efficient and adaptation 95 clean energy 190 2.5 Preparing for heat waves 96 4.2 Efficient and clean energy can be good for 2.6 Beating the odds and getting ahead of impacts: Managing development 192 risk of extreme events before they become disasters 99 4.3 A 450 ppm CO2e (2°C warmer) world requires a 2.7 Satellite data and geo-information are instrumental in fundamental change in the global energy system 200 managing risk--and inexpensive 100 4.4 Regional energy mix for 450 ppm CO2e (to limit warming 2.8 Creating jobs to reduce flood risk 101 to 2°C) 202 2.9 Public-private partnerships for sharing climate risks: 4.5 Renewable energy technologies have huge potential but face Mongolia livestock insurance 102 constraints 205 Contents ix 4.6 Advanced technologies 209 7.2 Innovation is a messy process and can be promoted 4.7 The role for urban policy in achieving mitigation and only by policies that address multiple parts of a complex development co-benefits 210 system 295 4.8 Energy efficiency faces many market and nonmarket 7.3 Innovative monitoring: Creating a global climate service barriers and failures 212 and a "system of systems" 296 4.9 Carbon pricing alone is not enough 213 7.4 ITER: A protracted start for energy R&D cost sharing 298 4.10 California's energy-efficiency and renewable energy 7.5 Technologies on the scale of carbon capture and storage programs 215 require international efforts 299 4.11 World Bank Group experience with financing energy 7.6 The Super-Efficient Refrigerator: A pioneer advanced efficiency 216 market commitment program? 300 4.12 Difficulties in comparing energy technology costs: A matter 7.7 A promising innovation for coastal adaptation 302 of assumptions 217 7.8 Universities need to be innovative: The case 4.13 Denmark sustains economic growth while cutting of Africa 305 emissions 218 7.9 CGIAR: A model for climate change? 306 4.14 Feed-in laws, concessions, tax credits, and renewable 7.10 Improved cook stoves designs can reduce soot, portfolio standards in Germany, China, and the United producing important benefits for human health and for States 219 mitigation 312 4.15 Concentrated solar power in Middle East and 8.1 Miscommunicating the need for climate action 323 North Africa 221 8.2 Misunderstandings about the dynamics of climate change 5.1 The climate regime today 234 encourage complacency 325 5.2 Some proposals for burden sharing 238 8.3 How risk perceptions can sink policies: Flood risk 5.3 Multitrack approaches score well on effectiveness management 325 and equity 242 8.4 End-to-end community engagement for landslide risk FC.1 Taxing virtual carbon 252 reduction in the Caribbean 327 6.1 Costing adaptation to climate change in developing 8.5 Communicating climate change 328 countries 261 8.6 Inserting climate education in school curricula 329 6.2 Assessing the co-benefits of the CDM 266 8.7 China's and India's path to institutional reform for climate 6.3 Carbon taxes versus cap-and-trade 268 action 333 6.4 Indonesian Ministry of Finance engagement on climate 8.8 National adaptation programs of action 334 change issues 269 8.9 Enhancing government accountability for climate change in 6.5 Conserving agricultural soil carbon 274 the United Kingdom 335 6.6 Allocating concessional development finance 277 8.10 Green federalism and climate change policy 336 6.7 Climate vulnerability versus social capacity 279 8.11 Garnering support for cap-and-trade 339 6.8 Climate vulnerability versus capacity to adapt 280 8.12 The private sector is changing practices even without national legislation 341 7.1 Geoengineering the world out of climate change 290 Figures 1 Unequal footprints: Emissions per capita in low-, middle-, 5 What does the way forward look like? Two options among and high-income countries, 2005 2 many: Business as usual or aggressive mitigation 10 2 Rebalancing act: Switching from SUVs to fuel-efficient 6 Climate impacts are long-lived: Rising temperatures and sea passenger cars in the U.S. alone would nearly offset the levels associated with higher concentrations of CO2 11 emissions generated in providing electricity to 1.6 billion 7 Global CO2e emissions by sector: Energy, but also more people 3 agriculture and forestry, are major sources 14 3 High-income countries have historically contributed 8 The full portfolio of existing measures and advanced a disproportionate share of global emissions and still technologies, not a silver bullet, will be needed to get the do 3 world onto a 2°C path 15 4 Off the charts with CO2 4 x CONTENTS 9 High expected demand drove cost reductions in solar 3.10 In Andhra Pradesh, India, farmers generate their own photovoltaics by allowing for larger-scale production 16 hydrological data, using very simple devices and tools, to 10 The gap is large: Estimated annual incremental climate regulate withdrawals from aquifers 165 costs required for a 2°C trajectory compared with current 3.11 An ideal climate-smart agricultural landscape of the resources 23 future would enable farmers to use new technologies and 1.1 Individuals' emissions in high-income countries overwhelm techniques to maximize yields and allow land managers to those in developing countries 39 protect natural systems, with natural habitats integrated into agriculturally productive landscapes 166 1.2 Corn-based biofuels in the United States increase CO2 emissions and health costs relative to gasoline 47 3.12 An ideal climate-smart landscape of the future would use flexible technology to buffer against climate shocks through 1.3 Assessing deadweight losses from partial participation in a natural infrastructure, built infrastructure, and market climate deal 57 mechanisms 167 1.4 Global green stimulus spending is rising 59 3.13 Global cereal prices are expected to increase 50 to 100 FA.1 Global emissions of greenhouse gases have been percent by 2050 168 increasing 72 3.14 A carbon tax applied to emissions from agriculture and FA.2 Major factors affecting the climate since the Industrial land-use change would encourage protection of natural Revolution 73 resources 170 FA.3 Global annual average temperature and CO2 concentration 4.1 The story behind doubling emissions: improvements in continue to climb, 1880­2007 73 energy and carbon intensity have not been enough to offset FA.4 Greenland's melting ice sheet 74 rising energy demand boosted by rising incomes 193 FA.5 Embers burning hotter: Assessment of risks and damages 4.2 Primary energy mix 1850­2006. From 1850 to 1950 energy has increased from 2001 to 2007 76 consumption grew 1.5 percent a year, driven mainly by coal. FA.6 Projected impacts of climate change by region 77 From 1950 to 2006 it grew 2.7 percent a year, driven mainly by oil and natural gas 193 FA.7 Ways to limit warming to 2°C above preindustrial levels 80 4.3 Despite low energy consumption and emissions per capita, developing countries will dominate much of the 2.1 The number of people affected by climate-related disasters future growth in total energy consumption and CO2 is increasing 98 emissions 194 2.2 Floods are increasing, even in drought-prone Africa 100 4.4 Greenhouse gas emissions by sector: world and high-, 2.3 Insurance is limited in the developing world 103 middle-, and low-income countries 195 2.4 Turning back the desert with indigenous knowledge, farmer 4.5 Car ownership increases with income, but pricing, public action, and social learning 106 transport, urban planning, and urban density can contain 3.1 Climate change in a typical river basin will be felt across the car use 196 hydrological cycle 136 4.6 Where the world needs to go: Energy-related CO2 emissions 3.2 Freshwater in rivers makes up a very small share of the per capita 197 water available on the planet--and agriculture dominates 4.7 Only half the energy models find it possible to achieve the water use 139 emission reductions necessary to stay close to 450 ppm 3.3 Meat is much more water intensive than major CO2e (2°C) 197 crops 149 4.8 Estimates of global mitigation costs and carbon prices for 3.4 Intensive beef production is a heavy producer of 450 and 550 ppm CO2e (2°C and 3°C) in 2030 from five greenhouse gas emissions 149 models 199 3.5 Agricultural productivity will have to increase even more 4.9 Global actions are essential to limit warming to 2°C rapidly because of climate change 150 (450 ppm) or 3°C (550 ppm). Developed countries alone could not put the world onto a 2°C or 3°C trajectory, even if 3.6 Ecosystems have already been extensively converted for they were to reduce emissions to zero by 2050 204 agriculture 151 4.10 The emissions gap between where the world is headed and 3.7 Computer simulation of integrated land use in where it needs to go is huge, but a portfolio of clean energy Colombia 153 technologies can help the world stay at 450 ppm CO2e 3.8 Demand for fish from aquaculture will increase, particularly (2°C) 206 in Asia and Africa 158 4.11 The goal is to push low-carbon technologies from unproven 3.9 Remote-sensing techniques are used in the vineyards concept to widespread deployment and to higher emission of Worcester (West Cape, South Africa) to gauge water reductions 207 productivity 164 Contents xi 4.12 Solar photovoltaic power is getting cheaper over time, 7.8 E-bikes are now among the cheapest and cleanest travel thanks to R&D and higher expected demand from larger mode options in China 307 scale of production 220 7.9 Middle-income countries are attracting investments from FC.1 Import-export ratio of energy-intensive products in the top five wind equipment firms, but weak intellectual high-income countries and low- and middle-income property rights constrain technology transfers and R&D countries 253 capacity 309 6.1 Annual mitigation costs rise with the stringency and 8.1 The direct actions of U.S. consumers produce up to one- certainty of the temperature target 259 third of total U.S. CO2 emissions 322 6.2 The gap is large: Estimated annual climate funding 8.2 Small local adjustments for big global benefits: Switching required for a 2°C trajectory compared with current from SUVs to fuel-efficient passenger cars in the United resources 263 States alone would nearly offset the emissions generated by 7.1 Global cumulative installed wind capacity has soared in the providing energy to 1.6 billion more people 323 past decade 287 8.3 Individuals' willingness to respond to climate change differs 7.2 Government budgets for energy RD&D are near their lows, across countries and does not always translate into concrete and nuclear dominates 292 actions 324 7.3 Annual spending for energy and climate change R&D pales 8.4 Climate change is not a priority yet 326 against subsidies 293 8.5 Concern about climate change decreases as wealth goes 7.4 The pace of invention is uneven across low-carbon up 327 technologies 293 8.6 Effective governance goes hand in hand with good 7.5 Policy affects every link of the innovation chain 295 environmental performance 332 7.6 The "valley of death" between research and the 8.7 Democracies do better in climate policy outputs than policy market 300 outcomes 338 7.7 Enrollment in engineering remains low in many developing countries 304 Maps 1 Climate change will depress agricultural yields in most 2.2 A complex challenge: managing urban growth and countries in 2050, given current agricultural practices and flood risk in a changing climate in South and Southeast crop varieties 5 Asia 94 1.1 More than a billion people depend on water from 2.3 Northern cities need to prepare for Mediterranean diminishing Himalayan glaciers 38 climate--now 96 1.2 Rich countries are also affected by anomalous climate: 2.4 Climate change accelerates the comeback of dengue in the The 2003 heat wave killed more than 70,000 people in Americas 97 Europe 41 2.5 Small and poor countries are financially vulnerable to 1.3 Climate change is likely to increase poverty in most of extreme weather events 104 Brazil, especially its poorest regions 42 2.6 Senegalese migrants settle in flood-prone areas around 1.4 The January 2008 storm in China severely disrupted urban Dakar 111 mobility, a pillar of its economic growth 45 FB.1 While many of the projected ecosystem changes are 1.5 Africa has enormous untapped hydropower potential, in boreal or desert areas that are not biodiversity compared to lower potential but more exploitation of hydro hotspots, there are still substantial areas of overlap and resources in the United States 46 concern 126 FA.1 Regional variation in global climate trends over the last FB.2 Unprotected areas at high risk of deforestation and with 30 years 75 high carbon stocks should be priority areas to benefit from FA.2 Potential tipping elements in the climate system: Global a REDD mechanism 129 distribution 79 3.1 Water availability is projected to change dramatically 2.1 At risk: Population and megacities concentrate in low- by the middle of the 21st century in many parts of the elevation coastal zones threatened by sea level rise and world 137 storm surges 91 3.2 The world will experience both longer dry spells and more intense rainfall events 138 xii CONTENTS 3.3 Climate change will depress agricultural yields in most 3.6 Developed countries have more data collection points and countries by 2050 given current agricultural practices and longer time series of water monitoring data 163 crop varieties 145 7.1 Advances in wind mapping open up new 3.4 Intensive agriculture in the developed world has opportunities 288 contributed to the proliferation of dead zones 150 3.5 World grain trade depends on exports from a few countries 161 Tables 1 Incremental mitigation costs and associated financing 4.5 Policy interventions for energy efficiency, renewable energy, requirements for a 2°C trajectory: What will be needed in and transport 214 developing countries by 2030? 9 6.1 Existing instruments of climate finance 258 2 In the long term, what will it cost? Present value of 6.2 Estimated annual climate funding needed in developing mitigation costs to 2100 9 countries 260 FA.1 Potential tipping elements in the climate system: 6.3 Potential regional CDM delivery and carbon revenues Triggers, time-scale, and impacts 80 (by 2012) 262 FB.1 Assessment of the current trend in the global state 6.4 New bilateral and multilateral climate funds 263 of major services provided by ecosystems 125 6.5 The tax incidence of an adaptation levy on the Clean 4.1 What it would take to achieve the 450 ppm CO2e Development Mechanism (2020) 267 concentration needed to keep warming close 6.6 Potential sources of mitigation and adaptation to 2°C--an illustrative scenario 198 finance 271 4.2 Investment needs to limit warming to 2°C (450 ppm CO2e) 6.7 National and multilateral initiatives to reduce deforestation in 2030 199 and degradation 273 4.3 Different country circumstances require tailored 7.1 International technology-oriented agreements specific to approaches 204 climate change 294 4.4 Policy instruments tailored to the maturity of 7.2 Key national policy priorities for innovation 303 technologies 207 Foreword Climate change is one of the most complex challenges of our young century. No country is immune. No country alone can take on the interconnected challenges posed by climate change, including controversial political decisions, daunting technological change, and far- reaching global consequences. As the planet warms, rainfall patterns shift and extreme events such as droughts, floods, and forest fires become more frequent. Millions in densely populated coastal areas and in island nations will lose their homes as the sea level rises. Poor people in Africa, Asia, and elsewhere face prospects of tragic crop failures; reduced agricultural productivity; and increased hunger, malnutrition, and disease. As a multilateral institution whose mission is inclusive and sustainable development, the World Bank Group has a responsibility to try to explain some of those interconnections across disciplines--development economics, science, energy, ecology, technology, finance, and effective international regimes and governance. With 186 members, the World Bank Group faces the challenge, every day, of building cooperation among vastly different states, the private sector, and civil society to achieve common goods. This 32nd World Develop- ment Report seeks to apply that experience, combined with research, to advance knowledge about Development and Climate Change. Developing countries will bear the brunt of the effects of climate change, even as they strive to overcome poverty and advance economic growth. For these countries, climate change threatens to deepen vulnerabilities, erode hard-won gains, and seriously undermine prospects for development. It becomes even harder to attain the Millennium Development Goals--and ensure a safe and sustainable future beyond 2015. At the same time, many developing countries fear limits on their critical call to develop energy or new rules that might stifle their many needs--from infrastructure to entrepreneurism. Tackling the immense and multidimensional challenge of climate change demands extraordinary ingenuity and cooperation. A "climate-smart" world is possible in our time--yet, as this Report argues, effecting such a transformation requires us to act now, act together, and act differently. We must act now, because what we do today determines both the climate of tomorrow and the choices that shape our future. Today, we are emitting greenhouse gases that trap heat in the atmosphere for decades or even centuries. We are building power plants, res- ervoirs, houses, transport systems, and cities that are likely to last 50 years or more. The innovative technologies and crop varieties that we pilot today can shape energy and food sources to meet the needs of 3 billion more people by 2050. We must act together, because climate change is a crisis of the commons. Climate change cannot be solved without countries cooperating on a global scale to improve energy effi- ciencies, develop and deploy clean technologies, and expand natural "sinks" to grow green by absorbing gases. We need to protect human life and ecological resources. We must act together in a differentiated and equitable way. Developed countries have produced most of the emissions of the past and have high per capita emissions. These countries should lead the way by significantly reducing their carbon footprints and stimulating research into xiii xiv F O R E WO R D green alternatives. Yet most of the world's future emissions will be generated in the devel- oping world. These countries will need adequate funds and technology transfer so they can pursue lower carbon paths--without jeopardizing their development prospects. And they need assistance to adapt to inevitable changes in climate. We must act differently, because we cannot plan for the future based on the climate of the past. Tomorrow's climate needs will require us to build infrastructure that can with- stand new conditions and support greater numbers of people; use limited land and water resources to supply sufficient food and biomass for fuel while preserving ecosystems; and reconfigure the world's energy systems. This will require adaptation measures that are based on new information about changing patterns of temperature, precipitation, and spe- cies. Changes of this magnitude will require substantial additional finance for adaptation and mitigation, and for strategically intensified research to scale up promising approaches and explore bold new ideas. We need a new momentum. It is crucial that countries reach a climate agreement in December in Copenhagen that integrates development needs with climate actions. The World Bank Group has developed several financing initiatives to help countries cope with climate change, as outlined in our Strategic Framework for Development and Climate Change. These include our carbon funds and facilities, which continue to grow as financing for energy efficiency and new renewable energy increases substantially. We are trying to develop practical experience about how developing countries can benefit from and support a climate change regime--ranging from workable mechanisms to provide incentives for avoided deforestation, to lower carbon growth models and initiatives that combine adaptation and mitigation. In these ways, we can support the UNFCCC process and the countries devising new international incentives and disincentives. Much more is needed. Looking forward, the Bank Group is reshaping our energy and envi- ronment strategies for the future, and helping countries to strengthen their risk management practices and expand their safety nets to cope with risks that cannot be fully mitigated. The 2010 World Development Report calls for action on climate issues: If we act now, act together, and act differently, there are real opportunities to shape our climate future for an inclusive and sustainable globalization. Robert B. Zoellick President The World Bank Group Acknowledgments This Report has been prepared by a core team led by Rosina Bierbaum and Marianne Fay and comprising Julia Bucknall, Samuel Fankhauser, Ricardo Fuentes-Nieva, Kirk Hamilton, Andreas Kopp, Andrea Liverani, Alexander Lotsch, Ian Noble, Jean-Louis Racine, Mark Roseg- rant, Xiaodong Wang, Xueman Wang, and Michael Ian Westphal. Major contributions were made by Arun Agrawal, Philippe Ambrosi, Elliot Diringer, Calestous Juma, Jean-Charles Hour- cade, Kseniya Lvovsky, Muthukumara Mani, Alan Miller, and Michael Toman. Helpful advice and data were provided by Leon Clarke, Jens Dinkel, Jae Edmonds, Per-Anders Enkvist, Brigitte Knopf, and Volker Krey. The team was assisted by Rachel Block, Doina Cebotari, Nicola Cenac- chi, Sandy Chang, Nate Engle, Hilary Gopnik, and Hrishikesh Patel. Additional contributions were made by Lidvard Gronnevet and Jon Strand. Bruce Ross-Larson was the principal editor. The World Bank's Map Design Unit created the maps under the direction of Jeff Lecksell. The Office of the Publisher provided editorial, design, composition, and printing services under the supervision of Mary Fisk and Andres Meneses; Stephen McGroarty served as acquisitions editor. The World Development Report 2010 was co-sponsored by Development Economics (DEC) and the Sustainable Development Network (SDN). The work was conducted under the general guidance of Justin Yifu Lin in DEC and Katherine Sierra in SDN. Warren Evans and Alan H. Gelb also provided valuable guidance. A Panel of Advisers comprised of Neil Adger, Zhou Dadi, Rashid Hassan, Geoffrey Heal, John Holdren (until December 2008), Jean-Charles Hourcade, Saleemul Huq, Calestous Juma, Nebojsa Nakic ´, ´enovic Carlos Nobre, John Schellnhuber, Robert Watson, and John Weyant provided extensive and excellent advice at all stages of the Report. World Bank President Robert B. Zoellick provided comments and guidance. Many others inside and outside the World Bank contributed with comments and inputs. The Development Data Group contributed to the data appendix and was responsible for the Selected World Development Indicators. The team benefited greatly from a wide range of consultations. Meetings and regional work- shops were held locally or through videoconferencing (using the World Bank's Global Develop- ment Learning Network) in: Argentina, Bangladesh, Belgium, Benin, Botswana, Burkina Faso, China, Costa Rica, Côte d'Ivoire, Denmark, Dominican Republic, Ethiopia, Finland, France, Germany, Ghana, India, Indonesia, Kenya, Kuwait, Mexico, Mozambique, the Netherlands, Nicaragua, Norway, Peru, the Philippines, Poland, Senegal, South Africa, Sweden, Tanzania, Thailand, Togo, Tunisia, Uganda, the United Arab Emirates, and the United Kingdom. The team wishes to thank participants in these workshops and videoconferences, which included academics, policy researchers, government officials, and staff of nongovernmental, civil society, and private sector organizations. Finally, the team would like to acknowledge the generous support of the Government of Norway, the UK Department for International Development, the Government of Denmark, the Government of Germany through Deutsche Gesellschaft für technische Zusammenarbeit, the Swedish Government through Biodiversity Centre/Swedish International Biodiversity Pro- gramme (SwedBio), the Trust Fund for Environmentally & Socially Sustainable Development xv xvi AC K N OW L E D G M E N T S (TFESSD), the multi-donor programmatic trust fund, and the Knowledge for Change Pro- gram (KCP). Rebecca Sugui served as senior executive assistant to the team--her 17th year with the WDR--Sonia Joseph and Jason Victor as program assistants, and Bertha Medina as team assistant. Evangeline Santo Domingo served as resource management assistant. Abbreviations and Data Notes Abbreviations AAU assigned amount unit ARPP Annual Report on Portfolio Performance BRIICS Brazil, the Russian Federation, India, Indonesia, China, and South Africa Bt Bacillus thuringiensis CCS carbon capture and storage CDM Clean Development Mechanism CER certified emission reduction CGIAR Consultative Group on International Agricultural Research CIPAV Centro para Investigación en Sistemas Sostenibles de Producción Agropecuaria CH4 methane CO2 carbon dioxide CO2e carbon dioxide equivalent CPIA Country Policy and Institutional Assessment CTF Clean Technology Fund EE energy efficiency EIT economies in transition ENSO El Niño­Southern Oscillation ESCO energy service company ETF­IW Environmental Transformation Fund­International Window EU European Union FCPF Forest Carbon Partnership Facility FDI foreign direct investment FIP Forest Investment Program GCCA Global Climate Change Alliance GCS global climate services enterprise GDP gross domestic product GEO Group on Earth Observation GEOSS Global Earth Observation System of Systems GEEREF Global Energy Efficiency and Renewable Energy Fund GEF Global Environment Facility GFDRR Global Facility for Disaster Reduction and Recovery GHG greenhouse gas GM genetically modified Gt gigaton GWP global warming potential IAASTD International Assessment of Agricultural Science and Technology for Development IATAL international air travel adaptation levy xvii xviii A B B R E V I AT I O N S A N D DATA N O T E S IDA International Development Association IEA International Energy Agency IFC International Finance Corporation IFCI International Forest Carbon Initiative IIASA International Institute for Applied Systems Analysis IMERS International Maritime Emission Reduction Scheme IPCC Intergovernmental Panel on Climate Change IPR intellectual property rights kWh kilowatt-hour JI Joint Implementation LDCF Least Developed Country Fund LECZ low-elevation coastal zones LPG liquefied petroleum gas MEA multilateral environmental agreement MRGRA Midwestern Regional GHG Reduction Accord MRV measurable, reportable, and verifiable NAPA National Adaptation Program of Action N2O nitrous oxide NGO nongovernmental organization O3 ozone O&M operation and maintenance OECD Organisation for Economic Co-operation and Development PaCIS Pacific Climate Information System ppb parts per billion PPCR Pilot Program for Climate Resistance ppm parts per million PPP purchasing power parity R&D research and development RD&D research, development, and deployment RDD&D research, development, demonstration, and deployment REDD reduced emissions from deforestation and forest degradation RGGI Regional Greenhouse Gas Initiative SCCF Strategic Climate Change Fund SDII simple daily intensity index SD-PAMs sustainable development policies and measures SO2 sulfur dioxide SUV sports utility vehicle toe tons of oil equivalent TRIPS Trade-Related Aspects of Intellectual Property Rights Tt trillion tons UN United Nations UNFCCC United Nations Framework Convention on Climate Change UN-REDD United Nations Collaborative Program on Reduced Emissions from Deforestation and forest Degradation WCI Western Climate Initiative WGI World Governance Indicator WMO World Meteorological Organization WTO World Trade Organization Abbreviations and Data Notes xix Data notes The countries included in regional and income groupings in this Report are listed in the Classification of Economies table at the end of the Selected World Development Indicators. Income classifications are based on gross national product (GNP) per capita; thresholds for income classifications in this edition may be found in the Introduction to Selected World Development Indicators. Figures, maps, and tables (including selected indicators) show- ing income groupings are based on the World Bank's income classification in 2009. The data shown in the Selected World Development Indicators are based on the classification in 2010. Group averages reported in the figures and tables are unweighted averages of the countries in the group, unless noted to the contrary. The use of the word countries to refer to economies implies no judgment by the World Bank about the legal or other status of a territory. The term developing countries includes low- and middle-income economies and thus may include economies in transition from central planning, as a matter of convenience. The terms industrialized countries or devel- oped countries may be used as a matter of convenience to denote high-income economies. Dollar figures are current U.S. dollars, unless otherwise specified. Billion means 1,000 million; trillion means 1,000 billion. Main Messages of the World Development Report 2010 Poverty reduction and sustainable development remain core global priorities. A quarter of the population of developing countries still lives on less than $1.25 a day. One billion people lack clean drinking water; 1.6 billion, electricity; and 3 billion, adequate sanitation. A quarter of all developing-country children are mal- nourished. Addressing these needs must remain the priorities both of developing countries and of development aid--recognizing that development will get harder, not easier, with climate change. Yet climate change must urgently be addressed. Climate change threatens all countries, with developing countries the most vulnerable. Estimates are that they would bear some 75 to 80 percent of the costs of damages caused by the changing climate. Even 2°C warming above preindustrial temperatures--the minimum the world is likely to experience--could result in permanent reductions in GDP of 4 to 5 percent for Africa and South Asia. Most developing countries lack sufficient fi nancial and technical capacities to manage increasing climate risk. They also depend more directly on climate-sensitive natural resources for income and well- being. And most are in tropical and subtropical regions already subject to highly variable climate. Economic growth alone is unlikely to be fast or equitable enough to counter threats from climate change, particularly if it remains carbon intensive and accel- erates global warming. So climate policy cannot be framed as a choice between growth and climate change. In fact, climate-smart policies are those that enhance development, reduce vulnerability, and finance the transition to low-carbon growth paths. A climate-smart world is within our reach if we act now, act together, and act differently than we have in the past: · Acting now is essential, or else options disappear and costs increase as the world commits itself to high-carbon pathways and largely irreversible warming trajec- tories. Climate change is already compromising efforts to improve standards of living and to achieve the Millennium Development Goals. Staying close to 2°C above preindustrial levels--likely the best that can be done--requires a verita- ble energy revolution with the immediate deployment of energy efficiency and available low-carbon technologies, accompanied by massive investments in the next generation of technologies without which low-carbon growth cannot be achieved. Immediate actions are also needed to cope with the changing climate and to minimize the costs to people, infrastructure and ecosystems today as well as to prepare for the greater changes in store. xx Main Messages: World Development Report 2010 Chapter Title Goes Here xxi · Acting together is key to keeping the costs down and effectively tackling both adap- tation and mitigation. It has to start with high-income countries taking aggressive action to reduce their own emissions. That would free some "pollution space" for developing countries, but more importantly, it would stimulate innovation and the demand for new technologies so they can be rapidly scaled up. It would also help create a sufficiently large and stable carbon market. Both these effects are critical to enable developing countries to move to a lower carbon trajectory while rapidly gaining access to the energy services needed for development, although they will need to be supplemented with financial support. But acting together is also critical to advance development in a harsher environment--increasing climate risks will exceed communities' capacity to adapt. National and international support will be essential to protect the most vulnerable through social assistance programs, to develop international risk-sharing arrangements, and to promote the exchange of knowledge, technology, and information. · Acting differently is required to enable a sustainable future in a changing world. In the next few decades, the world's energy systems must be transformed so that global emissions drop 50 to 80 percent. Infrastructure must be built to withstand new extremes. To feed 3 billion more people without further threatening already stressed ecosystems, agricultural productivity and efficiency of water use must improve. Only long-term, large-scale integrated management and flexible planning can sat- isfy increased demands on natural resources for food, bioenergy, hydropower, and ecosystem services while conserving biodiversity and maintaining carbon stocks in land and forests. Robust economic and social strategies will be those that take into account increased uncertainty and that enhance adaptation to a variety of climate futures--not just "optimally" cope with the climate of the past. Effective policy will entail jointly evaluating development, adaptation, and mitigation actions, all of which draw on the same finite resources (human, financial, and natural). An equitable and effective global climate deal is needed. Such a deal would recognize the varying needs and constraints of developing countries, assist them with the finance and technology to meet the increased challenges to development, ensure they are not locked into a permanently low share of the global commons, and establish mechanisms that decouple where mitigation happens from who pays for it. Most emissions growth will occur in developing nations, whose current car- bon footprint is disproportionately low and whose economies must grow rapidly to reduce poverty. High-income countries must provide financial and technical assis- tance for both adaptation and low-carbon growth in developing countries. Cur- rent financing for adaptation and mitigation is less than 5 percent of what may be needed annually by 2030, but the shortfalls can be met through innovative fi nanc- ing mechanisms. Success hinges on changing behavior and shifting public opinion. Individuals, as citizens and consumers, will determine the planet's future. Although an increas- ing number of people know about climate change and believe action is needed, too few make it a priority, and too many fail to act when they have the opportunity. So the greatest challenge lies with changing behaviors and institutions, particu- larly in high-income countries. Public policy changes--local, regional, national, and international--are necessary to make private and civic action easier and more attractive. Overview Changing the Climate for Development T hirty years ago, half the developing temperatures, warming that will require world lived in extreme poverty-- substantial adaptation. today, a quarter.1 Now, a much High-income countries can and must smaller share of children are mal- reduce their carbon footprints. They cannot nourished and at risk of early death. And continue to fill up an unfair and unsustain- access to modern infrastructure is much able share of the atmospheric commons. But more widespread. Critical to the progress: developing countries--whose average per rapid economic growth driven by techno- capita emissions are a third those of high- logical innovation and institutional reform, income countries (figure 1)--need massive particularly in today's middle-income coun- expansions in energy, transport, urban sys- tries, where per capita incomes have dou- tems, and agricultural production. If pursued bled. Yet the needs remain enormous, with using traditional technologies and carbon the number of hungry people having passed intensities, these much-needed expansions the billion mark this year for the first time will produce more greenhouse gases and, in history.2 With so many still in poverty hence, more climate change. The question, and hunger, growth and poverty alleviation then, is not just how to make development remain the overarching priority for develop- more resilient to climate change. It is how to ing countries. pursue growth and prosperity without caus- Climate change only makes the challenge ing "dangerous" climate change.3 more complicated. First, the impacts of a Climate change policy is not a simple changing climate are already being felt, with choice between a high-growth, high-carbon more droughts, more floods, more strong world and a low- growth, low- carbon storms, and more heat waves--taxing indi- world--a simple question of whether to viduals, firms, and governments, drawing grow or to preserve the planet. Plenty of resources away from development. Second, inefficiencies drive today's high- carbon continuing climate change, at current rates, intensity.4 For example, existing technolo- will pose increasingly severe challenges to gies and best practices could reduce energy development. By century's end, it could lead consumption in industry and the power to warming of 5°C or more compared with sector by 20­30 percent, shrinking carbon preindustrial times and to a vastly differ- footprints without sacrificing growth. 5 ent world from today, with more extreme Many mitigation actions--meaning weather events, most ecosystems stressed changes to reduce emissions of greenhouse and changing, many species doomed to gases--have significant co-benefits in pub- extinction, and whole island nations threat- lic health, energy security, environmental ened by inundation. Even our best efforts sustainability, and fi nancial savings. In are unlikely to stabilize temperatures at Africa, for example, mitigation opportuni- anything less than 2°C above preindustrial ties are linked to more sustainable land and 2 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 Figure 1 Unequal footprints: Emissions per capita in low-, middle-, and high-income munications (8 percent) or pharmaceuticals countries, 2005 (15 percent) invest in RD&D.10 CO2e per capita (tons) A switch to a low-carbon world through 16 technological innovation and complemen- 14 Emissions from tary institutional reforms has to start with land-use change immediate and aggressive action by high- 12 All other income countries to shrink their unsus- emissions tainable carbon footprints. That would 10 free some space in the atmospheric com- 8 mons (figure 2). More important, a credible Developing-country averages: commitment by high-income countries to 6 with land-use change drastically reduce their emissions would 4 without land-use change stimulate the needed RD&D of new tech- nologies and processes in energy, transport, 2 industry, and agriculture. And large and 0 predictable demand for alternative tech- High-income Middle-income Low-income nologies will reduce their price and help countries countries countries make them competitive with fossil fuels. Sources: World Bank 2008c; WRI 2008 augmented with land-use change emissions from Houghton 2009. Only with new technologies at competi- Note: Greenhouse gas emissions include carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), and high- global-warming-potential gases (F-gases). All are expressed in terms of CO2 equivalent (CO2e)--the quantity tive prices can climate change be curtailed of CO2 that would cause the same amount of warming. In 2005 emissions from land-use change in high income without sacrificing growth. countries were negligible. There is scope for developing countries forest management, to cleaner energy (such to shift to lower-carbon trajectories without as geothermal or hydro power), and to the compromising development, but this var- creation of sustainable urban transport ies across countries and will depend on the systems. So the mitigation agenda in Africa extent of financial and technical assistance is likely to be compatible with furthering from high-income countries. Such assis- development.6 This is also the case for Latin tance would be equitable (and in line with America.7 the 1992 United Nations Framework Con- Nor do greater wealth and prosperity vention on Climate Change, or UNFCCC): inherently produce more greenhouse gases, high-income countries, with one-sixth of even if they have gone hand in hand in the world's population, are responsible for the past. Particular patterns of consump- nearly two-thirds of the greenhouse gases tion and production do. Even excluding oil in the atmosphere (figure 3). It would producers, per capita emissions in high- also be efficient: the savings from helping income countries vary by a factor of four, to fi nance early mitigation in developing from 7 tons of carbon dioxide equivalent countries--for example, through infra- (CO2e) 8 per capita in Switzerland to 27 in structure and housing construction over Australia and Luxembourg.9 the next decades--are so large that they And dependence on fossil fuel can hardly produce clear economic benefits for all.11 be considered unavoidable given the inad- But designing, let alone implementing, an equacy of the efforts to find alternatives. international agreement that involves sub- While global subsidies to petroleum products stantial, stable, and predictable resource amount to some $150 billion annually, public transfers is no trivial matter. spending on energy research, development, Developing countries, particularly the and deployment (RD&D) has hovered around poorest and most exposed, will also need $10 billion for decades, apart from a brief spike assistance in adapting to the changing cli- following the oil crisis (see chapter 7). That mate. They already suffer the most from represents 4 percent of overall public RD&D. extreme weather events (see chapter 2). And Private spending on energy RD&D, at even relatively modest additional warm- $40 billion to $60 billion a year, amounts to ing will require big adjustments to the way 0.5 percent of private revenues--a fraction of development policy is designed and imple- what innovative industries such as telecom- mented, to the way people live and make a Overview: Changing the Climate for Development 3 living, and to the dangers and the opportu- Figure 2 Rebalancing act: Switching from SUVs to fuel-efficient passenger cars in the U.S. alone nities they face. would nearly offset the emissions generated in providing electricity to 1.6 billion more people The current financial crisis cannot be an Emissions (million tons of CO2) excuse to put climate on the back burner. 350 On average, a financial crisis lasts less than two years and results in a 3 percent loss in 300 gross domestic product (GDP) that is later offset by more than 20 percent growth over 250 eight years of recovery and prosperity.12 So for all the harm they cause, financial crises come and go. Not so with the growing threat 200 imposed by a changing climate. Why? Because time is not on our side. The 150 impacts of greenhouse gases released into the atmosphere will be felt for decades, even millennia,13 making the return to a "safe" 100 level very difficult. This inertia in the cli- mate system severely limits the possibility 50 of making up for modest efforts today with accelerated mitigation in the future.14 Delays 0 also increase the costs because impacts Emission reductions by switching Emission increase by providing worsen and cheap mitigation options disap- fleet of American SUVs to cars with basic electricity to 1.6 billion people pear as economies become locked into high- EU fuel economy standards. without access to electricity. carbon infrastructure and lifestyles--more Source: WDR team calculations based on BTS 2008. inertia. Note: Estimates are based on 40 million SUVs (sports utility vehicles) in the United States traveling a total of 480 billion miles (assuming 12,000 miles a car) a year. With average fuel efficiency of 18 miles a gallon, the Immediate action is needed to keep SUV fleet consumes 27 billion gallons of gasoline annually with emissions of 2,421 grams of carbon a gallon. warming as close as possible to 2°C. That Switching to fuel-efficient cars with the average fuel efficiency of new passenger cars sold in the European Union (45 miles a gallon; see ICCT 2007) results in a reduction of 142 million tons of CO2 (39 million tons of car- amount of warming is not desirable, but it bon) annually. Electricity consumption of poor households in developing countries is estimated at 170 kilowatt- is likely to be the best we can do. There isn't hours a person-year and electricity is assumed to be provided at the current world average carbon intensity of 160 grams of carbon a kilowatt-hour, equivalent to 160 million tons of CO2 (44 million tons of carbon). The size a consensus in the economic profession that of the electricity symbol in the global map corresponds to the number of people without access to electricity. this is the economic optimum. There is, however, a growing consensus in policy and Figure 3 High-income countries have historically contributed a disproportionate share of global emissions and still do scientific circles that aiming for 2°C warm- ing is the responsible thing to do.15 This Share of global emissions, historic and 2005 Report endorses such a position. From the Greenhouse gas emissions perspective of development, warming much Cumulative CO2 emissions CO2 emissions in 2005: All sectors, including since 1850: Energy in 2005: Energy land-use change above 2°C is simply unacceptable. But sta- bilizing at 2°C will require major shifts in 2% 3% 6% lifestyle, a veritable energy revolution, and a transformation in how we manage land and 34% 38% forests. And substantial adaptation would 47% 50% still be needed. Coping with climate change 64% 56% will require all the innovation and ingenu- ity that the human race is capable of. Inertia, equity, and ingenuity are three Low-income countries (1.2 billion people) Middle-income countries (4.2 billion people) themes that permeate this Report. Inertia High-income countries (1 billion people) Overuse relative to population share is the defining characteristic of the climate Sources: DOE 2009; World Bank 2008c; WRI 2008 augmented with land-use change emissions from Houghton 2009. challenge--the reason we need to act now. Note: The data cover over 200 countries for more recent years. Data are not available for all countries in Equity is the key to an effective global deal, the 19th century, but all major emitters of the era are included. Carbon dioxide (CO2) emissions from energy include all fossil-fuel burning, gas flaring, and cement production. Greenhouse gas emissions include CO2, to the trust needed to find an efficient reso- methane (CH4), nitrous oxide (N2O), and high-global-warming-potential gases (F-gases). Sectors include lution to this tragedy of the commons--the energy and industrial processes, agriculture, land-use change (from Houghton 2009), and waste. Overuse of the atmospheric commons relative to population share is based on deviations from equal per capita emissions; reason we need to act together. And ingenuity in 2005 high-income countries constituted 16 percent of global population; since 1850, on average, today's is the only possible answer to a problem that high-income countries constituted about 20 percent of global population. 4 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 is politically and scientifically complex--the million (ppm) for 800,000 years, but shot quality that could enable us to act differ- up to about 387 ppm over the past 150 years ently than we have in the past. Act now, act (figure 4), mainly because of the burning of together, act differently--those are the steps fossil fuels and, to a lesser extent, agriculture that can put a climate-smart world within and changing land use. A decade after the our reach. But first it requires believing there Kyoto Protocol set limits on international is a case for action. carbon emissions, as developed countries enter the first period of rigorous accounting The case for action of their emissions, greenhouse gases in the The average temperature on Earth has atmosphere are still increasing. Worse, they already warmed by close to 1°C since the are increasing at an accelerating rate.17 beginning of the industrial period. In the The effects of climate change are already words of the Fourth Assessment Report of visible in higher average air and ocean tem- the Intergovernmental Panel on Climate peratures, widespread melting of snow and Change (IPCC), a consensus document ice, and rising sea levels. Cold days, cold produced by over 2,000 scientists represent- nights, and frosts have become less fre- ing every country in the United Nations: quent while heat waves are more common. "Warming of the climate system is unequiv- Globally, precipitation has increased even ocal."16 Global atmospheric concentrations as Australia, Central Asia, the Mediterra- of CO2, the most important greenhouse nean basin, the Sahel, the western United gas, ranged between 200 and 300 parts per States, and many other regions have seen more frequent and more intense droughts. Heavy rainfall and floods have become Figure 4 Off the charts with CO2 more common, and the damage from-- and probably the intensity of--storms and Carbon dioxide concentration (ppm) tropical cyclones have increased. 1,000 Climate change threatens all, but Higher emissions scenario for 2100 particularly developing countries 800 The more than 5°C warming that unmiti- gated climate change could cause this cen- tury18 amounts to the difference between today's climate and the last ice age, when gla- 600 ciers reached central Europe and the north- Lower emissions scenario for 2100 ern United States. That change occurred over millennia; human-induced climate 400 change is occurring on a one-century time Observed in 2007 scale giving societies and ecosystems little time to adapt to the rapid pace. Such a drastic temperature shift would cause large 200 dislocations in ecosystems fundamental to human societies and economies--such as the possible dieback of the Amazon rain 0 forest, complete loss of glaciers in the Andes 800,000 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 and the Himalayas, and rapid ocean acidifi- Number of years ago cation leading to disruption of marine eco- systems and death of coral reefs. The speed Source: Lüthi and others 2008. Note: Analysis of air bubbles trapped in an Antarctic ice core extending back 800,000 years documents the and magnitude of change could condemn Earth's changing CO2 concentration. Over this long period, natural factors have caused the atmospheric CO2 more than 50 percent of species to extinc- concentration to vary within a range of about 170 to 300 parts per million (ppm). Temperature-related data make clear that these variations have played a central role in determining the global climate. As a result of tion. Sea levels could rise by one meter this human activities, the present CO2 concentration of about 387 ppm is about 30 percent above its highest level century,19 threatening more than 60 mil- over at least the last 800,000 years. In the absence of strong control measures, emissions projected for this century would result in a CO2 concentration roughly two to three times the highest level experienced in the lion people and $200 billion in assets in past 800,000 or more years, as depicted in the two projected emissions scenarios for 2100. developing countries alone.20 Agricultural Overview: Changing the Climate for Development 5 productivity would likely decline through- on developing countries. Warming of 2°C out the world, particularly in the tropics, could result in a 4 to 5 percent permanent even with changes in farming practices. reduction in annual income per capita in And over 3 million additional people could Africa and South Asia, 24 as opposed to die from malnutrition each year.21 minimal losses in high-income countries Even 2°C warming above preindus- and a global average GDP loss of about trial temperatures would result in new 1 percent.25 These losses would be driven by weather patterns with global consequences. impacts in agriculture, a sector important Increased weather variability, more fre- to the economies of both Africa and South quent and intense extreme events, and Asia (map 1). greater exposure to coastal storm surges It is estimated that developing coun- would lead to a much higher risk of cata- tries will bear most of the costs of the strophic and irreversible impacts. Between damages--some 75­80 percent.26 Several 100 million and 400 million more people factors explain this (box 1). Developing could be at risk of hunger.22 And 1 billion countries are particularly reliant on ecosys- to 2 billion more people may no longer have tem services and natural capital for produc- enough water to meet their needs.23 tion in climate-sensitive sectors. Much of their population lives in physically exposed Developing countries are more exposed and locations and economically precarious less resilient to climate hazards. These conditions. And their financial and institu- consequences will fall disproportionately tional capacity to adapt is limited. Already Map 1 Climate change will depress agricultural yields in most countries in 2050, given current agricultural practices and crop varieties EUROPE AND CENTRAL ASIA 7% CANADA AND WESTERN THE UNITED STATES EUROPE 1% 2% MIDDLE EAST AND NORTH AFRICA 11% SOUTH SUB-SAHARAN ASIA AFRICA 18% EAST ASIA 15% AND PACIFIC 12% LATIN AMERICA AND THE CARIBBEAN 6% AUSTRALIA AND NEW ZEALAND 2.7% Percentage change in yields between present and 2050 No data -50 -20 0 20 50 100 Sources: Müller and others 2009; World Bank 2008c. Note: The coloring in the figure shows the projected percentage change in yields of 11 major crops (wheat, rice, maize, millet, field pea, sugar beet, sweet potato, soybean, groundnut, sunflower, and rapeseed) from 2046 to 2055, compared with 1996­2005. The yield-change values are the mean of three emission scenarios across five global climate models, assuming no CO2 fertilization (a possible boost to plant growth and water-use efficiency from higher ambient CO2 concentrations). The numbers indicate the share of GDP derived from agriculture in each region. (The share for Sub-Saharan Africa is 23 percent if South Africa is excluded.) Large negative yield impacts are projected in many areas that are highly dependent on agriculture. 6 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 BOX 1 All developing regions are vulnerable to the impacts of climate change--for different reasons The problems common to developing well-managed coral reefs is $13 billion in disastrous impact could be a dramatic countries--limited human and financial Southeast Asia alone--which are already dieback of the Amazon rain forest and resources, weak institutions--drive their stressed by industrial pollution, coastal a conversion of large areas to savannah, vulnerability. But other factors, attribut- development, overfishing, and runoff of with severe consequences for the region's able to their geography and history, are agricultural pesticides and nutrients. climate--and possibly the world's. also significant. Vulnerability to climate change in East- Water is the major vulnerability in Sub-Saharan Africa suffers from ern Europe and Central Asia is driven by the Middle East and North Africa, the natural fragility (two-thirds of its sur- a lingering Soviet legacy of environmen- world's driest region, where per capita face area is desert or dry land) and high tal mismanagement and the poor state water availability is predicted to halve by exposure to droughts and floods, which of much of the region's infrastructure. 2050 even without the effects of climate are forecast to increase with further An example: rising temperatures and change. The region has few attractive climate change. The region's econo- reduced precipitation in Central Asia will options for increasing water storage, mies are highly dependent on natural exacerbate the environmental catastro- since close to 90 percent of its fresh- resources. Biomass provides 80 percent phe of the disappearing Southern Aral water resources are already stored in of the domestic primary energy supply. Sea (caused by the diversion of water to reservoirs. The increased water scarcity Rainfed agriculture contributes some grow cotton in a desert climate) while combined with greater variability will 23 percent of GDP (excluding South sand and salt from the dried-up seabed threaten agriculture, which accounts for Africa) and employs about 70 percent of are blowing onto Central Asia's glaciers, some 85 percent of the region's water the population. Inadequate infrastructure accelerating the melting caused by higher use. Vulnerability is compounded by a could hamper adaptation efforts, with temperature. Poorly constructed, badly heavy concentration of population and limited water storage despite abundant maintained, and aging infrastructure and economic activity in flood-prone coastal resources. Malaria, already the biggest housing--a legacy of both the Soviet era zones and by social and political tensions killer in the region, is spreading to higher, and the transition years--are ill suited to that resource scarcity could heighten. previously safe, altitudes. withstand storms, heat waves, or floods. South Asia suffers from an already In East Asia and the Pacific one major Latin America and the Caribbean's stressed and largely degraded natural driver of vulnerability is the large num- most critical ecosystems are under threat. resource base resulting from geography ber of people living along the coast and First, the tropical glaciers of the Andes coupled with high levels of poverty and on low-lying islands--over 130 million are expected to disappear, changing the population density. Water resources are people in China, and roughly 40 million, timing and intensity of water available to likely to be affected by climate change or more than half the entire population, in several countries, resulting in water stress through its effect on the monsoon, which Vietnam. A second driver is the continued for at least 77 million people as early as provides 70 percent of annual precipita- reliance, particularly among the poorer 2020 and threatening hydropower, the tion in a four-month period, and on the countries, on agriculture for income and source of more than half the electricity in melting of Himalayan glaciers. Rising sea employment. As pressures on land, water, many South American countries. Second, levels are a dire concern in the region, and forest resources increase--as a result warming and acidifying oceans will result which has long and densely populated of population growth, urbanization, and in more frequent bleaching and possible coastlines, agricultural plains threatened environmental degradation caused by diebacks of coral reefs in the Caribbean, by saltwater intrusion, and many low- rapid industrialization--greater vari- which host nurseries for an estimated lying islands. In more severe climate- ability and extremes will complicate their 65 percent of all fish species in the basin, change scenarios, rising seas would management. In the Mekong River basin, provide a natural protection against submerge much of the Maldives and the rainy season will see more intense pre- storm surge, and are a critical tourism inundate 18 percent of Bangladesh's land. cipitation, while the dry season lengthens asset. Third, damage to the Gulf of Mex- Sources: de la Torre, Fajnzylber, and Nash by two months. A third driver is that the ico's wetlands will make the coast more 2008; Fay, Block, and Ebinger 2010; World region's economies are highly depen- vulnerable to more intense and more Bank 2007a; World Bank 2007c; World Bank dent on marine resources--the value of frequent hurricanes. Fourth, the most 2008b; World Bank 2009b. policy makers in some developing countries account for 16 percent of world popula- note that more of their development bud- tion but would bear 20­25 percent of the get is diverted to cope with weather-related global impact costs. But their much greater emergencies.27 wealth makes them better able to cope with High-income countries will also be such impacts. Climate change will wreak affected even by moderate warming. havoc everywhere--but it will increase the Indeed, damages per capita are likely to gulf between developed and developing be higher in wealthier countries since they countries. Overview: Changing the Climate for Development 7 Growth is necessary for greater resilience, but is not sufficient. Economic growth B OX 2 Economic growth: Necessary, but not sufficient is necessary to reduce poverty and is at the heart of increasing resilience to climate Richer countries have more resources community-based early warning sys- change in poor countries. But growth alone to cope with climate impacts, and tem for cyclones and a flood forecast- better educated and healthier popu- ing and response program drawing is not the answer to a changing climate. lations are inherently more resilient. on local and international expertise. Growth is unlikely to be fast enough to help But the process of growth may But the scope of possible adaptation the poorer countries, and it can increase exacerbate vulnerability to climate is limited by resources--its annual vulnerability to climate hazards (box 2). change, as in the ever-increasing per capita income is $450. Mean- Nor is growth usually equitable enough extraction of water for farming, while, the Netherlands government to ensure protection for the poorest and industry, and consumption in the is planning investments amounting most vulnerable. It does not guarantee that drought-prone provinces around Bei- to $100 for every Dutch citizen every jing, and as in Indonesia, Madagascar, year for the next century. And even key institutions will function well. And if Thailand, and U.S. Gulf Coast, where the Netherlands, with a per capita it is carbon intensive, it will cause further protective mangroves have been income 100 times that of Bangladesh, warming. cleared for tourism and shrimp farms. has begun a program of selective But there is no reason to think that a Growth is not likely to be fast relocation away from low-lying areas low-carbon path must necessarily slow enough for low-income countries because continuing protection every- economic growth: many environmental to afford the kind of protection that where is unaffordable. regulations were preceded by warnings of the rich can afford. Bangladesh and the Netherlands are among the Sources: Barbier and Sathirathai 2004; massive job losses and industry collapse, few Deltacommissie 2008; FAO 2007; Gov- countries most exposed to rising sea of which materialized.28 Clearly, however, levels. Bangladesh is already doing a ernment of Bangladesh 2008; Guan and Hubacek 2008; Karim and Mimura the transition costs are substantial, notably lot to reduce the vulnerability of its 2008; Shalizi 2006; and Xia and others in developing low-carbon technologies and population, with a highly effective 2007. infrastructure for energy, transport, hous- ing, urbanization, and rural development. Two arguments often heard are that these thresholds or tipping points beyond which transition costs are unacceptable given catastrophic impacts occur (see Science the urgent need for other more immedi- focus). The comparison is also complicated ate investments in poor countries, and that by distributional issues across time (mitiga- care should be taken not to sacrifice the tion incurred by one generation produces welfare of poor individuals today for the benefits for many generations to come) sake of future, possibly richer, generations. and space (some areas are more vulnerable There is validity to these concerns. But the than others, hence more likely to support point remains that a strong economic argu- aggressive global mitigation efforts). And ment can be made for ambitious action on it is further complicated by the question of climate change. how to value the loss of life, livelihoods, and nonmarket services such as biodiversity and The economics of climate change: ecosystem services. Reducing climate risk is affordable Economists have typically tried to iden- Climate change is costly, whatever the tify the optimal climate policy using cost- policy chosen. Spending less on mitiga- benefit analysis. But as box 3 illustrates, tion will mean spending more on adapta- the results are sensitive to the particular tion and accepting greater damages: the assumptions about the remaining uncer- cost of action must be compared with the tainties, and to the normative choices made cost of inaction. But, as discussed in chap- regarding distributional and measurement ter 1, the comparison is complex because issues. (A technology optimist, who expects of the considerable uncertainty about the the impact of climate change to be relatively technologies that will be available in the modest and occurring gradually over time, future (and their cost), the ability of soci- and who heavily discounts what happens eties and ecosystems to adapt (and at what in the future, will favor modest action now. price), the extent of damages that higher And vice versa for a technology pessimist.) greenhouse gas concentrations will cause, So economists continue to disagree on the and the temperatures that might constitute economically or socially optimal carbon 8 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 trajectory. But there are some emerging 3°C.30 But they do note that the incremen- agreements. In the major models, the bene- tal cost of keeping warming around 2°C fits of stabilization exceed the costs at 2.5°C would be modest, less than half a percent of warming (though not necessarily at 2°C).29 GDP (see box 3). In other words, the total And all conclude that business as usual costs of the 2°C option is not much more (meaning no mitigation efforts whatsoever) than the total cost of the much less ambi- would be disastrous. tious economic optimum. Why? Partly Advocates of a more gradual reduction because the savings from less mitigation in emissions conclude that the optimal tar- are largely offset by the additional costs of get--the one that will produce the lowest more severe impacts or higher adaptation total cost (meaning the sum of impact and spending. 31 And partly because the real mitigation costs)--could be well above difference between ambitious and modest BOX 3 The cost of "climate insurance" Hof, den Elzen, and van Vuuren examine value of consumption and the present A strong motivation for choosing a the sensitivity of the optimal climate value of consumption that the world lower peak concentration target is to target to assumptions about the time would enjoy with no climate change). reduce the risk of catastrophic outcomes horizon, climate sensitivity (the amount A key point evident in the figure is the linked to global warming. From this per- of warming associated with a doubling relative flatness of the consumption loss spective, the cost of moving from a high of carbon dioxide concentrations from curves over wide ranges of peak CO2e target for peak CO2e concentrations to a preindustrial levels), mitigation costs, concentrations. As a consequence, mov- lower target can be viewed as the cost of likely damages, and discount rates. To do ing from 750 ppm to 550 ppm results in climate insurance--the amount of wel- so, they run their integrated assessment a relatively small loss in consumption fare the world would sacrifice to reduce model (FAIR), varying the model's settings (0.3 percent) with the Nordhaus assump- the risk of catastrophe. The analysis of along the range of assumptions found in tions. The results therefore suggest that Hof, den Elzen, and van Vuuren suggests the literature, notably those associated the cost of precautionary mitigation to that the cost of climate insurance is mod- with two well-known economists: Nicho- 550 ppm is small. With the Stern assump- est under a very wide range of assump- las Stern, who advocates early and ambi- tions, a 550 ppm target results in a gain tions about the climate system and the tious action; and William Nordhaus, who in present value of consumption of about cost of mitigating climate change. supports a gradual approach to climate 0.5 percent relative to the 750 ppm mitigation. target. Source: Hof, den Elzen, and van Vuuren 2008. Not surprisingly, their model results in completely different optimal targets Looking at tradeoffs: The loss in consumption relative to a world without warming for different peak CO2e concentrations depending on which assumptions are used. (The optimal target is defined as Reduction in net present value of consumption (%) the concentration that would result in the 4 lowest reduction in the present value of Stern assumptions global consumption.) The "Stern assump- Nordhaus assumptions tions" (which include relatively high 3 Optimum for given assumptions climate sensitivity and climate damages, and a long time horizon combined with low discount rates and mitigation costs) 2 produce an optimum peak CO2e concen- tration of 540 parts per million (ppm). The "Nordhaus assumptions" (which assume 1 lower climate sensitivity and damages, a shorter time horizon, and a higher discount rate) produce an optimum of 0 750 ppm. In both cases, adaptation costs 500 550 600 650 700 750 800 are included implicitly in the climate dam- CO2e concentration peak level (ppm) age function. Source: Adapted from Hof, den Elzen, and van Vuuren 2008, figure 10. The figure plots the least cost of stabi- Note: The curves show the percentage loss in the present value of consumption, relative to what it would be lizing atmospheric concentrations in the with a constant climate, as a function of the target for peak CO2e concentrations. The "Stern assumptions" and range of 500 to 800 ppm for the Stern and "Nordhaus assumptions" refer to choices about the value of key parameters of the model as explained in the text. The dot shows the optimum for each set of assumptions, where the optimum is defined as the greenhouse Nordhaus assumptions (reported as the gas concentration that would minimize the global consumption loss resulting from the sum of mitigation costs difference between the modeled present and impact damages. Overview: Changing the Climate for Development 9 climate action lies with costs that occur between 0.3 percent and 0.7 percent (table in the future, which gradualists heavily 2). Developing countries' mitigation costs discount. would represent a higher share of their own The large uncertainties about the poten- GDP, however, ranging between 0.5 and tial losses associated with climate change 1.2 percent. and the possibility of catastrophic risks There are far fewer estimates of needed may well justify earlier and more aggressive adaptation investments, and those that exist action than a simple cost-benefit analysis are not readily comparable. Some look only would suggest. This incremental amount at the cost of climate-proofi ng foreign aid could be thought of as the insurance pre- projects. Others include only certain sec- mium to keep climate change within what tors. Very few try to look at overall country scientists consider a safer band.32 Spending needs (see chapter 6). A recent World Bank less than half a percent of GDP as "climate study that attempts to tackle these issues insurance" could well be a socially accept- suggests that the investments needed could able proposition: the world spends 3 percent be between $75 billion and $100 billion of global GDP on insurance today.33 annually in developing countries alone.35 But beyond the question of "climate insurance" is the question of what might Table 1 Incremental mitigation costs and associated financing requirements for a 2°C be the resulting mitigation costs--and the trajectory: What will be needed in developing countries by 2030? Constant 2005$ associated financing needs. In the medium term, estimates of mitigation costs in devel- Model Mitigation cost Financing requirement oping countries range between $140 billion IEA ETP 565 and $175 billion annually by 2030. This McKinsey 175 563 represents the incremental costs relative to MESSAGE 264 a business-as-usual scenario (table 1). Financing needs would be higher, how- MiniCAM 139 ever, as many of the savings from the lower REMIND 384 operating costs associated with renewable Sources: IEA ETP: IEA 2008c; McKinsey: McKinsey & Company 2009 and additional data provided by McKinsey (J. Dinkel) for 2030, using a dollar-to-euro exchange rate of $1.25 to 1; MESSAGE: IIASA 2009 and additional energy and energy efficiency gains only data provided by V. Krey; MiniCAM: Edmonds and others 2008 and additional data provided by J. Edmonds and materialize over time. McKinsey, for exam- L. Clarke; REMIND: Knopf and others, forthcoming and additional data provided by B. Knopf. ple, estimates that while the incremental cost Note: Both mitigation costs and associated financing requirements are incremental relative to a business-as- usual baseline. Estimates are for the stabilization of greenhouse gases at 450 ppm CO2e, which would provide a in 2030 would be $175 billion, the upfront 40­50 percent chance of staying below 2°C warming by 2100 (Schaeffer and others 2008; Hare and Meinshausen investments required would amount to 2006). IEA ETP is the model developed by the International Energy Agency, and McKinsey is the proprietary methodology developed by McKinsey & Company; MESSAGE, MiniCAM, and REMIND are the peer-reviewed $563 billion over and above business-as-usual models of the International Institute for Applied Systems Analysis, the Pacific Northwest Laboratory, and the investment needs. McKinsey does point out Potsdam Institute for Climate Impact Research, respectively. McKinsey includes all sectors; other models only include mitigation efforts in the energy sector. MiniCAM reports $168 billion in mitigation costs in 2035, in that this amounts to a roughly 3 percent constant 2000 dollars; this figure has been interpolated to 2030 and converted to 2005 dollars. increase in global business-as-usual invest- ments, and as such is likely to be within the Table 2 In the long term, what will it cost? Present value of mitigation costs to 2100 capacity of global financial markets.34 How- Present value of mitigation costs to 2100 for 450 ppm CO 2e ever, financing has historically been a con- (% of GDP) straint in developing countries, resulting in Models World Developing countries underinvestment in infrastructure as well as a bias toward energy choices with lower DICE 0.7 upfront capital costs, even when such choices FAIR 0.6 eventually result in higher overall costs. The MESSAGE 0.3 0.5 search for suitable financing mechanisms MiniCAM 0.7 1.2 must therefore be a priority. PAGE 0.4 0.9 What about the longer term? Mitigation costs will increase over time to cope with REMIND 0.4 growing population and energy needs-- Sources: DICE: Nordhaus 2008 (estimated from table 5.3 and figure 5.3); FAIR: Hof, den Elzen, and van Vuuren 2008; MESSAGE: IIASA 2009; MiniCAM: Edmonds and others 2008 and personal communications; PAGE: Hope but so will income. As a result, the present 2009 and personal communications; REMIND: Knopf and others, forthcoming. value of global mitigation costs to 2100 is Note: DICE, FAIR, MESSAGE, MiniCAM, PAGE, and REMIND are peer-reviewed models. Estimates are for the stabilization of greenhouse gases at 450 ppm CO2e, which would provide a 40­50 percent chance of staying expected to remain well below 1 percent below 2°C warming by 2100 (Schaeffer and others 2008; Hare and Meinshausen 2006). The FAIR model result of global GDP, with estimates ranging reports abatement costs using the low settings (see table 3 in Hof, den Elzen, and van Vuuren 2008). 10 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 A climate-smart world is within hypothesis of this Report is that they can be reach if we act now, act together, tackled through climate-smart policies that and act differently entail acting now, acting together (or glob- Even if the incremental cost of reducing ally), and acting differently. Acting now, climate risk is modest and the investment because of the tremendous inertia in both needs far from prohibitive, stabilizing climate and socioeconomic systems. Acting warming around 2°C above preindustrial together, to keep costs down and protect temperatures is extremely ambitious. By the most vulnerable. And acting differently, 2050 emissions would need to be 50 percent because a climate-smart world requires a below 1990 levels and be zero or negative by transformation of our energy, food produc- 2100 (figure 5). This would require imme- tion, and risk management systems. diate and Herculean efforts: within the next Act now: Inertia means that 20 years global emissions would have to today's actions will determine fall, compared to a business-as-usual path, tomorrow's options by an amount equivalent to total emissions from high-income countries today. In addi- The climate system exhibits substantial iner- tion, even 2°C warming would also require tia (figure 6). Concentrations lag emission costly adaptation--changing the kinds of reductions: CO2 remains in the atmosphere risks people prepare for; where they live; for decades to centuries, so a decline in emis- what they eat; and the way they design, sions takes time to affect concentrations. develop, and manage agroecological and Temperatures lag concentrations: tempera- urban systems.36 tures will continue increasing for a few cen- So both the mitigation and the adap- turies after concentrations have stabilized. tation challenges are substantial. But the And sea levels lag temperature reductions: the thermal expansion of the ocean from an increase in temperature will last 1,000 years or more while the sea-level rise from melting Figure 5 What does the way forward look like? Two options among many: Business as usual or aggressive mitigation ice could last several millennia.37 The dynamics of the climate system Projected annual total global emissions (GtCO2e) therefore limit how much future mitiga- 160 tion can be substituted for efforts today. For 140 Business as example, stabilizing the climate near 2°C usual (~5°C) (around 450 ppm of CO2e) would require 120 2°C trajectory global emissions to begin declining immedi- 100 ately by about 1.5 percent a year. A five-year 80 delay would have to be offset by faster emis- 60 sion declines. And even longer delays simply could not be offset: a ten-year delay in miti- 40 gation would most likely make it impossible 20 to keep warming from exceeding 2°C.38 0 Inertia is also present in the built envi- ronment, limiting flexibility in reducing ­20 greenhouse gases or designing adaptation ­40 responses. Infrastructure investments are 2000 2010 2020 2030 2040 2050 2060 2070 2080 2090 2100 lumpy, concentrated in time rather than Year evenly distributed.39 They are also long- Source: Clarke and others, forthcoming. lived: 15­40 years for factories and power Note: The top band shows the range of estimates across models (GTEM, IMAGE, MESSAGE, MiniCAM) for emis- plants, 40­75 years for road, rail, and power sions under a business-as-usual scenario. The lower band shows a trajectory that could yield a concentration of 450 ppm of CO2e (with a 50 percent chance of limiting warming to less than 2°C). Greenhouse gas emissions distribution networks. Decisions on land use include CO2, CH4, and N2O. Negative emissions (eventually required by the 2°C path) imply that the annual rate of and urban form--the structure and density emissions is lower than the rate of uptake and storage of carbon through natural processes (for example, plant growth) and engineered processes (for example, growing biofuels and when burning them, sequestering the CO2 of cities--have impacts lasting more than a underground). GTEM, IMAGE, MESSAGE, and MiniCAM are the integrated assessment models of the Australian century. And long-lived infrastructure trig- Bureau of Agricultural and Resource Economics, the Netherlands Environmental Assessment Agency, Interna- tional Institute of Applied Systems Analysis, and Pacific Northwest National Laboratory. gers investments in associated capital (cars Overview: Changing the Climate for Development 11 for low-density cities; gas-fired heat and Figure 6 Climate impacts are long-lived: Rising temperatures and sea levels associated with power generation capacity in response to gas higher concentrations of CO2 pipelines), locking economies into lifestyles Annual CO2 emissions Time to reach and energy consumption patterns. equilibrium The inertia in physical capital is nowhere close to that in the climate system and is more likely to affect the cost rather than the CO2 emissions peak: feasibility of achieving a particular emission 0 to 100 years goal--but it is substantial. The opportuni- ties to shift from high-carbon to low-carbon CO2 concentration capital stocks are not evenly distributed in CO2 stabilization: time.40 China is expected to double its build- 100 to 300 years ing stock between 2000 and 2015. And the coal-fired power plants proposed around the world over the next 25 years are so numer- ous that their lifetime CO2 emissions would Temperature equal those of all coal-burning activities since the beginning of the industrial era.41 Temperature Only those facilities located close enough to stabilization: the storage sites could be retrofitted for car- a few centuries bon capture and storage (if and when that technology becomes commercially available: see chapters 4 and 7). Retiring these plants before the end of their useful life--if changes Sea-level rise in the climate force such action--would be Sea-level rise due extremely costly. to ice melting: Inertia is also a factor in research and several millennia development (R&D) and in the deployment Sea-level rise due of new technologies. New energy sources to thermal expansion: have historically taken about 50 years to centuries to millennia reach half their potential.42 Substantial investments in R&D are needed now to ensure that new technologies are available and rapidly penetrating the marketplace in the near future. This could require an additional $100 billion to $700 billion annually.43 Innovation is also needed in Today 100 1,000 transport, building, water management, years years urban design, and many other sectors Source: WDR team based on IPCC 2001. that affect climate change and are in turn Note: Stylized figures; the magnitudes in each panel are intended for illustrative purposes. affected by climate change--so innovation is a critical issue for adaptation as well. Inertia is also present in the behavior areas, and infrastructure continues to of individuals and organizations. Despite be designed for the climate of the past.44 greater public concern, behaviors have not Changing behaviors and organizational changed much. Available energy-efficient goals and standards is difficult and usu- technologies that are effective and pay for ally slow, but it has been done before (see themselves are not adopted. R&D in renew- chapter 8). ables is underfunded. Farmers face incen- tives to over-irrigate their crops, which in Act together: For equity and efficiency turn affects energy use, because energy is Collective action is needed to effectively a major input in water provision and treat- tackle climate change and reduce the ment. Building continues in hazard-prone costs of mitigation.45 It is also essential to 12 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 facilitate adaptation, notably through bet- delays are so large that there are clear eco- ter risk management and safety nets to pro- nomic benefits for high-income countries tect the most vulnerable. committed to limiting dangerous climate change to fi nance early action in develop- To keep costs down and fairly distributed. ing countries.50 More generally, the total Affordability hinges on mitigation being cost of mitigation could be greatly reduced done cost effectively. When estimating the through well-performing carbon-fi nance mitigation costs discussed earlier, model- mechanisms, financial transfers, and price ers assume that greenhouse gas emission signals that help approximate the out- reductions occur wherever and whenever come produced by the whenever, wherever they are cheapest. Wherever means pur- assumption. suing greater energy efficiency and other low-cost options to mitigate in whatever To manage risk better and protect the poor- country or sector the opportunity arises. est. In many places previously uncom- Whenever entails timing investments in mon risks are becoming more widespread. new equipment, infrastructure, or farm- Consider floods, once rare but now increas- ing and forestry projects to minimize costs ingly common, in Africa and the first hur- and keep economies from getting locked ricane ever recorded in the South Atlantic, into high-carbon conditions that would be which hit Brazil in 2004.51 Reducing disas- expensive to alter later. Relaxing the wher- ter risk--through community-based early ever, whenever rule--as would necessarily warning systems, climate monitoring, happen in the real world, especially in the safer infrastructure, and strengthened and absence of a global carbon price--dramat- enforced zoning and building codes, along ically increases the cost of mitigation. with other measures--becomes more The implication is that there are enor- important in a changing climate. Finan- mous gains to global efforts--on this point, cial and institutional innovations can also analysts are unanimous. If any country or limit risks to health and livelihoods. This group of countries does not mitigate, oth- requires domestic action--but domestic ers must reach into higher-cost mitigation action will be greatly enhanced if it is sup- options to achieve a given global target. For ported by international finance and sharing example, by one estimate, the nonparticipa- of best-practice. tion of the United States, which is respon- But as discussed in chapter 2, actively sible for 20 percent of world emissions, in reducing risk will never be enough because the Kyoto Protocol increases the cost of there will always be a residual risk that achieving the original target by about 60 must also be managed through better percent.46 preparedness and response mechanisms. Both equity and efficiency argue for The implication is that development may developing financial instruments that sepa- need to be done differently, with much rate who finances mitigation from where it greater emphasis on climate and weather happens. Otherwise, the substantial miti- risk. International cooperation can help, gation potential in developing countries for example, through pooling efforts to (65­70 percent of emission reductions, improve the production of climate infor- adding up to 45­70 percent of global miti- mation and its broad availability (see chap- gation investments in 2030)47 will not be ter 7) and through sharing best practices to fully tapped, substantially increasing the cope with the changing and more variable cost of achieving a given target. Taking climate.52 it to the extreme, a lack of fi nancing that Insurance is another instrument to results in fully postponing mitigation in manage the residual risk, but it has its limi- developing countries to 2020 could more tations. Climate risk is increasing along a than double the cost of stabilizing around trend and tends to affect entire regions 2°C.48 With mitigation costs estimated to or large groups of people simultaneously, add up to $4 trillion to $25 trillion49 over making it difficult to insure. And even the next century, the losses implied by such with insurance, losses associated with Overview: Changing the Climate for Development 13 catastrophic events (such as widespread flooding or severe droughts) cannot be B OX 4 Safety nets: From supporting incomes to reducing fully absorbed by individuals, communi- ties, and the private sector. In a more vola- vulnerability to climate change tile climate, governments will increasingly Bangladesh has had a long history of The new employment guarantee become insurers of last resort and have an cyclones and floods, and these could program provides those with no implicit responsibility to support disaster become more frequent or intense. The other means of income (including recovery and reconstruction. This requires government has safety nets that can access to other safety nets) with be tailored fairly easily to respond to employment for up to 100 days at that governments protect their own liquid- the effects of climate change. The best wages linked to the low-season ity in times of crisis, particularly poorer or examples are the vulnerable-group agricultural wage. The guarantee smaller countries that are fi nancially vul- feeding program, the food-for-work element ensures that those who nerable to the impacts of climate change: program, and the new employment need help get it. If work cannot be Hurricane Ivan caused damages equivalent guarantee program. provided, the individual is entitled to to 200 percent of Grenada's GDP.53 Having The vulnerable- group feeding 40 days of wages at the full rate and immediate funds available to jump-start program runs at all times and usually then 60 days at half the rate. covers more than 2 million house- Bangladesh's programs, and others the rehabilitation and recovery process holds. But it is designed to be ramped in India and elsewhere, suggest some reduces the derailing effect of disasters on up in response to a crisis: following lessons. Rapid response requires rapid development. the cyclone in 2008, the program access to funding, targeting rules to Multicountry facilities and reinsurance was expanded to close to 10 million identify people in need--chronic can help. The Caribbean Catastrophe Risk households. Targeting, done by the poor or those temporarily in need-- Insurance Facility spreads risk among 16 lowest level of local government and and procedures agreed on well before Caribbean countries, harnessing the rein- monitored by the lowest administra- a shock hits. A portfolio of "shovel- tive level, is considered fairly good. ready" projects can be preidentified surance market to provide liquidity to The food-for-work program, which as particularly relevant to increasing governments quickly following destructive normally operates during the low agri- resilience (water storage, irrigation hurricanes and earthquakes.54 Such facili- culture season, is ramped up during systems, reforestation, and embank- ties may need help from the international emergencies. It too is run in collabo- ments, which can double as roads in community. More generally, high-income ration with local governments, but low-lying areas). Experience from India countries have a critical role in ensur- program management has been sub- and Bangladesh also suggests the ing that developing countries have timely contracted to nongovernmental orga- need for professional guidance (engi- nizations in many parts of the country. neers) in the selection, design, and access to the needed resources when shocks Workers who show up at the work site implementation of the public works hit, whether by supporting such facilities or are generally given work, but there is and for equipment and supplies. through the direct provision of emergency usually not enough to go around, so funding. the work is rationed through rotation. Source: Contributed by Qaiser Khan. But insurance and emergency fund- ing are only one part of a broader risk- management framework. Social policies successful models of social safety nets and will become more important in helping tailor them to the needs created by the people cope with more frequent and per- changing climate. sistent threats to their livelihoods. Social policies reduce economic and social vul- To ensure adequate food and water for all nerability and increase resilience to climate countries. International action is critical change. A healthy, well-educated popula- to manage the water and food security chal- tion with access to social protection can lenges posed by the combination of climate better cope with climate shocks and climate change and population pressures--even change. Social protection policies will need with improved agricultural productivity to be strengthened where they exist, devel- and water-use efficiency. One fi fth of the oped where they are lacking, and designed world's freshwater renewable resources are so that they can be expanded quickly after shared between countries.56 That includes a shock. 55 Creating social safety nets in 261 transboundary river basins, home to countries that do not yet have them is criti- 40 percent of the world's people and gov- cal, and Bangladesh shows how it can be erned by over 150 international treaties that done even in very poor countries (box 4). do not always include all riparian states.57 Development agencies could help spread If countries are to manage these resources 14 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 more intensively, they will have to scale up and providing better information on both cooperation on international water bodies climate and market indexes can make food through new international treaties or the trade more efficient and prevent large price revision of existing ones. The system of shifts. Price spikes can also be prevented water allocation will need to be reworked by investing in strategic stockpiles of key due to the increased variability, and coop- grains and foodstuffs and in risk-hedging eration can be effective only when all ripar- instruments.60 ian countries are involved and responsible for managing the watercourse. Act differently: To transform energy, Similarly, increasing arid conditions in food production, and decision-making countries that already import a large share systems of their food, along with more frequent Achieving the needed emission reductions extreme events and growth in income and will require a transformation both of our population, will increase the need for food energy system and of the way we manage imports. 58 But global food markets are agriculture, land use, and forests (figure 7). thin--relatively few countries export food These transformations must also incorpo- crops.59 So small changes in either supply or rate the needed adaptations to a changing demand can have big effects on prices. And climate. Whether they involve deciding small countries with little market power which crop to plant or how much hydro- can fi nd it difficult to secure reliable food electric power to develop, decisions will imports. have to be robust to the variety of climate To ensure adequate water and nutrition outcomes we could face in the future rather for all, the world will have to rely on an than being optimally adapted to the climate improved trade system less prone to large of the past. price shifts. Facilitating access to markets for developing countries by reducing trade To ignite a veritable energy revolution. If barriers, weatherproofi ng transport (for financing is available, can emissions be cut example, by increasing access to year-round sufficiently deeply or quickly without sacri- roads), improving procurement methods, ficing growth? Most models suggest that they can, although none find it easy (see chapter 4). Dramatically higher energy efficiency, Figure 7 Global CO2e emissions by sector: Energy, but also agriculture and forestry, are major sources stronger management of energy demand, and large-scale deployment of existing Waste and low-CO2-emitting electricity sources could wastewater 3% Land-use produce about half the emission reductions Power change and needed to put the world on a path toward 26% forestry 2°C (figure 8). Many have substantial co- 17% benefits but are hampered by institutional and financial constraints that have proven hard to overcome. Agriculture So known technologies and practices 14% Transportation can buy time--if they can be scaled up. For 13% that to happen, appropriate energy pricing Residential and Industry is absolutely essential. Cutting subsidies commercial buildings 19% and increasing fuel taxes are politically dif- 8% ficult, but the recent spike and fall in oil Source: IPCC 2007a, figure 2.1. and gas prices make the time opportune for Note: Share of anthropogenic (human-caused) greenhouse doing so. Indeed, European countries used gas emissions in 2004 in CO2e (see figure 1 for the definition of CO2e). Emissions associated with land use and land-use the 1974 oil crisis to introduce high fuel change, such as agricultural fertilizers, livestock, deforesta- taxes. As a result, fuel demand is about half tion, and burning, account for about 30 percent of total green- house gas emissions. And uptakes of carbon into forests and what it likely would have been had prices other vegetation and soils constitute an important carbon been close to those in the United States.61 sink, so improved land-use management is essential in efforts to reduce greenhouse gases in the atmosphere. Similarly, electricity prices are twice as high Overview: Changing the Climate for Development 15 in Europe as they are in the United States spur innovation and increase competitive- and electricity consumption per capita is ness.66 And because utilities are potentially half.62 Prices help explain why European effective delivery channels for making emissions per capita (10 tons of CO2e) are homes, commercial buildings, and indus- less than half those in the United States try more energy efficient, incentives have to (23 tons).63 Global energy subsidies in be created for utilities to conserve energy. developing countries were estimated at This can be done by decoupling a utility's $310 billion in 2007,64 disproportionately profits from its gross sales, with profits benefiting higher-income populations. instead increasing with energy conserva- Rationalizing energy subsidies to target the tion successes. Such an approach is behind poor and encourage sustainable energy and California's remarkable energy conserva- transport could reduce global CO2 emis- tion program; its adoption has become a sions and provide a host of other benefits. condition for any U.S. state to receive fed- But pricing is only one tool for advanc- eral energy-efficiency grants from the 2009 ing the energy-efficiency agenda, which suf- fiscal stimulus. fers from market failures, high transaction For renewable energy, long-term power- costs, and fi nancing constraints. Norms, purchase agreements within a regulatory regulatory reform, and financial incentives framework that ensures fair and open grid are also needed--and are cost-effective. access for independent power producers will Efficiency standards and labeling programs attract investors. This can be done through cost about 1.5 cents a kilowatt-hour, much mandatory purchases of renewable energy at less than any electricity supply options,65 a fi xed price (known as a feed-in tariff) as in while industrial energy performance targets Germany and Spain; or through renewable Figure 8 The full portfolio of existing measures and advanced technologies, not a silver bullet, will be needed to get the world onto a 2°C path CO2e (gigatons) 70 ual sas us ines 60 Bus Demand reduction Renewables (hydro, solar, wind, 50 bioenergy) Nuclear 40 2°C Fossil CCS tr ajec tory 30 Forest sinks Other greenhouse gases (CH4, N2O, F-gases) 20 Fossil fuel switch (coal to gas) 10 0 2000 2010 2020 2030 2040 2050 2060 2070 2080 Year Source: WDR team with data from IIASA 2009. 16 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 portfolio standards that require a minimum on nonfood crops may reduce competition share of power to come from renewables, as with agriculture by using more marginal in many U.S. states.67 Importantly, predict- lands. But they could still lead to the loss of ably higher demand is likely to reduce the pasture land and grassland ecosystems and costs of renewables, with benefits for all compete for water resources.71 countries. In fact, experience shows that Breakthroughs in climate-smart tech- expected demand can have an even higher nologies will require substantially more impact than technological innovation in spending for research, development, dem- driving down prices (figure 9). onstration, and deployment. As mentioned But new technologies will be indispens- earlier, global public and private spending able: every energy model reviewed for this on energy RD&D is modest, both rela- Report concludes that it is impossible to get tive to estimated needs and in comparison onto the 2°C trajectory with only energy with what innovative industries invest. The efficiency and the diffusion of existing modest spending means slow progress, technologies. New or emerging technolo- with renewable energy still accounting gies, such as carbon capture and storage, for only 0.4 percent of all patents.72 More- second-generation biofuels, and solar pho- over, developing countries need access to tovoltaics, are also critical. these technologies, which requires boost- Few of the needed new technologies ing domestic capacity to identify and adapt are available off the shelf. Ongoing car- new technologies as well as strengthening bon capture and storage demonstration international mechanisms for technology projects currently store only about 4 mil- transfer (see chapter 7). lion tons of CO2 annually.68 Fully proving the viability of this technology in different To transform land and water management regions and settings will require about 30 and manage competing demands. By 2050 full-size plants at a total cost of $75 billion the world will need to feed 3 billion more to $100 billion.69 Storage capacity of 1 bil- people and cope with the changing dietary lion tons a year of CO2 is necessary by 2020 demands of a richer population (richer peo- to stay within 2°C warming. ple eat more meat, a resource-intensive way Investments in biofuels research are also to obtain proteins). This must be done in a needed. Expanded production using the harsher climate with more storms, droughts, current generation of biofuels would dis- and floods, while also incorporating agricul- place large areas of natural forests and grass- ture in the mitigation agenda--because agri- lands and compete with the production of culture drives about half the deforestation food.70 Second-generation biofuels that rely every year and directly contributes 14 per- cent of overall emissions. And ecosystems, already weakened by pollution, population Figure 9 High expected demand drove cost reductions in solar photovoltaics by allowing for larger-scale production pressure, and overuse, are further threat- ened by climate change. Producing more and Cost reduction by factor ($/watt) protecting better in a harsher climate while $25.30 reducing greenhouse gas emissions is a tall $25 Expected demand effect order. It will require managing the compet- $20 ing demands for land and water from agri- $15 43% culture, forests and other ecosystems, cities, R&D $10 and energy. 30% $5 $3.68 So agriculture will have to become more 22% 5% productive, getting more crop per drop and 0 1979 price Plant size Efficiency Other Unexplained 2001 price per hectare--but without the increase in environmental costs currently associated Source: Adapted from Nemet 2006. Note: Bars show the portion of the reduction in the cost of solar photovoltaic power, from 1979 to 2001, with intensive agriculture. And societies will accounted for by different factors such as plant size (which is determined by expected demand) and improved have to put much more effort into protecting efficiency (which is driven by innovation from R&D). The "other" category includes reductions in the price of the key input silicon (12 percent) and a number of much smaller factors (including reduced quantities of silicon ecosystems. To avoid pulling more land into needed for a given energy output, and lower rates of discarded products due to manufacturing error). cultivation and spreading into "unmanaged" Overview: Changing the Climate for Development 17 land and forests, agricultural productivity of species. While benefiting biodiversity, will have to increase, perhaps by as much as ecoagriculture practices also increase agri- 1.8 percent a year compared to 1 percent a culture's resilience to climate change along year without climate change.73 Most of that with farm productivity and incomes. In increase will have to occur in developing Central America farms using these practices countries because agriculture in high-income suffered half or less of the damage inflicted countries is already close to maximum fea- on others by Hurricane Mitch.75 sible yields. Fortunately, new technologies Better management of water is essential and practices are emerging (box 5). Some for agriculture to adapt to climate change. improve productivity and resilience as they River basins will be losing natural water sequester carbon in the soil and reduce the storage in ice and snow and in reduced nutrient runoff that damages aquatic ecosys- aquifer recharge, just as warmer tempera- tems. But more research is needed to under- tures increase evaporation. Water can be stand how to scale them up. used more efficiently through a combina- Increased efforts to conserve species and tion of new and existing technologies, bet- ecosystems will need to be reconciled with ter information, and more sensible use. food production (whether agriculture or fish- And that can be done even in poor coun- eries). Protected areas--already 12 percent tries and among small farmers: in Andhra of the earth's land but only a tiny portion of Pradesh, India, a simple scheme, in which the ocean and fresh water system--cannot farmers monitor their rain and groundwa- be the only solution to maintaining biodi- ter and learn new farming and irrigation versity, because species ranges are likely to techniques, has caused 1 million farmers to shift outside the boundaries of such areas. voluntarily reduce groundwater consump- Instead ecoagricultural landscapes, where tion to sustainable levels.75 farmers create mosaics of cultivated and nat- Efforts to increase water resources ural habitats, could facilitate the migration include dams, but dams can be only a part BOX 5 Promising approaches that are good for farmers and good for the environment Promising practices minimum necessary fertilizer and water the Amazon rain forest could sequester Cultivation practices such as zero-tillage could help the intensive, high-input farms carbon on a huge scale while improv- (which involves injecting seeds directly of high-income countries, Asia, and Latin ing soil productivity. Burning wet crop into the soil instead of sowing on America to reduce emissions and nutrient residues or manure (biomass) at low ploughed fields) combined with residue runoff, and increase water-use efficiency. temperatures in the almost complete management and proper fertilizer use can New technologies that limit emissions absence of oxygen produces biochar, help to preserve soil moisture, maximize of gaseous nitrogen include controlled- a charcoal-type solid with a very high water infiltration, increase carbon storage, release nitrogen through the deep place- carbon content. Biochar is highly stable minimize nutrient runoff, and raise yields. ment of supergranules of fertilizer or in soil, locking in the carbon that would Now being used on about 2 percent of the addition of biological inhibitors to otherwise be released by simply burning global arable land, this practice is likely fertilizers. Remote sensing technologies the biomass or allowing it to decom- to expand. Zero tillage has mostly been for communicating precise information pose. In industrial settings this process adopted in high-income countries, but about soil moisture and irrigation needs transforms half the carbon into biofuel is expanding rapidly in countries such as can eliminate unnecessary application and the other half into biochar. Recent India. In 2005, in the rice­wheat farming of water. Some of these technologies analysis suggests biochar may be able to system of the Indo- Gangetic plain, farm- may remain too expensive for most store carbon for centuries, possibly mil- ers adopted zero-tillage on 1.6 million developing- country farmers (and could lennia, and more studies are underway hectares; by 2008, 20­25 percent of the require payment schemes for soil carbon to verify this property. wheat in two Indian states (Haryana and conservation or changes in water pric- Punjab) was cultivated using minimum ing). But others such as biological inhibi- tillage. And in Brazil, about 45 percent of tors require no extra labor and improve cropland is farmed using these practices. productivity. Sources: de la Torre, Fajnzylber, and Nash 2008; Derpsch and Friedrich 2009; Eren- Promising technologies Learning from the past stein 2009; Erenstein and Laxmi 2008; Leh- Precision agriculture techniques for tar- Another approach building on a tech- mann 2007; Wardle, Nilsson, and Zackrisson geted, optimally timed application of the nology used by indigenous peoples in 2008. 18 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 of the solution, and they will need to be Robust strategies typically build flex- designed flexibly to deal with more variable ibility, diversification, and redundancy in rainfall. Other approaches include using response capacities (see chapter 2). They recycled water and desalination, which, favor "no-regrets" actions that provide while costly, can be worthwhile for high- benefits (such as water and energy effi- value use in coastal areas, especially if pow- ciency) even without climate change. They ered by renewable energy (see chapter 3). also favor reversible and flexible options But changing practices and technolo- to keep the cost of wrong decisions as low gies can be a challenge, particularly in poor, as possible (restrictive urban planning for rural, and isolated settings, where introduc- coastal areas can easily be relaxed while ing new ways of doing things requires work- forced retreats or increased protection can ing with a large number of very risk-averse be difficult and costly). They include safety actors located off the beaten track and fac- margins to increase resilience (paying the ing different constraints and incentives. marginal costs of building a higher bridge Extension agencies usually have limited or one that can be flooded, or extending resources to support farmers and are staffed safety nets to groups on the brink). And with engineers and agronomists rather than they rely on long-term planning based on trained communicators. Taking advantage scenario analysis and an assessment of of emerging technologies will also require strategies under a wide range of possible bringing higher technical education to rural futures.79 Participatory design and imple- communities. mentation is critical, because it permits the use of local knowledge about existing To transform decision-making processes: vulnerability and fosters ownership of the Adaptive policy making to tackle a riskier and strategy by its beneficiaries. more complex environment. Infrastructure Policy making for adaptation also needs design and planning, insurance pricing, and to be adaptive itself, with periodic reviews numerous private decisions--from planting based on the collection and monitoring of and harvesting dates to siting factories and information, something increasingly fea- designing buildings--have long been based sible at low cost thanks to better technolo- on stationarity, the idea that natural systems gies. For example, a key problem in water fluctuate within an unchanging envelope of management is the lack of knowledge about variability. With climate change, stationarity underground water, or about who con- is dead.76 Decision makers now have to con- sumes what. New remote-sensing technol- tend with the changing climate compound- ogy makes it possible to infer groundwater ing the uncertainties they already faced. consumption, identify which farmers have More decisions have to be made in a context low water productivity, and specify when to of changing trends and greater variability, increase or decrease water applications to not to mention possible carbon constraints. maximize productivity without affecting The approaches being developed and crop yields (see chapter 3). applied by public and private agencies, cities, and countries around the world from Aus- Making it happen: tralia to the United Kingdom are showing New pressures, new instruments, that it is possible to increase resilience even and new resources in the absence of expensive and sophisticated The previous pages describe the many steps modeling of future climate.77 Of course bet- needed to manage the climate change chal- ter projections and less uncertainty help, lenge. Many read like the standard fare of but these new approaches tend to focus on a development or environmental science strategies that are "robust" across a range of textbook: improve water resource manage- possible future outcomes, not just optimal ment, increase energy efficiency, promote for a particular set of expectations (box 6).78 sustainable agricultural practices, remove Robust strategies can be as simple as pick- perverse subsidies. But these have proven ing seed varieties that do well in a range of elusive in the past, raising the question of climates. what might make the needed reforms and Overview: Changing the Climate for Development 19 BOX 6 Ingenuity needed: Adaptation requires new tools and new knowledge Regardless of mitigation efforts, human- migration corridors, may be needed to Human health ity will need to adapt to substantial facilitate species movements to keep up Many adaptations of health systems changes in the climate--everywhere, and with the change in climate. to climate change will initially involve in many different fields. practical options that build on existing Physical capital knowledge. But others will require new Natural capital Climate change is likely to affect infra- skills. Advances in genomics are making A diversity of natural assets will be structure in ways not easily predictable it possible to design new diagnostic tools needed to cope with climate change and and varying greatly with geography. that can detect new infectious diseases. ensure productive agriculture, forestry, For example, infrastructure in low-lying These tools, combined with advances in and fisheries. For example, crop variet- areas is threatened by flooding rivers and communications technologies, can detect ies are needed that perform well under rising seas whether in Tangier Bay, New emerging trends in health and provide drought, heat, and enhanced CO2. But the York City, or Shanghai. Heat waves soften health workers with early opportunities private-sector- and farmer-led process asphalt and can require road closures; to intervene. Innovations in a range of of choosing crops favors homogeneity they affect the capacity of electricity technologies are already transforming adapted to past or current conditions, transmission lines and warm the water medicine. For example, the advent of not varieties capable of producing con- needed to cool thermal and nuclear hand-held diagnostic devices and video- sistently high yields in warmer, wetter, or power plants just as they increase elec- mediated consultations are expanding drier conditions. Accelerated breeding tricity demand. Uncertainties are likely to the prospects for telemedicine and programs are needed to conserve a wider influence not only investment decisions making it easier for isolated communi- pool of genetic resources of existing but the design of infrastructure that will ties to connect to the global health crops, breeds, and their wild relatives. need to be robust to the future climate. infrastructure. Relatively intact ecosystems, such as Similar uncertainty about the reliability of forested catchments, mangroves, and water supply is leading to both integrated wetlands, can buffer the impacts of cli- management strategies and improved mate change. Under a changing climate water-related technologies as hedges Sources: Burke, Lobell, and Guarino 2009; Ebi and Burton 2008; Falloon and Betts, these ecosystems are themselves at risk, against climate change. Greater technical forthcoming; Guthrie, Juma, and Sillem and management approaches will need knowledge and engineering capabilities 2008; Keim 2008; Koetse and Rietveld 2009; to be more proactive and adaptive. Con- will be needed to design future infra- National Academy of Engineering 2008; nections between natural areas, such as structure in the light of climate change. Snoussi and others 2009. behavior changes possible. The answer lies New pressures: Success hinges in a combination of new pressures, new on changing behavior and shifting instruments, and new resources. public opinion New pressures are coming from a grow- International regimes influence national ing awareness of climate change and its policies but are themselves a product of current and future costs. But awareness domestic factors. Political norms, gover- does not always lead to action: to suc- nance structures, and vested interests drive ceed, climate-smart development policy the translation of international law into must tackle the inertia in the behavior of domestic policy, while shaping the inter- individuals and organizations. Domes- national regime.80 And in the absence of a tic perception of climate change will also global enforcement mechanism, the incen- determine the success of a global deal--its tives for meeting global commitments are adoption but also its implementation. And domestic. while many of the answers to the climate To succeed, climate-smart development and development problem will be national policy has to factor in these local determi- or even local, a global deal is needed to gen- nants. The mitigation policies that a country erate new instruments and new resources will follow depend on domestic factors such for action (see chapter 5). So while new as the energy mix, the current and potential pressures must start at home with chang- energy sources, and the preference for state ing behaviors and shifting public opinion, or market-driven policies. The pursuit of action must be enabled by an efficient and ancillary local benefits--such as cleaner air, effective international agreement, one that technology transfers, and energy security-- factors in development realities. is crucial to generating sufficient support. 20 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 Climate-smart policies also have to government accountability for appropriate tackle the inertia in the behavior of individ- responses is played out. That is why many uals and organizations. Weaning modern local governments have preceded national economies from fossil fuels and increasing governments in climate action (box 7). resilience to climate change will require attitudinal shifts by consumers, business New instruments and new resources: leaders, and decision makers. The chal- The role of a global agreement lenges in changing ingrained behaviors call Immediate and comprehensive action is not for a special emphasis on nonmarket poli- feasible without global cooperation, which cies and interventions. requires a deal perceived as equitable by all Throughout the world disaster risk man- parties--high-income countries, which need agement programs are focused on changing to make the most immediate and stringent community perceptions of risk. The City of efforts; middle-income countries, where London has made targeted communica- substantial mitigation and adaptation need tion and education programs a centerpiece to happen; and low-income countries, where of its "London Warming" Action Plan. the priority is technical and financial assis- And utilities across the United States have tance to cope with vulnerability to today's begun using social norms and peer com- conditions, let alone unfolding changes in munity pressure to encourage lower energy the climate. The deal must also be effective demand: simply showing households how in achieving climate goals, incorporating they are faring relative to others, and sig- lessons from other international agreements naling approval of lower than average con- and from past successes and failures with sumption is enough to encourage lower large international transfers of resources. energy use (see chapter 8). Finally, it has to be efficient, which requires Addressing the climate challenge will adequate funding and financial instruments also require changes in the way govern- that can separate where mitigation happens ments operate. Climate policy touches on from who funds it--thereby achieving miti- the mandate of many government agencies, gation at least cost. yet belongs to none. For both mitigation and adaptation, many needed actions require a An equitable deal. Global cooperation long-term perspective that goes well beyond at the scale needed to deal with climate those of any elected administration. Many change can happen only if it is based on a countries, including Brazil, China, India, global agreement that addresses the needs Mexico, and the United Kingdom, have and constraints of developing countries, created lead agencies for climate change, only if it can separate where mitigation set up high-level coordination bodies, and happens from who bears the burden of improved the use of scientific information this effort, and only if it creates fi nancial in policy making (see chapter 8). instruments to encourage and facilitate Cities, provinces, and regions provide mitigation, even in countries that are rich political and administrative space closer to in coal and poor in income or that have the sources of emissions and the impacts of contributed little or nothing historically to climate change. In addition to implement- climate change. Whether these countries ing and articulating national policies and seize the opportunity to embark on a more regulations, they perform policy-making, sustainable development path will be heav- regulatory, and planning functions in sec- ily influenced by the fi nancial and techni- tors key to mitigation (transportation, con- cal support that higher-income countries struction, public services, local advocacy) can muster. Otherwise the transition costs and adaptation (social protection, disaster could be prohibitive. risk reduction, natural resource manage- Global cooperation will require more ment). Because they are closer to citizens, than financial contributions, however. these governments can raise public aware- Behavioral economics and social psychol- ness and mobilize private actors.81 And at ogy show that people tend to reject deals the intersection of the government and they perceive as unfair toward them, even the public, they become the space where if they stand to benefit.82 So the fact that Overview: Changing the Climate for Development 21 BOX 7 Cities reducing their carbon footprints The movement toward carbon-neutral by photovoltaic solar cells. In total the More than 700 cities and local govern- cities shows how local governments are city has over 500,000 square meters of ments around the world are participating taking action even in the absence of solar water heating panels, the equiva- in a "Cities for Climate Protection Cam- international commitments or stringent lent of about 0.5 megawatts of electric paign" to adopt policies and implement national policies. In the United States, water heaters. As a result of these efforts, quantifiable measures to reduce local which has not ratified the Kyoto Protocol, energy use has fallen by nearly a third and greenhouse gas emissions (http://www close to a thousand cities have agreed to CO2 emissions by half. .iclei.org). Together with other local gov- meet the Kyoto Protocol target under the Examples of movements to carbon- ernment associations, such as the C40 Mayors' Climate Protection agreement. In neutral cities are mushrooming well Cities Climate Leadership Group and the Rizhao, a city of 3 million people in north- beyond China. In 2008 Sydney became World Mayors Council on Climate Change, ern China, the municipal government the first city in Australia to become carbon they have embarked on a process that combined incentives and legislative tools neutral, through energy efficiency, renew- seeks empowerment and inclusion of cities to encourage the large-scale efficient able energy, and carbon offsets. Copenha- and local governments in the UN Frame- use of renewable energy. Skyscrapers are gen is planning to cut its carbon emissions work Convention on Climate Change. built to use solar power, and 99 percent to zero by 2025. The plan includes invest- of Rizhao's households use solar-power ments in wind energy and encouraging Sources: Bai 2006; World Bank 2009d; C40 heaters. Almost all traffic signals, street the use of electric and hydrogen-powered Cities Climate Leadership Group, http://www lights, and park illuminations are powered cars with free parking and recharging. .c40cities.org (accessed August 1, 2009). it is in everyone's interest to collaborate is circumstances. This is particularly prob- no guarantee of success. There are real con- lematic for adaptation, where technologies cerns among developing countries that a can be very location specific. drive to integrate climate and development International transfers of clean technol- could shift responsibility for mitigation ogies have so far been modest. They have onto the developing world. occurred in at best one-third of the projects Enshrining a principle of equity in a funded through the Clean Development global deal would do much to dispel such Mechanism (CDM), the main channel for concerns and generate trust (see chapter 5). financing investments in low-carbon tech- A long-term goal of per capita emissions nologies in developing countries. 86 The converging to a band could ensure that no Global Environment Facility, which has country is locked into an unequal share historically allocated about $160 million of the atmospheric commons. India has a year to climate mitigation programs,87 recently stated that it would never exceed is supporting technology needs assess- the average per capita emissions of high- ments in 130 countries. About $5 billion income countries.83 So drastic action by has recently been pledged under the new high-income countries to reduce their own Clean Technology Fund to assist develop- carbon footprint to sustainable levels is ing countries by supporting large, risky essential. This would show leadership, spur investments involving clean technologies, innovation, and make it feasible for all to but there are disputes over what constitutes switch to a low-carbon growth path. clean technology. Another major concern of developing Building technology agreements into a countries is technology access. Innovation global climate deal could boost technology in climate-related technologies remains innovation and ensure developing-country concentrated in high-income countries, access. International collaboration is criti- although developing countries are increas- cal for producing and sharing climate- ing their presence (China is seventh in smart technologies. On the production side, overall renewable energy patents, 84 and cost-sharing agreements are needed for an Indian fi rm is now the leader in on- large-scale and high-risk technologies such road electric cars 85). In addition, devel- as carbon capture and storage (see chapter oping countries--at least the smaller or 7). International agreements on standards poorer ones--may need assistance to pro- create markets for innovation. And inter- duce new technology or tailor it to their national support for technology transfer 22 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 can take the form of joint production and commit to output targets, where the "out- technology sharing--or financial support put" is greenhouse gas emissions, and devel- for the incremental cost of adopting new oping countries commit to policy changes cleaner technology (as was done through rather than emission targets. the Multilateral Fund for the Implementa- This approach is appealing for three rea- tion of the Montreal Protocol on Substances sons. First, it can advance mitigation oppor- that Deplete the Ozone Layer). tunities that carry development co-benefits. A global deal will also have to be accept- Second, it is well suited to developing coun- able to high-income countries. They worry tries, where fast population and economic about the financial demands that could be growth is driving the rapid expansion of the placed on them and want to ensure that capital stock (with opportunities for good financial transfers deliver the desired adap- or bad lock-in) and increases the urgency of tation and mitigation results. They also are moving energy, urban, and transport sys- concerned that a tiered approach allowing tems toward a lower-carbon path. A policy- developing countries to delay actions might based track can also offer a good framework affect their own competitiveness with lead- for countries with a high share of hard-to- ing middle-income countries. measure emissions from land use, land-use change, and forestry. Third, it is less likely An effective deal: Lessons from aid effective- to require monitoring of complex flows--a ness and international agreements. An challenge for many countries. Neverthe- effective climate deal will achieve agreed less, some overall monitoring and evalua- targets for mitigation and adaptation. Its tion of these approaches is critical, if only design can build on the lessons of aid effec- to understand their effectiveness.89 tiveness and international agreements. Cli- mate finance is not aid finance, but the aid An efficient deal: The role of experience does offer critical lessons. In climate finance particular, it has become clear that com- Climate finance can reconcile equity and mitments are seldom respected unless they efficiency by separating where climate action correspond to a country's objectives--the takes place from who pays for it. Sufficient conditionality versus ownership debate. finance flowing to developing countries-- So funding for adaptation and mitigation combined with capacity building and access should be organized around a process that to technology--can support low-carbon encourages recipient-country development growth and development. If mitigation and ownership of a low-carbon development finance is directed to where mitigation costs agenda. The aid experience also shows that a are lowest, efficiency will increase. If adapta- multiplicity of funding sources imposes huge tion finance is directed to where the needs transaction costs on recipient countries and are greatest, undue suffering and loss can be reduces effectiveness. And while the sources avoided. Climate finance offers the means to of funding might be separate, the spending reconcile equity, efficiency, and effectiveness of adaptation and mitigation resources must in dealing with climate change. be fully integrated into development efforts. But current levels of climate fi nance International agreements also show that fall far short of foreseeable needs. The tiered approaches can be an appropriate way estimates presented in table 1 suggest of bringing hugely different partners into a mitigation costs in developing countries single deal. Look at the World Trade Orga- could reach $140­$175 billion a year by nization: special and differential treatment 2030 with associated fi nancing needs of for developing countries has been a defining $265­$565 billion. Current flows of miti- feature of the multilateral trading system for gation finance averaging some $8 billion a most of the postwar period. Proposals are year to 2012 pale in comparison. And the emerging in the climate negotiations around estimated $30­$100 billion that could be the multitrack framework put forward in needed annually for adaptation in develop- the UNFCCC's Bali Action Plan.88 These ing countries dwarfs the less than $1 billion proposals would have developed countries a year now available (figure 10). Overview: Changing the Climate for Development 23 Compounding the shortfalls in climate Figure 10 The gap is large: Estimated annual finance are significant inefficiencies in how incremental climate costs required for a 2°C trajectory compared with current resources funds are generated and deployed. Key problems include fragmented sources of Constant 2005$, billions finance; high costs of implementing market 200 mechanisms such as the Clean Development Mitigation: Mechanism; and insufficient, distortionary $139 billion­$175 billion 175 instruments for raising adaptation fi nance. Chapter 6 identifies nearly 20 different bilateral and multilateral funds for climate 150 change currently proposed or in operation. This fragmentation has a cost identified in 125 the Paris Declaration on Aid Effectiveness: each fund has its own governance, raising Adaptation: $28 billion­$100 billion transaction costs for developing countries; 100 and alignment with country development objectives may suffer if sources of fi nance 75 are narrow. Other tenets of the Paris Declaration, including ownership, donor harmonization, and mutual accountabil- 50 ity, also suffer when fi nancing is highly Funding for fragmented. An eventual consolidation adaptation and 25 of funds into a more limited number is mitigation clearly warranted. $9 billion Looking forward, pricing carbon (whether 0 through a tax or through a cap and trade 2008­2012 2030 scheme) is the optimal way of both generat- Sources: See table 1 on page 9 and the discussion in chapter 6. ing carbon-finance resources and directing Note: Mitigation and adaptation costs for developing coun- those resources to efficient opportunities. In tries only. Bars represent the range of estimates for the incremental costs of the adaptation and mitigation efforts the near future, however, the CDM and other associated with a 2°C trajectory. Mitigation financing needs performance-based mechanisms for carbon associated with the incremental costs depicted here are much higher, ranging between $265 billion and $565 billion offsets are likely to remain the key market- annually by 2030. based instruments for mitigation finance in developing countries and are therefore criti- cal in supplementing direct transfers from high-income countries. simply change where they occur (in devel- The CDM has in many ways exceeded oping rather than developed countries) expectations, growing rapidly, stimulating and lower the cost of mitigation (thereby learning, raising awareness of mitigation increasing efficiency). options, and building capacity. But it also The Adaptation Fund under the Kyoto has many limitations, including low devel- Protocol employs a novel financing instru- opment co-benefits, questionable addition- ment in the form of a 2 percent tax on cer- ality (because the CDM generates carbon tified emission reductions (units of carbon credits for emission reductions relative to a offset generated by the CDM). This clearly baseline, the choice of baseline can always raises finance that is additional to other be questioned), weak governance, inefficient sources, but as pointed out in chapter 6, this operation, limited scope (key sectors such approach has several undesirable character- as transport are not covered), and concerns istics. The instrument is taxing a good (miti- about market continuity beyond 2012.90 For gation finance) rather than a bad (carbon the effectiveness of climate actions it is also emissions) and like any tax, there are inevi- important to understand that CDM trans- table inefficiencies (deadweight losses). Anal- actions do not reduce global carbon emis- ysis of the CDM market suggests that most sions beyond agreed commitments--they of the lost gains from trade as a result of the 24 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 tax would fall on developing-country suppli- forest carbon, and major monitoring issues ers of carbon credits.91 Adaptation finance would need to be resolved (see box 8). Pilot will also require an allocation mechanism programs must be developed rapidly to that ideally would embrace the principles of encourage more resilient and sustainable transparency, efficiency, and equity--effi- agriculture and to bring more resources cient approaches would direct finance to the and innovation to a sector that has lacked most vulnerable countries and those with the both in recent decades.92 greatest capacity to manage adaptation, while Within countries the role of the public equity would require that particular weight sector will be critical in creating incentives be given to the poorest countries. for climate action (through subsidies, taxes, Strengthening and expanding the climate caps, or regulations), providing informa- finance regime will require reforming exist- tion and education, and eliminating mar- ing instruments and developing new sources ket failures that inhibit action. But much of climate finance (see chapter 6). Reform of of the finance will come from the private the CDM is particularly important in view sector, particularly for adaptation. For pri- of its role in generating carbon finance for vate infrastructure service providers the projects in developing countries. One set of flexibility of the regulatory regime will be proposals aims at reducing costs through crucial in providing the right incentives for streamlining project approval, including climate-proofi ng investments and opera- upgrading the review and administrative tions. While it will be possible to leverage functions. A key second set of proposals private finance for specific adaptation invest- focuses on allowing the CDM to support ments (such as flood defenses) experience changes in policies and programs rather to date with public-private partnerships on than limit it to projects. "Sector no-lose tar- infrastructure in developing countries sug- gets" are an example of a performance-based gests that the scope will be modest. scheme, where demonstrable reductions in Generating additional finance for sectoral carbon emissions below an agreed adaptation is a key priority, and innova- baseline could be compensated through the tive schemes such as auctioning assigned sale of carbon credits, with no penalty if the amount units (AAUs, the binding caps that reductions are not achieved. countries accept under the UNFCCC), tax- Forestry is another area where climate ing international transport emissions, and a finance can reduce emissions (box 8). Addi- global carbon tax have the potential to raise tional mechanisms for pricing forest car- tens of billions of dollars of new fi nance bon are likely to emerge from the current each year. For mitigation it is clear that hav- climate negotiations. Already several ini- ing an efficient price for carbon, through tiatives, including the World Bank's Forest either a tax or cap-and-trade, will be trans- Carbon Partnership Facility, are exploring formational. Once this is achieved, the pri- how financial incentives can reduce defores- vate sector will provide much of the needed tation in developing countries and thereby fi nance as investors and consumers factor reduce carbon emissions. The major chal- in the price of carbon. But national carbon lenges include developing a national strat- taxes or carbon markets will not neces- egy and implementation framework for sarily provide the needed flows of fi nance reducing emissions from deforestation and to developing countries. If the solution to degradation; a reference scenario for emis- the climate problem is to be equitable, a sions; and a system for monitoring, report- reformed CDM and other performance- ing, and verification. based schemes, the linking of national Efforts to reduce emissions of soil car- carbon markets, the allocation and sale of bon (through incentives to change till- AAUs, and fiscal transfers will all provide ing practices, for example) could also be finance to developing countries. a target of fi nancial incentives--and are As this Report goes to press, countries essential to ensure natural areas are not are engaged in negotiations on a global cli- converted to food and biofuel production. mate agreement under the auspices of the But the methodology is less mature than for UNFCCC. Many of these same countries Overview: Changing the Climate for Development 25 BOX 8 The role of land use, agriculture, and forestry in managing climate change Land use, agriculture, and forestry have a earn $400 million to $2 billion a year. First, the carbon monitoring should fol- substantial mitigation potential but have As for soil carbon, even in Africa, where low an "activity-based" approach, where been contentious in the climate negotia- relatively carbon-poor lands cover close emission reductions are estimated based tions. Could emissions and uptakes be to half the continent, the potential for on the activities carried out by the farmer measured with sufficient accuracy? What soil carbon sequestration is 100 million rather than on much more expensive can be done about natural fluctuations in to 400 million tons of CO2e a year. At $10 soil analyses. Specific and conservative growth and losses from fires associated a ton, this would be on par with current emission reduction factors can be applied with climate change? Should countries official development assistance to Africa. for different agroecological and climatic get credits for actions taken decades or Largely through the efforts of a group zones. This is simpler, cheaper, and more centuries before the climate negotia- of developing countries that formed predictable for the farmer, who knows up tions? Would credits from land-based the Coalition for Rainforests, land use, front what the payments, and possible activities swamp the carbon market and land-use change, and forestry account- penalties, are for any given activity. drive down the carbon price, reducing ing were reintroduced into the UNFCCC Second, transaction costs can be incentives for further mitigation? Progress agenda. Those countries seek opportuni- reduced by "aggregators," who combine has been made on many of these issues, ties to contribute to reducing emissions activities over many smallholder farms, as and the Intergovernmental Panel on Cli- under their common but differentiated in the Kenya pilot project. By working with mate Change has developed guidelines responsibility and to raise carbon finance many farms, aggregators can build up a for measuring land-related greenhouse to better manage their forested systems. permanent buffer and average out occa- gases. Negotiations over what has become sional reversals in sequestration. Pooling Net global deforestation averaged known as REDD (Reduced Emissions from over a portfolio of projects with conserva- 7.3 million hectares a year from 2000 to Deforestation and Forest Degradation) tive estimates of permanence can make 2005, contributing about 5.0 gigatons of continue, but most expect some ele- soil carbon sequestration fully equivalent CO2 a year in emissions, or about a quar- ments of REDD to be part of an agree- to CO2 reduction in other sectors. ter of the emission reduction needed. ment in Copenhagen. Third, logistical help, especially for poor Another 0.9 gigaton reduction could Initiatives on soil carbon are not so farmers who need help to finance up- come from reforestation and better forest advanced. While carbon sequestration in front costs, must include strengthened management in developing countries. agriculture would be an inexpensive, tech- extension services. They are key to dis- But improved forest management and nically simple, and efficient response to seminating knowledge about sequestra- reduced deforestation in developing climate change, developing a market for tion practices and finance opportunities. countries are currently not part of the it is no easy feat. A pilot project in Kenya Sources: Canadell and others 2007; Eliasch international Clean Development Mecha- (see chapter 3) and soil carbon offsets on 2008; FAO 2005; Smith and others 2008; nism of the UNFCCC. the Chicago Climate Exchange point to Smith and others 2009; Tschakert 2004; There is also interest in creating a opportunities. Three steps can help move UNEP 1990; Voluntary Carbon Standard mechanism for payments for improved soil carbon sequestration forward. 2007; World Bank 2008c. management of soil carbon and other greenhouse gases produced by agri- It's not just about energy: At high carbon prices the combined mitigation potential of agriculture and forestry is greater than that of other individual sectors of the economy culture. Technically about 6.0 gigatons of CO2e in emissions could be reduced Potential emission reduction (GtCO2e/yr) through less tillage of soils, better wetland 7 and rice paddy management, and bet- Non-OECD/EIT 6 EIT ter livestock and manure management. OECD About 1.5 gigatons of emission reductions 5 World total a year could be achieved in agriculture for 4 a carbon price of $20 a ton of CO2e (figure). Forestry and agricultural mitigation 3 would produce many co-benefits. The 2 maintenance of forests keeps open a wider diversity of livelihood options, 1 protects biodiversity, and buffers against 0 extreme events such as floods and land- 0 0 00 0 0 00 0 0 00 0 0 00 0 0 00 0 0 00 0 0 00 <2 <5 <2 <5 <2 <5 <2 <5 <2 <5 <2 <5 <2 <5 <1 <1 <1 <1 <1 <1 <1 slides. Reduced tillage and better fertilizer Energy Transport Buildings Industry Agriculture Forestry Waste management can improve productivity. supply And the resources generated could be Carbon price ($/tCO2e) substantial--at least for countries with Source: Barker and others 2007b, figure TS.27. large forests: if the forest carbon markets Note: EIT = economies in transition. The ranges for global economic potentials as assessed in each sector are meet their full potential, Indonesia could shown by black vertical lines. 26 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 are also in the throes of one of the most ference with the climate system." http://unfccc severe fi nancial crises of recent decades. .int/resource/docs/convkp/conveng.pdf (accessed Fiscal difficulties and urgent needs could August 1, 2009). make it difficult to get legislatures to agree 4. Defined as carbon emitted per dollar of GDP. to spend resources on what is incorrectly 5. On a global scale, this would reduce CO2 perceived as solely a longer-term threat. emissions by 4­6 gigatons a year given the cur- Yet a number of countries have adopted rent energy mix in the power sector and industry fiscal recovery packages to green the econ- (IEA 2008e). Similar reductions would be pos- omy while restoring growth, for a global sible in the building sector in high-income coun- total of more than $400 billion over the tries. See, for example, Mills 2009. next few years in the hope of stimulating 6. World Bank 2009b. the economy and creating jobs.93 Invest- 7. de la Torre, Fajnzylber, and Nash 2008. ments in energy efficiency can produce a 8. Greenhouse gases each have different triple dividend of greater energy savings, heat-trapping potential. The carbon dioxide fewer emissions, and more jobs. equivalent (CO2e) concentration can be used to describe the composite global warming effect of The current climate negotiations, to cul- these gases in terms of the amount of CO2 that minate in Copenhagen in December 2009, would have the same heat-trapping potential have been making slow progress--inertia over a specified period of time. in the political sphere. For all the reasons 9. Authors' calculations, based on data from highlighted in this Report--inertia in the Climate Analysis Indicators Tool (WRI 2008). climate system, inertia in infrastructure, The range is much greater if small island states inertia in socioeconomic systems--a cli- such as Barbados (4.6 tons of CO2e per capita) mate deal is urgently needed. But it must be and oil producers such as Qatar (55 tons of CO2e a smart deal, one that creates the incentives per capita) or the United Arab Emirates (39 tons for efficient solutions, for flows of fi nance of CO2e per capita) are included. and the development of new technologies. 10. IEA 2008c. 11. Edmonds and others 2008; Hamilton 2009. And it must be an equitable deal, one that Blanford, Richels, and Rutherford (2008) also show meets the needs and aspirations of develop- substantial savings from countries announcing in ing countries. Only this can create the right advance the date when they will engage in mitiga- climate for development. tion, because that allows those investing in long- lived assets to factor in the likely change in future regulatory regimes and carbon prices and there- Notes fore minimizes the number of stranded assets. 1. Extreme poverty is defined as living on 12. Financial crises that are highly synchro- $1.25 a day or less. Chen and Ravallion 2008. nized across countries are associated with similar 2. FAO 2009b. durations and are followed by similar recover- 3. Article 2 of the United Nations Framework ies, although the losses tend to be more severe Convention on Climate Change (UNFCCC) calls (5 percent of GDP on average). IMF 2009, table for stabilizing greenhouse gas concentrations 3.1. Even the Great Depression in the United in the atmosphere at a level that "would prevent States lasted only three and a half years, from dangerous anthropogenic [human-caused] inter- August 1929 to March 1933. National Bureau of Many people are taking action to protect our environment. I think that only by working as a team will we succeed in making a difference. Even children can join together to help because we are the next generation and we should treasure our own natural environment. --Adrian Lau Tsun Yin, China, age 8 Anoushka Bhari, Kenya, age 8 Overview: Changing the Climate for Development 27 Economic Research Business Cycle Expansion 25. Nordhaus 2008; Stern 2007; Yohe and and Contraction database, http://www.nber.org/ others 2007, figure 20.3. cycles.html (accessed August 1, 2009). 26. The PAGE model, used for the Stern 13. Matthews and Caldeira 2008. Review of Climate Change, estimates that 80 14. Schaeffer and others 2008. percent of the costs of damages would be borne 15. While the question of what constitutes dan- by developing countries; Hope (2009), with gerous climate change requires value judgments, further data breakdowns communicated by the summaries of recent research by the Intergovern- author. The RICE model (Nordhaus and Boyer mental Panel on Climate Change (IPCC) suggest 2000), as expanded to include adaptation in de that warming by more than 2°C above preindus- Bruin, Dellink, and Agrawala (2009), suggests trial levels sharply increases risks, so that "signifi- that about three-quarters of the costs of dam- cant benefits result from constraining tempera- ages would be borne by developing countries. tures to not more than 1.6°C­2.6°C." Fisher and See also Smith and others (2009); Tol (2008). others 2007; IPCC 2007b; IPCC 2007c; Parry and Note that this may well be an underestimate, others 2007. Recent scientific publications further since it does not take into account the value of support the notion that warming should be con- lost ecosystem services. See chapter 1 for a dis- strained to remain as close as possible to 2°C above cussion of the limitation of models' ability to preindustrial temperatures. Focus A on science; capture costs of impacts. Mann 2009; Smith and others 2009. The organiz- 27. Noted during consultations with East ers of the 2009 International Scientific Congress on African and Latin American countries. Climate Change concluded that "there is increas- 28. Barbera and McConnell 1990; Barrett ing agreement that warming above 2°C would 2003; Burtraw and others 2005; Jaffe and others be very difficult for contemporary societies and 1995; Meyer 1995. ecosystems to cope with." http://climatecongress 29. Hope 2009; Nordhaus 2008. .ku.dk/ (accessed August 1, 2009). Other calls for 30. Nordhaus 2008. not allowing warming to exceed 2°C include Euro- 31. Few models incorporate adaptation costs. pean Commission 2007; SEG 2007; and Interna- See de Bruin, Dellink, and Agrawala (2009) for a tional Scientific Steering Committee 2005. The discussion. leaders of Australia, Brazil, Canada, China, the 32. Nordhaus 2008, p. 86, figure 5.3. Nordhaus European Union, France, Germany, India, Indone- finds the additional cost of stabilizing warming at sia, Italy, Japan, the Republic of Korea, Mexico, the 2°C rather than his optimal target of 3.5°C to be Russian Federation, South Africa, the United King- 0.3 percent of GDP annually. The additonal cost dom, and the United States--meeting at the Major of 2.5°C rather than 3.5°C is less than 0.1 percent Economies Forum on Energy and Climate in July of GDP annually. 2009--recognized "the scientific view that the 33. The developing-country average is 1.5 per- increase in global average temperature above pre- cent of GDP; it includes health insurance and industrial levels ought not to exceed 2°C." http:// excludes life insurance. Swiss Re 2007. usclimatenetwork.org/resource-database/MEF_ 34. McKinsey & Company 2009. Declarationl-0.pdf (accessed August 1, 2009). 35. In constant 2005 dollars. World Bank 16. IPCC 2007c. 2009c. 17. Raupach and others 2007. 36. Adger and others 2009. 18. Lawrence and others 2008; Matthews 37. IPCC 2001. and Keith 2007; Parry and others 2008; Scheffer, 38. Mignone and others 2008. This is true in Brovkin, and Cox 2006; Torn and Harte 2006; the absence of effective and acceptable geoengi- Walter and others 2006. neering technology (see chapter 7). 19. Horton and others 2008. 39. This can result from economies of scale 20. This estimate does not take into account in technology provision (as was the case for the the increase of damages from storm surges, and French nuclear program and appears to be an it uses current population and economic activi- issue for concentrated solar power); network ties. So in the absence of large-scale adaptation, effects (for a highway or rail construction pro- it is likely to be a significant underestimate. Das- gram); or demographic or economic shocks. gupta and others 2009. This and the rest of the paragraph are based on 21. Stern 2007. Shalizi and Lecocq 2009. 22. Easterling and others 2007, table 5.6, p 299. 40. Shalizi and Lecocq 2009. 23. Parry and others 2007, table TS.3, p 66. 41. Folger 2006; Levin and others 2007. 24. Nordhaus and Boyer 2000. Stern (2007) also 42. Häfele and others 1981, as cited in Ha- finds that losses associated with climate change Duong, Grubb, and Hourcade 1997. would be much greater in India and Southeast Asia 43. Davis and Owens 2003; IEA 2008b; Nemet than the world average. and Kammen 2007; SEG 2007; Stern 2007. 28 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 44. Repetto 2008. prices, the elasticity is estimated at ­0.5, meaning 45. Stern 2007, part VI. that a doubling of fuel prices would halve emis- 46. Based on the formula used in Nordhaus sions, holding income per capita constant. 2008. 62. Based on average electricity prices for 47. These are rounded values based on the fol- households in 2006­07 from the U.S. Energy Infor- lowing. The IPCC estimates that at carbon prices mation Agency, http://www.eia.doe.gov/emeu/ up to $50 a ton CO2e, about 65 percent of emis- international/elecprih.html (accessed August 1, 2009). sion reduction would take place in developing 63. Emission data is from WRI (2008). countries in 2030 (Barker and others 2007a, table 64. IEA 2008d; UNEP 2008. A 2004 report 11.3). McKinsey & Company (2009) estimates this by the European Environment Agency (EEA share at 68 percent for a 450 ppm scenario if done 2004) estimated European subsidies to energy at using a least-cost allocation. As to the least-cost 30 billion in 2001, two-thirds for fossil fuels, the share of global mitigation investments in 2030 tak- rest for nuclear and renewables. ing place in developing countries, it is estimated at 65. http://www.eia.doe.gov/emeu/international/ 44­67 percent for a 450 ppm CO2e concentration elecprih.html (accessed July 2009). (see table 4.2: 44 percent, MESSAGE; 56 percent, 66. Price and Worrell 2006. McKinsey; 67 percent, IEA ETP) although an out- 67. ESMAP 2006. lying estimate is offered by REMIND (91 percent). 68. http://co2captureandstorage.info/index.htm Over the course of the century (using present value (accessed August 1, 2009). of all investments to 2100), the estimated share of 69. Calvin and others, forthcoming; IEA developing countries is somewhat higher, with 2008a. ranges between 66 percent (Edmonds and others 70. Gurgel, Reilly, and Paltsev 2007; IEA 2006; 2008) and 71 percent (Hope 2009). Wise and others 2009. 48. Edmonds and others 2008. 71. NRC 2007; Tilman, Hill, and Lehman 49. For a 425­450 ppm CO2e, or 2°C, stabili- 2006; WBGU 2009. zation scenario, IIASA (2009) estimates the cost 72. OECD 2008. at $4 trillion; Knopf and others (forthcoming) at 73. Lotze-Campen and others 2009; Wise and $6 trillion; Edmonds and others (2008) at $9 tril- others 2009. See chapter 3 for a discussion. lion; Nordhaus (2008) at $11 trillion; and Hope 74. Scherr and McNeely 2008. (2009) at $25 trillion. These are present values, 75. World Bank 2007b. and the large differences among them are largely 76. Milly and others 2008. driven by the different discount rate used. All fol- 77. Fay, Block, and Ebinger 2010; Ligeti, Pen- low a first-best scenario where mitigation takes ney, and Wieditz 2007; Heinz Center 2007. place wherever and whenever most cost-effective. 78. Lempert and Schlesinger 2000. 50. Hamilton 2009. 79. Keller, Yohe, and Schlesinger 2008. 51. The Nameless Hurricane, http://science. 80. Cass 2005; Davenport 2008; Dolsak 2001; nasa.gov/headlines/y2004/02apr_hurricane.htm Kunkel, Jacob, and Busch 2006. (accessed March 12, 2009). 81. Alber and Kern 2008. 52. Rogers 2009; Westermeyer 2009. 82. Guth, Schmittberger, and Schwarze 1982; 53. OECS 2004. Camerer and Thaler 1995; Irwin 2009; Ruffle 1998. 54. World Bank 2008a. 83. Times of India, http://timesofindia.india 55. Kanbur 2009. times.com/NEWS/India/Even-in-2031-Indias- 56. FAO 2009a. per- capita- emission- will- be- 1/7th- of- US/ 57. Worldwatch Institute, "State of the World articleshow/4717472.cms (accessed August 2009). 2005 Trends and Facts: Water Conflict and Security 84. Dechezleprêtre and others 2008. Cooperation," http://www.worldwatch.org/node/69 85. Maini 2005; Nagrath 2007. (accessed July 1, 2009); Wolf and others 1999. 86. Haites and others 2006. 58. Easterling and others 2007; Fisher and 87. http://www.gefweb.org/uploadedFiles/ others 2007. Publications/ClimateChange-FS-June2009.pdf 59. FAO 2008. (accessed July 6, 2009). 60. von Braun and others 2008; World Bank 88. http://unfccc.int/meetings/cop_13/items/ 2009a. 4049.php (accessed August 1, 2009). 61. Sterner 2007. The average fuel price in the 89. The development and aid community Euro area in 2007 was more than twice what it was has been moving toward impact evaluation and in the United States ($1.54 a liter as opposed to 63 results-based aid, suggesting a degree of frus- cents a liter). Variations in emissions not driven tration with input-based programs (where the by income can be captured by the residuals of a quantity of funds disbursed and the number of regression of emissions per capita on income. schools built were monitored, as opposed to the When these residuals are regressed on gasoline number of children graduating from schools or Overview: Changing the Climate for Development 29 improvements in their performance). However, Ibitoye, C. J. Jepma, W. A. Pizer, and K. Yamaji. there is some difference in the way "input-based" 2007a. "Mitigation From a Cross-Sectoral Per- approaches are defined in this case, because the spective." In Climate Change 2007: Mitigation. "inputs" are policy changes rather than narrowly Contribution of Working Group III to the Fourth defined financial inputs--adoption and enforce- Assessment Report of the Intergovernmental ment of a fuel efficiency standard rather than Panel on Climate Change, ed. B. Metz, O. 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The steep increase in green- temperatures that hit agriculture from the house gases since the Industrial Revolution Aegean Sea to the Indus River. This change has transformed the relationship between in climate brought down Egypt's pyramid- people and the environment. In other building Old Kingdom and Sargon the words, not only does climate affect develop- Great's empire in Mesopotamia.1 After only ment but development affects the climate. a few decades of lower rainfall, cities lin- Left unmanaged, climate change will ing the northern reaches of the Euphrates, reverse development progress and compro- the breadbasket for the Akkadians, were mise the well-being of current and future deserted. At the city of Tell Leilan on the generations. It is certain that the earth will northern Euphrates, a monument was halted get warmer on average, at unprecedented half-built.2 With the city abandoned, a thick speed. Impacts will be felt everywhere, but layer of wind-blown dirt covered the ruins. much of the damage will be in developing Even intensively irrigated southern Meso- countries. Millions of people from Bangla- potamia, with its sophisticated bureaucracy desh to Florida will suffer as the sea level and elaborate rationing, could not react fast rises, inundating settlements and contami- enough to the new conditions. Without the nating freshwater.4 Greater rainfall variabil- shipments of rainfed grain from the north, ity and more severe droughts in semiarid and faced with parched irrigation ditches Africa will hinder efforts to enhance food and migrants from the devastated northern security and combat malnourishment.5 The cities, the empire collapsed.3 hastening disappearance of the Himalayan and Andean glaciers--which regulate river flow, generate hydropower, and supply clean water for over a billion of people on farms Key messages and in cities--will threaten rural liveli- Development goals are threatened by climate change, with the heaviest impacts on poor hoods and major food markets (map 1.1).6 countries and poor people. Climate change cannot be controlled unless growth in both rich and That is why decisive, immediate action poor countries becomes less greenhouse-gas-intensive. We must act now: country develop- is needed. Even though the debate about ment decisions lock the world into a particular carbon intensity and determine future warming. the costs and benefits of climate change Business-as-usual could lead to temperature increases of 5°C or more this century. And we mitigation continues, the case is very strong must act together: postponing mitigation in developing countries could double mitigation costs, for immediate action to avoid unmanage- and that could well happen unless substantial financing is mobilized. But if we act now and act able increases in temperature. The unac- together, the incremental costs of keeping warming around 2°C are modest and can be justified ceptability of irreversible and potentially given the likely dangers of greater climate change. catastrophic impacts and the uncertainty about how, and how soon, they could occur 38 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 Map 1.1 More than a billion people depend on water from diminishing Himalayan glaciers · ········· · ··· · · · · · ······ ·· ·· ·· ··· ·· · ···· ········ · ·· · ··· · ·· ·· ·· ····· ·· · · · · · · · · ·· ···· · ·· ····· · · · · · ·· ··· · · · · ·· ······ · · ······ ····· · ·· ·· ·· ··· ··· · · ·· · ·· · · ·· · ············ ····· ··· ···· ······ ·· ····· · ·· ·· · · ·· ··· · ·· · ·· ·········· ·· · ······ · ······ ·· ·· · ·· ········· · · ·· ··· ········ ·· ··· · ·· · ····· ··· · ··· ·· ·· ·· · · · ··· · · · ··· ·· ·· ··· ·· · HWANG HE ····· ·· ···· · · · ········· · ··············· · ·· · · · · ·· · · ·· 150 million ··· · · · ·· · · ····· ··· ·· · · · ·· ··· ··· · ·· · · ·· ··· · · ··· · · ·· ··· · ··· ·· ······ · ·· INDUS ·· · · ·· · · · ·· 200 million · · · · · · ·· · · · ·· · · ·· · · ·· ··· ·· · · ·· · · · · ··· · ······· ·· · · · · ·· · · · · · ·· ··· ········ · · ·· ········· · ····· · ·· · ··· · · ···· · ·· · ······················· · ··········· ········ ·· · ·· ··· · ·· · ··· · · ·· ·· · ·· ··· ·· ······· ··· · · · ··· ··· · · · · ·· · · · ····· · ··· · ·· ·· · ·· ··············· ··· ··· · ······· ··· ·· ·· ··· ······ · · · ·· · ·· YANGTZE ··· · ··· ·· · ··· ·· · · · · ·· ··· ·· · BRAHMAPUTRA · · ···· ·· · ······ · · ·········· ··· · · · ···· · · · ·· ···· ··· · 450 million GANGES · 60 million ·· · 400 million GANGES- BRAHMAPUTRA DELTA 120 million IRRAWADDY SALWEEN MEKONG 35 million 20 million 60 million Population density (persons/sq. km) 0­100 101­250 251­500 501­1000 Rivers 1001­2000 >2000 No data River basins ·· ··· ····· ·· ··· ···· ··· ···· · Glaciers Sources: Center for International Earth Science Information Network, http://sedac.ciesin.columbia.edu/gpw/global.jsp (accessed May 15, 2009); Armstrong and others 2005; ESRI 2002; WDR team. Note: The glaciers of the Himalayas and Tibetan Plateau regulate the supply of water throughout the year in major river basins supporting large agricultural and urban populations, with meltwater providing between 3 and 45 percent of river flow in the Gan- ges and Indus, respectively. Reduced storage as ice and snowpack will result in larger flows and flooding during rainy months and water shortages during warmer, drier months when water is most needed for agriculture. Glacier locations shown in the map only include glaciers larger than 1.5 sq. km in area. Numbers indicate how many people live in each river basin. compel bold actions. The strong inertia in cutting their own emissions by reshaping the climate system, in the built environ- their built and economic environments. ment, and in the behavior of individuals They also need to promote and finance the and institutions requires that this action be transition to low-carbon growth in develop- urgent and immediate. ing countries. Better application of known Over the past two centuries the direct practices and fundamental transforma- benefits of carbon-intensive development tions--in natural resource management, have been concentrated largely in today's energy provision, urbanization, social safety high-income countries. The inequity in nets, international financial transfers, tech- the global distribution of past and current nological innovation, and governance, both emissions, and in current and future dam- international and national--are needed to ages, is stark (figure 1.1; see also focus A fig- meet the challenge. ure FA.6 and the overview). But if countries Increasing people's opportunities and are willing to act, the economic incentives material well-being without undermining for a global deal exist. the sustainability of development is still The window of opportunity to choose the main challenge for large swaths of the the right policies to deal with climate world, as a severe fi nancial and economic change and promote development is clos- crisis wreaks havoc across the globe. Stabi- ing. The further countries go along current lizing the financial markets and protecting emissions trajectories, the harder it will be the real economy, labor markets, and vul- to reverse course and alter infrastructures, nerable groups are the immediate priority. economies, and lifestyles. High-income But the world must exploit this moment of countries must face head-on the task of opportunity for international cooperation Understanding the Links between Climate Change and Development 39 Figure 1.1 Individuals' emissions in high-income countries overwhelm those in developing countries CO2e/person (tons) 30 Australia Canada United States High-income country Middle-income country Brazil 25 Low-income country Russian Federation Emissions from land-use change Germany Japan United Kingdom 20 Ukraine Italy Peru Indonesia South Africa Myanmar 15 Ghana France Iraq; Colombia Iran, Islamic Rep. of Vietnam Mexico Congo, Dem. Rep. Pakistan Turkey Algeria Ethiopia 10 Thailand Nigeria Tanzania Egypt, Arab Rep. of Bangladesh Philippines Sudan China Uganda Chad; 5 Kenya; Niger; Rwanda India 0 0.30 0.19 0.13 0.22 0.10 1.32 0.15 1.13 0.16 0.16 Population in 2005 (billions) Sources: Emissions of greenhouse gases in 2005 from WRI 2008, augmented with land-use change emissions from Houghton 2009; population from World Bank 2009c. Note: The width of each column depicts population and the height depicts per capita emissions, so the area represents total emissions. Per capita emissions of Qatar (55.5 tons of carbon dioxide equivalent per capita), UAE (38.8), and Bahrain (25.4)--greater than the height of the y-axis--are not shown. Among the larger countries, Brazil, Indonesia, the Democratic Republic of Congo, and Nigeria have low energy-related emissions but significant emissions from land-use change; therefore, the share from land-use change is indicated by the hatching. and domestic intervention to tackle the rest By defi nition, then, unmitigated climate of development's problems. Among them, change is incompatible with sustainable and a top priority, is climate change. development. Unmitigated climate change is Climate change threatens to reverse incompatible with sustainable development gains development An estimated 400 million people escaped Development that is socially, economically, poverty between 1990 and 2005, the date of and environmentally sustainable is a chal- the latest estimate8--although the unfolding lenge, even without global warming. Eco- global financial crisis and the spike in food nomic growth is needed, but growth alone prices between 2005 and 2008 have reversed is not enough if it does not reduce poverty some of these gains.9 Since 1990 infant mor- and increase the equality of opportunity. tality rates dropped from 106 per 1,000 live And failing to safeguard the environment births to 83.10 Yet close to half the popula- eventually threatens economic and social tion of developing countries (48 percent) are achievements. These points are not new. still in poverty, living on less than $2 a day.11 They only echo what still is, after more than Nearly a quarter--1.6 billion--lack access 20 years, perhaps the most widely used defi- to electricity,12 and one in six lack access to nition of sustainable development: "devel- clean water.13 Around 10 million children opment that meets the needs of the present under five still die each year from prevent- without compromising the ability of future able and treatable diseases such as respira- generations to meet their own needs." 7 tory infections, measles, and diarrhea.14 40 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 In the last half century the use of natu- epidemic in western Canadian forests, ral resources (among them fossil fuels) has partly a consequence of milder winters, supported improvements in well-being, is ravaging the timber industry, threaten- but when accompanied by resource degra- ing the livelihoods and health of remote dation and climate change, such use is not communities, and requiring millions in sustainable. Neglecting the natural envi- government spending for adjustment and ronment in the pursuit of growth, people prevention.18 Attempts to adapt to similar have made themselves more vulnerable to future threats, in developed and developing natural disasters (see chapter 2). And the countries, will have real human and eco- poorest often rely more directly on natu- nomic costs even as they cannot eliminate ral resources for their livelihoods. Roughly all direct damage. 70 percent of the world's extremely poor Warming can have a big impact on both people live in rural areas. the level and growth of gross domestic By 2050 the global population will reach product (GDP), at least in poor countries. 9 billion, barring substantial changes in An examination of year-to-year variations demographic trends, with 2.5 billion more in temperature (relative to a country's aver- people in today's developing countries. age) shows that anomalously warm years Larger populations put more pressure on reduce both the current level and subse- ecosystems and natural resources, inten- quent growth rate of GDP in developing sify the competition for land and water, and countries.19 Consecutive warm years might increase the demand for energy. Most of the be expected to lead to adaptation, lessen- population increase will be in cities, which ing the economic impacts of warming, yet could help limit resource degradation and the developing countries with more pro- individual energy consumption. But both nounced warming trends have had lower could increase, along with human vulner- growth rates.20 Evidence from Sub-Saharan ability, if urbanization is poorly managed. Africa indicates that rainfall variability, Climate change imposes an added burden projected to increase substantially, also on development.15 Its impacts are already reduces GDP and increases poverty.21 visible, and the most recent scientific evi- Agricultural productivity is one of many dence shows the problem is worsening fast, factors driving the greater vulnerability of with current trajectories of greenhouse gas developing countries (see chapter 3, map (GHG) emissions and sea-level rise outpac- 3.3). In northern Europe and North Amer- ing previous projections.16 And the disrup- ica crop yields and forest growth might tions to socioeconomic and natural systems increase under low levels of warming and are happening even now--that is, even carbon dioxide (CO2) fertilization.22 But sooner than previously thought (see focus in China and Japan yields of rice, a major A on science).17 Changing temperature and global staple, will likely decline, while yields precipitation averages and a more variable, of wheat, maize, and rice in Central and unpredictable, or extreme climate can alter South Asia will be particularly hard hit.23 today's yields, earnings, health, and physi- Prospects for crops and livestock in rainfed cal safety and ultimately the paths and lev- semiarid lands in Sub-Saharan Africa are els of future development. also bleak, even before warming reaches Climate change will affect numerous sec- 2­2.5°C above preindustrial levels.24 tors and productive environments, includ- India's post-1980 deceleration in the ing agriculture, forestry, energy, and coastal increase of rice productivity (from the zones, in developed and developing coun- Green Revolution in the 1960s) is attrib- tries. Developing economies will be more utable not only to falling rice prices and affected by climate change, in part because deteriorating irrigation infrastructure, as of their greater exposure to climate shocks previously postulated, but also to adverse and in part because of their low adaptive climate phenomena from local pollution capacity. But no country is immune. The and global warming.25 Extrapolating from 2003 summer heat wave killed more than past year-to-year variations in climate and 70,000 people in a dozen European coun- agricultural outcomes, yields of major crops tries (map 1.2). The mountain pine beetle in India are projected to decline by 4.5 to Understanding the Links between Climate Change and Development 41 Map 1.2 Rich countries are also affected by anomalous climate: The 2003 heat wave killed more than 70,000 people in Europe Number of deaths Affected Not affected UNITED KINGDOM 301 THE NETHERLANDS 965 BELGIUM 1,175 GERMANY 9,355 LUXEMBOURG 166 SLOVENIA SWITZERLAND 289 CROATIA 1,039 788 FRANCE 19,490 PORTUGAL ITALY 2,696 20,089 SPAIN 15,090 Source: Robine and others 2008. Note: Deaths attributed to the heat wave are those estimated to be in excess of the deaths that would have occurred in the absence of the heat wave, based on average baseline mortality trends. 9 percent within the next three decades, the number of people exposed to malaria and even allowing for short-term adaptations.26 dengue will increase, with the burden most The implications of such climate change pronounced in developing countries.29 The for poverty--and GDP--could be enor- incidence of drought, projected to increase mous given projected population growth in the Sahel and elsewhere, is strongly cor- and the evidence that one percentage point related with past meningitis epidemics in of agricultural GDP growth in developing Sub-Saharan Africa.30 Declining agricultural countries increases the consumption of the yields in some regions will increase malnu- poorest third of the population by four to trition, reducing people's resistance to ill- six percentage points.27 ness. The burden of diarrheal diseases from The impacts of climate change on health climate change alone is projected to increase add to the human and economic losses, up to 5 percent by 2020 in countries with especially in developing countries. The per capita incomes below $6,000. Higher World Health Organization estimates that temperatures are likely to increase cardio- climate change caused a loss of 5.5 mil- vascular illness, especially in the tropics but lion disability-adjusted life years in 2000-- also in higher-latitude (and higher-income) 84 percent of them in Sub-Saharan Africa and countries--more than offsetting the relief East and South Asia.28 As temperatures rise, from fewer cold-related deaths.31 42 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 Map 1.3 Climate change is likely to increase poverty in most of Brazil, especially its poorest regions Median income ($PPP) Effects of climate change on poverty (percentage points) < 4000 4001­5000 5001­6000 6001­7000 -4­0 0­1 1­2 2­3 7001­8000 8001­10000 >10000 No data 3­4 4­5 >5 No data Sources: Center for International Earth Science Information Network, http://sedac.ciesin.columbia.edu/gpw/global.jsp (accessed May 15, 2009); Dell, Jones, and Olken 2009; Assunçao and Chein 2008. Note: Climate-change poverty impact estimates for mid-21st century based on a projected decline in agricultural yields of 18 percent. The change in poverty is expressed in per- centage points; for example, the poverty rate in the northeast, estimated at 30 percent (based on $1 a day with year 2000 data), could rise by 4 percentage points to 34 percent. The estimates allow for internal migration, with the poverty outcomes of migrants counted in the sending municipality. Adverse climate trends, variability, and A cycle of descent into poverty could shocks do not discriminate by income, but emerge from the confluence of climate better- off people and communities can change, environmental degradation, and more successfully manage the setbacks market and institutional failures. The cycle (map 1.3). When Hurricane Mitch swept could be precipitated by the gradual col- through Honduras in 1998, more wealthy lapse of a coastal ecosystem, less predict- households than poor ones were affected. able rainfall, or a more severe hurricane But poor households lost proportionally season.35 While large-scale natural disas- more: among affected households, the poor ters cause the most visible shocks, small lost 15 to 20 percent of their assets, while but repeated shocks or subtle shifts in the the richest lost only 3 percent.32 The longer- distribution of rainfall throughout the term impacts were greater too: all affected year can also produce abrupt yet persistent households suffered a slowdown in asset changes in welfare. accumulation, but the slump was greater for Empirical evidence on poverty traps-- poorer households.33 And impacts varied by defined as consumption permanently below gender (box 1.1): male-headed households, a given threshold--is mixed.36 But there is with greater access to new lodging and growing evidence of slower physical asset work, spent shorter periods in postdisas- recovery and human capital growth among ter shelters compared with female-headed the poor after shocks. In Ethiopia a season households, which struggled to get back with starkly reduced rainfall depressed on their feet and remained in the shelters consumption even after four to five years.37 longer.34 Instances of drought in Brazil have been Understanding the Links between Climate Change and Development 43 BOX 1.1 Empowered women improve adaptation and mitigation outcomes Women and men experience climate postdisaster recovery indicate that put- Women represent at least half of the change differently. Climate-change ting women in charge of food distribution world's agricultural workers, and women impacts and policies are not gender systems results in less corruption and more and girls remain predominantly respon- neutral because of differences in respon- equitable food distribution. sible for water and firewood collection. sibility, vulnerability, and capacity for Adaptation and mitigation potential, mitigation and adaptation. Gender-based Women's participation boosts especially in the agriculture and forestry patterns of vulnerability are shaped by the biodiversity and improves water sectors, cannot be fully realized without value of and entitlement to assets, access management employing women's expertise in natural to financial services, education level, social Between 2001 and 2006 the Zammour resource management, including tradi- networks, and participation in local orga- locality in Tunis saw an increase in veg- tional knowledge and efficiency in using nizations. In some circumstances, women etal area, biodiversity preservation, and resources. are more vulnerable to climate shocks stabilization of eroding lands in the to livelihoods and physical safety--but mountainous ecosystem--the result of an Women's participation supports there is evidence that in contexts where antidesertification program that invited public health women and men have equal economic women to share their perspectives during In India indigenous peoples know medici- and social rights, disasters do not discrimi- consultations, incorporated local women's nal herbs and shrubs and apply these for nate. Empowerment and participation of knowledge of water management, and therapeutic uses. Indigenous women, as women in decision making can lead to was implemented by women. The proj- stewards of nature, are particularly knowl- improved environmental and livelihood ect assessed and applied innovative and edgeable and can identify almost 300 outcomes that benefit all. effective rainwater collection and preser- useful forest species. vation methods, such as planting in stone Women's participation in disaster pockets to reduce the evaporation of irri- Globally, whether in Central America, management saves lives gation water, and planting of local species North Africa, South Asia, or Southern Community welfare before, during, and of fruit trees to stabilize eroded lands. Africa, gender-sensitive climate change after extreme climatic events can be adaptation and mitigation programs improved by including women in disaster Women's participation enhances show measurable results: women's full preparedness and rehabilitation. Unlike food security and protects forests participation in decision making can other communities that witnessed numer- In Guatemala, Nicaragua, El Salvador, and and will save lives, protect fragile natural ous deaths, La Masica, Honduras, reported Honduras women have planted 400,000 resources, reduce greenhouse gases, and no deaths during and after Hurricane Mitch maya nut trees since 2001. Beyond build resilience for current and future in 1998. Gender-sensitive community enhanced food security, women and their generations. Mechanisms or financing for education on early warning systems and families can benefit from climate change disaster prevention, adaptation, and miti- hazard management provided by a disas- finance, as the sponsoring Equilibrium gation will remain insufficient unless they ter agency six months before the hurricane Fund pursues carbon-trading opportuni- integrate women's full participation-- contributed to this achievement. Although ties with the United States and Europe. voices and hands--in design, decision both men and women participated in In Zimbabwe, women lead over half of making, and implementation. hazard management activities, ultimately, the 800,000 farm households living in women took over the task of continuously communal areas, where women's groups Sources: Contributed by Nilufar Ahmad, monitoring the early warning system. Their manage forest resources and develop- based on Parikh 2008; Lambrou and Laub enhanced risk awareness and manage- ment projects through tree planting, 2004; Neumayer and Plumper 2007; Smyth ment capacity enabled the municipality to nursery development, and woodlot own- 2005; Aguilar 2006; UNISDR 2007; UNDP evacuate promptly. Additional lessons from ership and management. 2009; and Martin 1996. followed by significantly reduced rural low sensitivity to rainfall variation but also wages in the short term, with the wages with low average returns, locking in patterns of affected workers catching up with their of inequality in the country.40 peers' only after five years.38 Climate shocks can also permanently In addition limited access to credit, insur- affect people's health and education. ance, or collateral hampers poor households' Research in Côte d'Ivoire linking rain- opportunities to make productive invest- fall patterns and investment in children's ments or leads them to choose investments education shows that in regions experi- with low risk and low returns to guard against encing greater-than-usual weather vari- future shocks.39 In villages throughout India ability, school enrollment rates declined poorer farmers have mitigated climatic risk by 20 percent for both boys and girls.41 by investing in assets and technologies with And when coupled with other problems, 44 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 environmental shocks can have long-term change when incomes grow.45 The average effects. People exposed to drought and civil carbon footprint of citizens in rich coun- strife in Zimbabwe during early childhood tries, including oil producers and small (between 12 and 24 months of age) suffered island states, varies by a factor of twelve, from a height loss of 3.4 centimeters, close as does the energy intensity of GDP,46 to 1 fewer years of schooling, and a nearly suggesting that carbon footprints do not six-month delay in starting school. The always increase with income. And today's estimated effect on lifetime earnings was 14 developing economies use much less energy percent, a big difference to someone near per capita than developed countries such as the poverty line.42 the United States did at similar incomes, showing the potential for lower- carbon Balancing growth and assessing policies growth.47 in a changing climate Adaptation and mitigation need to be Growth: Changing carbon footprints and integrated into a climate-smart develop- vulnerabilities. By 2050 a large share of ment strategy that increases resilience, the population in today's developing coun- reduces the threat of further warming, and tries will have a middle-class lifestyle. But improves development outcomes. Adapta- the planet cannot sustain 9 billion people tion and mitigation measures can advance with the carbon footprint of today's aver- development, and prosperity can raise age middle- class citizen. Annual emis- incomes and foster better institutions. A sions would nearly triple. Moreover, not all healthier population living in better-built development increases resilience: growth houses and with access to bank loans and may not happen fast enough and can create social security is better equipped to deal new vulnerabilities even as it reduces oth- with a changing climate and its conse- ers. And poorly designed climate change quences. Advancing robust, resilient devel- policies could themselves become a threat opment policies that promote adaptation to sustainable development. is needed today because changes in the cli- But it is ethically and politically unac- mate, already begun, will increase even in ceptable to deny the world's poor the oppor- the short term. tunity to ascend the income ladder simply The spread of economic prosperity has because the rich reached the top first. Devel- always been intertwined with adaptation oping countries now contribute about half to changing ecological conditions. But as of annual greenhouse gas emissions but have growth has altered the environment and as nearly 85 percent of the world's population; environmental change has accelerated, sus- the energy-related carbon footprint of the taining growth and adaptability demands average citizen of a low- or middle-income greater capacity to understand our environ- country is 1.3 or 4.5 metric tons of carbon ment, generate new adaptive technologies dioxide equivalent (CO2e), respectively, com- and practices, and diffuse them widely. As pared with 15.3 in high-income countries.43 economic historians have explained, much Moreover, the bulk of past emissions-- of humankind's creative potential has and thus the bulk of the existing stock of been directed at adapting to the changing greenhouse gases in the atmosphere--is world.48 But adaptation cannot cope with the responsibility of developed countries.44 all the impacts related to climate change, Resolving the threat of climate change to especially as larger changes unfold in the human well-being thus not only depends long term (see chapter 2).49 on climate-smart development--increasing Countries cannot grow out of harm's incomes and resilience while reducing emis- way fast enough to match the changing cli- sions relative to projected increases. It also mate. And some growth strategies, whether requires climate-smart prosperity in the driven by the government or the market, developed countries--with greater resilience can also add to vulnerability--particularly and absolute reductions in emissions. if they overexploit natural resources. Under Evidence shows that policy can make the Soviet development plan, irrigated cot- a big difference in how carbon footprints ton cultivation expanded in water-stressed Understanding the Links between Climate Change and Development 45 Central Asia and led to the near disappear- But mitigation policies can also go wrong ance of the Aral Sea, threatening the liveli- and reduce welfare if ancillary effects are not hoods of fishermen, herders, and farmers.50 considered in design and execution. Relative And clearing mangroves--natural coastal to cleaner cellulosic ethanol production and buffers against storm surges--to make way even gasoline, corn-based biofuel produc- for intensive shrimp farming or housing tion in the United States imposes higher development increases the physical vulner- health costs from local pollution and offers ability of coastal settlements, whether in only dubious CO2 emission reductions (fig- Guinea or in Louisiana. ure 1.2).53 Moreover, biofuel policies in the Climate shocks can strain normally ade- United States and Europe have diverted quate infrastructure or reveal previously inputs from food to fuel production and untested institutional weaknesses, even in fast-growing and high-income countries. Map 1.4 The January 2008 storm in China severely disrupted mobility, a pillar of its economic For example, despite impressive economic growth growth for more than two decades, and in part because of accompanying labor-market transitions, millions of migrant workers in Beijing D.P.R. Tianjin OF China were stranded during the unexpect- Shijiazhuang KOREA edly intense snow storms in January 2008 (map 1.4). The train system collapsed as Jinan Lanzhou workers returned home for the Chinese Jinghu Line Qingdao Zhengzhou New Year, stranding millions, while the Xi'an Longhai Line Luoyang southern and central provinces suffered food shortages and power failures. Hur- Nanjing ricane Katrina exposed the United States Jingguang Line Hefei as unprepared and ill equipped, showing Chengdu Suzhou Shanghai Hangzhou that even decades of steady prosperity do Chongqing Wuhan not always produce good planning (and by Nanchang extension, good adaptation). Nor do high Changsha average incomes guarantee protection for Jingjiu Line Fuzhou the poorest communities. Mitigation policies--for better or worse. Mitigation policies can be exploited to pro- Guangzhou vide economic co-benefits in addition to Shenzhen emission reductions and can create local VIETNAM and regional opportunities. Biofuels could LAO make Brazil the world's next big energy P.D.R. supplier--its ethanol production has more than doubled since the turn of the century.51 A large share of unexploited hydropower Provinces affected high T Travel flow from coastal potential is in developing countries, par- Minimally/not affected medium regions to rural regions low ticularly in Sub-Saharan Africa (map 1.5). Moderately affected Railway network North Africa and the Middle East, with Severely affected year-round exposure to sunlight, could Major passenger rail line benefit from increased European demand for solar energy (see chapter 4, box 4.15).52 Sources: ACASIAN 2004; Chan 2008; Huang and Magnoli 2009; United States Department of Agriculture Foreign Yet comparative advantage in renewable Agricultural Service, Commodity Intelligence Report, February 1 2008, http://www.pecad.fas.usda.gov/high- energy production in many countries still lights/2008/02/MassiveSnowStorm.htm (accessed July 14, 2009); Ministry of Communications, Government of the People's Republic of China, "The Guarantee Measures and Countermeasures for Extreme Snow and Rainfall is not optimally exploited, evidenced by Weather," February 1 2008, http://www.china.org.cn/e-news/news080201-2.htm (accessed July 14, 2009). the proliferation of solar power produc- Note: Width of arrows reflects estimates of size of travel flows during the Chinese New Year holiday, based on reversal of estimated labor migration flows. Total internal migration is estimated between 130 million and 180 tion in Northern Europe rather than North million people. Assessment of severity of the storm's impact is based on cumulative precipitation in the month Africa. of January and Chinese news and government communications at the time of the storm. 46 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 Map 1.5 Africa has enormous untapped hydropower potential, compared to lower potential but more exploitation of hydro resources in the United States N ile er Nig Blu e Nil e e nu Be W hit e Ni le Ubangi ngo Co 4.50 25% of world electricity Lukaga production in 2005 4.00 ba Gigawatt hours / year in 2005 (millions) Luala 3.50 Total electricity production 3.00 Economically feasible hydropower Chire 2.50 Current hydropower production Zambezi 2.00 1.50 Orange 1.00 0.50 0.00 United States Sub-Saharan Africa Economically feasible hydropower in Sub­Saharan Africa (GWh per year) < 2,000 2,001­5,000 5,001­10,000 10,001­50,000 Undetermined or not applicable Sources: International Journal on Hydropower and Dams, World Atlas, 2006 (http://hydropower-dams.com, accessed July 9, 2009); IEA Energy Balances of OECD Countries 2008; and IEA Energy Balances of Non-OECD Countries 2007 (http://www.oecd.org/ document/10/0,3343,en_21571361_33915056_39154634_1_1_1_1,00.html, accessed July 9, 2009). Note: The United States has exploited over 50 percent of its hydropower potential, compared to only 7­8 percent in the countries of Sub-Saharan Africa. Total electricity production in the United States is shown for scale. contributed to increases in global food Ukraine, have responded with export bans prices.54 Such food price hikes often increase and other protectionist measures, limiting poverty rates.55 The overall impact on pov- the gains for domestic producers, reducing erty depends on the structure of the econ- grain supplies, and narrowing the scope for omy, because net producers will benefit from future market solutions.56 higher prices, and net buyers will be worse The interrelationship of trade and mit- off. But many governments in food-surplus igation policies is not straightforward. It countries, including Argentina, India, and has been suggested that the carbon content Understanding the Links between Climate Change and Development 47 of exports be counted in the carbon tally that spending on energy constitutes a larger of the destination country, so that the share of total expenditures for poor house- exporting countries are not punished for holds than for rich ones. But the regressive specializing in the heavy industrial goods effect could be offset either through scaled consumed by others. But if importers tariff design or a targeted program based place a border tax on the carbon content of on existing social policy mechanisms.58 goods to equalize the carbon price, export- And green taxes in developing countries ing countries would still bear some of the could even be progressive, as suggested by burden through a loss in competitiveness a recent study for China. Most poor house- (see focus C on trade). holds in China reside in rural areas and con- sume products much less carbon intensive Green taxes. As outlined in chapter 6, than those consumed by generally better- carbon taxes can be an efficient instrument off urban households. If revenues from a for controlling carbon emissions--but carbon tax were recycled into the economy changes in the tax system to incorporate on an equal per capita basis, the progressive environmental costs (green taxes) could effect would be larger still.59 be regressive, depending on the country's Gaining political support for green economic structure, the quality of target- taxes and ensuring they do not harm the ing, and the distribution of burden shar- poor will not be easy. Revenue recycling ing. In the United Kingdom a carbon tax would be critical for Latin America and imposed equally on all households would Eastern Europe, where a significant share be very regressive, consistent with findings of the poor live in urban areas and would from other OECD countries.57 The reason is be directly hurt by green taxes. But such revenue recycling, as well as the targeting suggested by the Great Britain study, would Figure 1.2 Corn-based biofuels in the United States require a strong commitment to such a increase CO2 emissions and health costs relative to gasoline policy shift, difficult in the many develop- ing countries where regressive subsidies for Nonmarket costs ($/liter) energy and other infrastructure services Heat source for ethanol production Corn Natural Coal are politically entrenched. Without revenue 0.40 wastes gas recycling, the impact of carbon pricing or green taxes--even if progressive--is likely to harm the poor because poor households 0.30 spend as much as 25 percent of their income on electricity, water, and transport. It is also 0.20 likely to be politically difficult because even the average household spends about 10 per- cent of its income on these services.60 0.10 The real income of the poorest will also be reduced in the near term as the higher 0.00 up-front costs of greener infrastructure Gasoline Corn ethanol construction, operation, and services hit the supply side of the economy.61 A green Cost of GHG emissions Health cost from from production and use particulates tax could have a direct effect on households Cost of GHG emissions due to land-use change (caused by the increase in energy prices) and an indirect effect (on total household Source: Hill and others 2009. expenditure as a result of higher costs of Note: Costs are in terms of dollar per liter of gasoline or gasoline equivalent. Health costs (green) are estimated costs production and thus prices of consumer because of particulate matter emissions, from the produc- goods). A study in Madagascar found that tion and end-use combustion of an additional liter of ethanol. Greenhouse-gas emission costs (blue) assume a carbon price the indirect effects could represent 40 per- of $120 a ton, based on the estimated price of carbon capture cent of the welfare losses through higher and storage. A portion (diagonal hatching in figure) of the greenhouse gas emissions associated with corn ethanol pro- prices of food, textiles, and transport.62 duction comes from clearing, conversion, or cultivation of land. Despite the greater direct consumption of 48 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 infrastructure services by the middle class, and scarce resources. But monetizing costs the poorest quintile was projected to suffer and benefits can too easily omit nonmar- the biggest loss in real income. ket environmental goods and services and There is ample scope around the world becomes impossible if future risks (and atti- for better energy tariff and subsidy design tudes toward risk) are highly uncertain. that both increases cost recovery and bet- Additional decision tools, comple- ter targets benefits to the poor.63 Climate menting cost-benefit analysis, are needed change (and green tax proceeds) may to establish overall goals and acceptable make it worthwhile and feasible to expand risks. Multicriteria approaches can pro- income support programs to countries that vide insights about tradeoffs that are not all now rely on energy and water pricing as expressed in monetary terms. In the face of part of their social policy. Greater energy risk aversion and uncertainty about future efficiency reduces costs for everyone, while climate risks, the "tolerable windows" greener technologies can be less expensive approach can identify emissions paths that than traditional carbon-intensive ones. For stay within chosen boundaries of accept- example, upgrading to improved wood- able risk and then evaluate the cost of doing fi red cook stoves in rural Mexico could so.66 "Robust decision making" can high- reduce emissions by 160 million tons of light policies that provide an effective hedge CO2 over the next 20 years, with net eco- against undesirable future outcomes.67 nomic gains (from lower direct energy costs and better health) of $8 to $24 for each ton The cost-benefit debate: Why it's not of avoided CO2 emissions.64 just about the discount rate The economic debate about the cost-benefit Evaluating the tradeoffs analysis of climate change policy has been While few still debate the need for action particularly active since the publication to mitigate climate change, controversy of the Stern Review of the Economics of remains over how much and how soon to Climate Change in 2007. That report esti- mitigate. Holding the changes in global mated the potential cost of unmitigated cli- average temperatures below "dangerous" mate change to be very high--a permanent levels (see focus A on science) would require annualized loss of 5­20 percent of GDP-- immediate and global actions--actions that and argued for strong and immediate are costly--to reduce emissions from pro- action. The report's recommendations con- jected levels by 50 to 80 percent by 2050. tradicted many other models that make an A growing literature shows that the case economic case for more gradual mitigation for immediate and significant mitigation in the form of a "climate policy ramp."68 is stronger when taking into account the The academic debate on the appropri- inertia in the climate system, meaning that ate discount rate--which drives much warming and its impacts cumulate slowly of the difference between Stern's result but are to a considerable extent irreversible; and the others--will most likely never be the inertia of the built environment, which resolved (box 1.2).69 Stern used a very low implies a higher cost of reducing emissions discount rate. In this approach, commonly in the future if higher-emission fi xed capi- justified on ethical grounds, the fact that tal is put into place today; and the benefit future generations will likely be richer is of reducing the greater uncertainty and risk the only factor that makes the valuation of of catastrophic outcomes associated with future welfare lower than that of today; in higher temperatures.65 all other ways, the welfare of future genera- Any response to climate change involves tions is just as valuable as the welfare of the some weighing of pros and cons, strengths current generation.70 Good arguments can and weaknesses, benefits and costs. The be presented in favor of both high and low question is how this evaluation is to be discount rates. Unfortunately, intergenera- undertaken. Cost-benefit analysis is a tional welfare economics cannot help solve crucial tool for policy evaluation in the the debate--because it raises more ques- unavoidable context of competing priorities tions than it can answer.71 Understanding the Links between Climate Change and Development 49 BOX 1.2 The basics of discounting the costs and benefits of climate change mitigation The evaluation of resource allocation Three factors determine the discount judgments and empirical information across time is a staple of applied eco- rate. The first is how much weight to that attempt to assess preferences from nomics and project management. Such give to the welfare enjoyed in the future, past behavior are used, sometimes in evaluations have been used extensively strictly because it comes later rather combination. Because the costs of miti- to analyze the problem of costs and ben- than sooner. This pure rate of time pref- gation policies are borne immediately, efits of climate change mitigation. But big erence can be thought of as a measure and the possibly large benefits of such disagreements remain about the correct of impatience. The second factor is the policies (avoided damages) are enjoyed values of the parameters. growth rate in per capita consumption: far in the future, the choice of parameters The social discount rate expresses the if growth is rapid, future generations will for the social discount rate strongly influ- monetary costs and benefits incurred in be much wealthier, reducing the value ences climate-policy prescriptions. the future in terms of their present value, assigned today to losses from future Sources: Stern 2007; Stern 2008; Dasgupta or their value to decision makers today. climate damages compared with costs 2008; Roemer 2009; Sterner and Persson By definition, then, the primary tool of of mitigation borne today. The third fac- 2008. intergenerational welfare analysis--total tor is how steeply the marginal utility of a. The marginal utility of consumption expected net present value--collapses consumption (a measure of how much an declines as income rises because an addi- the distribution of welfare over time. additional dollar is enjoyed) declines as tional dollar of consumption provides more Determining the appropriate value for the income rises.a utility to a poor person than to a person already consuming a lot. The steepness of elements of the discount rate in the con- There is no universal agreement on the change--known as the elasticity of the text of a long-term problem like climate how to choose the numerical values for marginal utility of consumption with respect change involves deep economic and ethi- each of the three factors that determine to changes in income level--also measures cal considerations (see box 1.4). the social discount rate. Both ethical tolerance of risk and inequality. Yet the call for rapid and significant unmitigated climate change.74 In fact, fac- action to mitigate greenhouse gas emis- toring the loss of biodiversity into a stan- sions is not solely dependent on a low dis- dard model results in a strong call for more count rate. While its role in determining rapid mitigation, even with a higher dis- the relative weight of costs and benefits is count rate. important, other factors raise the benefits of mitigation (avoided damages) in ways More accurately modeled dynamics: that also strengthen the case for rapid and Threshold effects and inertia. The dam- significant mitigation, even with a higher age function, which links changes in tem- discount rate.72 peratures to associated monetized damages, is usually modeled in cost-benefit analysis Broader impacts. Most economic mod- as rising smoothly. But mounting scien- els of climate change impacts do not ade- tific evidence suggests that natural systems quately factor in the loss of biodiversity and could exhibit nonlinear responses to cli- associated ecosystem services--a paradoxi- mate change as a consequence of positive cal omission that amounts to analyzing the feedbacks, tipping points, and thresholds tradeoffs between consumption goods and (box 1.3). Positive feedbacks could occur, environmental goods without including for example, if warming causes the perma- environmental goods in individuals' utility frost to thaw, releasing the vast amounts of function.73 Although the estimated market methane (a potent greenhouse gas) it con- value of lost environmental services may be tains and further accelerating warming. difficult to calculate and may vary across Thresholds or tipping points are relatively cultures and value systems, such losses do rapid and large-scale changes in natural (or have a cost. The losses increase the rela- socioeconomic) systems that lead to serious tive price of environmental services as they and irreversible losses. Positive feedbacks, become relatively and absolutely scarcer. tipping points, and thresholds mean that Introducing environmental losses into there might be great value to keeping both a standard integrated assessment model the pace and magnitude of climate change significantly increases the overall cost of as low as possible.75 50 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 BOX 1.3 Positive feedbacks, tipping points, thresholds, and nonlinearities in natural and socioeconomic systems Positive feedbacks in the weather events remain within the enve- direct damages. This effect is evident in climate system lope of past variations--but that impacts some natural disasters. Recent evidence Positive feedbacks amplify the effects could increase sharply if climate condi- in Louisiana shows that the economy has of greenhouse gases. One such positive tions consistently exceed these boundar- the capacity to absorb up to $50 billion of feedback is the change in reflectiveness, ies in the future. direct losses with minimal indirect losses. or albedo, of the earth's surface: highly But indirect losses increase rapidly with Nonlinearities and indirect reflective surfaces like ice and snow more destructive disasters (figure). Direct economic effects bounce the sun's warming rays back out losses from Hurricane Katrina reached The economic response to these impacts to the atmosphere, but as higher tempera- $107 billion, with indirect losses adding is itself nonlinear, in part because climate- tures cause ice and snow to melt, more another $42 billion; a simulated disaster change impacts will simultaneously energy is absorbed on the earth's surface, with direct losses of $200 billion would increase the need for adaptation and leading to further warming and more cause an additional $200 billion in indi- potentially decrease adaptive capacity. melting, as the process repeats itself. rect losses. Direct impacts can also beget indirect Tipping points in natural systems effects (macroeconomic feedbacks, busi- Sources: Schmidt 2006; Kriegler and others Even smooth, moderate changes in the ness interruptions, and supply- chain 2009; Adams and others 2009; Hallegatte climate can lead a natural system to a disruptions) that increase more than 2008; personal communication from point beyond which relatively abrupt, dollar for dollar in response to greater Stéphane Hallegatte, May 2009. possibly accelerating, irreversible, and ultimately very damaging changes occur. For example, regional forest die- off could Indirect losses increase even more steeply as direct damages rise: Estimates from Louisiana result from the combination of drought, Indirect losses ($ billions) pests, and higher temperatures that 400 combine to exceed physiological limits. A possible tipping point of global concern 350 is the melting of the ice sheet that covers much of Greenland. Past a certain level of 300 warming, summer melt will not refreeze 250 in winter, dramatically increasing the rate of melting and leading to a sea-level rise 200 of 6 meters. 150 Thresholds in socioeconomic systems The economic cost of direct impacts could 100 also present strong threshold effects--a result of the fact that current infrastruc- 50 tures and production practices are engi- 0 neered to be robust only to previously experienced variation in weather condi- ­50 tions. This suggests that any increases 0 50 100 150 200 250 300 in impacts will be driven primarily by Direct losses ($ billions) rising concentrations of population and assets rather than by climate--so long as Source: Data provided by Stéphane Hallegatte, based on Hallegatte 2008. Substantial inertia in the climate sys- example, a delay of more than 10 years tem adds to the concern about positive would likely preclude stabilization of the feedbacks, threshold effects, and irre- atmosphere at any less than 3°C of warm- versibility of climate change impacts. ing.77 In addition, the climate system will Scientists have found that the warming keep changing for several centuries even caused by increases in greenhouse gas after concentrations of greenhouse gases concentration may be largely irrevers- stabilize (see overview). So only imme- ible for a thousand years after emissions diate mitigation preserves the option stop.76 Postponing mitigation forgoes the value--that is, avoids the loss of options option of a lower warming trajectory: for in stabilization outcomes. Understanding the Links between Climate Change and Development 51 Inertia is also substantial in the built envi- becomes commercially available. This is ronment--transport, energy, housing, and not the case in India, South Africa, or many the urban form (the way cities are designed). other countries, where retrofits will prove In response to this inertia, some argue for unaffordable unless new plants are sited postponing mitigation investments to avoid close to the few existing storage sites (see getting locked into higher cost, lower-carbon chapters 4 and 7). investments unnecessarily, instead waiting Developing countries, with less existing until better, less expensive technology allows infrastructure than developed countries, quick ramping up of mitigation and more is have a f lexibility advantage and could known about the risks societies will need to potentially leapfrog to cleaner technolo- protect against. gies. Developed countries must provide But it is not possible in practice to post- leadership in bringing new technologies to pone major investments in infrastructure market and sharing knowledge from their and energy provision without compromis- experiences of deployment. The ability to ing economic development. Energy demand change emissions trajectories depends on is likely to triple in developing countries the availability of appropriate and afford- between 2002 and 2030. In addition, many able technology, which will not be in place power plants in high-income countries were at some future date without research and built in the 1950s and 1960s so are coming development (R&D) investment, dissemi- to the end of their useful life, implying that nation, and learning-by- doing starting many new plants will need to be built over today. the next 10­20 years even with constant Opportunities to shift from higher- to demand. Currently, coal plants remain lower-carbon long-lived capital stock are among the cheapest option for many coun- not equally available over time.80 The choice tries--in addition to offering energy secu- to switch to a more energy and economi- rity for those with ample coal reserves. If all cally efficient system realistically cannot be coal-burning power plants scheduled to be made in the future if the required technolo- built in the next 25 years come into opera- gies are not yet on the shelf and at sufficient tion, their lifetime CO2 emissions would be scale to be affordable and if people do not equal to those of all coal-burning activities yet have the know-how to use them (see since the beginning of industrialization.78 chapter 7).81 Effective, affordable backstop Consequently, the absence of stronger mitigation technologies for transforming emission reduction commitments by the energy systems will not be available in the power sector today will lock in relatively future without active research and dem- high emission trajectories. onstration initiatives that move potential Nor is it always possible to cost- technologies along the cost and learning effectively retrofit such investments on a curves. To that end, developed countries large scale. Retrofits are not always pos- need to provide leadership in developing sible, and they can be prohibitively costly. and bringing new technologies to market Staying with the coal example, carbon and in sharing knowledge from their expe- capture and storage--a technology that is riences of deployment. being developed to capture the CO2 pro- duced by a fossil-fuel power plant and store Accounting for uncertainties. Economic it underground--requires that the plant be assessments of climate change policies located within 50 to 100 miles of an appro- must factor in the uncertainties about the priate CO2 storage site or else the cost of size and timing of adverse impacts and transporting the carbon becomes prohibi- about the feasibility, cost, and time pro- tively high.79 For countries endowed with fi les of mitigation efforts. A key uncer- an abundance of potential storage sites, this tainty missed by most economic models is is not an issue: about 70 percent of China's the possibility of large catastrophic events power plants happen to be close enough to related to climate change (see focus A on storage sites and therefore could reasonably science), a topic that is at the center of an be retrofitted if and when the technology ongoing debate. 82 The underlying prob- 52 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 ability distribution of such catastrophic The economics of decision making risks is unknown and will likely remain so. under uncertainty makes a case that uncer- More aggressive mitigation almost surely tainty about the effects of climate change will reduce their likelihood, though it is calls for more rather than less mitigation.85 very difficult to assess by how much. The Uncertainty makes a strong argument for possibility of a global catastrophe, even one adopting an iterative approach to selecting with very low probability, should increase targets--starting with an aggressive stance. society's willingness to pay for faster and This is not lessened by the prospect of more aggressive mitigation to the extent learning (acquiring new information that that it helps to avoid calamity.83 changes our assessment of uncertainty). Even without considering these cata- strophic risks, substantial uncertainties Normative choices on aggregation and values. remain around climate change's ecologi- Climate change policies require tradeoffs cal and economic impacts. The likely pace between short-term actions and long-term and ultimate magnitude of warming are benefits, between individual choices and unknown. How changes in climate vari- global consequences. So climate change ability and extremes--not just changes in policy decisions are driven fundamentally mean temperature--will affect natural sys- by ethical choices. Indeed, such decisions are tems and human well-being is uncertain. about concern for the welfare of others. Knowledge is limited about people's ability Directly including the benefits from to adapt, the costs of adaptation, and the nonmarket environmental goods--and magnitude of unavoided residual damages. their existence for future generations-- Uncertainty about the speed of discovering, in economic models of well-being is one disseminating, and adopting new technolo- approach for capturing these tradeoffs.87 gies is also substantial. In practice the ability to quantify such These uncertainties only increase with tradeoffs has been limited, but this frame- the pace and amount of warming--a major work does provide a point of departure for argument for immediate and aggressive further assessment of the increased value action.84 Greater uncertainty requires adap- that societies assign to the environment tation strategies that can cope with many as income increases, of possible tradeoffs different climates and outcomes. Such between current consumption and costly strategies exist (and are discussed below), efforts to safeguard the welfare--and exis- but they are less efficient than strategies tence--of future generations.88 that could be designed with perfect knowl- Moreover, the way a model aggregates edge. So uncertainty is costly. And more impacts across individuals or countries of uncertainty increases costs. different income levels significantly affects Without inertia and irreversibility, the value of estimated losses.89 To capture a uncertainty would not matter so much, dimension of equity additional to the inter- because decisions could be reversed and generational concerns expressed in the dis- adjustments would be smooth and cost- count rate, equity weights can be applied to less. But tremendous inertia--in the cli- reflect that the loss of a dollar means more mate system, in the built environment, to a poor person than to a rich one. Such and in the behavior of individuals and an approach better captures human welfare institutions--makes it costly, if not impos- (rather than just income). And because poor sible, to adjust in the direction of more people and poor countries are more exposed stringent mitigation if new information is to climate change, this approach substan- revealed or new technologies are slow to tially increases estimated aggregate losses be discovered. So inertia greatly increases from climate change. By contrast, summing the potential negative implications of cli- up global damages in dollars and expressing mate policy decisions under uncertainty. them as a share of global GDP--implicitly And uncertainty combined with inertia weighting damages by contribution to total and irreversibility argue for greater pre- output--amounts to giving a much lower cautionary mitigation. weight to the losses of poor people. Understanding the Links between Climate Change and Development 53 Value systems also play a role in environ- catastrophe through massive deforestation. mental policy decisions. Recently climate But as early as 1700 it had an elaborate sys- change has emerged as a human rights issue tem of woodland management in place.90 (box 1.4). And most societies have ethical One reason the Tokugawa shogunate, the or religious systems that value nature and rulers at the time, decided to act was con- identify human responsibilities for the stew- cern for future family generations--a con- ardship of the earth and its natural riches-- cern that resulted from Confucian cultural though the results often fall short of the traditions91--and a desire to maintain the espoused ideals. In the first half of the 1600s, hereditary political system. Today, Japan's Japan was hurtling toward an environmental territory is almost 80 percent forested.92 BOX 1.4 Ethics and climate change The complexity of climate change high- direct and indirect effects on exercising allocated according to each country's or lights several ethical questions. Issues and realizing civil and political rights. But group's contribution to climate change. of fairness and justice are particularly establishing causation and attribution is a A particular version of this view is that important given the long temporal and serious problem and may limit the scope cumulative historical emissions need to geographical disconnect between green- for applying human rights law to interna- be taken into account when establish- house gas emissions and their impacts. tional or domestic disputes. ing responsibilities. A counterargument At least three major ethical dimensions Because the causes of climate change holds that "excusable ignorance" grants arise in the climate change problem: are diffuse, the direct link between the immunity to past emitters, because they evaluating impacts, considering intergen- emissions of a country and the impacts were not aware of the consequences of erational equity, and distributing respon- suffered in another are difficult to estab- their actions, but this argument has been sibilities and costs. lish in a litigation context. A further obsta- criticized on the grounds that the poten- cle to defining responsibility and harm in tial negative effects of greenhouse gases Evaluating impacts legal terms is the diffusion of emissions on the climate have been understood for Several disciplines, economics included, and impacts over time: in some cases, some time. argue that welfare should be the over- the source of the harm has occurred over A further dimension of responsibility arching criterion in policy evaluation. But multiple generations, and the damages concerns how people have benefited even within a "discounted utilitarianism" felt today may also by felt by many future from the past emissions of greenhouse framework, there are large disagree- generations. gases (see overview figure 3). While these ments, most notably about which dis- benefits clearly have been enjoyed by count rate to use and how to aggregate Considering intergenerational equity the developed countries, which have welfare across individuals in the present Intergenerational equity is an integral contributed the bulk of atmospheric CO2 and future. One common argument is part of the evaluation of impacts. How so far, developing countries also gained that there is no sound ethical reason to intergenerational equity is incorporated some benefits from the resulting prosper- discount economic and human impacts in an underlying economic model has sig- ity. One response is to ignore the past just because they are anticipated to hap- nificant implications. As noted in box 1.2, and allot equal per capita entitlements pen 40--or even 400--years hence. A standard present-value criteria discount to all future emissions. Yet another view counterargument is that it is not equita- future costs and benefits, collapsing the recognizes that what is ultimately impor- ble for the current generation to allocate distribution of welfare over time to the tant is not the distribution of emissions resources to mitigating future climate present moment. Alternative formula- but rather the distribution of economic change if other investments are seen to tions include maximizing the current gen- welfare, including climate change dam- have a higher return, thus coming back to eration's utility, incorporating its altruistic ages and mitigation costs. This suggests the problem of weighing costs and ben- concerns for future generations, and that in a world of unequal wealth, greater efits of alternative uncertain options. taking into account the uncertainty of the responsibility for bearing costs falls to Recent discussion has focused on existence of future generations. the better off--although this conclusion human rights as the relevant criterion does not preclude mitigation actions for evaluating impacts. Some human Distributing responsibilities being undertaken in poorer countries rights--particularly economic and social and costs with external finance provided by high- rights--will be jeopardized by climate- Probably the most contentious issue income countries (see chapter 6). change impacts and possibly some policy is who should bear the burden of solv- responses. These include the right to ing the climate change problem. One food, the right to water, and the right to ethical response is the "polluter pays" Sources: Singer 2006; Roemer 2009; Caney shelter. Climate impacts may also have principle: responsibilities should be 2009; World Bank 2009b. 54 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 Alternative frameworks for decision The guardrails approach does not making require a monetary estimate of the damages, Uncertainty, inertia, and ethics point to the because the constraints are determined by need for caution and thus to the need for what is judged to be tolerable in each system more immediate and aggressive mitigation, (for instance, it might be difficult to trans- but the analytical debate over how much late into GDP figures the number of people more continues among economists and displaced after a severe drought). Drivers policy makers. The conclusions of differ- of the value of emission guardrails include ent cost-benefit analyses are very sensitive scientific analysis of the potential for to initial assumptions such as the base- threshold effects, as well as nonmonetized line scenario, the abatement and damage judgments about residual risks and vulner- functions, and the discount rate, includ- abilities that would remain under differ- ing implicit assumptions embedded in ent mitigation and adaptation strategies. model formulations93 --which can lead to The costs of remaining within proposed decision-making gridlock. sets of guardrails need to be considered in Alternative decision-making frame- relation to the judgments surrounding the works that incorporate broader- based levels of climate safety provided by the dif- assessments of costs and benefits, allow- ferent guardrails. On this sort of multicri- ance for risk aversion, and the impli- teria basis, decision makers can make an cations of ethical judgments can more informed and more comprehensive assess- effectively support decision making in ment of where it is best to set the guardrails the face of numerous knowledge gaps and (and this assessment can be periodically obstacles. Including some of the valuation revisited over time). issues noted above (option values, ecosys- This approach can be complemented by tem services, risks of discontinuities) into decision support techniques, such as robust a broader cost-benefit analysis is desirable decision making, to address difficult-to- (albeit difficult). More, however, is needed evaluate uncertainties.96 In the context of to make the normative consequences of unknown probabilities and a highly uncer- policy choices as transparent as possible to tain future, a robust strategy answers the inform decision makers aiming to estab- question, "What actions should we take, given lish concrete environmental and develop- that we cannot predict the future, to reduce ment targets and policies. That can help the possibility of an undesirable outcome to them win the support of the myriad stake- an acceptable level?"97 In the context of cli- holders who will experience the real-world mate change, policy becomes a contingency costs and benefits. problem--what is the best strategy given a One alternative is a tolerable windows, variety of possible outcomes?--rather than a or "guardrail," approach. A window of traditional optimization problem. The intel- mitigation goals, or a range bounded by lectual underpinnings of this approach are guardrails, is chosen to limit tempera- not new; they can be traced back to the work ture change and the rate of change to by Savage in the early 1950s on "minimizing what are considered--heuristically or on the maximum regret."98 the basis of expert judgment--to be tol- Looking for robust rather than just opti- erable levels.94 The window is defi ned by mal strategies is done through what essen- constraints derived from several climate- tially amounts to scenario-based planning. sensitive systems. One constraint could be Different scenarios are created, and alter- determined by society's aversion to a given native policy options are compared based GDP loss, associated with a given amount on their robustness--the ability to avoid a and rate of temperature change. A second given outcome--across the different sce- could be defi ned by society's aversion to narios. Such analysis includes "shaping social strife and inequitable impacts. A actions" that influence the future, "hedg- third could be concern about warming ing actions" that reduce future vulnerabil- thresholds, beyond which certain ecosys- ity, and "signposts" that indicate the need tems collapse.95 for a reassessment or change of strategies. Understanding the Links between Climate Change and Development 55 Robust decision analysis can also be done changes in fossil-fuel use in middle-income with more formal quantitative tools, in countries suggest that their CO2 emissions an exploratory modeling approach, using will continue to increase and will exceed mathematical methods for characterizing the cumulative emissions of developed decisions and outcomes under conditions countries in the coming decades.103 of deep uncertainty. The implication, as stated in the UNFCCC Under robust decision making, costs, and the Bali Action Plan,104 is that all nations benefits, and the tradeoffs inherent in cli- have a role in an agreement that reduces mate policies are assessed under all sce- global emissions and that this role has to be narios. The policy prescription is not to commensurate with their development sta- pursue an "optimal" policy--in the tradi- tus. In this approach, developed countries tional sense of maximizing utility--that take the lead in meeting significant reduction performs, on average, better than the oth- targets, and they assist developing countries ers. Instead, sound policies are those that in laying the foundations for lower-carbon withstand unpredictable futures in a robust growth pathways and meeting their citizens' way. In this framing near-term policies can adaptation needs. The UNFCC also calls for be understood as a hedge against the cost developed countries to compensate develop- of policy adjustments--lending support to ing countries for the additional mitigation efforts to invest in R&D and infrastructure and adaptation costs developing countries today to keep open the option of a low- will incur. carbon future tomorrow.99 A critical component of global action is a global mechanism allowing those who The costs of delaying the global mitigate to differ from those who pay (the mitigation effort subject of chapter 6). Negotiated interna- Today's global warming was caused over- tional fi nancial transfers can enable the whelmingly by emissions from rich coun- direct fi nancing--by high-income coun- tries.100 Developing countries are rightly tries--of mitigation measures undertaken concerned about the consequences of in developing countries. (In developing imposing limitations on their growth. This countries, mitigation will often entail supports the argument, embodied in the reorienting future emission trajectories principle of "common but differentiated to more sustainable levels, not reducing responsibilities" in the United Nations absolute emission levels.) Unlocking large- Framework Convention on Climate Change scale fi nance from the high-income coun- (UNFCCC), which holds that high-income tries seems a great challenge. However, if countries should lead in reducing emis- high-income countries are committed to sions, given both their historical respon- achieving lower total global emissions, it sibility and their significantly higher per is in their interest to provide the fi nancing capita emissions today. Developed coun- to ensure that significant mitigation takes tries' much greater financial and technolog- place in developing countries. Estimates ical resources further argue for their taking of global mitigation costs usually assume on the bulk of mitigation costs, regardless that mitigation will happen wherever or of where the mitigation occurs. whenever it is cheapest. Many low- cost But emission reductions by rich countries measures to reduce emissions relative to alone will not be enough to limit warming projected trajectories are in developing to tolerable levels. While cumulative per countries. So global least-cost mitigation capita past emissions are small especially paths always imply that a large share of in low-income but also in middle-income mitigation is in developing countries-- countries,101 total annual energy-related regardless of who pays.105 CO2 emissions in middle-income countries Delayed action by any country to signif- have caught up with those of rich countries, icantly lower emission trajectories implies and the largest share of current emissions a higher global cost for any chosen mitiga- from land-use change comes from tropi- tion target. For example, delaying mitiga- cal countries.102 More important, projected tion actions in developing countries until 56 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 2050 could more than double the total cost is much cheaper for the world as a whole of meeting a particular target, according to to reach a given mitigation goal with a full one estimate.106 Another estimate suggests portfolio of measures occurring in all coun- that an international agreement that cov- tries. It is so much cheaper that, provided ers only the five countries with the high- enough countries are committed to a global est total emissions (covering two-thirds of mitigation objective, all will be better off if emissions) would triple the cost of achiev- the developed countries bear the cost of ing a given target, compared with full par- fi nancing scaled-up measures in develop- ticipation.107 The reason is that shrinking ing countries today. the pool of mitigation opportunities avail- Developed countries have the means able for reaching a set target requires pur- and incentives to transfer enough fi nance suing not only the negative- and low-cost to non-Annex I countries109 to make them measures but also high-cost measures. at least as well off by receiving transfers and Although developed and developing scaling up their mitigation efforts imme- countries have similar potential for nega- diately, compared with delaying commit- tive cost (net benefit) measures and high- ment a decade or more before phasing in cost measures, the middle range of low-cost their own national targets and policies. For mitigation options is predominantly in a given mitigation target, each dollar trans- developing countries (with many in agri- ferred to that end could yield an average of culture and forestry). Exploiting all avail- three dollars in welfare gains by eliminat- able measures will be crucial for achieving ing deadweight losses--gains that can be substantial mitigation. This point is illus- shared according to negotiated terms. In trated by the McKinsey analysis (figure other words, the participation of develop- 1.3a), but the results are not exclusive to ing countries in reaching a global target it. If developing countries do not reduce is worth a lot. Sharing the large recovered their emission trajectories, the total cost of deadweight losses can form a strong incen- any chosen amount of mitigation will be tive for universal participation in a fair deal. much higher (the marginal cost of abate- It is not a zero-sum game.110 ment in developed countries alone--the That said, it is crucial not to underesti- red line in figure 1.3b--is always higher mate the difficulties of reaching agreement than if the global portfolio of options--the on global emissions targets. The reason is orange line in figure 1.3b--is considered). that such agreement suffers from a kind of The decline in total mitigation potential international "tragedy of the commons": all and the increase in global mitigation costs countries can benefit from global partici- stemming from an approach involving mit- pation, but unilateral incentives to partici- igation mostly in high-income countries pate are weak for most countries. This is the do not depend on any particular model.108 case not only because all countries would Nor do they depend on any differences in like to free ride, enjoying the benefits with- opportunities and costs between developed out bearing the costs.111 Most countries are and developing countries: if the developed small enough that if one decided to defect countries declined to reduce their emis- from a global agreement, the agreement sions, similarly global costs would rise and would not unravel. When applied to all some amount of potential abatement would countries, however, this reasoning under- be forgone (figure 1.3c). mines the possibility of reaching a deal in These increases in global abatement the first place.112 costs represent pure deadweight losses-- In fact, simulations exploring a variety wasted additional costs that yield zero wel- of coalition structures and international fare gains. Avoiding such losses (the shaded resource transfers to persuade reluctant wedges between the marginal cost curves participants to stay in the coalition reveal in figures 1.3b and 1.3c) creates plenty of the difficulty in reaching a stable agreement incentives and space to negotiate the loca- (one that is consistent with self-interest) to tion and fi nancing of mitigation actions undertake deep and costly cuts in global while making all participants better off. It emissions. Stable and effective coalitions Figure 1.3 Assessing deadweight losses from partial participation in a climate deal a. Global greenhouse gas mitigation marginal cost curve beyond 2030 business-as-usual Marginal mitigation cost ($/tCO2e) 120 Efficiency in buildings: Land-use and land-use change, mostly in developing Advanced technologies: 100 residential and commercial; countries: reduced deforestation, grassland carbon capture and storage 80 building envelope, heat & water management, soil restoration, afforestation, 60 changed agronomy practices, livestock practices, 40 reduced intensive agricultural conversion 20 0 ­20 ­40 Small hydro and nuclear power in developing countries Renewable energy: on- and off-shore wind, ­60 More efficient motors; solar photovoltaic energy, concentrated solar power ­80 energy co-generation; ­100 electricity from landfill waste; Marginal cost, all countries ­120 gasoline plug-in hybrid engine Mitigation measure in a developing country ­140 Negative costs: Long-term savings Mitigation measure in a high-income country ­160 outweigh initial costs 0 10 20 30 40 Mitigation potential (GtCO2e/year) b. Deadweight loss from only mitigating in developed countries: a limited participation marginal cost curve Marginal mitigation cost ($/tCO2e) 120 100 Gt of forgone mitigation at $120/tCO2e 80 60 40 Additional cost of achieving 10 Gt of 20 mitigation 0 ­20 ­40 ­60 ­80 Marginal cost, all countries ­100 Marginal cost, only ­120 high-income countries ­140 Deadweight loss ­160 0 10 20 30 40 Mitigation potential (GtCO2e/year) c. Deadweight loss from only mitigating in developing countries: a limited participation marginal cost curve Marginal mitigation cost ($/tCO2e) 120 100 Gt of forgone mitigation at $120/tCO2e 80 60 Additional cost of achieving 40 25 Gt of mitigation 20 0 ­20 ­40 ­60 ­80 Marginal cost, all countries ­100 Marginal cost, only ­120 developing countries ­140 Deadweight loss ­160 0 10 20 30 40 Mitigation potential (GtCO2e/year) Source: McKinsey & Company 2009 with further data breakdown provided for WDR 2010 team. Note: The bars in (a) represent various mitigation measures, with the width indicating the amount of emission reduction each measure would achieve and the height indicating the cost, per ton of avoided emissions, of the measure. Tracing the height of the bars creates a marginal mitigation cost curve. Panels (b) and (c) show the marginal mitigation cost curve if mitigation only takes place in high-income countries (b) or only in developing countries (c), as well as the resulting deadweight losses associated with these scenarios. Such dead- weight losses could be avoided or minimized through financial mechanisms that allow a separation between who pays and who mitigates, and ensure the most cost-effective mitiga- tion measures are adopted. 58 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 are possible for milder and less costly global The fi nancial crisis presents an added emissions cuts, but such cuts do not suffi- burden to development efforts and a likely ciently address the threats to sustainability distraction from the urgency of climate of greater climate change.113 change. Individual, community, and coun- try vulnerability to the climate threat will Seizing the moment: Immediate increase as economic growth slows down, stimulus and long-term revenues disappear, and assistance shrinks. transformations While the economic slowdown will be In 2008 the global economy suffered a dra- matched by a temporary deceleration in matic shock, triggered by disruptions in emissions, people remain vulnerable to the the housing and fi nancial markets in the warming already in the pipeline; and with- United States and eventually encompass- out concerted efforts to decouple emissions ing many countries. The world had not from growth, emissions will again acceler- experienced such a financial and economic ate as economic recovery takes hold. upheaval since the Great Depression. Credit Governments in many developed and markets froze, investors f led to safety, developing countries are responding to scores of currencies realigned, and stock the crisis by expanding public spending. markets dropped sharply. At the height of Spending proposed in several national and the financial volatility the stock market in regional stimulus plans totals $2.4 trillion the United States lost $1.3 trillion in value to $2.8 trillion.120 Governments expect that in one session.114 this spending increase will protect or create The ongoing consequences for the real jobs by increasing effective demand--one economy and development indicators of the main priorities for halting the down- around the world are huge--and continue turn. The World Bank has proposed that 0.7 to unfold. The global economy is projected percent of high-income countries' stimulus to contract in 2009. Unemployment is on packages be channeled into a "vulnerability the rise around the world. The United States fund" to minimize the social costs of the alone had lost almost 5 million jobs between economic crisis in developing countries.122 December 2007, when the recession began and March 2009.115 Some estimates suggest The case for a green stimulus 32 million job losses in developing coun- Despite the economic chaos the case for tries.116 Between 53 million and 90 million urgent action against climate change people will fail to escape poverty because remains. And it becomes more pressing of the fallout during 2009.117 Official devel- given the increase in poverty and vulnera- opment assistance--already well below the bility around the world. Thus recent public committed targets for several donor coun- debates have focused on the possibility of tries--is likely to decline as public finances using fiscal packages to push for a greener in developed countries worsen and atten- economy, combating climate change while tion shifts toward domestic priorities. restoring growth. Some regions are becoming more vulner- How can both the economic slump and able to future challenges as a consequence climate change be tackled with the fiscal of the economic downturn: Sub-Saharan stimulus? Solving the climate change prob- economies grew rapidly in the first years of lem requires government intervention, not the 21st century, but the collapse of com- least because climate change is created by modity prices and global economic activity a large-scale negative externality. And the will test this trend. Countries and commu- once-in-a lifetime crisis in the fi nancial nities around the world that rely on remit- markets and the real economy calls for pub- tances from nationals working in developed lic spending. countries are severely affected as these Investment in climate policy can be an financial transfers fall.118 In Mexico remit- efficient way to deal with the economic cri- tances fell by $920 million in the six months sis in the short term. Low-carbon technolo- leading up to March 2009--a decline of 14 gies could generate a net increase in jobs, percent.119 because they can be more labor intensive Understanding the Links between Climate Change and Development 59 than high- carbon sectors.122 Some esti- long-term savings for the public sector.128 mates suggest that $1 billion in government Similar virtues can be found in helping to spending on green projects in the United fi nance other energy-efficiency measures States can create 30,000 jobs in a year, that reduce the social cost of energy in 7,000 more than generated by traditional private buildings, as well as in water and infrastructure.123 Other estimates suggest sanitation facilities and in improved traf- that spending $100 billion would generate fic flows. almost 2 million jobs--about half of them In each country the portfolio of projects directly.124 But as with any short-term stim- and investments varies widely, according to ulus, the job gains might not be sustained the specific conditions of the economy and in the long run.125 the needs for job creation. Most stimulus packages in Latin America, for instance, Green spending around the world will be spent on public works--including Several governments have included a share highways--with limited mitigation poten- of "green" investments in their stimulus tial.129 In the Republic of Korea, where proposals--including low- carbon tech- 960,000 jobs are expected to be created nologies, energy efficiency, research and in the next four years, a large part of the development, and water and waste man- investment--$13.3 billion of $36 billion-- agement (figure 1.4). The Republic of Korea will be allocated to three projects: river will devote 80.5 percent of its fiscal plan to restoration, expansion of mass transit and green projects. Some $100 billion to $130 railroads, and energy conservation in vil- billion of the U.S. stimulus package has lages and schools, programs projected to been allocated to climate-change-related create 500,000 jobs.130 China will devote investments. Overall, some $436 billion $85 billion to rail transport as a low- will be disbursed in green investments as carbon alternative to road and air transport part of fiscal stimuli around the world, with that can also help alleviate transportation half expected to be used during 2009.126 bottlenecks. Another $70 billion will be The efficiency of these investments will allocated for a new electricity grid that depend on how quickly they can be imple- improves the efficiency and availability of mented; how well targeted they can be electricity.131 In the United States two fairly in creating jobs and utilizing underused inexpensive projects--$6.7 billion for ren- resources; and how much they shift econo- ovating federal buildings, and another $6.2 mies toward long-lived, low-carbon infra- billion for weatherizing homes--will create structure, reduced emissions, and increased an estimated 325,000 jobs a year.132 resilience.127 Investments in energy effi- In most developing countries the projects ciency in public buildings, for instance, are in stimulus packages do not have a strong appealing because they are usually "shovel emission-reduction component, but they ready," are very labor intensive, and generate could improve resilience to climate change Figure 1.4 Global green stimulus spending is rising Size of green share of total stimulus package ($, billions) 94.1 Size of total stimulus package ($, billions) 221.3 787.0 12.4 586.1 485.9 1.3 13.8 2.5 2.1 2.6 7.1 30.7 103.5 104.8 26.7 30.4 31.8 33.7 38.1 Australia United Canada France Korea, Italy Germany Japan China United States Kingdom Rep. of Source: Robins, Clover, and Singh 2009. 60 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 and create jobs. Improving water and sani- But behavioral change needs to be matched tation networks in Colombia, for example, with institutional reform, additional is estimated to create 100,000 direct jobs per fi nance, and technological innovation to $1 billion invested while reducing the risk avoid irreversible, catastrophic increases of water-borne illnesses.133 Both developing in temperature. In any case and under any and developed countries should consider scenario, strong public policy can help adaptation measures such as streambed and economies absorb the shocks of unavoid- wetland restoration, which can be particu- able climate impacts, minimize net social larly labor intensive and thus reduce both losses, and protect the welfare of those who the physical and fi nancial vulnerability of most stand to lose. some groups. The challenge would be to The response to climate change could ensure that the adaptation measures are generate momentum to improve the devel- sustained after the expenditure program opment process and promote welfare- ends. enhancing reforms that need to happen These preliminary figures will likely anyway. For example, the joint efforts to change as the crisis unfolds. There is no increase energy efficiency and promote guarantee that the green elements of the fis- development could find a policy--and cal stimulus will succeed in either generat- physical--expression in greener, more ing jobs or changing the carbon mix of the resilient cities. Improving urban design to economy. And even in the best-case scenario, promote energy efficiency--through, say, the fiscal interventions will not be enough more public transportation and a conges- to eliminate the risk of high-carbon lock-in tion charge--can increase physical secu- and climate vulnerability. But the opportu- rity and the quality of life. Much depends nity to jump-start green investments and lay on the degree to which existing inadequate the foundation for low-carbon economies is institutional mechanisms and policies real and needs to be seized. can be strengthened or replaced thanks to greater political space for change brought Fundamental transformations in the about by the threat of global warming and medium and long term to increased international technical and Incorporating sound low-carbon and high- financial assistance. resilience investment components in fiscal Individual citizens will have a large role expansions to combat the financial crisis in the public debate and implementation of will not be enough to thwart the long-term solutions. Opinion surveys show that peo- problems posed by climate change. Funda- ple around the world are concerned about mental transformations are needed in social climate change, even in the recent fi nan- protection, in carbon finance, in research cial turmoil134 (though evidence on recent and development, in energy markets, and in trends in the United States is mixed).135 the management of land and water. Most governments also recognize, at least Over the medium and long terms the in discourse, the enormity of the danger. challenge is to fi nd new paths to reach And the international community has the twin goals of sustaining development acknowledged the problem, as exemplified and limiting climate change. Reaching an by the 2007 Nobel Peace prize awarded for equitable and fair global deal would be an the scientific assessment and communica- important step toward avoiding worst-case tion to the public of climate change. scenarios. But it requires transforming the The challenge for decision makers is carbon-intensive lifestyles of rich coun- to ensure that this awareness creates the tries (and rich people everywhere) and the momentum for reform of institutions and carbon-intensive growth paths of develop- behavior and serves the needs of those ing countries. This in turn requires com- most vulnerable.136 The fi nancial crises of plementary socioeconomic changes. the 1990s catalyzed the revamping of social Modifications in social norms that safety nets in Latin America, giving birth reward a low-carbon lifestyle could prove a to Progresa­Oportunidades in Mexico powerful element of success (see chapter 8). and Bolsa Escola­Bolsa Familia in Brazil, Understanding the Links between Climate Change and Development 61 among the best innovations in social policy 22. IPCC 2007b. in decades.138 23. Cruz and others 2007. The current crisis has eroded faith in 24. Easterling and others 2007. unregulated markets. As a consequence, 25. Auffhammer, Ramanathan, and Vincent 2006. better regulation, more intervention, and 26. Guiteras 2007. greater government accountability are 27. Ligon and Sadoulet 2007. expected. For dealing with climate change, 28. Campbell-Lendrum, Corvalan, and Pruss- additional climate-smart regulation is Ustun 2003. needed to induce innovative approaches to 29. Among the many diverse regions and coun- mitigation and adaptation. Such policies tries affected are Colombia (Vergara 2009), the create an opening for the scale and scope of Caucasus (Rabie and others 2008), Ethiopia (Con- government interventions needed to correct falonieri and others 2007), and the islands of the climate change--the biggest market failure South Pacific (Potter 2008). in human history. 30. Molesworth and others 2003. 31. Confalonieri and others 2007. 32. Confalonieri and others 2007; Morris and Notes others 2002. 1. Weiss and Bradley 2001. 33. Carter and others 2007. 2. Ristvet and Weiss 2000. 34. World Bank 2001. 3. Weiss 2000. 35. Azariadis and Stachurski 2005. 4. Harrington and Walton 2008; IWM and 36. Lokshin and Ravallion 2000; Jalan and CEGIS 2007. Ravallion 2004; Dercon 2004. 5. Schmidhuber and Tubiello 2007. 37. Dercon 2004. 6. Bates and others 2008. 38. Mueller and Osgood 2007. 7. WCED 1987. 39. Azariadis and Stachurski 2005. 8. Chen and Ravaillon 2008. 40. Rosenzweig and Binswanger 1993. 9. World Bank 2009a. 41. Jensen 2000. 10. United Nations 2008. 42. Alderman, Hoddinott, and Kinsey 2006. 11. Chen and Ravaillon 2008. 43. Figures include all greenhouse gases but 12. IEA 2007. do not include emissions from land-use change. 13. United Nations 2008. If estimates of land-use change emissions are 14. United Nations 2008. added, the share of developing countries in 15. UNDP 2008. global emissions is closer to 60 percent. 16. IARU 2009. 44. WRI 2008. 17. Smith and others 2009. 45. Chomitz and Meisner 2008. 18. Patriquin and others 2005; Patriquin, 46. Authors' calculations, based on data from Wellstead, and White 2007; Pacific Institute for CAIT (WRI 2008). Greenhouse gas emissions Climate Solutions 2008. (excluding land-use change) per capita range 19. Note that this relationship holds even when from 4.5 to 55.5 metric tons CO2e (7 to 27, if controlling for the fact that poorer countries tend to small-island states and oil producers are excluded) be warmer on average. Dell, Jones, and Olken 2008. among high-income countries. Emissions per 20. Dell, Jones, and Olken 2008. $1,000 of output at market exchange rates range 21. Brown and others 2009. from 0.15 to 1.72 metric tons in high-income "Take care of your earth, Look after its creatures. Don't leave your children, A planet that's dead." --Lakshmi Shree, India, age 12 62 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 countries; measuring output at purchasing power 76. Solomon and others 2009. parity, the range is 0.20 to 1.04 metric tons. 77. Mignone and others 2008. 47. Marcotullio and Schulz 2007. 78. Folger 2006; Auld and others 2007. 48. Rosenberg 1971. 79. Carbon capture and storage technology is 49. IPCC 2007a. described in chapter 4, box 4.6. 50. Lipovsky 1995. 80. Shalizi and Lecocq 2009. 51. "Annual Brazilian Ethanol Exports" and 81. For a general discussion, see Arthur 1994; "Brazilian Ethanol Production," http://english for a more specific application of increasing .unica.com.br/dadosCotacao/estatistica/ (accessed returns and the need to invest in innovation in the December 2008). area of energy efficiency, see Mulder 2005. 52. Ummel and Wheeler 2008. 82. Weitzman 2007; Weitzman 2009a; Weitz- 53. Hill and others 2009. man 2009b; Nordhaus 2009. 54. Mitchell 2008. 83. Gjerde, Grepperud, and Kverndokk 1999; 55. Ivanic and Martin 2008. Kousky and others 2009. 56. Ng and Aksoy 2008; World Bank 2008. 84. Hallegatte, Dumas, and Hourcade 2009. 57. Cramton and Kerr 1999. 85. See Pindyck (2007) and Quiggin (2008) 58. Ekins and Dresner 2004. for recent reviews. 59. Brenner, Riddle, and Boyce 2007. 86. O'Neill and others 2006. 60. Benitez and others 2008. 87. In their model, Sterner and Persson 61. Estache 2009. (2008) include environmental goods in the util- 62. Andriamihaja and Vecchi 2007. ity function. 63. Komives and others 2005. 88. Portney and Weyant 1999. 64. Johnson and others 2008. 89. Fisher and others 2007; Hourcade and 65. Pindyck 2007; Weitzman 2009a; Hallegatte, Ambrosi 2007; Tol 2005. Dumas, and Hourcade 2009. 90. Diamond 2005. 66. Yohe 1999; Toth and Mwandosya 2001. 91. Komives and others 2007; Diamond 2005. 67. Lempert and Schlesinger 2000. 92. Diamond 2005. 68. Nordhaus 2008a. For a discussion of mod- 93. Hof, den Elzen, and van Vuuren 2008. els and their results, see, for example, Heal 2008; 94. Bruckner and others 1999. Fisher and others 2007; Tol 2005; and Hourcade 95. Yohe 1999. and Ambrosi 2007. 96. Toth and Mwandosya 2001. 69. The 5 percent estimate is largely driven 97. Lempert and Schlesinger 2000. by the discount rate, but the margin between 5 98. Savage 1951; Savage 1954. percent and 20 percent is based on the inclu- 99. Klaus, Yohe, and Schlesinger 2008. sion of nonmarket impacts (health and envi- 100. IPCC 2007a. ronment), possibly higher sensitivity of the 101. See overview figure 3 for cumulative climate to greenhouse gases, and the use of emissions relative to population share. equity weighting. Stern 2007; Dasgupta 2007; 102. According to the IEA (2008), non-OECD Dasgupta 2008. (Organisation for Economic Co-operation and 70. For a discussion, see Dasgupta 2007; Das- Development) countries reached the same level of gupta 2008; and box 1.4. annual energy-related emissions as OECD coun- 71. Dasgupta 2008. tries in 2004 (approximately 13 gigatons of CO2 a 72. Heal 2008; Sterner and Persson 2008. year). The World Resource Institute's CAIT emis- 73. Guesnerie 2004; Heal 2005; Hourcade and sion indicator database suggests the same conclu- Ambrosi 2007. sion using the World Bank's definition of devel- 74. Sterner and Persson 2008. oped and developing countries; WRI 2008. 75. Hourcade and others (2001) explore the 103. Wheeler and Ummel 2007. sensitivity of seven different integrated assessment 104. Chapter 5, box 5.1, describes the Bali models to the shape of the damage function and Action Plan in detail. find that optimal concentration trajectories can 105. For 2030, this has been estimated at imply significant departure from current emission 65­70 percent of the emission reduction, or trends if significant damages occur with warming 45­70 percent of the investment cost. Over the of 3°C or 500 parts per milion (ppm) CO2 concen- course of the century (using net present value tration. 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In the words of the Intergovernmental Panel on Climate Change (IPCC) in its fourth assessment report: "Warming of the climate system is unequivocal."1 For nearly 1 million years before the Industrial Revolution, the carbon dioxide (CO2) concentration in the atmosphere ranged between 170 and 280 parts per million (ppm). Levels are now far above that range--387 ppm--higher than the highest point in at least the past 800,000 years, and the rate of increase may be accelerating.2 Under high-emissions scenarios, concentrations by the end of the 21st century could exceed those experienced on the planet for tens of millions of years. Article 2 of the United Nations But, even stabilizing global tempera- Defining "dangerous anthropogenic Framework Convention on Climate tures at 2°C above preindustrial levels interference" will be a political deci- Change sets the objective of achiev- will significantly change the world. sion, not a scientific determination. ing a "stabilization of greenhouse gas Earth has warmed 0.8°C on average A decade after the Kyoto Protocol, as emissions at a level that would prevent from preindustrial times, and high- we enter the first period of rigorous dangerous anthropogenic interfer- latitude regions are already experiencing accounting of emissions by developed ence with the climate system."3 To the environmental and cultural disruption; countries, the world is negotiating the extent that avoiding "dangerous" inter- further impacts will be unavoidable as course of action for the coming decades ference is defined in the convention, it warming continues. A 2°C warming that will largely determine whether our is described as keeping emissions to will cause more frequent and stronger children inherit a planet that has sta- levels that "allow ecosystems to adapt extreme weather events, including heat bilized around 2°C warmer or is on a naturally to climate change, ensure that waves, increased water stress in many path to much higher temperatures. food production is not threatened and world regions, declining food produc- The term "dangerous" involves several enable economic development to pro- tion in many tropical regions, and dam- components--the total magnitude of ceed in a sustainable manner." It is not aged ecosystems, including widespread change, the rate of change, the risk of clear that this objective is fully achiev- loss of coral reefs from warming and sudden or abrupt change, and the like- able because the warming already ocean acidification. lihood of crossing irreversibly harmful observed has been linked to increases Unless the world acts quickly to alter thresholds. What is determined to be a in droughts, floods, heat waves, forest emissions pathways, models project that dangerous degree of climate change can fires, and intense rainfall events that by 2100 the global average temperature be expected to depend on the effects on are already threatening human and will increase to 2.5­7°C above preindus- human and natural systems and their natural systems. trial levels,6 depending on the amount capacity to adapt. This focus looks at There is convincing evidence that and rate of energy growth, limits on how the climate system works, at the the capacity of societies and ecosystems fossil-fuel energy sources, and the pace changes observed to date, what a 2°C to adapt to global warming is severely of development of carbon-free energy warmer world versus a 5°C or warmer tested beyond warming of 2°C.4 If the technologies (see chapter 4). Although world portends, the risks of crossing world is able to limit the human-caused this temperature may seem like a mod- irreversible thresholds, and the chal- temperature increase to about 2°C est increase compared with seasonal lenge to limit warming to 2°C. above its preindustrial level, it might be variations, the lower end of this range possible to limit significant loss from is the equivalent of moving from Oslo How the climate system works the Greenland and West Antarctic ice to Madrid. The upper end is equivalent The climate of Earth is determined by sheets and subsequent sea-level rise; to to the warming that has occurred since the incoming energy from the Sun, the limit the increase of floods, droughts, the peak of the last glacial age, which outgoing energy radiated from Earth, and forest fires in many regions; to led to the melting of two-kilometer and exchanges of energy among the limit the increase of death and illness thick ice that covered northern Europe atmosphere, land, oceans, ice, and living from the spread of infectious and diar- and North America.7 For the next few things. The composition of the atmo- rheal diseases and from extreme heat; to decades, the global average tempera- sphere is particularly important because avoid extinction of more than a quar- ture is projected to increase 0.2­0.3°C some gases and aerosols (very small ter of all known species; and to pre- a decade,8 a rate of change that will tax particles) affect the flow of incoming vent significant declines in global food the ability of species and ecosystems to solar radiation and outgoing infrared production.5 adapt (see focus B on biodiversity). radiation. Water vapor, CO2, methane The science of climate change 71 (CH4), ozone (O3), and nitrous oxide Gases released from human activi- FA.1). The combustion of coal, oil, and (N2O) are all greenhouse gases (GHGs) ties have greatly amplified the natural natural gas now contributes about 80 naturally present in the atmosphere. greenhouse effect. The global average percent of the CO2 emitted annually, They warm Earth's surface by imped- atmospheric CO2 concentration has with land-use changes and defores- ing the escape of infrared (heat) energy increased significantly since the begin- tation accounting for the remaining into space. The warming effect created ning of the Industrial Revolution, 20 percent. In 1950 the contributions by the natural levels of these gases is especially in the past 50 years. Over from fossil fuels and land use were "the natural greenhouse effect." This the 20th century, the CO2 concentra- about equal; since then, energy use has effect warms the world about 33°C tion increased from about 280 ppm to grown by a factor of 18. The concen- more than it would be otherwise, keeps 387 ppm--almost 40 percent--mainly trations of other heat-trapping gases, most of the world's water in the liquid because of the burning of carbon-based including methane and nitrous oxide, phase, and allows life to exist from the fossil fuels and, to a lesser extent, defor- have also increased significantly as a equator to near the poles. estation and changes in land use (box result of fossil-fuel combustion, farm- BOX FA.1 The carbon cycle The amount of carbon dioxide (CO2) in the atmosphere is controlled by biogeo- ATMOSPHERE (824) chemical cycles that redistribute carbon among the ocean, land, living material, Land sinks and atmosphere. The atmosphere cur- Gross and land-use rently contains about 824 gigatons (Gt) of primary change Ocean-to-atmosphere Fossil fuel combustion carbon. Human- caused emissions of car- Respiration production emissions flux and industrial processes bon in 2007 totaled about 9 Gt of carbon, of which about 7.7 Gt (or 28.5 Gt of CO2) were from the combustion of fossil fuel 119.6 120.2 2.7 1.5 92.2 90.6 7.7 and the rest were from changes in land cover. (One Gt equals a billion metric tons. To convert carbon emissions and fluxes to CO2 amounts, multiply the amount of carbon by 3.67.) The atmospheric concentration of CO2 is currently increasing at a rate of OCEAN (38,000) Carbon (Gt) about 2 parts per million (ppm) a year, Natural flux which is equivalent to an increase in the VEGETATION AND SOILS (2,300) Anthropogenic flux atmospheric loading of carbon by about SINK (carbon stored) 4 Gt of carbon a year (in other words, Source: Adapted from IPCC 2007b. about half of the fossil-fuel emissions of CO2 lead to a long-term increase in the termed, is assumed to result mainly from and the frequency of fire, pest infesta- atmospheric concentration). The rest of changes in land cover (net increases tions, drought, and heat stress increases. the CO2 emissions are being taken up by in forest cover from reforestation and If fossil-fuel emissions continue on a "carbon sinks"--the ocean and terrestrial afforestation in excess of deforestation) business-as-usual path, uptake of emis- ecosystems. The oceans take up about and increased carbon uptake because of sions by forests and other terrestrial eco- 2 Gt of carbon a year (the difference enhanced growth of the world's forests systems may slow and even reverse, with between the 90.6 and the 92.2 indicated in response to higher CO2 concentrations these ecosystems becoming a net source in the figure, plus a small land-to-ocean (known as the CO2 fertilization effect). of emissions by the end of the century, flux). The net uptake of carbon by oceans Terrestrial ecosystems hold about according to some models. And warmer and by terrestrial systems (photosynthe- 2,300 Gt of carbon--roughly 500 Gt in oceans will absorb CO2 more slowly, so a sis minus respiration) and the estimates above-ground biomass and about three greater fraction of fossil-fuel emissions of emissions from land-use change and times that amount in the soils. Reducing will remain in the atmosphere. fossil-fuel combustion would result in deforestation needs to be an important atmospheric concentrations higher than component of slowing emissions growth. Sources: Fischlin and others 2007; IPCC are recorded. It appears that terrestrial While every effort should be made to 2000; IPCC 2001; Canadell and others 2007; ecosystems are currently taking up the increase land storage of carbon, there Houghton 2003; Prentice and others 2001; excess. A 2.7 Gt "residual sink," as it is will be challenges as the climate changes Sabine and others 2004. 72 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 ing and industrial activities, and land- warming influence causes long-term combustion of coal in coming decades use changes (figure FA.1).9 climate change. In contrast, the warm- would reduce long-term warming, the Some of the pollutants introduced by ing influence of methane emissions associated reduction in the cooling humans warm Earth, and some cool it persists for only a few decades, and the effect from sulfur emissions caused (figure FA.2). Some are long-lived, and climatic influences of aerosols--which mainly by coal combustion would lead some short-lived. By trapping infrared can either be heat-trapping such as to an increase of perhaps 0.5°C. radiation, carbon dioxide, nitrous oxide, black carbon (soot) or heat-reducing Temperatures today are already and halocarbons10 warm Earth, and such as reflective sulfates11--persist for 0.8°C above preindustrial levels (figure because the increased concentrations only days to weeks.12 So while a sharp FA.3). Were it not for the cooling influ- of these gases persist for centuries, their decline in the CO2 emissions from the ence of reflective particles (such as sul- Figure FA.1 Global emissions of greenhouse gases have been increasing a. Increases over time b. Composition of global emissions in 2004 Gt CO2e/year 5 N2O other 0 N2O agriculture F-gasses N 2O 1.1% 7.9% 10 CH4 other CH4 waste 5 CH4 agriculture CH4 CH4 energy 14.3% 0 10 5 CO2 decay and peat CO2 deforestation CO2 (fossil 0 fuel use) CO2 56.6% 30 (deforestation, decay of biomass) 25 17.3% 20 CO2 other CO2 (other) 15 CO2 fossil fuel use 2.8% 10 5 0 1970 1980 1990 2000 2004 50 40 30 Total greenhouse gases 20 10 0 1970 1980 1990 2000 2004 Source: Reproduced from Barker and others 2007. Note: This figure shows the sources and growth rates of some of the medium- to long-term greenhouse gases. Fossil fuels and land-use change have been the major sources of CO2, while energy and agriculture contribute about equally to emissions of CH4. N2Ocomes mainly from agriculture. Additional greenhouse gases not included in the figure are black carbon (soot), tropospheric ozone, and halocarbons. The comparisons of the equivalent emissions of different gases are based on the use of the 100-year Global Warming Potential; see note 9 for explanation. The science of climate change 73 Figure FA.2 Major factors affecting the climate since the Industrial Revolution fate aerosols) and the decades that it Cooling influences Warming influences takes ocean temperatures to come into Human activities equilibrium with the increased trap- Carbon dioxide ping of infrared radiation, the global Long-lived (CO2) average temperature increase caused greenhouse N2O Nitrous oxide by human activities would likely gases CH4 Halocarbons already be about 1°C warmer than it is Methane today. Thus the current elevated con- Ozone Stratospheric centrations of greenhouse gases alone Tropospheric (­0.05) are near to committing the world to Stratospheric a 2°C warming, a level beyond which water vapor the world can expect to experience very disruptive, even "dangerous" Surface reflectivity Land use Soot (black carbon) on snow consequences.13 Direct Changes observed to date and Reflective particles effect the implications of our changing Cloud reflective understanding of the science effect The effects of changes in climate since the mid-19th century are particularly Total net human activities evident today in the observations of higher average air and ocean tem- Total natural peratures; the widespread melting influences (solar output) of snow and ice around the world, ­2 ­1 0 1 2 particularly in the Arctic and Green- watts/square meter land (figure FA.4); and the increase in global sea level. Cold days, cold nights, Source: Adapted from Karl, Melillo, and Peterson 2009. Note: The figure above shows the amount of warming influence (orange bars) or cooling influence (blue bars) that differ- and frosts have become less frequent, ent factors have had on Earth's climate since the beginning of the industrial age (from about 1750 to the present). Results while the frequency and intensity of are in watts per square meter. The top part of the box includes all the major human-induced factors, while the second part of the box includes the Sun, the only major natural factor with a long-term effect on climate. The cooling effect of heat waves have increased. Both floods individual volcanoes is also natural but is relatively short-lived (2 to 3 years), thus their influence is not included in this and droughts are occurring more fre- figure. The bottom part of the box shows that the total net effect (warming influences minus cooling influences) of human activities is a strong warming influence. The thin lines on each bar provide an estimate of the range of uncertainty. quently.14 The interiors of continents have tended to dry out despite an Figure FA.3 Global annual average temperature and CO2 concentration continue to climb, 1880­2007 overall increase in total precipitation. Global temperature (°C) CO2 concentration (ppm) Globally, precipitation has increased, 400 as the water cycle of the planet has 14.5 been sped up by warmer temperatures, Above average temperature 380 even while the Sahel and Mediterra- Below average temperature 14.3 CO2 concentration nean regions have seen more frequent 360 and more intense droughts. Heavy 14.1 rainfall and floods have become more 340 common, and there is evidence that 13.9 the intensities of storms and tropical 320 cyclones have increased.15 13.7 These impacts are not distributed 300 evenly across the globe (map FA.1). 13.5 As expected, temperature changes are 1880 1900 1920 1940 1960 1980 2000 greater at the poles, with some regions of Year the Arctic warming 0.5°C in just the past Source: Adapted from Karl, Melillo, and Peterson 2009. Note: Orange bars indicate temperature above the 1901­2000 average, blue bars are below average temperatures. 30 years.16 At low latitudes--those close The green line shows the rising CO2 concentration. While there is a clear long-term global warming trend, each to the equator--a greater fraction of the individual year does not show a temperature increase relative to the previous year, and some years show greater changes than others. These year-to-year fluctuations in temperature are attributable to natural processes, such as trapped infrared energy goes into evapo- the effects of El Niños, La Niñas, and volcanic eruptions. ration, limiting warming but providing 74 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 Figure FA.4 Greenland's melting ice sheet poles or six meters a decade up moun- tains as an apparent result of the increase 1992 2002 2007 in temperatures.18 These rapid changes are leading to asynchrony in many of the long-established predator-prey rela- tionships, with some species arriving too early or too late to find their traditional food sources. Over the past 20 years, our under- standing of the science of climate change has greatly improved. In 1995, 70°N 70°N 70°N for example, the IPCC concluded: "The balance of evidence suggests a discern- ible human influence on global cli- mate."19 In 2001 the IPPC concluded: "There is new and stronger evidence that most of the warming observed over 60°N 60°N 60°N the last 50 years is attributable to human activities."20 Six years later, in 2007, the 50°W 40°W 50°W 40°W 50°W 40°W IPCC concluded: "Warming of the cli- Permanent ice sheet that melts in summer Seasonal ice coverage Permanent ice sheet mate system is unequivocal. Most of the observed increase in globally-averaged temperatures since the mid-20th cen- Seasonal melt departure (x1000 km2) tury is very likely due to the observed 100 increase in anthropogenic greenhouse 80 gas concentrations."21 60 In 2001 and 2007 the scientific com- 40 munity summarized the best under- 20 standing of climate change impacts or 0 reasons for concern in five categories: ­20 unique species/threatened ecosystems, ­40 extreme events, breadth of impacts, ­60 total economic impacts, and large-scale ­80 discontinuities. In the "burning ember" ­100 charts, the intensity of the red shading 1970 1975 1980 1985 1990 1995 2000 2005 signifies the degree of concern over the Year effect in question (figure FA.5). Com- Sources: Top panel: Adapted from ACIA 2005 and Cooperative Institute for Environmental Sciences (CIRES), http:// paring column B in the left and right cires.colorado.edu/steffen/greenland/melt2005/ (accessed July, 2009). Bottom panel: Reproduced from Mote 2007. panels shows how the change in the best Note: The orange areas on the maps of Greenland show the extent of summer ice melt, which has increased dramat- available information from 2001 to 2007 ically in recent years. Ten percent more ice was lost in 2007 than in 2005. The bar chart shows that despite annual variation in ice cover, significant loss has occurred for more than a decade. moved the red area closer to the zero degree line for extreme events--that is, at the current global average tempera- an increase in water vapor that pours out Major changes are projected in ecosys- ture, extreme events are already increas- as more intense rains from convective tems as climate change shifts the ideal ing. A comparison of the two E columns storms and tropical cyclones. geographic ranges of plant and animal shows that the threat of discontinuous The resilience of many ecosystems species. Productivity of agriculture, events, such as changes in the ocean is likely to be exceeded in the coming forests, and fisheries will be affected as conveyor-belt heat-distribution system decades by a combination of the effects will other ecological services.17 Already or catastrophic thawing of the Arctic of climate change and other stresses, 20,000 datasets show a wide range of spe- leading to massive releases of meth- including habitat degradation, invasive cies on the move, with changes averaging ane, becomes much larger if the world species, and air and water pollution. about six kilometers a decade toward the warms another 2°C over today's levels. Map FA.1 Regional variation in global climate trends over the last 30 years a. Temperature Temperature change (°C) <­1 ­1­ ­0.6 ­0.6­ ­0.2 ­0.2­0.2 No data 0.2­0.6 0.6­1 1­ 1.4 >1.4 Source: Goddard Institute for Space Studies, http://data.giss.nasa.gov/cgi-bin/gistemp/do_nmap.py?year_last=2009&month_last=07&sat=4&sst=1&type=anoms&mean_gen=07&y ear1=1990&year2=2008&base1=1951&base2=1980&radius=1200&pol=reg (accessed July 2009). Note: Yellow, orange, and red colors denote average increases in temperatures (°C) from 1980 to the present compared with the previous three decades. Warming has been greatest at high latitudes, especially in the Northern Hemisphere. b. Precipitation Precipitation change (millimeters per day) <­1 ­1­ ­0.5 ­0.5­ ­0.3 ­0.3­ ­0.1 ­0.1­0.1 0.1­ 0.3 0.3­0.5 0.5­1 >1 No data Source: Goddard Institute for Space Studies, http://data.giss.nasa.gov/cgi-bin/precipcru/do_PRCmap.py?type=1&mean_gen=0112&year1=1980&year2=2000&base1=1951&bas e2=1980 (accessed May 2009). Note: Yellow denotes increased precipitation in millimeters a day; blue denotes decreases from 1980 to present compared with the previous three decades. Drying has been greatest in continental interiors, while rainfall has become more intense in many coastal areas. The changing geographic distribution of rainfall has serious implications for agriculture. 76 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 Figure FA.5 Embers burning hotter: Assessment of risks and damages has increased from 2001 to 2007 2001 assessment 2007 assessment 5 5 Risks to Large Negative Net Higher Risks to Large Negative Net High Increase in global mean temperature above circa 1990 (°C) many increase for most negative many increase for most negative regions in all regions in all metrics metrics 4 4 3 3 Future 2 2 Positive or Positive or negative negative Negative market Negative market for some impacts; for some impacts; 1 1 regions; majority regions; majority positive of people positive of people Risks to for adversely Very Risks to for adversely some Increase others affected low some Increase others affected Low 0 0 Past ­0.6 ­0.6 A B C D E A B C D E Risks to Risk of Distribution Aggregate Risks of large Risks to Risk of Distribution Aggregate Risks of large unique extreme of impacts impacts scale unique extreme of impacts impacts scale and weather discontinuities and weather discontinuities threatened events threatened events systems systems Source: Reproduced from Smith and others 2009. Notes: The figure shows risks from climate change, as described in 2001 (left) compared with updated data (right). Climate-change consequences are shown as bars and the increases in global mean temperature (°C) above today's levels (0 degrees to 5 degrees). Each column corresponds to a specific kind of impact. For example, "unique and threat- ened systems," such as alpine meadows or arctic ecosystems, are the most vulnerable (illustrated by the shading in column A) and only a small change in temperature may lead to great loss. The color scheme represents progressively increasing levels of risk from yellow to red. Between 1900 and 2000 global average temperature increased by ~0.6°C (and by nearly 0.2°C in the decade since) and has already led to some impacts. Since 2001 the assessed risk of damages has increased even for temperatures of an additional 1°C above today's levels, or about 2°C total above preindustrial levels. Since the finalization of the IPCC's Future changes if the on people and the environment at dif- fourth assessment report in 2007, new temperature increase ferent temperature increases and in information has further advanced sci- exceeds 2°C different regions (see figure FA.6). If entific understanding. This information The physical impacts of future climate temperatures reach 2°C above prein- includes updated observations of recent change on humans and the environ- dustrial levels, water availability will changes in climate, better attribution ment will include increasing stresses be reduced for another 0.4­1.7 billion of observed climate change to human on and even collapses of ecosystems, people in midlatitudes and semiarid and natural causal factors, improved biodiversity loss, changing timing of low latitudes. Those affected by severe understanding of carbon-cycle feed- growing seasons, coastal erosion and water shortages will be mainly in Africa backs, and new projections of future aquifer salinization, permafrost thaw, and Asia. At these higher temperatures, changes in extreme weather events and ocean acidification, 23 and shifting most coral reefs would die (box FA.2), the potential for catastrophic change.22 ranges for pests and diseases. These and some crops, particularly cereals, Many risks are now assessed to be impacts are shown for different tem- could not be successfully grown in greater than previously thought, par- peratures and world regions in figure the altered climates prevailing in low- ticularly the risks of large sea-level rise FA.6. latitude regions. About a quarter of in the current century and of increases The physical effects of future cli- plant and animal species are likely to in extreme weather events. mate change will have varying impacts be at increased risk of extinction (see The science of climate change 77 Figure FA.6 Projected impacts of climate change by region Global mean annual temperature change relative to preindustrial era (°C) 0.8 1.8 2.8 3.8 4.8 5.8 10 to 15% 25 to 40% Sub-Saharan species at risk of extinction AFRICA Semi-arid/ arid areas increase by 5 to 8% 75 to 250 350 to 600 Additional people with increased water stress million million 2 to 5% decrease wheat and 5 to 12% decrease rice Crop yield maize in India potential in China Additional people at ASIA Up to 2 million Up to 7 million risk of coastal flooding each year 0.1 to 1.2 0.2 to 1.0 Additional people with increased water stress billion billion Annual bleaching of Great Barrier Reef AUSTRALIA/ 3,000 to 5,000 more heat related deaths per year NEW ZEALAND ­10% Murray-Darling River flow ­50% Decreasing water security in south and east Australia and parts of east New Zealand +5 to +15% in North +10 to +20% Water availability 0 to ­25% in South ­5 to ­35% EUROPE +2 to +10% in North +10 to +25% +10 to +30% Wheat yield potential +3 to +4% in South ­10 to +20% ­15 to +30% Potential extinction of about 25% Potential extinction of about Central Brazilian savanna tree species 45% Amazonian tree species LATIN Many tropical glaciers disappear Many mid-latitude glaciers disappear AMERICA 10 to 80 80 to 180 Additional people with increased water stress million million 5 to 20% increase crop 70 to 120% increase forest yield potential area burned in Canada NORTH Decreased space heating and increased space cooling AMERICA 3 to 8 times increase About 70% increase in hazardous in heat wave days in ozone days some cities Increase in depth of 10 to 50% Arctic tundra seasonal thaw of 10 to 15% 15 to 25% 30 to 50% replaced by forest POLAR Arctic permafrost 15 to 25% polar desert 20 to 35% reduction of REGIONS replaced by tundra Arctic permafrost area 20 to 35% decrease annual average Arctic sea ice area Increasing coastal inundation and damage to infrastructure due to sea-level rise Alien species colonize mid- SMALL and high latitude islands ISLANDS Agricultural losses up to 5% GDP in high terrain islands, up to 20% GDP in low terrain islands 0 1 2 3 4 5 Global mean annual temperature change relative to 1980­99 (°C) Source: Adapted from Parry and others 2007. 78 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 BOX FA.2 Ocean health: Coral reefs and ocean acidification The oceans will become more acidic affected are plankton, which form the base Coral reefs are already being pushed to over the coming decades and centuries of the marine food chain and are a major their thermal limits by recent temperature as a direct chemical consequence of the food source for fish and marine mammals. increases. Higher sea surface temperatures increasing atmospheric concentration of From the evidence available, there is sig- stress corals and cause coral bleaching CO2. Absorption of approximately one- nificant uncertainty about whether marine (the loss or death of symbiotic algae), fre- third of manmade emissions of CO2 over species and ecosystems will be able to quently resulting in large-scale mortality. the past 200 years has decreased the pH acclimate or evolve in response to such An ecological "tipping point" is likely to of surface seawater by 0.1 units (pH, the rapid changes in ocean chemistry. At this be crossed in many areas if ocean tem- degree of acidity or alkalinity, is measured stage, research into the impacts of high peratures increase to more than 2°C above on a logarithmic scale, and a 0.1 decrease concentrations of CO2 in the oceans is still their preindustrial levels, especially as in pH represents a 30 percent increase in in its infancy. ocean acidification reduces carbonate con- ocean acidity). Projected pH decreases in But for coral reefs, the adverse conse- centrations, inhibiting reef accretion. Once ocean surface waters over the next 100 quences are already becoming evident. the corals die, macroalgae colonize the years range from 0.3 to 0.5 units, which Coral reefs are among the marine ecosys- dead reefs and prevent regrowth of cor- would make the ocean more acidic than it tems most vulnerable to the changing als. Poor management can amplify these has been in many tens of millions of years.a climate and atmospheric composition dynamics, because overfishing of herbi- One of the most important implications of and are threatened by a combination of vore reef fish leads to greater macroalgae the changing acidity of the oceans is the direct human impacts and global climate abundance, and sediment and nutrient problem that it may cause for the many change. Their loss would directly affect runoff from deforestation and poor agri- marine photosynthetic organisms and millions of people. Coral reefs, both tropi- cultural practices promote macroalgae animals, such as corals, bivalves, and some cal and deep cold water, are global centers growth, exacerbating damage to corals. plankton species that make their shells and of biodiversity. They provide goods and Sources: Barange and Perry 2008; Doney plates out of calcium carbonate. The pro- services of roughly $375 billion a year to 2006; Fabry and others 2008; Wilkinson 2008. cess of "calcification" will be inhibited as nearly 500 million people. About 30 mil- a. Monaco Declaration, http://ioc3.unesco the water becomes more acidic. Some of lion of the world's poorest people directly .org/oanet/Symposium2008/Monaco the most abundant life forms that will be rely on coral reef ecosystems for food. Declaration.pdf (accessed May 2009). focus B).24 Communities will suffer small island states and coastal plains comes can be worse than expected. As more heat stress, and coastal areas will would be flooded by storm surges and the overview and chapter 1 highlight, be more frequently flooded.25 sea-level rise as the major ice sheets the existence of uncertainties warrant What if temperatures rise to 5°C deteriorate and the traditional ways of a precautionary approach to climate above preindustrial levels? About 3 bil- life of Arctic peoples would be lost as change given the potential for irre- lion additional people would suffer water the sea ice retreats. versible impacts and the inertia in the stress, corals would have mostly died off, Recent evidence indicates that loss climate system, in infrastructure and some 50 percent of species worldwide of sea ice, the melting of the Greenland technology turnover, and in socioeco- would eventually go extinct, produc- and Antarctic ice sheets, the rate of sea- nomic systems. tivity of crops in both temperate and level rise, and the thawing of the perma- tropical zones would fall, about 30 per- frost and mountain glaciers are faster Crossing thresholds? cent of coastal wetlands would be inun- than expected when the IPCC 2007 These impacts do not fully capture dated, the world would be committed report was completed.28 New analyses the probability and uncertainty of an to several meters of sea-level rise, and suggest that droughts in West Africa29 increase in extreme events or define the there would be substantial burden on and a drying of the Amazon rain for- thresholds of irreversible catastrophic health systems from increasing malnu- est30 may be more probable than previ- events. Although climate change is often trition and diarrheal and cardiorespi- ously thought.31 characterized as a gradual increase in ratory diseases.26 Terrestrial ecosystems While scientific uncertainty has global average temperature, this depic- are expected to shift from being carbon often been cited as a reason to wait for tion is inadequate and misleading in at "sinks" (storage) to being a source of more evidence before acting to control least two ways. carbon; whether this carbon is released climate change, these recent surprises First, the historical and paleo- as carbon dioxide or methane, it would all illustrate that uncertainty can cut climatic records both suggest that still accelerate global warming.27 Many the other way as well and that out- the projected changes in the climate The science of climate change 79 could well occur in jumps and shifts droughts and fires, less extensive per- term. For example, the higher emis- rather than gradually. As mentioned, mafrost, and more frequent air pollu- sions are in 2020, the lower they will the Greenland and West Antarctic ice tion episodes. Shifts in the timing and need to be in 2050 to stay within the sheets are particularly at risk from patterns of the world's monsoons and same overall budget. If carbon emis- global warming, and there appear ocean-atmosphere oscillations (as in sions are allowed to increase another to be mechanisms that could lead to the El Niño/Southern Oscillation and 20­40 percent before reductions begin, large and rapid changes in the amount the North Atlantic Oscillation) are also the rate of decline would need to be of ice they store.32 This is important likely. Map FA.2 and table FA.1 show between 4 percent (the orange path in because total loss of the ice now stored some of the possible tipping points, figure FA.7a) and 8 percent (blue path) in both sheets would eventually raise their location, and the temperatures each year to keep to the carbon budget. the global sea level by about 12 meters. that might trigger change as well as the For comparison, at Kyoto the wealthy Some analyses indicate that this pro- likely impacts. countries agreed to reduce emis- cess would proceed slowly in a warm- sions on average by 5.2 percent from ing world, taking as much as several Can we aim for 2°C warming 1990 levels over the 2008­12 period, millennia or more. But recent studies and avoid 5°C or beyond? whereas total global emissions would indicate that because these ice sheets Many studies conclude that stabilizing need to decline by 4­8 percent each are largely below sea level and sur- atmospheric concentrations of green- and every year in order to limit warm- rounded by warming water, their dete- house gases at 450 ppm CO2 or its ing to about 2°C. rioration could happen much faster, equivalent will yield only a 40­50 per- Warming caused by other green- conceivably in only a few centuries.33 cent chance of limiting the global aver- house gases such as methane, black Sharply increased melting of either or age temperature increase to 2°C above carbon, and nitrous oxide--which cur- both of these ice sheets, with accom- preindustrial levels.36 Many emission rently contribute about 25 percent of panying changes in ocean circulation, paths can get us there, but all require total warming--means that an even is only one of several possibilities for emissions to peak in the next decade lower limit for CO2 will be necessary tipping points in the climate system of and then to decline worldwide to half to stay near 2°C warming from human a warming world, where changes could of today's levels by 2050, with fur- activities. These other greenhouse gases mean passing a point of no return-- ther emissions reductions thereafter. could account for about 125 billion of one where a system will shift to a dif- However, for greater confidence that the remaining 500 billion tons in our ferent state, causing the potential for a particular temperature will not be emissions budget, meaning that the severe environmental and societal dis- exceeded, the emissions reductions carbon dioxide that can be emitted-- locations to go up accordingly.34 must be even steeper. As indicated in measured in carbon--is really only Second, no one lives in the global figure FA.7c, the "best guess" of a 2°C about 375 billion tons total.38 Short- average temperature. Climate change path cannot exclude the possibility of term measures that reduce 2020 emis- impacts will differ sharply from region hitting 4°C. sions of potent, but short-lived gases, to region and often will interact with A more robust way of thinking about such as methane and black carbon or other environmental stresses. For the problem is in terms of an emissions tropospheric ozone, slow the rate of example, evaporation and precipitation budget. Keeping warming caused by warming. Indeed, reducing black car- are both increasing and will continue CO2 alone to 2°C will require limiting bon by 50 percent or ozone by 70 per- to increase globally, but as the atmo- cumulative CO2 emissions to 1 tril- cent,39 or halting deforestation would spheric circulation shifts, the changes lion tons (Tt) of carbon (3.7 Tt CO2).37 each offset about a decade of fossil- will vary regionally, with some places The world has already emitted half that fuel emissions and would help to limit become wetter and some drier. Among amount over the previous two-and-a- warming in concert with reductions in the likely additional consequences will half centuries. For the 21st century, a CO2 emissions. To really reduce the risk be shifts in storm tracks, more intense business-as-usual path would release of excessive warming, moving to nega- tropical cyclones and extreme rainfall the remaining half trillion tons in 40 tive emissions may also be required. events, a higher snow line leading to years, requiring future generations to Accomplishing this--that is, having no less spring snowpack, further shrink- live in a world in which essentially zero new emissions and also removing CO2 age of mountain glaciers,35 reduced carbon was emitted. from the atmosphere--may be possible coverage of winter snowfall and sea ice, The concept of a cumulative bud- using biomass to supply energy, fol- faster evaporation of soil moisture lead- get provides a framework for thinking lowed by sequestration of the carbon ing to more frequent and more intense about targets for the short and long (see chapter 4). 80 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 Map FA.2 Potential tipping elements in the climate system: Global distribution Melt of Arctic Sea Ice Loss Greenland Permafrost and Ice Sheet Climatic Tundra Loss Boreal Forest Change­Induced Boreal Forest Dieback Ozone Hole Dieback Sahara Indian Greening Monsoon Instability Dieback West African Change in ENSO Monsoon Shift of Amazon Amplitude or Frequency Rainforest Instability of West Antarctic Ice Sheet Source: Adapted from Lenton and others 2008. Note: Several regional-scale features of the climate system have tipping points, meaning that a small climate perturbation at a critical point could trigger an abrupt or irreversible shift in the system. These could be triggered this century depending on the pace and magnitude of climate change. Table FA.1 Potential tipping elements in the climate system: Triggers, time-scale, and impacts Tipping element Triggering level of warming Transition timescale Key impacts Disappearance of Arctic summer sea-ice +0.5­2°C ~10 years (rapid) Amplified warming, ecosystem change Melting of Greenland ice sheet +1­2°C >300 years (slow) Sea-level rise of 2­7 meters Melting of West Antarctic ice sheet +3­5°C >300 years (slow) Sea-level rise of 5 meters Collapse of Atlantic thermohaline circulation +3­5°C ~100 years (gradual) Regional cooling in Europe Persistence of El Niño-Southern Oscillation +3­6°C ~100 years (gradual) Drought in Southeast Asia and elsewhere (ENSO) Indian summer monsoon N/A ~1 year (rapid) Drought Sahara/Sahel and West African Monsoon +3­5°C ~10 years (rapid) Increased carrying capacity Drying and dieback of Amazon rainforest +3­4°C ~50 years (gradual) Biodiversity loss, decreased rainfall Northward shift of boreal forest +3­5°C ~50 years (gradual) Biome switch Warming of Antarctic bottom water Unclear ~100 years (gradual) Changed ocean circulation, reduced carbon storage Melting of tundra Ongoing ~100 years (gradual) Amplified warming, biome switch Melting of permafrost Ongoing <100 years (gradual) Amplified warming from release of methane and carbon dioxide Release of marine methane hydrates Unclear 1,000 to 100,000 years Amplified warming from release of methane Source: Adapted from Lenton and others 2008. Note: An expert elicitation of opinions about the probability of passing a tipping point in a subset of these systems--the melting of the West Antarctic ice sheet, melting of Greenland ice sheet, Amazon drying, and ocean circulation (Kriegler and others 2009)--estimated at least a 16 percent probability of one of these events for a warming of 2­4°C. The probability would rise to greater than 50 percent for a global mean temperature change above 4°C relative to year 2000 levels. In many cases, these numbers are considerably higher than the probability allocated to catastrophic events in current climate-damage assessments; for example, Stern (2007) assumed a 5­20 percent loss of the ice sheets with a 10 percent probability for a warming of 5°C. The science of climate change 81 Figure FA.7 Ways to limit warming to 2°C above preindustrial levels a. Idealized CO2 emission profiles b. Cumulative carbon emissions c. Temperature response Carbon/year (billion tons) Carbon (trillion tons) CO2 induced warming (°C) 1.2 4 14 1.0 12 Likelihood 3 10 0.8 8 0.6 2 2008 total 6 0.4 4 1 2 0.2 0 0.0 0 1950 2000 2050 2100 2150 1950 2000 2050 2100 2150 1950 2000 2050 2100 2150 Year Year Year Peak reduction rates ­3% per year ­4% per year ­8% per year Observed temperatures relative to 1900­1920 Source: Allen and others 2009a. Note: Three idealized CO2 emission paths (FA.7a) each consistent with total cumulative emissions (b) of 1 trillion tonnes of carbon. Each of the paths yields the same range of projected temperature increase (c) relative to uncertainty in the climate system's response (grey shading and red error bar), provided the cumulative total is unaffected. The blue, green, and red curves in FA.7a are all consistent with the 1 trillion tonne budget, but the higher and later the emissions peak, the faster the emissions have to decline to stay within the same cumulative emissions budget. Diamonds in FA.7c indicate observed temperatures relative to 1900­1920. While 2°C is the most likely outcome, temperature increases as high as 4°degrees above preindustrial levels cannot be ruled out. Notes and nitrous oxide concentrations have also persistent and nonreactive. Until they were increased, reaching new highs of 1,789 and banned to protect the ozone layer, many 1. IPCC 2007b. The Intergovernmental 321 parts per billion (ppb), respectively. were commonly used as refrigerants and Panel on Climate Change (IPCC) was orga- The carbon dioxide equivalent concentra- to form insulating materials. Because these nized in 1988 as a joint effort of the World tion (CO2e) is a quantity that describes, compounds also lead to global warming, the Meteorological Organization and the UN for a given mixture and amount of green- banning of them under the Montreal Proto- Environment Programme to summarize the house gases, the amount of CO2 that would col and subsequent amendments has helped state of scientific knowledge about climate have the same potential to contribute to to limit global warming (in fact, even more so change in a periodic series of major assess- global warming measured over a specified than the Kyoto Protocol). While the replace- ments. The first of these was completed in period. For example, for the same mass of ment compounds that have been introduced 1990, the second in 1995, the third in 2001, gas, the Global Warming Potential (GWP) do contribute less to global warming and and the fourth in 2007. for methane over a 100-year period is 25, ozone depletion, greatly increased use of the 2. Raupach and others 2007. and for nitrous oxide, 298. This means that replacements could exert a significant warm- 3. http://unfccc.int/essential_background/ emissions of 1 metric ton of methane and ing influence over time, and so emissions of convention/background/items/1353.php nitrous oxide, respectively, would cause such compounds should be reduced over (accessed August 30, 2009). the same warming influence as emissions coming decades. 4. Smith and others 2009. of 25 and 298 metric tons of carbon diox- 11. Natural removal of the sulfate par- 5. Parry and others 2007. ide. Fortunately, the mass of the emissions ticles from the atmosphere over the few 6. Temperature increases at the poles will of these gases is not as great as for CO2, so weeks following their formation is also the be about double the global average. their effective warming influence is less. primary contributor to acidification of pre- 7. Schneider von Deimling and others Note, however, that over different periods, cipitation (acid rain), which reduces soil 2006. the GWPs can vary; for example, the near- fertility, damages plants and buildings, and 8. The observed increases have averaged term (20-year) GWP for methane is 75, adversely affects human health. about 0.2°C per decade since 1990, which indicating that over short periods of time, 12. Forster and others 2007. give us confidence in the future projections. methane emissions are very important and 13. Adger and others 2008; SEG 2007. See IPCC 2007a, table 3.1, which gives a controlling them can slow the pace of cli- 14. Millennium Ecosystem Assessment range of 0.1­0.6°C a decade across all sce- mate change. 2005. These seemingly contradictory changes narios. 10. Halocarbon compounds are chemi- are possible because, as temperature goes up, 9. According to the latest estimates from cals containing carbon atoms bonded to both evaporation and the capacity of the the World Meteorological Organization, halogen atoms (fluorine, chlorine, bromine, atmosphere to hold water vapor increase. the average CO2 concentration in 2008 or iodine). These compounds tend to be very With increased atmospheric water vapor, was 387 parts per million (ppm). Methane 82 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 convective rains become more intense, more "Are There Social Limits to Adaptation Brewer, P. G., and E. T. Peltzer. 2009. often leading to floods. At the same time, to Climate Change?" Climatic Change 93 "Oceans: Limits to Marine Life." 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Experience shows that local livelihoods after yet another flood-- decision making, diversity, and social once occasional, now every few learning are key features of flexible, resilient years--or to take their chances in Dhaka, the communities2 and that vulnerable commu- crowded capital. In the tall forests of south- nities can be effective agents of innovation ern Australia, families are deciding whether and adaptation.3 But climate change threat- to rebuild their homes after the most dam- ens to overwhelm local efforts, requiring aging fires in history--aware that they are more from national and global supporting still in the grip of the longest and most structures. severe drought on record. With losses from People's vulnerability is not static, and the extreme climate events inevitable, societies effects of climate change will amplify many have explicitly or implicitly chosen the risk forms of human vulnerability. Crowded cit- they bear and the coping strategies to deal ies expand into hazardous zones. Natural with them. Some losses are so high and the systems are transformed through modern coping so insufficient that development is agriculture. Infrastructure development-- impeded. As the climate changes, more and dams and roads--create new opportunities more people risk falling into what is called but can also create new risks for people. the "adaptation deficit." Climate change, superimposed on these Reducing vulnerability and increasing processes, brings additional stress for natu- resilience to the climate has traditionally ral, human, and social systems. People's been the responsibility of households and livelihoods need to function under condi- communities1 through their livelihood tions that will almost certainly change but cannot be predicted with certainty. Whichever mitigation pathway is fol- lowed, the temperature and other climate Key messages changes over the next decades will be very Further climate change is unavoidable. It will stress people physically and economically, similar. Temperatures are already about 1°C particularly in poor countries. Adapting requires robust decision making--planning over a long above those of the preindustrial era, and all time horizon and considering a broad range of climate and socioeconomic scenarios. Countries realistic mitigation scenarios suggest that can reduce physical and financial risks associated with variable and extreme weather. They can we may expect another 1°C by midcentury. also protect the most vulnerable. Some established practices will have to be expanded--such The world of 2050 and beyond, however, as insurance and social protection--and others will have to be done differently--such as urban will be much different from today's--just and infrastructure planning. These adaptation actions would have benefits even without climate how different depends on mitigation. Con- change. Promising initiatives are emerging, but applying them on the necessary scale will sider two possibilities for this generation's require money, effort, ingenuity, and information. children and grandchildren. In the fi rst scenario the world is on track to limiting 88 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 temperature increases to 2­2.5°C above convincingly that ethics, culture, knowl- preindustrial levels. In the second the emis- edge, and attitudes toward risk limit human sions are much higher, leading eventually adaptation more than physical, biological, to temperatures about 5°C or more above or economic thresholds.9 The adaptation preindustrial levels.4 effort that will be required by future gener- Even on the lower temperature trajectory ations is thus determined by how effectively many ecosystems will come under increas- climate change is mitigated. ing stress, patterns of pests and disease will Incremental environmental impacts continue to change, and agriculture will imply stronger physical constraints on require significant changes in practice or future development. Climate-smart poli- displacement in location. On the higher cies will have to address the challenges of temperature trajectory most of the negative a riskier and more complex environment. trends will be even worse, and the few posi- Development practice has to be more adap- tive trends, such as increases in agricultural tive to shifting baselines, grounded in productivity in cooler cropping regions, strategies robust to imperfect knowledge.10 will be reversed. Agriculture will undergo Cropping strategies need to be robust under transformational change in practices and more volatile weather conditions by seeking locations. Storm intensity will be higher. to maintain long-term consistency in out- And sea levels are likely to rise by about one put rather than to maximize production. meter.5 Floods, droughts, and extreme tem- Urban planners in coastal cities need to peratures will be much more common.6 The anticipate demographic developments and past decade has been the hottest on record, new risks from rising seas or flooding. Pub- but by 2070 even the coolest years are likely lic health workers need to prepare for sur- to be hotter than now. As the physical and prising changes in climate-linked disease biological stresses arising from climate patterns.11 Information is crucial to sup- change increase, so will social tension. port risk-based planning and strategies--it On the higher trajectory, warming is the basis of good policy and better risk could trigger feedbacks in Earth systems management. that would make it difficult to further con- Managing ecosystems and their ser- strain temperature increases, regardless of vices will be more important and more mitigation. These feedbacks could rapidly difficult. Well-managed landscapes can collapse ecosystems, as some are predicting modulate flood waters. Intact coastal wet- for the Amazon and the boreal peat lands lands can buffer against storm damage. (see focus A). People in that higher-track But management of natural resources will world would see rapidly accelerating losses face a rapidly changing climate with more and costs reverberate through their societ- extreme events and with ecosystems under ies and economies--requiring adaptation increasing threats from stresses other than at a scale unprecedented in human history. climate (such as land-use and demographic International tensions could be expected change).12 Managing such physical risks is to rise over resources, and migration an integral part of climate-smart develop- away from the areas most affected would ment--an essential step to avoid avoidable increase.7 impacts on people. On the lower track, adaptation will However, not all physical impacts are be challenging and costly, and business- avoidable, particularly those linked to as-usual development will be far from extreme and catastrophic events whose sufficient. Broader and accelerated imple- probability is difficult to assess under cli- mentation of policies that have proved suc- mate change. Eliminating the risk of the cessful is paramount as is adaptation that most extreme events is not possible, and harnesses the ingenuity of people, institu- attempting to do so would be extremely tions, and markets. On the higher track costly given the uncertainty about the the question is whether warming may be location and timing of impacts. Being approaching, or already exceeding, lev- fi nancially prepared to cope with climate els to which we can adapt.8 Some argue impacts is critical for both households and Reducing Human Vulnerability: Helping People Help Themselves 89 government. This requires flexible risk- uncertainties because projections tend to spreading mechanisms. lose precision at finer scales--an inherent As chapter 1 discusses, the poor have the problem of downscaling from coarse, aggre- least capacity to manage physical and finan- gate models. If decision parameters cannot cial risk and to make longer-term adapta- be observed and measured,15 robust strate- tion decisions. Their lives are affected more gies (see chapter 1) that directly address the by climate, whether they practice subsis- reality of a world of shifting baselines and tence farming or are landless squatters in a intermittent disturbances16 are the appro- floodplain at the urban fringe. Other social priate framework in a context of unknown groups share many of the vulnerabilities of probabilities. the poor stemming from their lack of entitle- Accepting uncertainty as inherent to the ments, productive assets, and voice.13 Social climate change problem and robustness as policy, a critical complement to physical and a decision criterion implies changing deci- financial risk management, provides many sion-making strategies for long-lived invest- tools to help manage the risk affecting the ment and long-term planning. It demands most vulnerable and to empower commu- rethinking traditional approaches that nities to become agents in climate-change assume a deterministic model of the world management. in which the future is predictable. This chapter focuses on measures that First, priority should be given to no- will assist people in handling today's vari- regrets options: investment and policy able climate and the climate changes that options that provide benefits even with- occur over the next few decades. It fi rst out climate change. Such options exist in describes a policy framework based on almost every domain--in water and land strategies that are robust to climate uncer- management (see chapter 3), in sanitation tainty and management practices that are to reduce water-borne diseases (controlling adaptive in the face of dynamic conditions. sewer leakage), in disaster risk reduction It then looks at managing physical risks, (avoiding high-risk zones), in social protec- financial risks, and social risks. tion (providing assistance to the poor). But such options often are not implemented, Adaptive management: partly because of a lack of information and Living with change transaction costs but also because of cogni- Climate change adds an additional source of tive and political failures (see chapter 8).17 unknowns for decision makers to manage. Second, buying "safety margins" in new Real-world decision makers make decisions investments can increase climate resil- under uncertainty every day, even in the ience, often at low cost. For instance, the absence of climate change. Manufacturers marginal cost of building a higher dam or invest in flexible production facilities that including additional groups in a social pro- can be profitable across a range of produc- tection scheme can be small.18 Safety mar- tion volumes to compensate for unpredict- gins account not only for possible impacts able demand. Military commanders insist of climate change (more severe events) but on overwhelming numerical superiority. also for the uncertainty in socioeconomic Financial investors protect themselves development (changes in demand). against fluctuations in markets by diversi- Third, reversible and flexible options fying. All these forms of hedging are likely need to be favored, accepting that decisions to lead to suboptimal results for any fi xed can be wrong and thus keeping the cost of expectation about the future, but they are reversing them as low as possible. Restric- robust in the face of uncertainty.14 tive urban planning because of uncertain A compounding set of uncertainties-- flooding outcomes can be reversed more about demographics, technology, markets, easily and cheaply than future retreat or and climate--requires policies and invest- protection options. Insurance provides flex- ment decisions to be based on imperfect ible ways of managing risk and protecting and incomplete knowledge. Local and necessary investment when the direction national decision makers face even greater and magnitude of change are uncertain.19 90 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 Farmers transitioning to drought-tolerant Implementing such strategies through varieties (rather than investing in irriga- adaptive management entails continuous tion) can use insurance to protect their information development, f lexible and seasonal investment in new seeds from an robust planning and design, participa- exceptionally severe drought. For storm- tory implementation, and monitoring and prone areas a combination of early warning evaluation of feedback. It realigns decisions systems, evacuation plans, and (possibly and management with the scale of ecologi- expensive) property insurance can provide cal and social contexts and processes, such more flexibility to save lives and replace as watersheds and ecoregions, and can be homes than can protecting entire coastal driven by local or community management areas with infrastructure or depopulating systems.22 It stresses management informed them unnecessarily.20 by scientific and local knowledge, as well as Fourth, institutionalizing long-term policy experiments that develop under- planning requires forward-looking sce- standing, set learning as an objective, and nario analysis and an assessment of improve the ability to make decisions under strategies under a wide range of possible uncertainty (box 2.1).23 futures. This leads to periodic reviews of Involving stakeholders in planning investment (and, if necessary, revisions), increases ownership and the likelihood that and it improves policies and practices by actions will be sustained.24 Boston and Lon- iterative learning from outcomes. Widen- don both have climate-change strategies. In ing the spatial scope of planning is equally Boston the process was research-led, with critical to be prepared for changes that inconsistent stakeholder engagement. The may propagate over longer distances, such completed study, seen as overly technical, as the melting of glaciers that change the has had little impact. London used a bottom- water supply of urban zones hundreds up approach, engaging many stakeholders. of kilometers downstream, widespread And after the London Warming Report was droughts that affect regional grain mar- released, the Climate Change Partnership kets, or accelerated rural-urban migration evolved from the stakeholder organization caused by environmental degradation. But to continue adaptation planning.25 the required structural changes can be dif- A risk-based decision-making model ficult because of the inertia in prevailing favoring robustness and longer-term plan- management practices.21 ning, and appropriate local, community, and national governance structures is essential for adaptation to climate change.26 Increasing pressure on scarce resources BOX 2.1 Characteristics of adaptive management (land, water), combined with major socio- demographic transformations (population Adaptive management is an planning and capacity building, and growth, urbanization, globalization) and a approach to guide intervention in is aligned with ecological processes the face of uncertainty. The principal at appropriate spatial scale. It cre- shifting climate, provide much less room to idea is that management actions are ates an enabling framework for leave risks unmanaged. A storm hitting a informed by explicit learning from cooperation between administrative modern, rapidly growing coastal city has the policy experiments and the use of levels, sectors, and line departments; potential to cause a lot more damage than in new scientific information and tech- broad stakeholder participation the past when the coast was less populated nical knowledge to improve under- (including research centers and and built up. In the face of the uncertainty standing, inform future decisions, non- government organizations) in arising from climate change, robust strate- monitor the outcome of interven- problem solving and decisionmak- tions, and develop new practices. ing; and adaptable legislation to gies and adaptive management provide the This framework establishes mecha- support local action and respond to appropriate framework to better manage nisms to evaluate alternative scenar- new information. physical, financial, and social risks. ios and structural and nonstructural measures, understand and challenge Managing physical risks: assumptions, and explicitly consider Sources: Adapted from Raadgever and uncertainties. Adaptive manage- Avoiding the avoidable others 2008; Olsson, Folke, and Berkes ment has a long time horizon for 2004. Natural systems, when well managed, can reduce human vulnerability to climate risks Reducing Human Vulnerability: Helping People Help Themselves 91 and deliver developmental co-benefits, infrastructure and planning urban expan- reduce poverty, conserve biodiversity, and sion appropriately. Similarly, coastal man- sequester carbon. Ecosystem-based adap- grove forests protect against storm surges tation--maintaining or restoring natural partly by absorbing the flows and partly ecosystems to reduce human vulnerabil- by keeping human settlements behind the ity--is a cost-effective approach to reducing mangroves farther from the sea. climate risks and one that offers multiple benefits (see focus B). For example, forested Build climate-smart cities catchments buffer water flows from moder- Half the world's people now live in cities, a ate rains far better than nonforested catch- share that will rise to 70 percent by 2050.28 ments, but heavier rains quickly saturate Of urban population growth (5 million the sponge, so most water moves quickly new residents a month), 95 percent will be over the land.27 Well-vegetated wetlands in the developing world, with small cities downstream may be needed to further growing fastest. 29 Urban areas concen- buffer water flows while natural drainage trate people and economic assets, often in systems carry it away. But wetlands con- hazard-prone areas as cities have histori- verted to agriculture or urban settlements cally prospered in coastal areas and at the and simplified drainage systems inevitably confluence of rivers. In fact, low-elevation fail, leading to flooding. A comprehensive coastal zones at risk from rising sea lev- response to flood management includes els and coastal surges are home to about maintaining catchment cover, managing 600 million people globally and 15 of the wetlands and river channels, and siting world's 20 megacities (map 2.1).30 Map 2.1 At risk: Population and megacities concentrate in low-elevation coastal zones threatened by sea level rise and storm surges Population in low elevation coastal zones (LECZ) (%) Mega cities <2 2­5 5­10 10­20 Outside LECZ 20­50 >50 Landlocked countries/No data Inside LECZ Source: United Nations 2008a. Note: Megacities in 2007 included Beijing, Bombay, Buenos Aires, Cairo, Calcutta, Dhaka, Istanbul, Karachi, Los Angeles, Manila, Mexico City, Moscow, New Delhi, New York, Osaka, Rio de Janeiro, São Paulo, Seoul, Shanghai, and Tokyo. Megacities are defined as urban areas with more than 10 million inhabitants. 92 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 Climate change is only one of many interventions show mixed results, however. factors that determine urban vulner- The Arab Republic of Egypt's attempt to cre- ability. For many coastal cities, migration ate satellite cities to decongest Cairo never increases the population exposed to rising attracted the projected population and did sea levels, storm surges, and floods,31 as in little to stop population growth in Cairo, Shanghai, where the net annual influx of partly because of the lack of policies to pro- people exceeds the natural growth rate by mote regional integration.37 Successful pol- a factor of four.32 And many cities in river icies facilitate concentration and migration deltas are sinking as a result of groundwater during the early stages of urbanization and extraction and declining sediment deposits interurban connectivity during the later caused by dams upstream. While subsid- stages. Public investments in infrastructure ing land has been an issue for some time in are most effective when they increase social many coastal cities (New Orleans, Shang- equity (through broader access to services) hai), it is an emerging threat for Hanoi, and integrate the urban space (through the Jakarta, and Manila.33 Urban development transport system).38 farther inland increases the water demand Urbanization seldom is harmoni- upstream, and many rivers, including the ous, generating pollution and pockets of Nile, no longer reach their delta. wrenching poverty and social dislocation. Urbanization, done well, can increase Today, urban areas in developing coun- resilience to climate-related risks. Higher tries are home to 746 million people liv- population densities lower the per capita ing below the poverty line (a quarter of the costs of providing piped treated water, sewer world's poor),39 and the urban poor suffer systems, waste collection, and most other from more than low income and consump- infrastructure and public amenities. Sound tion. Overcrowding, insecure tenure, illegal urban planning restricts development in settlements sited in landslide- and flood- flood-prone areas and provides critical prone areas, poor sanitation, unsafe hous- access to services. Infrastructure develop- ing, inadequate nutrition, and poor health ments (embankments or levees) can provide exacerbate the vulnerabilities of the 810 physical protection for many and will require million people in urban slums.40 additional safety margins where climate These many vulnerabilities call for com- change increases risk. And well-established prehensive improvements in urban planning communication, transport, and early warn- and development. Government agencies, ing systems help evacuate people swiftly, as particularly local ones, can shape the is the case in Cuba, where up to 800,000 peo- adaptive capacity of households and busi- ple are routinely evacuated within 48 hours nesses (box 2.2). But action by community- when hurricanes approach.34 Such measures based and nongovernmental organizations can increase the ability of urban dwellers to (NGOs) is also crucial, particularly those cope with shocks in the short term and adapt that build homes and directly provide ser- to a changing climate in the long term.35 vices, as slum-dweller organizations do.41 Cities are dynamic and highly adaptive Sound planning and regulation can identify systems that offer a wide range of creative high-risk zones in urban areas and allow solutions to environmental challenges. A low-income groups to find safe and afford- number of countries are looking into new able housing, as in Ilo, Peru, where local urban development strategies that aim at authorities safely accommodated a fivefold spreading regional prosperity. The Repub- increase in the population after 1960.42 But lic of Korea has embarked on an ambitious hard investments in infrastructure may also program to develop "Innovation Cities" as a be required to protect urban zones, such as way to decentralize the country's economic coastal cities in North Africa, with seawalls activities.36 Many of these efforts focus on and embankments (box 2.3). technological innovation and offer new A major risk for urban areas is flooding-- opportunities to redesign future cities to often caused by buildings, infrastructure, deal with the climate-change challenges. and paved areas that prevent infi ltration, Attempts to influence the spatial pat- exacerbated by overwhelmed drainage sys- terns of urban areas through public policy tems. In well-managed cities flooding is Reducing Human Vulnerability: Helping People Help Themselves 93 BOX 2.2 Planning for greener and safer cities: The case of Curitiba Despite a sevenfold population increase Land use and mobility were planned trash. In low-income areas where conven- between 1950 and 1990, Curitiba, Brazil, in an integrated fashion, and the city's tional waste management is difficult, the has proven itself to be a clean and efficient radial (or axial) layout was designed to "Garbage Purchase" program exchanges city, thanks to good governance and social divert traffic from the downtown area garbage for bus tokens, surplus food, and cooperation. The cornerstone of Curitiba's (three-fourths of the city's people use a school notebooks. success lies in its innovative Plano Director, highly efficient bus system). The industrial Replications are under way. In Juarez, adopted in 1968 and implemented by the center is built close to the city center Mexico, for example, the Municipal Plan- Instituto de Pesquisa Planejamento Urbano to minimize the commute for workers. ning Institute is building new homes and de Curitiba (IPPUC). Rather than use high- Numerous natural preservation areas are transforming the previously inhabited tech solutions for urban infrastructure, like situated around the industrial area to buf- flood zone into a city park. subways and expensive mechanical gar- fer flooding. bage separation plants, the IPPUC pursued Another part of the city's success is its appropriate technology that is effective waste management; 90 percent of its resi- both in cost and application. dents recycle at least two-thirds of their Source: Roman 2008. rarely a problem because surface drainage is Many Andean cities are reengineering built into the urban fabric to accommodate their water supplies to accommodate the floodwaters from extreme events that exceed shrinking and eventual disappearance of the capacity of protective infrastructure (see glaciers. Melting means that dry-season box 2.3). Inadequate solid waste manage- water supply is no longer reliable, and res- ment and drain maintenance, by contrast, ervoirs will need to compensate for the lost can quickly clog drainage channels and water storage and regulation function of cause local flooding with even light rainfall; glaciers.44 In the deltas in Southeast Asia, in Georgetown, Guyana, such a situation led the rapidly spreading suburbs of cities to 29 local floods between 1990 and 1996.43 such as Bangkok and Ho Chi Minh City Cities also have to look beyond their are encroaching on rice fields, reducing borders to prepare for climate change. water retention capacity and increasing BOX 2.3 Adapting to climate change: Alexandria, Casablanca, and Tunis Alexandria, Casablanca, and Tunis, each works to improve upstream watershed urban redevelopment projects, if carried with 3 million to 5 million people, are management and to broaden the main out, also risk increasing the city's vulner- assessing the extent of the projected drainage canals. Leaks in the household ability to rising seas. impacts of climate change and devising water distribution network have been Adaptation to climate change in Alex- adaptation scenarios for 2030 through an repaired, with the water saving equal andria, Casablanca, and Tunis should ongoing regional study. The cities' early to the consumption of about 800,000 occur primarily through improving responses to their increasing vulnerability people. But coastal zone management urban planning; identifying land-use and show uneven paths toward adaptation. remains a concern, given the limited tools expansion scenarios that would minimize In Alexandria the recent construction of to control construction and reduce sand vulnerability; addressing the vulnerability the corniche, a major six-lane highway built extraction from beaches. of key infrastructure assets, such as ports, right on the coast, has worsened coastal Tunis is also addressing its urban flood- roads, bridges, and water-treatment erosion and steepened the profile of the ing risks by improving drainage canals plants; and improving the capacity of seabed, causing storm surges to reach and controlling informal construction responsible institutions to coordinate farther into the city. Sea defenses are being around some natural reservoirs. Sea- responses and manage emergencies. In built without sufficient engineering stud- walls are being built to defend the most addition, energy efficiency in buildings ies or coordination among the responsible threatened coastal neighborhoods, and and municipal systems can be consistent institutions. A lake near the city, a natural the new master plan directs urban devel- with increasing resilience to climate receptacle for drainage waters, is suffering opment away from the sea. But the city change while reducing greenhouse gas acute pollution and real-estate pressures to center, already below sea level, is subsid- emissions. reclaim it for construction purposes. ing, and harbor and logistic facilities, as Casablanca responded to recent dev- well as power-generation and water- astating urban flooding episodes with treatment plants, are under threat. Major Source: Bigio 2008. 94 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 the risk of floods.45 The risk can get worse Local city governments can promote risk when upstream storage areas reach their reduction and risk-based planning. Creat- capacity and have to discharge water. Peak ing a risk information database, developed river discharges in South and Southeast jointly with citizens, businesses, and offi- Asian river basins are projected to increase cials, is the fi rst step in setting priorities with climate change, requiring greater for intervention and identifying hotspots. upstream efforts to protect urban centers And establishing a city mandate through downstream (map 2.2).46 executive orders and council legislation can Map 2.2 A complex challenge: managing urban growth and flood risk in a changing climate in South and Southeast Asia Brahmaputra Ganges Previous floods Population density (persons/sq. km) 2005 0­100 1001­2000 2004 101­250 >2000 2003 251­500 No data 2002 501­1000 Rivers Mek ong Sources: WDR team analysis. Flood data: Dartmouth Flood Observatory 2009. Population data: CIESIN 2005. Note: Living with floods is engrained in the economic activities and culture of people in South and Southeast Asia. The floodplains of some of the major river basins (Ganges, top; Mekong, bottom) concentrate a large number of people and expose agriculture and growing urban centers to seasonal flood risk. Climate change is likely to bring more intense flooding, partly caused by the melting of glaciers in the upper catchment of the Himalaya region and partly by the shorter and more intense monsoon rains, which will likely change flood patterns in the region. At the same time urban centers are rapidly encroaching into agricultural areas that serve as natural retention zones for flood waters, bringing new complexity to managing flood water and urban expansion in the future. Reducing Human Vulnerability: Helping People Help Themselves 95 facilitate mainstreaming, as in storm- and particularly Africa and South Asia. Climate flood-prone Makati City, Philippines, where change will increase that burden and will be the Disaster Coordination Council plans most consequential for the poor (see chap- the city's disaster risk management.47 ter 1).51 The estimated additional 150,000 Many municipal actions to promote deaths a year attributable to climate change local development and resilience to extreme in recent decades may be just the tip of the events and disasters overlap with the mea- iceberg.52 The indirect effects of climate sures for adaptation, including water change mediated by water and sanitation, supply and sanitation, drainage, prevention- ecosystems, food production, and human focused health care, and disaster prepared- habitation could be far higher. Children are ness (box 2.4). Such interventions are likely especially susceptible, with malnutrition to be in the immediate interest of decision and infectious diseases (mostly diarrheal makers in urban contexts (see chapter 8).48 It diseases) part of a vicious cycle causing cog- is evidently easier to cast adaptation-oriented nitive and learning disabilities that perma- initiatives as being in the city's immediate nently affect future productivity. In Ghana interests, in order to break political logjams and Pakistan the costs associated with for climate action.49 malnutrition and diarrheal diseases are Building climate-smart cities will involve estimated to be as high as 9 percent of gross considerable use of emerging technologies. domestic product (GDP) when accounting However, much of the available technical for long-term productivity losses in later expertise in developing countries is concen- years. These costs will only increase with trated in the central government, with local climate change, if adaptation to these con- authorities often left to draw from a small ditions is slow.53 pool of expertise.50 Urban universities can The recent heat waves, such as the one play a key role in supporting efforts by cit- that killed about 70,000 people in Europe in ies to adopt and implement climate-smart 2003, showed that even high-income coun- practices through changes in curriculum tries can be vulnerable.54 Heat waves are and teaching methods that enable students likely to increase in frequency and inten- to spend more time in the practical world sity (map 2.3), 55 with urban heat islands solving local problems. producing temperatures up to 3.5­4.5°C higher than in surrounding rural areas.56 Keep people healthy For better preparedness several countries Diseases linked to climate, namely malnu- and metropolitan areas now have heat- trition, diarrheal diseases, and vector-borne health warning systems (box 2.5). illnesses (especially malaria), already repre- Vector-borne diseases are increasing sent a huge health burden in some regions, their geographic spread and are reappearing BOX 2.4 Fostering synergies between mitigation and adaptation The spatial organization of cities, or their developments. Similarly, increased den- adaptation and mitigation are often urban form, determines energy use and sity combined with the paving of infiltra- related to building height, layout, spac- efficiency. The concentration of popula- tion areas hampers urban drainage that ing, materials, shading, ventilation, and tion and consumption tends to increase mitigates flooding. air-conditioning. rapidly during the early stage of urban- Climate-smart urban design can fos- Many climate-smart designs, combin- ization and development. Denser urban ter synergies between mitigation and ing ecological principles, social sensibili- areas have higher energy efficiency and adaptation. Promoting renewable energy ties, and energy efficiency, are planned shorter travel distances (see chapter 4, sources tends to favor the decentraliza- for urban areas in China, such as Dongtan, box 4.7). But increasing the density of tion of energy supply. Green spaces pro- close to Shanghai, but so far the plans people, economic activity, and infrastruc- vide shading and cooling, reducing the have largely remained blueprints. ture tends to amplify the effects of cli- need to air-condition buildings or to leave Sources: Girardet 2008; Laukkonen and mate on cities. For instance, green space the city during heat waves. Green-roofing others 2009; McEvoy, Lindley, and Handley can reduce the urban heat-island effects, can save energy, attenuate storm water, 2006; Wang and Yaping 2004; World Bank but it can also fall victim to building and provide cooling. Synergies between 2008g; Yip 2008. 96 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 Map 2.3 Northern cities need to prepare for Mediterranean climate--now Helsinki St. Petersburg Oslo Stockholm Berlin London Sandomierz Paris Ternopol Rome Soria Istanbul Barcelona Vila Real Teruel Badajoz Karaman Chlef Ouezzane Nicosia Source: WDR team, reproduced from Kopf, Ha-Duong, and Hallegatte 2008. Note: With increasing global temperatures, climate zones will shift north, and by the middle of the 21st century many central and northern European cities will "feel" Mediterranean. This is not good news and has major implications: water utilities will need to adjust management plans, and health services will need to be prepared for more extreme heat episodes (similar to the 2003 Euro- pean heat wave). While a few degrees of warming may seem appealing on a cold winter day in Oslo (the scenario shown in the map corresponds approximately to a global temperature increase of 1.2°C relative to today), the necessary changes in planning, public health management, and urban infrastructure are substantial. Buildings that were designed and engineered for cold harsh winters will need to function in a drier and hotter climate, and heritage buildings may suffer irreparable damages. Even more challenging is the construction of new buildings today as their design needs to be highly flexible to gradually adjust to drastically different conditions over the coming decades. BOX 2.5 Preparing for heat waves After heat waves in 2003 the Spanish Min- actions, and protection of at-risk Similar actions are under way else- istry of Health and CatSalut (the regional populations. where. Wales has a framework for heat- Catalan health service) implemented a · Level 2 is activated only if the tempera- wave preparedness and response. It comprehensive interministerial and inter- ture rises above the warning threshold establishes guidelines for preventing and agency action plan to blunt the effects (35°C in coastal areas and 40°C in inland treating heat-related illnesses, operates of future heat waves on health.a The plan areas), at which point health and social an early warning system during the sum- incorporates health responses and com- care and emergency service responses mer months, and has communication munications (at all levels of health care) are initiated. mechanisms with the meteorological triggered by a heat-health warning system. office.b Metropolitan Shanghai has a heat- The plan has three levels of action dur- The action plan and its health system health warning system as part of its multi- ing the summer season: response hinge on using primary health hazard management plan.c care centers (including social services) in · Level 0 starts on June 1 and focuses on the region. The centers identify and local- Sources: preparedness. ize vulnerable populations to strengthen a. CatSalut 2008. · Level 1 is triggered during July and outreach to them and disseminate public b. Welsh Assembly Government 2008. August and focuses on meteorological health information during the summer. c. Shanghai Multi-Hazard Early Warning Sys- assessments (including daily recordings They also collect health data to monitor and tem Demonstration Project, http://smb.gov. of temperature and humidity), disease evaluate the health impacts of heat waves cn/SBQXWebInEnglish/TemplateA/Default/ surveillance, assessment of preventive and the effectiveness of interventions. index.aspx (accessed March 13, 2009). Reducing Human Vulnerability: Helping People Help Themselves 97 in Eastern Europe and Central Asia. 57 early warning systems.61 Today, surveillance Malaria already strains economies in tropi- in many parts of the world fails to antici- cal areas,58 killing almost 1 million people a pate new disease pressure, for example, in year (mostly children), and climate change is Africa, where malaria is reaching urban projected to expose 90 million more people dwellers with the expansion of urban settle- (a 14 percent increase) to the disease by 2030 ments into areas of transmission.62 Satellite in Africa alone.59 Dengue has been expand- remote-sensing and biosensors can improve ing its geographic range (map 2.4), and cli- the accuracy and precision of surveillance mate change is expected to double the rate systems and prevent disease outbreaks of people at risk from 30 percent to up to 60 through early detection of changes in cli- percent of the world population (or 5 billion mate factors.63 Advanced seasonal climate to 6 billion people) by 2070.60 To detect and forecast models can now predict peak times monitor epidemic-prone diseases, national for malaria transmission and give regional health systems need better surveillance and authorities in Africa information to operate Map 2.4 Climate change accelerates the comeback of dengue in the Americas UNITED STATES ociR otreuP HAITI )SU( JAMAICA DOMINICAN REPUBLIC THE BAHAMAS MEXICO COLOMBIA R.B. DE VENEZUELA CUBA BELIZE HONDURAS GUATEMALA EL SALVADOR NICARAGUA R.B. DE GUYANA COSTA RICA VENEZUELA SURINAME ).rF( anaiuG hcnerF PANAMA COLOMBIA ECUADOR PERU BRAZIL BOLIVIA PARAGUAY CHILE Change in incidence rates of dengue fever ARGENTINA in the Americas URUGUAY (% change between 1995­1997 and 2005­2007) Greatly increased rate (>100%) Increase from 0 cases to positive rate Increased rate (10% to 100%) Decreased rate (-100% to -10%) Source: PAHO 2009. Note: Infectious and vector-borne diseases have been expanding into new geographic areas all over the world. In the Americas the incidence of dengue fever has been rising because of increasing population density and widespread international travel and trade. Changes in humidity and temperature brought about by climate change amplify this threat and allows disease vectors (mosquitoes) to thrive in locations previously unsuitable for the disease; see Knowlton, Solomon, and Rotkin-Ellman 2009. 98 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 an early warning system and longer lead- Such interventions require coordi- times to respond more effectively.64 nated intersectoral action and public Most measures to prevent these diseases expenditures. For water-borne diseases, are not new, but climate change makes the inter ventions should include the health better implementation of well-established agency, public works, and utilities.67 Jointly public health approaches even more managed water, sanitation, hygiene, and urgent.65 Breaking the transmission path- food security--combined with health and ways requires better management of water disaster management--can yield high (urban drainage), improved sanitation and returns. So can engaging the private sec- hygiene (sewerage systems, sanitation facili- tor, if it improves performance. Privatizing ties, hand-washing behaviors), and effective water services in Argentina in the 1990s vector control to limit or eradicate insects dramatically reduced the child mortality that transmit disease pathogens.66 linked to water-borne diseases.68 Monitoring and managing the health impacts of climate change will require Figure 2.1 The number of people affected by climate-related disasters is increasing greater use of new diagnostic tools. Advances Number of people killed per five-year period (millions) in genomics and information technology are 1.00 accelerating the design of a wide range of diagnostic tools that can help in monitoring 0.75 the spread of diseases and the emergence of 0.50 new ones. New communications tools will 0.25 make it easier to collect, analyze, and share health information in a timely manner.69 0 But having such tools will not be sufficient 1971­75 1976­80 1981­85 1986­90 1991­95 1996­2000 2001­05 without extensive programs to train health Number of people affected per five-year period (billions) care workers. Similarly, major institutional 2.00 reforms will need to be introduced to inte- 1.50 grate health care into other activities. Schools, for example, can be major centers for the pro- 1.00 vision of basic health care as well as sources 0.50 of medical information and education. 0 1971­75 1976­80 1981­85 1986­90 1991­95 1996­2000 2001­05 Prepare for extreme events Natural disasters are taking an increas- People affected as a share of population (%) ing economic toll, and managing them 8 better is essential for adapting to climate 7 change. While deaths from weather-related 6 natural disasters are on the decline,70 eco- 5 nomic losses caused by storms, floods, and 4 droughts are all rising (from about $20 bil- 3 lion a year in the early 1980s to $70 billion 2 in the early 2000s for high-income countries 1 and from $10 billion a year to $15 billion for 0 low- and middle-income countries).71 But 1971­75 1976­80 1981­85 1986­90 1991­95 1996­2000 2001­05 this increase is largely explained by higher low-income countries upper-middle-income countries exposure of economic value per area rather lower-middle-income countries high-income countries than changes in climate.72 The number of Sources: WDR team; CRED 2009. affected people (people requiring humani- Note: Over the past 40 years the death toll has fallen but the number of people affected has doubled every decade. tarian assistance after disasters) continues (People affected are those requiring immediate assistance during a period of emergency and can also include displaced or evacuated people.) In lower-middle-income countries almost 8 percent of the population is affected to increase, with the largest share in lower- each year. The increase cannot be attributed only to climate change; much results from population increase, middle-income countries characterized by greater exposure of infrastructure and improved reporting of disasters. However, the impacts on people are just as real and show why it is so essential to begin focusing on the current adaptation deficit while looking ahead to a rapid urban growth (figure 2.1).73 About 90 more climatically stressful future. percent of the economic losses in developing Reducing Human Vulnerability: Helping People Help Themselves 99 countries are borne by households, busi- designed to reduce risks of future disas- nesses, and governments with the rest cov- ters, bridging the humanitarian and devel- ered by insurance or donor funds. opment agendas.74 The private sector is Unless disaster impacts are systemati- instrumental in this framework, providing cally reduced, past development gains will financial (insurance, risk assessments) and be at risk. So the focus is shifting from cop- technical (communication, construction, ing with disaster events to forward-looking service provision) solutions.75 disaster risk management and toward pre- Climate change greatly increases the need ventive rather than reactive measures. In for effective management of extreme weather line with the Hyogo Framework of Action events and for disaster risk management for reducing disaster risks (the 2005 policy that increases preparedness and prevents framework defined by the United Nations), losses (box 2.6).76 In many places previ- recovery and reconstruction are being ously uncommon risks are becoming more BOX 2.6 Beating the odds and getting ahead of impacts: Managing the risk of extreme events before they become disasters Recurrent extreme climate events-- capacity to observe, record, research, flood control designed according to cur- storms, floods, droughts, wildfires-- analyze, forecast, model, and map natural rent probabilities could add to future characterize many parts of the world and hazards and vulnerabilities. Geographic losses by encouraging development in are part of the climate system. Climate information systems can integrate these flood-prone areas today but leaving them change is likely to change patterns of sources of information and give decision more prone to future major damages. So extreme events, but negative impacts can makers a powerful tool to understand climate-change predictions have to be be reduced through systematic risk man- risk--both at the national agencies and taken into account in current decision agement. The basic steps are assessing the local level. Many low- and middle- making and longer-term planning. risk, reducing risk, and mitigating risk.a income countries are now performing Mitigating risk entails actions to mini- Assessing risk, a prerequisite for risk man- risk assessments and are systematically mize impacts during an event and its agement, is the basis for informed decision strengthening their capacity to manage immediate aftermath. Early warning and making. It focuses action and resources. disasters better.b surveillance systems harness informa- Identifying pertinent risk is the first step Reducing risk requires mainstreaming tion technology and communication and generally does not require sophis- risk in the overall strategic framework of systems to provide advance warnings of ticated techniques. Rice farmers in Asia development, a task more important than extreme events. For such information to readily point out their most flood-prone ever as the density of people and infra- save lives, disaster management agencies fields. Water reservoir managers know the structure increases. Since the late 1990s need mechanisms in place to receive and difficulties of managing the competing there has been increasing recognition of communicate information to communi- demands for electricity and water supply the need to address risks emanating from ties well ahead of the event. This requires when water levels are low. And communi- natural hazards in medium-term strategic systematic preparedness training; capacity ties can identify social groups and indi- development frameworks, in legislation building and awareness raising; and coor- viduals who tend to be affected first when and institutional structures, in sectoral dination between national, regional, and adverse weather events occur. strategies and policies, in budgetary pro- local entities. Taking swift and targeted Quantifying risk is the next step, and a cesses, in individual projects, and in mon- action after a disaster is equally important, variety of approaches exist depending on itoring and evaluation. Mainstreaming including social protection for the most the scope of a risk assessment. Communi- requires analysis of how potential hazard vulnerable and a strategy for recovery and ties use simple participatory techniques events could affect policies, programs, reconstruction. based on readily observable indicators and projects and vice versa. (such as the market price for staple crops Development initiatives do not neces- Sources: WDR team; Ranger, Muir-Wood, during droughts) to trigger action at the sarily reduce vulnerability to natural haz- and Priya 2009; United Nations 2007; United household and community level, or they ards, and they can unwittingly create new Nations 2009; NRC 2006; Benson and Twigg use community-based mapping to deter- vulnerabilities or heighten existing ones. 2007. mine flood-prone areas. Risk assessments Solutions for jointly sustaining develop- a. Here the term mitigation refers to avoid- at the sector level (agriculture or hydro- ment, reducing poverty, and strengthen- ance of losses from extreme weather events, power) or for a country generally require ing resilience to hazards thus need to be for example, by evacuating people from a flood plain, through short-term measures in more systematic and quantitative data explicitly sought. Disaster risk reduction anticipation of an immediate threat. analysis (mapping agricultural extent or should promote resilience and help com- b. Global Facility for Disaster Reduction and regional hydrology). munities adapt to new and increased Recovery, www.gfdrr.org (accessed May 15, Understanding risk requires investment risks. But even this cannot be guaranteed. 2009); Prevention, www.proventionconsor- in scientific, technical, and institutional For instance, investments in structural tium.org (accessed May 15, 2009). 100 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 widespread, as in Africa, where the number changes in land use and demographics. of floods is increasing rapidly (figure 2.2), Satellite and geographic information tech- and in Brazil, which experienced the first nology provide powerful means to generate South Atlantic hurricane ever in 2004.77 physical and socioeconomic information Generating information about where rapidly and cost-effectively (box 2.7; see extreme weather impacts are likely and the also chapters 3 and 7). consequences they may have requires socio- Many developed countries provide economic data (maps showing population detailed flood-risk maps as a public ser- density or land values) as well as physical vice to homeowners, businesses, and local information (records of precipitation or authorities.79 In China the government has extreme events).78 But in a changing cli- drawn such maps since 1976 and publishes mate the past is no longer prologue (once- flood-risk maps that delineate high-risk rare events may become more frequent), zones for the most populated river basins. and uncertainty about the future climate With such tools, residents can have infor- is an important element in assessing risk mation on when, how, and where to evacu- and evaluating planning decisions. Equally ate. The maps can also be used for land-use important are monitoring and periodic planning and building design.80 Put in the updates in socioeconomic data to reflect hands of local communities, such services foster local action, as in Bogota, where sim- Figure 2.2 Floods are increasing, even in drought-prone Africa ilar risk-based information for earthquake- prone zones strengthens the resilience of Events per five-year period communities.81 700 Risk can never be eliminated, and being 600 Africa Rest of the world prepared to cope with extreme events is 500 vital for protecting people. Warning sys- 400 tems and response plans (say, for evacua- 300 tion in an emergency) save lives and prevent 200 avoidable losses. Engaging communities in 100 preparedness and emergency communica- tion protects their livelihoods. For example, 0 1971­75 1976­80 1981­85 1986­90 1991­95 1996­2000 2001­05 in Mozambique communities along the Búzi River use radios to warn communities Source: WDR team analysis from CRED 2009. Note: Flood events are increasing everywhere but particularly in Africa, with new regions being exposed to downstream of flooding.82 Even in remote, flooding and with less recovery time between events. Reporting of events may have improved since the 1970s, isolated communities local action can but this is not the main cause of rising numbers of reported floods, because the frequency of other disaster events in Africa, such as droughts and earthquakes, has not shown a similar increase. reduce risk, create jobs, and address poverty BOX 2.7 Satellite data and geo-information are instrumental in managing risk--and inexpensive Satellite data and geo-information tech- empower indigenous forest dwellers places where such data and knowledge nology are often available for free or at with information. High-resolution sen- are currently limited. moderate cost, and the software and sors identify urban encroachment into The use of such services and technol- tools to use such technology operate on hazardous zones. Geographic position- ogy broadly and effectively in developing desktop computers. ing devices used in surveys can reveal countries does not require hard invest- Satellites monitor moisture and veg- new information about how households ments--investments in higher education, etation and provide invaluable informa- interact with the natural environment. institutional capacity building, mission- tion to agricultural extension services. Geo-information systems streamline data focused regional research centers, and They track tropical storms and provide management, ensure information is avail- promoting private enterprise are the early warning to coastal communities. able when it is needed, and provide a main elements. By mapping flood impacts they support cost-effective and rapid tool to build the recovery and reconstruction opera- knowledge base for informed policy mak- tions. They map forests and biomass and ing and for understanding risk patterns in Sources: ESA 2002; NRC 2007a, 2007b. Reducing Human Vulnerability: Helping People Help Themselves 101 (box 2.8). At the national level, being finan- cially prepared to provide immediate assis- B OX 2 . 8 Creating jobs to reduce flood risk tance after disasters is critical for avoiding long-term losses for communities. Heavy rains are common in Liberia, for-work options, government officials yet drainage systems have not been embraced it. In September 2006 a one- maintained for decades because of year project to clear and rehabilitate Managing financial risks: Flexible years of neglect and civil war. As a drainage systems was launched in five instruments for contingencies result, flooding has triggered recur- counties. This significantly increased Public policy creates a framework that rent disasters in both rural and urban the flow of rainwater and reduced delineates clear roles and responsibilities for settings. Cleaning the drains was not flooding and related health risks. The the public sector, private sector, households, a priority for government officials or project also rehabilitated wells and citizens, because nobody had the improved market access by clearing and individuals. Core to such a framework resources. But after Mercy Corps, an roads and building small bridges. is a spectrum of risk management prac- international nongovernmental orga- tices with layered responsibilities. A minor nization, raised the possibility of cash- Source: Mercy Corps 2008. drought that causes small losses in crop production can be managed by households through informal and community-based risk sharing unless several small droughts homeowners receive a premium reduction if occur in short sequence (see chapter 1). A they install fire alarms). If climate is trend- more severe drought, one that occurs, say, ing in a predictable fashion (toward hotter every 10 years, can be managed through or drier weather conditions, for instance), risk transfer instruments in the private insurance is not viable. Insurance is appro- sector. But for the most severe and wide- priate when impacts are random and rare, spread events the government has to act as helping households, businesses, and govern- the insurer of last resort. It has to develop a ments spread risk over time (by paying regu- framework that allows communities to help lar premiums rather than covering the full themselves and the private sector to play an costs at once) and geographically (by sharing active and commercially viable role, while risk with others). So, it does not eliminate making provisions to cover its liabilities risk, but it does reduce the variance of losses arising from catastrophic events. borne by individuals in the insurance pool. Insurance against storms, floods, and Provide layers of protection droughts, whether provided to govern- The use and support of insurance mecha- ments or individuals, is difficult to manage. nisms has gained much attention in the con- Climate risk tends to affect entire regions text of adaptation.83 Insurance can protect or large groups of people simultaneously; against losses associated with extreme climate for example, thousands of breeders in events and manage costs that cannot be cov- Mongolia saw their livestock decimated in ered by international aid, by governments, or 2002, when a dry summer was followed by by citizens.84 Some novel approaches have an extremely cold winter (box 2.9). Such been developed and tested, such as weather- covariant events characterize many climate based derivatives and microinsurance prod- risks and make insurance very difficult to ucts on the private market. Consider the provide because claims tend to cluster and weather-index insurance for smallholder require large backup capital and adminis- farmers in India that provides compensa- trative efforts.86 That is one reason major tion to hundreds of thousands of farmers in climate risks are not widely covered by case of severe precipitation shortfall--and insurance, particularly in the developing the Caribbean common insurance pool that world. Indeed, microfi nance institutions quickly provides governments with liquidity often limit the share of agricultural loans in after disasters.85 their portfolio in case widespread weather But insurance is not a silver bullet--it is impacts cause their clients to default.87 only one element in a broader risk manage- The provision of financial services has been ment framework that promotes risk reduc- a long-standing challenge in development for tion (avoiding avoidable losses) and rewards reasons unrelated to climate change. Access sound risk management practices (just as to insurance products is generally much 102 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 BOX 2.9 Public-private partnerships for sharing climate risks: Mongolia livestock insurance An important concept of climate-risk commercial livestock insurance provided to offer commercial insurance to herders, management is risk-sharing by commu- by Mongolian insurers. A social insurance which they had been reluctant to do. nities, governments, and businesses. In program through the government bears The scheme provides advantages for Mongolia livestock herders, the national the losses associated with catastrophic all. Herders can buy insurance against government, and insurance companies livestock mortality that would overwhelm unavoidable losses. Insurers can expand developed a scheme to manage the herders and insurers alike. This tiered their business in rural areas, strengthening financial risks arising from severe winter- approach defines a clear framework for the rural financial service infrastructure. spring cold episodes (dzuds) that peri- self-insurance by herders, commercial The government, by providing a well- odically result in widespread livestock insurance, and social insurance. structured social insurance, can better mortality. Such episodes killed 17 percent An important innovation is the use of manage its fiscal risk. Even though a cata- of livestock in 2002 (in some areas up index insurance rather than individual live- strophic event exposes the government to to 100 percent), amounting to losses of stock insurance, which had been ineffec- significant potential risk, the government $200 million (16 percent of GDP). tive because the verification of individual had been compelled politically to absorb In this scheme herders retain the losses tends to be fraught with moral haz- even greater risk in the past. Because the responsibility for smaller losses that do ard and often prohibitively high costs. With government covers catastrophic out- not affect the viability of their business or this new type of insurance, herders are comes, the commercial insurance, limited household, and they often use arrange- compensated based on the average live- to moderate levels of mortality, can be ments with community members to buf- stock mortality rate in their district, and an offered at affordable rates. fer against smaller losses. Larger losses individual loss assessment is not required. (of 10­30 percent) are covered through This gives Mongolian insurers incentives Sources: Mahul and Skees 2007; Mearns 2004. weaker in developing countries (figure 2.3), insurance markets.91 And diversifying risk a fact reflected in the generally lower penetra- will be more difficult as climate change tion of financial services in rural areas. The leads to more synchronized, widespread, Philippines Crop Insurance Corporation, and systemic effects globally and region- for example, reaches only about 2 percent of ally--effects that are difficult to offset in farmers, largely in the more productive and other regions or market segments. richer zones.88 Providing financial services The erosion of market-based insurability to rural populations is challenging and risky, implies a strong reliance on governments because many rural households are not part as insurers of last resort, a role that many of the monetized economy and have weather- governments have implicitly taken. But the sensitive livelihoods. In urban settings people track record of governments has not been are more concentrated, but it is still difficult stellar, in either the developing world or the to reach the poor in the informal economy. developed. For instance, Hurricane Katrina Climate change could further erode in 2005 bankrupted the U.S. flood insur- the insurability of climate-related risk. ance program 10 times over, with more Unchecked climate change could make claims in one year than in its 37-year his- many climate risks uninsurable or the pre- tory. And few government-sponsored crop miums unaffordable. Insurability requires insurance programs are financially sustain- the ability to identify and quantify (or at able without major subsidies.92 At the same least estimate partially) the likelihood of time, if the magnitude of losses associated an event and the associated losses, to set with recent catastrophic events is any indi- premiums, and to diversify risk among cation of the insurability of future losses individuals or collectives.89 Meeting all from climate change, it suggests a more three conditions makes a risk insurable but explicit role of the public sector to absorb not necessarily profitable (as reflected in the damages that are beyond the private the low premium-to-claims ratio of many sector's capacity.93 agricultural insurance programs) and the Insurance is no panacea for adapting to cli- transaction costs of operating an insurance mate risks and is only one strategy to address program can be considerable.90 The uncer- some of the impacts of climate change. It tainties arising from climate change con- generally is not appropriate for long-term found the actuarial processes that underlie and irreversible impacts, such as sea-level Reducing Human Vulnerability: Helping People Help Themselves 103 Figure 2.3 Insurance is limited in the developing world Non­life insurance premium volume in 2006 (total volume = $1.5 trillion) Non­life insurance penetration in 2006 Latin America Premium/GDP (%) & Caribbean 5.0 3% Africa 1% 4.5 Asia 13% 4.0 3.5 3.0 2.5 North America 2.0 46% 1.5 1.0 0.5 Europe 0.0 35% North Oceania Europe Asia Latin America Africa World Oceania 1% America and the Caribbean Source: Swiss Re 2007. Note: Insurance is primarily a developed-country market as indicated by the regional share of premiums (left), and penetration (premium as percent of GDP) of non­life insurance (right). Non­life insurance includes property, casualty, and liability insurance (also referred to as general insurance), health insurance, and insurance products not defined as life insurance. rise and desertification, trends that would for example, the winds of Hurricane Ivan lead to massive losses for insurers and thus caused losses equivalent to more than 200 be uninsurable. Insurance must also be con- percent of GDP.97 Because outside aid is not sidered within an overall risk-management always immediately available, 16 Caribbean and adaptation strategy, including sound countries have developed a well-structured regulation of land-use and building codes, to financial risk-management scheme to avoid counterproductive behavior--or mal- streamline emergency funding and mini- adaptation (such as continued settlement on mize service interruptions. Operating since a storm-prone coast)--because of the secu- 2007, it provides rapid liquidity to govern- rity in an insurance contract.94 ments following destructive hurricanes and earthquakes, using innovative access Keep governments liquid to international reinsurance markets that Financial planning prepares governments can diversify and offset risk globally (box for catastrophic climate impacts and main- 2.10). tains essential government services in the Even poor economies can manage cli- immediate aftermath of disasters.95 Prear- mate risks more effectively by harness- ranged fi nancing arrangements--such as ing information, markets, good planning, catastrophe reserve funds, contingent lines and technical assistance. By forming part- of credit, and catastrophe bonds--allow gov- nerships with insurers and international ernments to respond swiftly, scale up social financial institutions, governments can protection programs, and avoid longer-term overcome the private sector's reluctance to losses that accrue to households and com- commit capital and expertise to the low- munities while people are homeless, out of income market. In 2008 Malawi pioneered work, and experience basic deprivations.96 a weather-based risk management contract Having immediate funds available to jump- to protect itself against droughts that would start the rehabilitation and recovery process lead to national maize production shortfalls reduces the derailing effect of disasters on (often accompanied by high volatility in development. regional commodity prices and food inse- Many small countries are fi nancially curity). In exchange for a premium an inter- more vulnerable to catastrophic events national reinsurance company committed because of the magnitude of disaster- to pay an agreed amount to the govern- related losses relative to the size of their ment in case of predefi ned severe drought economy (map 2.5); in Grenada in 2004, conditions, as measured and reported by 104 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 Map 2.5 Small and poor countries are financially vulnerable to extreme weather events High 11­50 Critical event Financial Medium 51­250 return period vulnerability (years) Low > 250 Not applicable Source: Mechler and others 2009. Note: The map shows degree to which countries are financially vulnerable to floods and storms. For example, in countries shaded dark red a severe weather event that would exceed the public sector's financial ability to restore damaged infrastructure and continue with development as planned is expected about once every 11 to 50 years (an annual probability of 2­10 percent). The high financial vulnerability of small economies underscores the need for financial contingency planning to increase governments' resilience against future disasters. Only the 74 most disaster-prone countries that experienced direct losses of at least 1 percent of GDP due to floods, storms, and droughts during the past 30 years were included in the analysis. the Malawian weather service. The World to be systematically promoted to mini- Bank Treasury acted as a trusted intermedi- mize government reliance on such fi nan- ary to the market, increasing confidence in cial arrangements for more routine losses. the transaction on both sides. Because pay- Contingent financing has opportunity costs ment and drought parameters were defined and should cover only the most urgent gov- beforehand, disbursement from such a ernment financial needs and most extreme fi nancial product could be rapid, and the losses. Agricultural extension services, government could forward-purchase maize building code enforcement, and strategic on regional commodity markets to secure urban planning are a few examples show- food as soon as possible before drought ing where government action can reduce would affect the most vulnerable, which avoidable consequences and the likelihood reduces response costs significantly, and of the most extreme outcomes. Equally decreases dependence on international important are early warning systems that appeals for assistance.98 provide advance warning and prevent the For these initiatives to be affordable and loss of human life and economic damages. sustainable, disaster risk reduction needs Such systems, supported by governments, Reducing Human Vulnerability: Helping People Help Themselves 105 can have dramatic effects, as in Bangladesh, where they have reduced human deaths from B OX 2 . 1 0The Caribbean Catastrophe Risk Insurance floods and storms and therefore the need for the government to finance the losses.99 Facility: Insurance against service interruption after disasters Among the many challenges facing insurance. It disburses funds based the governments of small island states on the occurrence of a predefined Managing social risks: Empower in the aftermath of natural disasters, event of a particular intensity, with- communities to protect themselves the most urgent is obtaining access out having to wait for onsite loss Climate change does not affect everyone to cash to implement urgent recovery assessments and formal confirma- equally.100 For poor households even mod- efforts and maintain essential govern- tions. This type of insurance is gener- erate climate stress can result in irreversible ment services. This challenge is partic- ally less expensive and settles claims ularly acute for Caribbean countries, quickly, because measuring the losses of human and physical capital.101 The whose economic resilience is limited strength of an event is almost instan- impacts on children can be long term and by mounting vulnerability and high taneous. The facility allows participat- affect lifetime earnings through education indebtedness. ing countries to pool their individual (withdrawal from school after a shock), The new Caribbean Catastrophe risks into one better-diversified health (compounding effect of poor sanita- Risk Insurance Facility provides portfolio and facilitates access to the tion and water- or vector-borne diseases), Caribbean Community governments reinsurance market, further spread- and stunting.102 Women in the develop- with an insurance instrument akin ing risks outside the region. to business interruption insurance. It Such insurance mechanisms should ing world experience the effects of climate furnishes short-term liquidity if they be part of a comprehensive financial disproportionately because many of their suffer catastrophic losses from a hur- strategy using an array of instruments household responsibilities (gathering and ricane or earthquake. to cover different types of events and selling wild products) are affected by the A wide range of instruments exists probabilities. vagaries of the weather.103 Households and to finance long-term recovery, but communities adapt through their livelihood this facility fills a gap in financing Sources: Ghesquiere, Jamin, and Mahul choices, asset allocations, and locational short-term needs through parametric 2006; World Bank 2008e. preferences, often relying on traditional knowledge to inform these decisions.104 People will be both more willing and more able to change if they have social support climates but less able to adapt to climate systems that combine community sharing, change.108 Second, the local nature of adap- publicly provided social insurance (such as tation means that sweeping policies with pensions), privately supplied fi nance and one-size-fits-all prescriptions are not suited insurance, and publicly provided safety to serving the needs of different urban and nets. rural locations.109 Building blocks of community resil- Build resilient communities ience--the capacity to retain critical Building on local and traditional knowledge functions, self-organize, and learn when about managing climate risk is important exposed to change--are evident through- for two reasons.105 First, many communities, out the world.110 In coastal Vietnam storm notably indigenous peoples, already have surges and rising sea levels are already put- context-relevant knowledge and strategies ting stress on coping mechanisms. After for addressing climate risks. Efforts to marry cutbacks of many state services in the late development and climate adaptation for vul- 1990s, local collective decision making and nerable communities will benefit from the credit and exchange networks substituted ways people have always responded to envi- social capital and learning for government ronmental risks, as in Africa where com- planning and infrastructure. (In recent munities have adapted to extended periods years, however, the government has recog- of drought.106 But those traditional coping nized its role to support community resil- and adaptation strategies can prepare com- ience and infrastructure development and munities only for some perceived risks, not now promotes a broad agenda of disaster for the uncertain and possibly different risks risk management).111 brought by climate change.107 In this way In the western Arctic the Inuit, expe- communities might be well adapted to their riencing diminished sea ice and shifting 106 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 wildlife distributions, have adjusted the tim- and introducing individual transferable ing of subsistence activities and are hunting catch quotas with local enforcement.114 a greater variety of species. They are increas- Active participation of local communities ing the resilience of their communities by and primary stakeholders in comanage- sharing food, trading more with one another, ment of fisheries is a key to success.115 and by developing new local institutions.112 Beyond resilience-enhancing benefits, Similarly, indigenous communities in devel- decentralized resource management can oping countries are adapting to climate have synergistic benefits for mitigation change--for instance, through rainwater and adaptation. For example, forest com- harvesting, crop and livelihood diversifica- mons management in tropical regions has tion, and changes in seasonal migration--to produced simultaneous livelihood ben- alleviate adverse impacts and take advantage efits (adaptation) and carbon storage gains of new opportunities.113 (mitigation) when local communities own In general, communities have better their forests, have greater decision-making time-, place-, and event-specific knowledge autonomy, and ability to manage larger for- of local climate hazards and of how such est patches.116 In many developing countries hazards affect their assets and productive decentralized governance of forests based activities. Communities also have greater on principles of common-pool resources capacity to manage local social and ecologi- has given local populations the authority to cal relationships that will be affected by cli- manage forests, use their time- and place- mate change. And they typically incur lower specific knowledge to create appropriate costs than external actors in implementing rules and institutions, and work with gov- development and environmental projects ernment agencies to implement the rules (figure 2.4). A recent review of more than they have created.117 Enhancing indigenous 11,000 fisheries found that the likelihood of peoples' land rights and ensuring their stock collapse can be dramatically reduced role in management has resulted in more by moving away from overall harvest limits sustained and cost-effective management Figure 2.4 Turning back the desert with indigenous knowledge, farmer action, and social learning NIGER Libya Algeria Mali Ni ger Chad Burkina Faso Nigeria Change in vegetation greenness, 1982­2006 (%) 11­25 >25 -10­10 (no significant trend) Sources: WRI and others 2008; Botoni and Reij 2009; Herrmann, Anyamba, and Tucker 2005. Note: In Niger farmers have turned back the encroaching desert; landscapes that were denuded in the 1980s are now densely studded with trees, shrubs, and crops. This trans- formation, so vast that its effects can be observed from satellites, has affected 5 million hectares of land (about the size of Costa Rica), which amounts to almost half of the culti- vated land in Niger. The new economic opportunities created by the regreening have benefited millions of people through increased food security and resilience to drought. Key to this success was a low-cost technique known as farmer-managed natural regeneration that adapts a centuries-old technique of woodland management. After some earlier success with the reintroduction of this indigenous technique in the 1980s, farmers saw the benefits and spread the word. The social learning effect was enhanced by donors sup- porting farmer study tours and farmer-to-farmer exchanges. The central government's role was pivotal in reforming land tenure and forest policies. Reducing Human Vulnerability: Helping People Help Themselves 107 of forests and biodiversity resources, as in by 2012 and to directly support governments Mexico and Brazil.118 at all levels, NGOs, and other intermediary Effective community-based adaptation agencies.124 builds on social learning, the process of exchanging knowledge about existing expe- Provide safety nets for the most riences, and incorporating it with techni- vulnerable cal scientific information.119 When people Climate change will amplify vulnerabilities migrate between urban and rural areas and expose more people to climate threats for seasonal employment or in the wake of more frequently and for longer periods. natural disasters, their movements follow This requires social policies to assist groups flows of earlier movements of relatives and whose livelihoods may gradually erode friends.120 When people adopt new tech- with climate change. Extreme events may nologies or change cropping patterns, their also directly affect households and require decisions depend on information flows in safety nets (social assistance) to prevent the social networks.121 When people choose dif- most vulnerable from falling economically. ferent areas to strengthen their skills and Protracted episodes of climate stress (as is education, their decisions are tied to those common with drought) can contribute to of their peers.122 commodity price increases and volatility, Community and experience-based social disproportionally affecting the poor and learning has been a principal means to cope vulnerable, as was the case in the 2008 food with climate risks in the past, but it may crises.125 High food prices increase poverty prove insufficient for climate change. Con- for those who need to purchase food to sup- sequently, effective community-oriented port their families, and worsen nutrition, climate adaptation strategies must balance reduce use of health and education ser- the assets of communities (greater local vices, and deplete the productive assets of capacity and knowledge, potential reserves the poor.126 In parts of the developing world of social capital, lower costs) against the food insecurity and associated food price deficits (limited scientific knowledge, nar- fluctuations already represent a systemic row scope for action). source of risk that is expected to increase While numerous community-based with climate change.127 adaptation activities are supported by a Climate shocks have two important wide range of NGOs and other intermedi- characteristics. First, there is uncertainty aries, they reach only a minuscule fraction about who exactly will be affected and of those at risk. A pressing challenge is to where. The affected population is often not replicate their successes far more widely. identified until a crisis is well advanced, Scaling up has often been limited by poor when it is difficult to respond swiftly and links, and sometimes tensions, between effectively. Second, the timing of possible local stakeholders and government institu- shocks is not known ahead of time. Both tions. Issues of authority, responsibility, and aspects have implications for conceptualiz- funding often impede cooperation. Success- ing and designing social policies in response fully scaling up community-driven devel- to future climate threats. Social protection opment will require that its supporters and should be thought of as a system, rather governments think of the process beyond than isolated interventions, and should be the project and of transformation or transi- put in place during good times. Safety nets tion to avoid projects coming to a brutal end need to have flexible financing and contin- when funding stops. Capacity, pivotal to suc- gent targeting so they can be ramped up cess, includes motivation and commitment, to provide effective responses for episodic which in turn require appropriate incentives shocks.128 at all levels.123 The new Adaptation Fund can To address chronic vulnerabilities, a greatly increase the support for scaling up wide set of safety net instruments provides because it is expected to manage resources cash or in-kind transfers to poor house- on the order of $0.5 billion to $1.2 billion holds.129 Used effectively, they have an 108 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 immediate impact on reducing inequality areas and insurance-based mechanisms to and are the first-best approach to address- access contingent financing.133 ing the poverty implications of commod- Workfare programs can be part of a ity price increases; they allow households safety net's response.134 They are labor- to invest in their future livelihoods and intensive public works programs that pro- manage risk by reducing the incidence of vide income to a target population while negative coping strategies (such as selling building or maintaining public infrastruc- of livestock during droughts). Safety nets ture. These programs focus on assets and can be designed to encourage households to high-return activities that can increase the invest in human capital (education, train- resilience of communities, such as water ing, nutrition) that increases resilience in storage, irrigation systems, and embank- the long term. ments. To be fully effective, however, they In response to shocks, safety nets can need clear objectives, suitable and well- have an insurance function if they are conceived projects, predictable funding, designed to be scalable and flexible. They professional guidance in selection and are often phased, with the priorities shift- implementation, and credible monitoring ing from immediate provision of food, san- and evaluation (box 2.11). itation, and cleanup to eventual recovery, Safety nets can also facilitate the reform rebuilding, and, possibly, disaster preven- of energy policy. Raising fuel prices brings tion and mitigation. To fulfi ll an insurance energy efficiency, economic gains, and fis- function, safety nets need countercycli- cal savings, but also brings significant polit- cal and scalable budgets, targeting rules ical and social risks. Safety nets can protect to identify people with transitory needs, the poor from high energy prices and help flexible implementation that allows rapid eliminate large, burdensome, regressive, response following a shock, and basic orga- and climate-damaging energy subsidies nizational procedures and responsibilities (see chapter 1).135 Energy subsidies, a com- agreed on well before a disaster.130 Early mon response to high fuel prices, are often warnings provided through seasonal fore- inefficient and not well targeted, but elimi- casts and bulletins can mobilize safety nets nating them is often problematic. Several ahead of time and prepare logistics and middle-income countries (Brazil, China, food deliveries.131 Colombia, India, Indonesia, Malaysia, and Safety nets will need to be strengthened Turkey) have recently used safety nets to substantially where they exist and devel- facilitate the removal of fossil-fuel subsi- oped where they are lacking. Many low- dies.136 Cash transfer payments following income countries cannot afford permanent the removal of subsidies must be carefully transfers to their poor, but scalable safety targeted to ensure that the poor are reason- nets that provide a basic form of noncon- ably compensated--the reform in Indo- tributory insurance can represent a core nesia showed that, even with substantial social protection that prevents mortality mistargeting, the bottom four deciles of the and excessive depletion of assets, even in population still gained during the transfer poor countries where they have not com- period.137 monly been used.132 For instance, the Productive Safety Net Facilitate migration in response in Ethiopia combines permanent social to climate change assistance (a longer-term workfare program Migration will often be an effective targeted at 6 million food-insecure house- response to climate change--and unfor- holds) and scalable safety nets that can tunately the only response in some cases. be rapidly expanded to serve millions of Estimates of the number of people at risk transitory poor households during a major of migration, displacement, and reloca- drought. An important innovation is the tion by 2050 vary from to 200 million to use of indexes based on observed weather as high as 1 billion.138 (But these estimates impacts to quickly provide more scalable are based on broad assessments of people and targeted assistance to food-insecure exposed to increasing risks rather than Reducing Human Vulnerability: Helping People Help Themselves 109 BOX 2.11 Workfare in India under the Indian National Rural Employment Guarantee Act India over time has developed an employ- kilometers of the household where pos- plantations. It provides funds for tools ment guarantee program built on an sible. The operation is transparent with and other items necessary to complete earlier successful scheme in the state of lists of works and contractors publicly activities and technical support for Maharashtra. The program establishes, available and on the program's Web site, designing and implementing the proj- through self-selection, the right of up to allowing public oversight against corrup- ects. It can thus become a core part of 100 days of employment at the statutory tion and inefficiency. Since the program's village development through produc- minimum wage for every household that inception in 2005, 45 million households tive, climate-resilient asset creation and volunteers. Households do not have to have contributed 2 billion days of labor maintenance.b demonstrate need, and some wages are and undertaken 3 million tasks.a Sources: paid even if work cannot be provided. With appropriate guidance, the pro- a. National Rural Employment Guarantee The program makes provision for at gram can support climate-smart develop- Act--2005, http://nrega.nic.in/ (accessed May least a third of the work to be available to ment. It operates at scale and can direct 2009). women, on-site child care, and medical significant labor toward appropriate b. CSE India, http://www.cseindia.org/ insurance for work injuries; work must adaptive works, including water con- programme/nrml/update_january08.htm be provided promptly and within five servation, catchment protection, and (accessed May 15, 2009); CSE 2007. analyses of whether exposure will lead them The negative portrayal of migration can to migrate.139) Adaptation, such as coastal foster policies that seek to reduce and con- protection, will offset climate impacts and trol its incidence and do little to address the reduce migration.140 needs of those who migrate, when migration Today's movements are a crude guide may be the only option for those affected by to the geography of movements in the near climate hazards. Indeed, policies designed future (box 2.12). Migration related to cli- to restrict migration rarely succeed, are mate change is likely to be predominantly often self-defeating, and increase the costs from rural areas in developing countries to to migrants and to communities of origin towns and cities. Policies to facilitate migra- and destination.146 In facilitating migra- tion should consider that most of the world's tion as a response to climate impacts, it is migrants move within their own countries better to formulate integrated migration and that the migration routes used by eco- and development policies that address the nomic and involuntary migrants overlap needs of voluntary migrants and support significantly. their entrepreneurial abilities and techni- Little evidence suggests that migra- cal skills. tion caused by climate change provokes or To the extent possible, policies should exaggerates conflict, but that could change. discourage settlement of migrants in areas People migrating because of environmen- with high exposure to persistent climate tal changes are likely disempowered, with hazards (map 2.6). Between 1995 and 2005, little capacity to wage confl ict.141 Where 3 million people were displaced by civil migration coincides with conflict, the rela- unrest in Colombia, mostly to small or mid- tionship may not be causal.142 Similarly, the sized cities. Many have moved to marginal link between violent conflict and resource city areas prone to flooding or landslides or scarcity (water wars)143 or degradation has near waste dumps, while their lack of edu- rarely been substantiated (poverty and dys- cation and job skills leaves them earning functional institutions have more explana- only 40 percent of the minimum salary.147 tory power).144 But uncertainty about the Anticipating involuntary migration and causal chains does not imply that future cli- resettlement, forward-looking plans should mate-induced migration would not increase identify alternative sites, apply compensa- the potential for confl ict when coinciding tion formulas that allow migrants to relo- with pressure on resources, food insecurity, cate and develop new sources of livelihoods, catastrophic events, and lack of governance and build public and social infrastructure in the receiving region.145 for community life. Again, such policies 110 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 BOX 2.12 Migration today The estimates of climate-change-induced and about half of all international migrants migrants to overcome the barriers to migration are highly uncertain and are women. Half of the world's interna- movement. These patterns are largely ambiguous. In the short term climate tional migrants originate from 20 coun- explained by barriers to movement and stress is likely to add incrementally to tries. Less than 10 percent of the world's the requirements to overcome them. Bar- existing migration patterns (map at left) international migrants are people forced riers include financial ones as the costs of rather than generating entirely new flows to cross an international border for fear of transport, housing on arrival, and living of people. The majority of the world's persecution (the definition of refugees). expenses while developing new income migrants move within their own coun- Many forced migrants, however, fall under streams. Observations suggest that there tries. For example, there are nearly as the definition of internally displaced per- is a "migration hump," where the rate of many internal migrants in China alone sons (map at right), estimated to number migration from a community increases (about 130 million) as there are interna- 26 million people globally. The routes and as incomes rise beyond a level necessary tional migrants in all countries (estimated intermediaries used by migrants fleeing to meet subsistence needs, and then to be 175 million in 2000). Most internal conflicts, ethnic strife, and human rights decreases again as the gap between migrants are economic migrants, moving violations are increasingly the same as incomes at the place of origin and the from rural to urban areas. There is also those used by economic migrants. The main destination closes. The migration significant, if poorly estimated, rural- available international statistics do not hump explains why the poorest of the rural migration, which tends to smooth allow a specific attribution of internal dis- poor do not migrate or migrate only very demand and supply in rural labor mar- placement due to environmental degrada- short distances. kets, and which serves as a step in the tion or natural disasters, but most of the migration path of rural migrants. forced migration linked to climate change International migration is largely a is likely to remain internal and regional. Sources: Tuñón 2006; World Bank 2008f; United Nations 2005; United Nations 2006; phenomenon in the developed world. Of Migration flows are not random, but Migration DRC 2007; de Haas 2008; Lucas international migrants, about two-thirds patterned, with flows of migrants con- 2006; Sorensen, van Hear, and Engberg- move between developed countries. The centrating around places where existing Pedersen 2003; Amin 1995; Lucas 2006; growth in new arrivals is higher in the migrants have demonstrated that a life Lucas 2005; Massey and Espana 1987; de developed than the developing countries, can be established and can help future Haan 2002; Kolmannskog 2008. International labor migration Internal displacement 19.1 18.6 12.5 25.9 23.0 2.0 0.7 11.8 7.2 0.5 8.7 13.5 5.1 11.3 8.4 3.5 10.0 15.2 2.7 0.6 Share of international migration by region (%) Internally displaced persons (millions) Total number of migrants in 2000 = 175 million (100%) 0­0.1 0.1­0.2 0.2­0.5 Inflows Outflows 0.5­1 >1 None / No data Sources: Parsons and others 2007; IDMC 2008 stand in sharp contrast to many ongoing in planning the move and in reconstruc- efforts to address the needs of involuntary tion--and to rely as little as possible on migrants and refugees--whether they are outside contractors and agencies. Those internally displaced or cross international being resettled must receive compensation borders. at the standards and prices in the receiving Recent experience has suggested some region, and they should be involved in the lessons for resettling migrants. The first is design and construction of infrastructure to involve the communities to be resettled in the new location. Where possible, the Reducing Human Vulnerability: Helping People Help Themselves 111 Map 2.6 Senegalese migrants settle in flood-prone areas around urban Dakar Guediawaye Guediawaye Pikine Pikine Dakar Dakar Dakar, SENEGAL Population change between 1999 and 2008 Flood risk (number of inhabitants/pixel) Very high flood risk Low Medium High <0 0­50 51­100 101­250 251­500 >500 Source: Geoville Group 2009. Note: Slow economic growth in the agricultural sector has made Dakar the destination of an exodus from the rest of the country. Forty percent of Dakar's new inhabitants between 1988 and 2008 have moved into zones of high flood potential, twice as high as that of Dakar's urban (19 percent) and rural communes (23 percent). Because urban expansion is geo- graphically limited, the influx of migrants has resulted in a very high concentration of people in urban and peri-urban zones (in the map, 16 pixels constitute one square kilometer). decision-making structures in the commu- leadership positions in 2050. On a path to nity being resettled should be respected to a 2°C warmer world, they will face dra- the fullest extent. matic changes. However, managing these changes will be but one of their many Looking ahead to 2050: challenges. Heading toward a 5°C warmer Which world? world, the outlook will be far more dis- mal. It will be clear that mitigation efforts A recurring theme of this Report is that over more than half a century have been the inertia in social, climate, and biologi- inadequate. Climate change will not be cal systems supports the case for action simply one of many challenges--it will be now. Some children alive today will be in the dominant challenge. "I would like to reach out to our world leaders to help initiate educational awareness and local government efforts to empower children to protect and restore the environment. Social and Political Institutions must respond and adapt strategies to protect public health, particularly for children. As a fifth grader, I think these are possible ways in order to ensure the survival of our Mother Earth." Raisa Kabir, Bangladesh, age 10 --Dave Laurence A. Juntilla, Philippines, age 11 112 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 Notes 33. Nicholls and others 2008. 1. WRI and others 2008; Heltberg, Siegel, and 34. Simms and Reid 2006. Jorgensen 2009. 35. World Bank 2008a. 2. Tompkins and Adger 2004. 36. Seo 2009. 3. Enfors and Gordon 2008. 37. World Bank 2008g. 4. The first is approximately the B1 SRES sce- 38. World Bank 2008g. nario where the world is on track to stabilization 39. Using a $2.15 a day poverty line; see Raval- of greenhouse gases at 450­550 ppm CO2e and lion, Chen, and Sangraula 2007. eventually a temperature of about 2.5°C above 40. United Nations 2008a. preindustrial levels, and the second where emis- 41. Satterthwaite 2008. sions are significantly higher is approximately 42. Díaz Palacios and Miranda 2005. the A1B SRES scenario, which would lead to 43. Pelling 1997. stabilization at about 1,000 ppm and eventually 44. World Bank 2008c. temperatures about 5°C above preindustrial lev- 45. Hara, Takeuchi, and Okubo 2005. els; see Solomon and others 2007. 46. Bates and others 2008. 5. Horton and others 2008; Parry and others 47. World Bank 2008a. 2007; Rahmstorf and others 2007. 48. Satterthwaite and others 2007. 6. Allan and Soden 2008. 49. McEvoy, Lindley, and Handley 2006. 7. WBGU 2008. 50. Laryea-Adjei 2000. 8. Adger and others 2008. 51. Confalonieri and others 2007. 9. Repetto 2008. 52. Only includes major cause-specific mor- 10. Lempert and Schlesinger 2000. tality and excludes indirect effects and morbidity; 11. Keim 2008. see McMichael and others 2004; Global Humani- 12. Millennium Ecosystem Assessment 2005. tarian Forum 2009. 13. Ribot, forthcoming. 53. World Bank 2008b. 14. Lempert and Schlesinger 2000; Lempert 54. Robine and others 2008. 2007. 55. Solomon and others 2007; Luber and 15. Lewis 2007. McGeehin 2008. 16. Lempert and Schlesinger 2000; Lempert 56. Corburn 2009. and Collins 2007. 57. Fay, Block, and Ebinger 2010. 17. Bazerman 2006. 58. Gallup and Sachs 2001. 18. Groves and Lempert 2007. 59. Hay and others 2006; this estimation only 19. Ward and others 2008. accounts for the expansion of the disease vector; 20. Hallegatte 2009. population growth will compound this effect and 21. Pahl-Wostl 2007; Brunner and others increase the population at risk by 390 million 2005; Tompkins and Adger 2004; Folke and oth- people (or 60 percent) relative to the 2005 popu- ers 2002. lation baseline. 22. Cumming, Cumming, and Redman 2006. 60. Hales and others 2002; without climate 23. Olsson, Folke, and Berkes 2004; Folke and change only 35 percent of the projected global others 2005; Dietz, Ostrom, and Stern 2003. population in 2085 would be at risk. 24. Dietz and Stern 2008. 61. WHO 2008; de la Torre, Fajnzylber, and 25. Ligeti, Penney, and Wieditz 2007. Nash 2008. 26. Pahl-Wostl 2007. 62. Keiser and others 2004. 27. FAO and CIFOR 2005. 63. Rogers and others 2002. 28. United Nations 2008b. 64. World Climate Programme 2007. 29. United Nations 2008a. 65. WHO 2005; Frumkin and McMichael 30. Balk, McGranahan, and Anderson 2008. 2008. Low-elevation coastal zones are defined 66. Better sanitation and hygiene are good for as coastal land below 10 meters elevation; see health, as evidenced by the impact of sanitation Socioeconomic Data and Application Center, improvements on urban child health in Salva- http://sedac.ciesin.columbia.edu/gpw/lecz.jsp dor, Brazil, a city with 2.4 million people. The (accessed January 8, 2009). program reduced the prevalence of diarrheal 31. McGranahan, Balk, and Anderson 2007. diseases by 22 percent across the city in 2003­04 32. The net migration rate in Shanghai has been and by 43 percent in high-risk communities. The 4­8 percent, compared with approximately minus improvements were mostly attributable to new 2 percent attributable to natural growth between infrastructure (Barreto and others 2007). 1995 and 2006; see United Nations 2008a. 67. AMWA 2007. Reducing Human Vulnerability: Helping People Help Themselves 113 68. Galiani, Gertler, and Schargrodsky 2005. 98. World Bank to Offer Index-based Weather 69. Richmond 2008. Derivative Contracts, http://go.worldbank.org/ 70. A growing body of evidence suggests 9GXG8E4GP1 (accessed May 15, 2009). that existing disaster loss data miss most of the 99. Government of Bangladesh 2008. small events that may account for as much as a 100. Bankoff, Frerks, and Hilhorst 2004. quarter of deaths attributed to natural hazards, 101. Dercon 2004. and that decision makers in many municipali- 102. Alderman, Hoddinott, and Kinsey 2006; ties have relatively low awareness of the risks Bartlett 2008; UNICEF 2008; del Ninno and climate change poses for their cities' popula- Lundberg 2005. tions and infrastructure; see Awuor, Orindi, 103. Francis and Amuyunzu-Nyamongo 2008; and Adwera 2008; Bull-Kamanga and others Nelson and others 2002. 2003; Roberts 2008. 104. Ensor and Berger 2009; Goulden and 71. Hoeppe and Gurenko 2006. others 2009; Gaillard 2007. 72. United Nations 2009. 105. Adger and others 2005; Orlove, Chiang, 73. United Nations 2008a. and Cane 2000; Srinivasan 2004; Wilbanks and 74. International Strategy for Disaster Reduc- Kates 1999. tion, http://www.unisdr.org/eng/hfa/hfa.htm 106. Stringer and others, forthcoming; Twom- (accessed March 12, 2009). low and others 2008. 75. World Economic Forum 2008. 107. Nelson, Adger, and Brown 2007. 76. Milly and others 2002. 108. Walker and others 2006. 77. The Nameless Hurricane, http://science. 109. Gaiha, Imai, and Kaushik 2001; Martin nasa.gov/headlines/y2004/02apr_hurricane.htm and Prichard 2009. (accessed March 12, 2009). 110. Gibbs 2009. 78. Ranger, Muir-Wood, and Priya 2009. 111. Adger 2003. 79. An example is the information services 112. Berkes and Jolly 2002. provided by the Scottish Environment Protec- 113. Macchi 2008; Tebtebba Foundation 2008. tion Agency, www.sepa.org.uk/flooding (accessed 114. Costello, Gaines, and Lynham 2008. March 12, 2009). 115. Pomeroy and Pido 1995. 80. Lin 2008. 116. Chhatre and Agrawal, forthcoming. 81. Ghesquiere, Jamin, and Mahul 2006. 117. Ostrom 1990; Berkes 2007; Agrawal and 82. Ferguson 2005. Ostrom 2001; Larson and Soto 2008. 83. Linnerooth-Bayer and Mechler 2006. 118. Sobrevila 2008; White and Martin 2002. 84. Mills 2007. 119. Bandura 1977; Levitt and March 1988; 85. Manuamorn 2007; Giné, Townsend, and Ellison and Fudenberg 1993; Ellison and Fuden- Vickery 2008; World Bank 2008e. berg 1995. 86. Hochrainer and others 2008. 120. Granovetter 1978; Kanaiaupuni 2000; 87. Christen and Pearce 2005. Portes and Sensenbrenner 1993. 88. Llanto, Geron, and Almario 2007. 121. Buskens and Yamaguchi 1999; Rogers 89. Kunreuther and Michel-Kerjan 2007; Tol 1995. 1998. 122. Foskett and Helmsley-Brown 2001. 90. World Bank 2005. 123. Gillespie 2004. 91. Mills 2005; Dlugolecki 2008; ABI 2004. 124. World Bank 2009. 92. Skees 2001. 125. Ivanic and Martin 2008. 93. This raises important issues: land-use 126. Grosh and others 2008. regulation and codes are required and need to be 127. 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Cardiff, UK: Welsh Assembly den. 2008. "Building Adaptive Capac- Government Department for Public Health ity to Cope with Increasing Vulnerability and Health Professions. Due to Climatic Change in Africa: A New White, A., and A. Martin. 2002. Who Owns the Approach." Physics and Chemistry of the World's Forests? Forest Tenure and Public For- Earth 33 (8­13): 780­87. ests in Transition. Washington, DC: Forest UNICEF (United Nations Children's Fund). Trends and Center for International Environ- 2008. Climate Change and Children: A Human mental Law. Security Challenge. Florence: UNICEF. WHO (World Health Organization). 2005. United Nations. 2005. Trends in Total Migrant Health and Climate Change: The Now and Stock: The 2005 Revision. New York: United How. A Policy Action Guide. Geneva: WHO. Nations Population Division, Department of ------. 2008. Protecting Health from Climate Economic and Social Affairs. Change: World Health Day 2008. Geneva: ------. 2006. 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"A Hand- ------. 2008e. The Caribbean Catastrophe Risk ful of Heuristics and Some Propositions for Insurance Facility: Providing Immediate Fund- Understanding Resilience in Social-Ecological ing after Natural Disasters. Washington, DC: Systems." Ecology and Society 11 (1):13. World Bank. Wang, R., and Y. E. Yaping. 2004. "Eco-city ------. 2008f. World Development Indicators Development in China." Ambio: A Journal of 2008. Washington, DC: World Bank. the Human Environment 33 (6): 341­42. ------. 2008g. World Development Report 2009. Ward, R. E. T, C. Herweijer, N. Patmore, and Reshaping Economic Geography. Washington, R. Muir-Wood. 2008. "The Role of Insurers DC: World Bank. Reducing Human Vulnerability: Helping People Help Themselves 123 ------. 2009. Development and Climate WRI (World Resources Institute), United Change: A Strategic Framework for the World Nations Development Programme, United Bank Group: Technical Report. Washington, Nations Environment Programme, and World DC: World Bank. Bank. 2008. World Resources 2008: Roots of World Climate Programme. 2007. Climate Ser- Resilience: Growing the Wealth of the Poor. vices Crucial for Early Warning of Malaria Epi- Washington, DC: WRI. demics. Geneva: World Climate Programme. Yip, S. C. T. 2008. "Planning for Eco-Cities in World Economic Forum. 2008. Building Resil- China: Visions, Approaches and Challenges." ience to Natural Disasters: A Framework for Paper presented at the 44th ISOCARP Con- Private Sector Engagement. Geneva: World gress. The Netherlands. Economic Forum, World Bank, and United Nations International Strategy for Disaster Reduction. focus B Biodiversity and ecosystem services in a changing climate Earth supports a complex web of 3 million to 10 million species of plants and animals1 and an even greater number of micro- organisms. For the first time a single species, humankind, is in a position to preserve or destroy the very functioning of that web.2 In people's daily lives only a few species appear to matter. A few dozen species provide most basic nutrition--20 percent of human calorie intake comes from rice,3 20 percent comes from wheat;4 a few species of cattle, poultry, and pigs supply 70 percent of animal protein. Only among the 20 percent of animal protein from fish and shell fish is a diversity of dietary species found.5 Humans are estimated to appropriate a third of the Sun's energy that is converted to plant material.6 But human well-being depends on ately affected because they depend most have biodiversity protection programs a multitude of species whose complex directly on ecosystem services.7 of varying degrees of effectiveness, and interactions within well-functioning several international treaties and agree- ecosystems purify water, pollinate flow- Threats to biodiversity and ments coordinate measures to slow or ers, decompose wastes, maintain soil ecosystem services halt the loss of biodiversity. fertility, buffer water flows and weather In the past two centuries or so, human- Climate change imposes an additional extremes, and fulfill social and cultural kind has become the driver of one of threat. Earth's biodiversity has adjusted needs, among many others (box FB.1). the major extinction events on Earth. to past changes in climate--even to The Millennium Ecosystem Assessment Appropriating major parts of the energy rapid changes--through a mix of spe- concluded that of 24 ecosystem services flow through the food web and altering cies migration, extinctions, and oppor- examined, 15 are being degraded or the fabric of the land cover to favor the tunities for new species. But the rate of used unsustainably (table FB.1). The species of greatest value have increased change that will continue over the next main drivers of degradation are land- the rate of species extinction 100 to century or so, whatever the mitigation use conversion, most often to agricul- 1,000 times the rate before human efforts, far exceeds past rates, other than ture or aquaculture; excess nutrients; dominance of Earth.8 In the past few catastrophic extinctions such as after and climate change. Many consequences decades people have become aware of major meteorite events. For example, the of degradation are focused in particular their impacts on biodiversity and the rates of tree species migration during the regions, with the poor disproportion- threats of those impacts. Most countries waxing and waning of the most recent ice age about 10,000 years ago were esti- mated to be about 0.3­0.5 kilometers a year. This is only a tenth the rate of change in climate zones that will occur BOX F B.1 What is biodiversity? What are ecosystem services? over the coming century.9 Some species Biodiversity is the variety of all forms States and Canada, along with more will migrate fast enough to thrive in a of life, including genes, populations, than half the number of mammal and new location, but many will not keep up, species, and ecosystems. Biodiversity bird species in those two countries. especially in the fragmented landscapes underpins the services that ecosystems Ecosystem services are the ecosystem of today, and many more will not survive provide and has value for current uses, processes or functions that have value the dramatic reshuffling of ecosystem possible future uses (option values), and to individuals or society. The Millennium composition that will accompany cli- intrinsic worth. Ecosystem Assessment described five mate change (map FB.1). Best estimates The number of species is often used major categories of ecosystem services: as an indicator of the diversity of an provisioning, such as the production of of species losses suggest that about 10 area, though it only crudely captures food and water; regulating, such as the percent of species will be condemned the genetic diversity and the complex- control of climate and disease; support- to extinction for each 1°C temperature ity of ecosystem interactions. There are ing, such as nutrient cycles and crop rise,10 with even greater numbers at risk 5 million to 30 million distinct species pollination; cultural, such as spiritual and of significant decline.11 on Earth; most are microorganisms and recreational benefits; and preserving, Efforts to mitigate climate change only about 1.75 million have been for- such as the maintenance of diversity. through land-based activities may sup- mally described. Two-thirds of the diver- sity is in the tropics; a 25 hectare plot in port the maintenance of biodiversity Sources: Millennium Ecosystem Assess- Ecuador was found to have more tree ment 2005; Kraft, Valencia, and Ackerly and ecosystem services or threaten them species than exist in all of the United 2008; Gitay and others 2002. further. Carbon stocks in and on the land can be increased through reforesta- Biodiversity and ecosystem services in a changing climate 125 Table FB.1 Assessment of the current trend in the global state of major services provided by ecosystems Service Subcategory Status Notes Provisioning services Food Crops Substantial production increase Livestock Substantial production increase Capture fisheries Declining production due to overharvest Aquaculture Substantial production increase Wild foods Declining production Fiber Timber +/­ Forest loss in some regions, growth in others Cotton, hemp, silk +/­ Declining production of some fibers, growth in others Wood fuel Declining production Genetic resources Lost through extinction and crop genetic resource loss Biochemicals, natural medicines, Lost through extinction, overharvest pharmaceuticals Fresh water Unsustainable use for drinking, industry, and irrigation; amount of hydro energy unchanged, but dams increase ability to use that energy Regulating services Air quality regulation Decline in ability of atmosphere to cleanse itself Climate regulation Global Globally, ecosystems have been a net sink for carbon since mid-century Regional and local Preponderance of negative impacts (for example, changes in land cover can affect local temperature and precipitation) Water regulation +/­ Varies depending on ecosystem change and location Erosion regulation Increased soil degradation Water purification and waste treatment Declining water quality Disease regulation +/­ Varies depending on ecosystem change Pest regulation Natural control degraded through pesticide use Pollination Apparent global decline in abundance of pollinators Natural hazard regulation Loss of natural buffers (wetlands, mangroves) Cultural services Spiritual and religious values Rapid decline in sacred groves and species Aesthetic values Decline in quantity and quality of natural lands Recreation and ecotourism +/­ More areas accessible but many degraded Source: Millennium Ecosystem Assessment 2005. tion and revegetation and through such What can be done? change and in the context of compet- agricultural practices as reduced soil till- Changes in priorities and active and ing uses for land or sea. age. These activities can create complex adaptive management will be needed This requires an ongoing process to and diverse landscapes supportive of to maintain biodiversity under a anticipate how ecosystems will respond biodiversity. But poorly planned mitiga- changing climate. In some places, to a changing climate while interacting tion actions, such as clearing forest or active management will take the form with other environmental modifiers. woodland to produce biofuels, can be of further improving protection from Some species will die out, others will counterproductive to both goals. Large human interference, while in others persist, and some will migrate, form- dams can provide multiple benefits conservation may need to include ing new combinations of species. The through irrigation and energy produc- interventions in species and ecosystem ability to anticipate such change will tion but also can threaten biodiversity processes that are stronger and more always be incomplete and far from per- through direct inundation and dramatic hands- on than today's. In all cases fect, so any management actions must changes in downstream river flows and biodiversity values must be actively be within a framework that is flexible the dependent ecosystems. considered--in the face of climate and adaptive. 126 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 Map FB.1 While many of the projected ecosystem changes are in boreal or desert areas that are not biodiversity hotspots, there are still substantial areas of overlap and concern Projected ecosystem shift Biodiversity hotspot Significant overlap between biodiversity hotspot and ecosystem shift region Source: WDR team based on Myers and others (2000) and Fischlin and others (2007). Note: The map shows the overlap between biodiversity hotspots--regions with exceptional concentrations of endemic species undergoing exceptional loss of habitat (Conservation International and Myers and others 2000)--and the projected changes in terrestrial ecosystems by 2100 relative to the year 2000, as presented by the Intergovernmental Panel on Climate Change in Fischlin and others (2007), figure 4.3 (a), p. 238. The changes should be taken as only indicative of the range of possible ecosystem changes and include gains or losses of forest cover, grassland, shrub- and woodland, herbaceous cover, and desert amelioration. Some species loss is inevitable, and tudinal, moisture, and soil gradients. Pro- are not likely to grow significantly. This some species may need to be protected posals to expand or modify conservation means that the lands that surround and in botanical and zoological gardens or reserves could lead to clashes over priori- connect areas with high conservation in seed banks. It is essential that key spe- ties for land allocation and for resources values and priorities (the environmen- cies in the delivery of ecosystem services within biodiversity management (such tal matrix), and the people who man- are identified and, if necessary, actively as money for land acquisition versus that age or depend on these lands will be of managed. Proactive management of for active habitat manipulation). Power- increasing importance for the fate of land and the seas under a changing ful tools exist for selecting the optimal species in a changing climate. climate is a fairly new and ill-defined allocation of lands to achieve particular There will be a greater need for more process. Relatively little knowledge has conservation goals that could balance flexible biodiversity conservation strat- been developed on identifying realistic competing demands.12 egies that take the interests of different management responses, so significant But protected areas alone are not the social groups into account in biodiver- sharing of learning, best practices, and solution to climate change. The current sity management strategies. So far the capacity building will be necessary. reserve network has increased rapidly principal actors in creating protected over the past decade to cover about areas have been nongovernmental orga- Conservation reserves 12 percent of Earth's land area,13 but it nizations and central governments. To Any extensions or modifications to the is still inadequate to conserve biodiver- ensure the flexibility needed to main- conservation priority areas (conservation sity. Given demographic pressures and tain biodiversity, a wide range of man- reserves) need to capture altitudinal, lati- competing land uses, protected areas agers, owners, and stakeholders of these Biodiversity and ecosystem services in a changing climate 127 matrix lands and waters will need to be oping countries were adequately man- the framework of the Law of the Sea.25 engaged in management partnerships. aged and that more than 10 percent of Fisheries are seen as being in crisis, and Incentives and compensation for these protected areas were already thoroughly fisheries mismanagement is blamed. But actors may be required to maintain a degraded.18 the fundamental requirements for fish- matrix that provides refugia and cor- Community-based conservation eries management are known.26 Climate ridors for species. Some of the options Community-based conservation pro- change may provide an additional impe- include extending payments for envi- grams could be adopted on a much tus to implement reforms, primarily by ronmental services, "habitat banking,"14 larger scale. These programs attempt to reducing fishing fleet overcapacity and and further exploration of "rights-based enhance local user rights and steward- fishing effort to sustainable levels.27 A approaches to resources access," as used ship over natural resources, allowing sustainable, long-term harvesting strat- in some fisheries. those nearest to natural resources, who egy must be implemented--one that already share in the costs of conserva- assesses stock exploitation in relation Biodiversity planning and management tion (such as wildlife depredation of to reference points that take uncertainty A plan for actively managing the viabil- crops) to share in its benefits as well. and climate change into account.28 The ity of ecosystems as the climate changes But such programs are not panaceas, key challenge is to translate high-level should be developed for all conserva- and more effort needs to go into design- policy goals into operational actions for tion lands and waters and significant ing effective programs. sustainable fisheries.29 areas of habitat. Elements include: Community participation is the sine Payment for ecosystem services · Climate-smart management plans qua non of successful biodiversity con- for coping with major stressors, such Payment for ecosystem services has for servation in the developing world, but as fire, pests, and nutrient loads. some time been considered an efficient long-term success stories (such as har- · Decision procedures and triggers for and equitable way to achieve many out- vesting sea turtle eggs in Costa Rica and comes related to conservation and the changing management priorities in Brazil) are rare.19 Certain elements clearly the face of climate change. For exam- provision of ecosystem services. Exam- contribute to the success that some pro- ple, if a conservation area is affected ples include paying upstream land man- grams have had regionally, such as the by two fires within a short period, agers to manage the watershed in ways wildlife-focused programs in southern making the reestablishment of the that protect ecosystem services such Africa. These elements include stable previous habitat and values unlikely, as flows of clean water, sharing profits governments, high resource value (iconic then a program to actively manage the from game reserves with surrounding wildlife), strong economies that support transition to an alternative ecosystem landholders whose property is damaged export-oriented resource use (including structure should be implemented. by the game, and most recently paying tourism and safari hunting), low human landholders to increase or maintain the · Integration into the plans of the rights, population densities, good local gov- carbon stocks on their land. Box FB.2 interests, and contributions of indig- ernance, and government policies that provides examples of the provision of enous peoples and others directly offer a social safety net to buffer against multiple services of conservation and dependent on these lands or waters. lean years. Even when these conditions carbon sequestration. are met, the benefits in some countries Such proactive planning is rare even Experience suggests that, because typically do not accrue to the poor.20 in the developed world.15 Canada has a payments are provided only if a ser- proactive management approach to cli- Managing marine ecosystems vice is rendered, user-financed schemes mate change in the face of rapid warming Effective land management also has tend to be better tailored to local needs, in its northern regions.16 Other countries benefits for marine ecosystems. Sedi- better monitored, and better enforced are outlining some of the core principles mentation and eutrophication caused than similar government- financed of proactive management: forecasting by land-based runoff reduce the resil- programs.30 changes; managing regional biodiversity, ience of marine ecosystems such as coral A significant opportunity for addi- including conservation areas and their reefs.21 The economic value of coral reefs tional payments for conservation and surrounding landscape; and setting pri- is often greater than the value of the agri- improved land management may flow orities to support decision making in the culture on the land that affects them.22 from the scheme for Reduced Emissions face of inevitable change.17 But in many For fisheries the main tools for man- from Deforestation and forest Degrada- parts of the world, basic biodiversity aging biodiversity are ecosystem-based tion (REDD) under consideration by the management is still inadequate. In 1999 fisheries management,23 integrated United Nations Framework Convention the International Union for Conserva- coastal zone management including on Climate Change. REDD seeks to tion of Nature determined that less than protected marine areas,24 and bind- lower emissions by paying countries for a quarter of protected areas in 10 devel- ing international cooperation within reducing deforestation and degrada- 128 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 ments, and dams to control river flows BOX F B.2 Payment for ecosystem and mitigation services all present threats to biodiversity.32 Adaptation goals can often be achieved Two successful payment programs are The project is expected to sequester through better management of ecosys- the Moldova Soil Conservation project about 2.5 million tons of carbon dioxide tems rather than through physical and and the bird conservation and water- equivalent by 2017. In Bolivia, farmers engineering interventions; for example, shed protection program in Bolivia's bordering Amboró National Park are Los Negros Valley, both funded through paid to protect a watershed containing coastal ecosystems can be more effec- the World Bank BioCarbon Fund. In Mol- the threatened cloud forest habitat of tive as buffer zones against storm surges dova, 20,000 hectares of degraded and 11 species of migratory birds, with ben- than sea walls. Other options include eroded state-owned and communal efits both for local biodiversity and for catchment and flood plain management agricultural lands are being reforested, dry-season water supplies. to adjust downstream water flows and reducing erosion and providing for- the introduction of climate-resilient est products to local communities. Source: World Bank Carbon Finance Unit. agroecosystems and dry-land pastoral- ism to support robust livelihoods. Ecosystem-based adaptation aims tion. These payments could be part of not recognized and if they do not have to increase the resilience and reduce a market-based mechanism within an secure rights to their lands, territories, the vulnerability of people to climate enhanced Clean Development Mecha- and resources (box FB.3). Experience change through the conservation, res- nism process, or they could be non- from community-based natural resource toration, and management of ecosys- market payments from a new financial management initiatives has shown that tems. When integrated into an overall mechanism that does not impinge on the involvement of local people, includ- adaptation strategy, it can deliver a the emissions compliance mechanisms. ing indigenous peoples, in participatory cost-effective contribution to adapta- The challenge of REDD is in its imple- monitoring of natural resources can pro- tion and generate societal benefits. mentation, which is discussed in more vide accurate, cost-effective, and locally In addition to the direct benefits detail in chapter 6. anchored information on forest biomass for adaptation, ecosystem-based adap- REDD could make a significant con- and natural resource trends. tation activities can also have indirect tribution to both the conservation of benefits for people, biodiversity, and biodiversity and mitigation of climate Ecosystem-based adaptation mitigation. For example, the restora- change if it protects biologically diverse "Hard" adaptation measures such as tion of mangrove systems to provide areas that have high carbon stocks and coastal defense walls, river embank- shoreline protection from storm surges are at high risk of deforestation. Tech- niques for identifying such areas are available and could be used to guide B OX FB.3 Excerpts from the Declaration of Indigenous the allocation of financial resources (map FB.2).31 Peoples on Climate Change To deal effectively with the chang- "All initiatives under Reducing Emissions education. We strongly urge relevant ing impacts and competing uses of from Deforestation and Degradation United Nations bodies to facilitate and ecosystems under a changing climate, (REDD) must secure the recognition and fund the participation, education, and governments will need to introduce implementation of the rights of Indig- capacity building of Indigenous youth enous Peoples, including security of land and women to ensure engagement in strong, locally appropriate policies, tenure, recognition of land title according all international and national processes measures, and incentives to change to traditional ways, uses and customary related to climate change." (Article 7) long-established behaviors, some of laws and the multiple benefits of forests "We offer to share with humanity our which are already illegal. These actions for climate, ecosystems, and peoples Traditional Knowledge, innovations, and will run counter to some community before taking any action." (Article 5) practices relevant to climate change, preferences, so the balance between "We call for adequate and direct fund- provided our fundamental rights as appropriate regulation and incentives is ing in developed and developing States intergenerational guardians of this and for a fund to be created to enable knowledge are fully recognized and critical. REDD holds potential benefits Indigenous Peoples' full and effective respected. We reiterate the urgent need for forest-dwelling indigenous and local participation in all climate processes, for collective action." (Concluding Para). communities, but a number of condi- including adaptation, mitigation, The declaration was issued during the tions will need to be met for these ben- monitoring, and transfer of appropri- Indigenous Peoples Global Summit on efits to be achieved. Indigenous peoples, ate technologies, in order to foster our Climate Change held in Anchorage on for example, are unlikely to benefit from empowerment, capacity building, and April 24, 2009. REDD if their identities and rights are Biodiversity and ecosystem services in a changing climate 129 Map FB.2 Unprotected areas at high risk of deforestation and with high carbon stocks should be based adaptation builds effectively on priority areas to benefit from a REDD mechanism. local knowledge and needs. Ecosystem-based adaptation may require giving priority to some ecosys- tem services at the expense of others. Using wetlands for coastal protection Kalimantan Timur, may require emphasis on silt accumu- INDONESIA lation and stabilization, for example, possibly at some expense to wildlife and recreation. Slope stabilization with dense shrubbery is an effective ecosystem-based adaptation to increas- ing rainfall intensity under climate change. However, in the dry periods often associated with the increasingly variable rainfall patterns under climate change the slopes may be exposed to wildfires that destroy the shrubs and lead to disastrous reversals of the adap- tation goals. So, ecosystem-based adap- tation must be assessed for risk and cost-effectiveness. Notes 1. McGinley 2007. 2. Vitousek and others 1999. 3. Fitzgerald, McCouch, and Hall 2009. 4. Brown 2002. 5. WHO and FAO 2009. 6. Haberl 1997. 7. Millennium Ecosystem Assessment 2005. 8. Lawton and May 1995. 9. England and others (2004) estimated the average rate of glacial retreat to be 0.1 kilo- meter a year about 8,000 years ago during the last ice age, which ultimately placed a con- straint on how fast species could migrate Province boundary International boundary poleward. 10. Convention on Biological Diversity Deforestation threat class/Carbon category 2009; Fischlin and others 2007. Low threat / Medium carbon Moderate threat / Medium carbon High threat / Medium carbon 11. Foden and others 2008. 12. Bode and others 2008; Joseph, Malo- Low threat / High carbon Moderate threat / High carbon High threat / High carbon ney, and Possingham 2008; McCarthy and Protected area Non-forest in 2003 No data Possingham 2007. 13. UNEP-WCMC 2008. Sources: Brown and others 1993; Harris and others 2009. 14. This is a form of trading high- Note: A recent study for the East Kalimantan region of Indonesia used GEOMOD and a database of carbon stocks conservation-value lands. Some holders in Indonesia's tropical forests to identify the best areas for REDD activities. The resulting map identifies areas with high deforestation threat that also have high carbon stocks. The overlay of the existing or proposed protected areas of such lands will choose to place them in allows decision makers to see where to direct financial resources and focus the protection efforts to get the most a habitat bank. If a need arises to damage benefits under a REDD mechanism (namely, the dark red areas--high threat/high carbon--not included within the boundaries of already existing protected areas). similar land elsewhere, such as for highway easements, the project proponents must can also increase fishery opportunities other vulnerable groups than options buy the rights to land of equivalent conser- and sequester carbon. Ecosystem-based based on infrastructure and engineer- vation value from the bank. adaptation options are often more ing. Consistent with community-based 15. Heller and Zavaleta 2009. accessible to the rural poor, women, and approaches to adaptation, ecosystem- 16. Welch 2005. 130 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 17. Hannah and others 2002; Hannah, Years Later." Environmental Conservation 2008. "Species Susceptibility to Climate Midgley, and Miller 2002. 34 (2): 122­31. Change Impacts." In The 2008 Review of 18. Dudley and Stolton 1999. Convention on Biological Diversity. 2009. the IUCN Red List of Threatened Species, 19. Campbell, Haalboom, and Trow 2007. Draft Findings of the Ad Hoc Technical ed. J.-C. Vie, C. Hilton-Taylor, and S. N. 20. Bandyopadhyay and Tembo 2009. Expert Group on Biodiversity and Climate Stuart. Gland, Switzerland: International 21. Smith, Gilmour, and Heyward 2008. Change. Montreal: Convention on Bio- Union for Conservation of Nature. 22. Gordon 2007. logical Diversity. Gitay, H., A. Suarez, R. T. Watson, and D. 23. FAO 2003; FAO 2005; Stiansen and Cunningham, S., and T. Bostock. 2005. Suc- J. Dokken, eds. 2002. Climate Change others 2005. cessful Fisheries Management. Issues, Case and Biodiversity. Technical Paper of the 24. Halpern 2003; Harmelin-Vivien and Studies and Perspectives. Delft, The Neth- Intergovernmental Panel on Climate others 2008. erlands: Eburon Academic Publishers. Change, IPCC Secretariat, Geneva. 25. Lodge and others 2007. Dudley, N., and S. Stolton. 1999. "Conver- Gordon, I. J. 2007. "Linking Land to Ocean: 26. Cunningham and Bostock 2005. sion of Paper Parks to Effective Man- Feedbacks in the Management of Socio- 27. OECD 2008; World Bank 2008. agement: Developing a Target." Paper Ecological Systems in the Great Barrier 28. Beddington, Agnew, and Clark 2007. presented at the Joint Workshop of Reef Catchments." Hydrobiologia 591 29. FAO 2003; FAO 2005; ICES 2008a; the IUCN/WWF Forest Innovations (1): 25­33. ICES 2008b. Project and the World Commission on Haberl, H. 1997. "Human Appropriation of 30. Wunder, Engel, and Pagiola 2008. Protected Areas in association with the Net Primary Production as an Environ- 31. Brown and others 1993; Harris and WWF-World Bank Alliance and the mental Indicator: Implications for Sustain- others 2009. Forests for Life Campaign. June 14. able Development." Ambio 26 (3): 143­46. 32. This section draws upon material being Turrialba, Costa Rica. Halpern, B. S. 2003. "The Impact of Marine prepared by the Ad Hoc Technical Expert Group on Biodiversity and Climate Change England, J. H., N. Atkinson, A. S. Dyke, Reserves: Do Reserves Work and Does 2009 for the Convention on Biological Diver- D. J. A. Evans, and M. Zreda. 2004. "Late Reserve Size Matter?" Ecological Applica- sity and the UN Framework Convention on Wisconsinan Buildup and Wastage of tions 13 (1): S117­37. Climate Change. the Innuitian Ice Sheet across Southern Hannah, L., T. Lovejoy, G. Midgley, W. Ellesmere Island, Nunavut." Canadian Bond, M. Bush, J. Lovett, D. Scott, and Journal of Earth Sciences 41 (1): 39­61. F. I. Woodward. 2002. "Conservation References FAO (Food and Agriculture Organization). of Biodiversity in a Changing Climate." Bandyopadhyay, S., and G. Tembo. 2009. 2003. "The Ecosystem Approach to Fish- Conservation Biology 16 (1): 264­68. "Household Welfare and Natural eries: Issues, Terminology, Principles, Hannah, L., G. Midgley, and D. Miller. Resource Management around National Institutional Foundations, Implementa- 2002. "Climate Change-Integrated Con- Parks in Zambia." Policy Research Work- tion and Outlook." Fisheries Technical servation Strategies." Global Ecology and ing Paper Series 4932, World Bank, Paper 443, FAO, Rome. Biogeography 11 (6): 485­95. Washington, DC. ------. 2005. Putting Into Practice the Eco- Harmelin-Vivien, M., L. Le Direach, J. Beddington, J. R., D. J. Agnew, and C. W. system Approach to Fisheries. Rome: FAO. Bayle-Sempere, E. Charbonnel, J. A. Clark. 2007. "Current Problems in the Management of Marine Fisheries." Sci- Fischlin, A., G. F. Midgley, J. T. Price, R. Garcia-Charton, D. Ody, A. Perez-Ruzafa, ence 316 (5832): 1713­16. Leemans, B. Gopal, C. Turley, M. D. A. O. Renones, P. Sanchez-Jerez, and C. Valle. Rounsevell, O. P. Dube, J. Tarazona, and 2008. "Gradients of Abundance and Bio- Bode, M., K. A. Wilson, T. M. Brooks, W. R. A. A. Velichko. 2007. "Ecosystems, Their mass across Reserve Boundaries in Six Turner, R. A. Mittermeier, M. F. McBride, Properties, Goods and Services." In Cli- Mediterranean Marine Protected Areas: E. C. Underwood, and H. P. Possingham. mate Change 2007: Impacts, Adaptation Evidence of Fish Spillover?" Biological 2008. "Cost-Effective Global Conserva- and Vulnerability. Contribution of Work- Conservation 141 (7): 1829­39. tion Spending Is Robust to Taxonomic ing Group II to the Fourth Assessment Harris, N. L., S. Petrova, F. Stolle, and S. Group." Proceedings of the National Report of the Intergovernmental Panel Brown. 2009. "Identifying Optimal Areas Academy of Sciences 105 (17): 6498­501. on Climate Change, ed. M. Parry, O. F. for REDD Intervention: East Kaliman- Brown, S., L. R. Iverson, A. Prasad, and L. Canziani, J. P. Palutikof, P. J. van der Lin- tan, Indonesia, as a Case Study." Environ- Dawning. 1993. "Geographical Distribu- den, and C. E. Hanson. Cambridge, UK: mental Research Letters 3:035006, doi:10. tion of Carbon in Biomass and Soils of Cambridge University Press. 1088/1748-9326/3/3/035006. Tropical Asian Forests." Geocarto Inter- Fitzgerald, M. A., S. R. McCouch, and Heller, N. E., and E. S. Zavaleta. 2009. "Bio- national 4: 45­59. R. D. Hall. 2009. "Not Just a Grain of diversity Management in the Face of Brown, T. A. 2002. Genomes. Oxford: John Rice: The Quest for Quality." Trends in Climate Change: A Review of 22 Years of Wiley & Sons. Plant Science 14 (3): 133­39. Recommendations." Biological Conserva- Campbell, L. M., B. J. Haalboom, and J. Foden, W., G. Mace, J.-C. Vie, A. Angulo, tion 142 (1): 14­32. Trow. 2007. "Sustainability of Commu- S. Butchart, L. DeVantier, H. Dublin, ICES (International Council for the Explo- nity-Based Conservation: Sea Turtle Egg A. Gutsche, S. Stuart, and E. Turak. ration of the Sea). 2008a. ICES Advice Harvesting in Ostional (Costa Rica) Ten Biodiversity and ecosystem services in a changing climate 131 Book 9: Widely Distributed and Migra- Environmental Information Coalition, UNEP-WCMC ((United Nations Environ- tory Stocks. Copenhagen: ICES Advisory National Council for Science and Envi- ment Program­World Conservation Committee. ronment. Monitoring Center). 2008. State of the ------. 2008b. ICES Insight Issue No. 45. Millennium Ecosystem Assessment. 2005. World's Protected Areas 2007: An Annual Copenhagen: ICES. Ecosystems and Human Well-Being: Syn- Review of Global Conservation Progress. Joseph, L. N., R. F. Maloney, and H. P. Pos- thesis Report. Washington, DC: World Cambridge, UK: UNEP-WCMC. singham. 2008. "Optimal Allocation of Resources Institute. Vitousek, P. M., H. A. Mooney, J. Lub- Resources among Threatened Species: A Myers, N., R. A. Mittermeier, C. G. Mitter- chenco, and J. M. Melillo. 1999. "Human Project Prioritization Protocol." Conser- meier, G. A. B. da Fonseca, and J. Kent. Domination of Earth's Ecosystems." Sci- vation Biology 23 (2): 328­38. 2000. "Biodiversity Hotspots for Conser- ence 277 (5325): 494­99. Kraft, N. J. B., R. Valencia, and D. D. Ack- vation Priorities." Nature 403: 853­58. Welch, D. 2005. "What Should Protected erly. 2008. "Functional Traits and Niche- OECD (Organisation for Economic Co- Area Managers Do in the Face of Cli- Based Tree Community Assembly in an operation and Development). 2008. mate Change?" The George Wright Amazonian Forest." Science 322 (5901): Recommendation of the Council on the Forum 22 (1): 75­93. 580­82. Design and Implementation of Decom- WHO and FAO (World Health Organization Lawton, J. H., and R. M. May. 1995. Extinction missioning Schemes in the Fishing Sector. and Food and Agriculture Organization). Rates. Oxford, UK: Oxford University Press. Paris: OECD. 2009. "Global and Regional Food Con- Lodge, M. W., D. Anderson, T. Lobach, G. Smith, L. D., J. P. Gilmour, and A. J. Hey- sumption Patterns and Trends." In Diet, Munro, K. Sainsbury, and A. Willock. ward. 2008. "Resilience of Coral Com- Nutrition and the Prevention of Chronic Dis- 2007. Recommended Best Practices for munities on an Isolated System of Reefs eases. Geneva and Rome: WHO and FAO. Regional Fisheries Management Orga- following Catastrophic Mass-Bleaching." World Bank. 2008. The Sunken Billions: nizations. London: Chatham House Coral Reefs 27 (1): 197­205. The Economic Justification for Fisheries for the Royal Institute of International Stiansen, J. E., B. Bogstad, P. Budgell, P. Reform. Washington, DC: World Bank Affairs. Dalpadado, H. Gjosaeter, K. Hiis Hauge, and FAO. McCarthy, M. A., and H. P. Possingham. R. Ingvaldsen, H. Loeng, M. Mauritzen, Wunder, S., S. Engel, and S. Pagiola. 2008. 2007. "Active Adaptive Management for S. Mehl, G. Ottersen, M. Skogen, and "Taking Stock: A Comparative Analysis Conservation." Conservation Biology 21 E. K. Stenevik. 2005. Status Report on of Payments for Environmental Services (4): 956­63. the Barents Sea Ecosystem 2004­2005. Programs in Developed and Developing McGinley, M. 2007. Species Richness. Wash- Bergen, Norway: Institute of Marine Countries." Ecological Economics 65 (4): ington, DC: Encyclopedia of Earth-- Research (IMR). 834­52. CHAPTER 3 Managing Land and Water to Feed Nine Billion People and Protect Natural Systems C limate change is already affect- water, land, forests, fisheries, and biodiver- ing the natural and managed sity more efficiently to obtain the services systems--forests, wetlands, coral and products societies need without further reefs, agriculture, fisheries--that damaging these resources through overuse, societies depend on to provide food, fuel, pollution, or encroachment. and fiber, and for many other services. It will Water will have to be used more effi- depress agricultural yields in many regions, ciently. To do that, managers need to think making it harder to meet the world's grow- on basin-wide scales and to devise efficient ing food needs. It comes as the world faces and flexible ways to allocate water among intensified competition for land, water, bio- competing quantity and quality demands diversity, fish, and other natural resources. At for human use (such as energy, agriculture, the same time, societies will be under pres- fisheries, and urban consumption) and for sure to reduce the 30 percent of greenhouse healthy ecosystems (such as forests, wet- gas emissions that come from agriculture, lands, and oceans). deforestation, land-use change, and forest Countries also need to get more from degradation. their agriculture. The rate of increase in To meet the competing demands and yields for key agricultural commodities has reduce vulnerability to climate change, soci- been declining since the 1960s. Countries eties will need to balance producing more will have to reverse that trend if the world is from their natural resources with protect- to meet its food needs in the face of climate ing these resources. That means managing change. Models vary, but all show the need for a marked increase in productivity.1 That increase in productivity cannot come at the Key messages expense of soil, water, or biodiversity as it has Climate change will make it harder to produce enough food for the world's growing population, so often in the past. So countries will need and will alter the timing, availability, and quality of water resources. To avoid encroaching into to accelerate research, enhance extension already-stressed ecosystems, societies will have to almost double the existing rate of agricul- services, and improve market infrastructure tural productivity growth while minimizing the associated environmental damage. This requires to get crops to market. But they also need dedicated efforts to deploy known but neglected practices, identify crop varieties able to to give farmers incentives to reduce carbon withstand climate shocks, diversify rural livelihoods, improve management of forests, and invest emissions from soil and deforestation. And in information systems. Countries will need to cooperate to manage shared water resources and fisheries and to improve food trade. Getting basic policies right matters, but new technologies they need to help farmers hedge against an and practices are also emerging. Financial incentives will help. Some countries are redirecting uncertain climate by diversifying income their agricultural subsidies to support environmental actions, and future credits for carbon stored sources and genetic traits of crops, and bet- in trees and soils could benefit emission reductions and conservation goals. ter integrate biodiversity into the agricultural landscape. 134 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 Applying climate-smart practices will incentives to conserve forests and adopt hinge on managing biodiversity better-- more sustainable farming techniques. The integrating natural habitats into rural techniques are not yet proven at the needed landscapes, protecting wetlands, and scale, but the potential is great, and the maintaining the water storage provided by additional benefits for agricultural produc- aquifers. Increasingly, countries are mak- tivity and poverty reduction are substan- ing use of techniques that improve soil and tial. At a high enough carbon price, global water productivity. But these innovations emission reductions from agriculture could will bear fruit only if decisions are based equal reductions from the energy sector (see on solid intersectoral analysis and only if overview, box 8).2 Third, countries could users have the right incentives--stemming change the way they support agriculture. from policies, institutions, and market Rich countries provide $258 billion annu- conditions. ally in agriculture support, 3 more than Many natural resources cross borders. As half of which depends only on the amount climate change makes resources harder to of crop produced or input used. Though manage, and growing populations increase politically difficult, countries are begin- demand, countries will need to cooperate ning to change the terms of these subsidies more intensively to manage international to encourage implementation of climate- waters, forests, and fisheries. All countries smart practices on a large scale. will turn more frequently to the inter- This chapter fi rst discusses what can national agricultural market and so will be done at the national level to increase benefit from a number of measures--from productivity of agriculture and fi sheries stock management to more competitive while more effectively protecting natural procurement techniques to customs and resources. It next discusses what can be port logistics--that make food trade more done to support national efforts, focus- reliable and efficient. ing on international cooperation and the Climate change also puts a premium essential role of information both at the on information about natural resources. global and the local level. Then it focuses Information--traditional and new, inter- on how incentives might change to acceler- national and local--will have a high payoff ate implementation of beneficial practices under a more variable and more uncertain and to help societies balance the need for climate, where the stakes are higher and increased production with better protec- making decisions is more complicated. tion of natural resources. Information supports resource manage- ment, food production, and better trade. Put in place the fundamentals for If societies generate information they can natural resource management trust about their resources and can get it An extensive literature recommends to the people who can use it, from inter- strengthening the policy and institutional national river basin authorities to farmers conditions that influence how people man- in their fields, those people can make more age agriculture, aquaculture, and healthy informed choices. ecosystems. Several measures can increase Many of these solutions, long advocated productivity in all sectors, while protecting in the natural resource literature, have long-term ecological health. None of these been frustratingly slow in coming to frui- approaches functions alone. All require the tion. But three new factors, all related to cli- support of the others to work effectively, mate change, could provide new incentives. and any change in one can alter the whole First, food prices are expected to increase system. as a result of more climate shocks as well Several themes recur across sectors, cli- as from growing demand. Increasing food mates, and income groups. prices should spur innovation to increase productivity. Second, it may be possible to · Innovative decision-making tools allow extend carbon markets to pay farmers to users to determine the impacts of differ- store carbon in soil. This step would create ent actions on natural resources. Managing Land and Water to Feed Nine Billion People and Protect Natural Systems 135 · Research and development that produce new systems. The irrigation agency, used new technologies and adapt them to to providing advice to farmers, is moving local conditions can improve resource toward contracting advisory services out to management, as can advisory services private firms. It will have to find, contract, that help users learn about the options and supervise these firms--tasks that require available to them. a very different set of skills. And the farmers · Property rights give users incentives to will need to trust these new advisors as well. protect or invest in their resources. Farmers' choices of crops are deter- · Pricing resources in a way that reflects mined in part by government price sup- their full value gives incentives to use ports for sugar and wheat, which reduce the them efficiently. incentives to switch to other crops such as higher-value fruits and vegetables. If inter- · Well-regulated markets are important for national trade agreements make it easier to many agricultural and natural resource functions; infrastructure is also critical ensure a reliable market for new crops, the so that producers can access those mar- farmers might make the switch. But with- kets effectively. out good roads, refrigerated transport, and state- of-the-art packaging facilities, the · Strong institutions are important for set- fruit and vegetables will rot before reach- ting and enforcing rules. ing their destination. · Information, at all levels, permits users If the new advisory services are good, and managers to make better choices. farmers will learn how they can get higher These fundamentals apply to water, agri- incomes by switching to growing fruit culture, and fisheries, as discussed in this and vegetables for export. The extension chapter. services will also help them to organize To understand how these drivers affect and interact with European buyers. New the incentives of a particular community, infrastructure (a reliable weigh station, a consider farmers on the plains of the Oum cold-storage facility) will make it feasible Er Rbia river basin in Morocco. Engineers to assume the risk of switching crops. If have designed a feasible drip irrigation sys- the farmers can get information they trust tem that would allow these farmers to gen- about the impacts of their actions on their erate higher revenue from the water they aquifer, they may determine as a group receive (by increasing yields or switching to to use water more responsibly. If the river higher-value crops). Economists have fig- basin agency has new planning tools, it can ured out that it will be profitable. Hydrolo- allocate water more effectively across differ- gists have calculated how much water they ent users' priorities, including the environ- can safely allocate to these farmers without ment. In the long term new initiatives that neglecting environmental needs. Sociolo- set a price on soil carbon or change water gists have talked to the farmers and found allocation may provide the incentives for that 80 percent of them want to invest in farmers to grow crops using different soil this technology. Marketing specialists have management techniques. Each step in the talked to agroprocessors who want to buy process is feasible, and in the long run will the new crops. And the government is benefit every player. The challenge comes in willing to pay for a large share. But even coordinating all the efforts across multiple here, getting things moving is fiendishly institutions and in persisting to see things difficult. through over a long time. It is not worth investing in new, improved Natural resources cannot be managed pipes between the dam and the field unless separately, especially with climate change. most farmers will install the drip irrigation New ways are needed to put water, agricul- on their fields. Yet the farmers will not put ture, forests, and fisheries into a broader down a deposit on the drip systems until they context with a web of related outcomes. In are convinced that the new pipes will really some communities, farmers have begun be laid and the water will really flow. They to moderate their fertilizer use to protect also need information about how to use the aquatic ecosystems, and fisheries managers 136 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 are considering how setting catch limits responses less predictable; resource manag- for one species will affect others. These ers will need to cope with that uncertainty management tools appear under a wide with robust plans that consider the poten- variety of names: ecosystem-based man- tial outcomes of multiple actions under agement, integrated soil-fertility manage- multiple conditions. ment, adaptive management, to name a few. Adaptive management (as described But all share key features: they coordinate in chapter 2) will need to be applied at all a broader range of variables (wider land- levels of resource management. Individual scapes, longer time frames, and learning by farmers can monitor their soil to tailor experience) than do traditional approaches. fertilizer use to local soil, water, climate, And they stress the need for reliable infor- and crop conditions without harming mation about the managed resource to ecosystems. Rural communities can tai- ensure that recommendations are accurate, lor their cropping choices to the amount site specific, and adaptable to changing of water they can safely extract from their conditions. By increasing climate variabil- groundwater year after year, and go back to ity, climate change will make ecosystems' using the aquifer only as insurance against Figure 3.1 Climate change in a typical river basin will be felt across the hydrological cycle Heavier rain increases erosion, siltation, and landslides. Forest hydrology changed, Increased temperatures leading to loss of forest biodiversity. cause glacial melt. Basin receives more rain and less snow. Greater extremes in water availability Increased demand Higher temperatures increase (lower low flows and more frequent for hydropower. evaporation from water bodies floods) affect supply of cooling water Affects timing of water and from soil. for power stations. available downstream. Greater production of biofuels increases Coastal cities vulnerable to floods, agricultural water demand. storms, and sea-level rise. Increase in paved surfaces accelerates runoff and reduces aquifer recharge. Growing demand for resources. AQUI FER Increased temperature causes more evaporative losses, increases crop water demand. Growing seasons alter. Less frequent and heavier rainfall Droughts more frequent. reduce aquifer recharge. Increased competition for water concentrates pollution. Coastal aquifers vulnerable Increased competition for to salt-water intrusion. water risks drying up wetlands. Changes in temperature, water availability, and pollution concentrations affect aquatic ecosystems. Sources: WDR team based on World Bank, forthcoming d; Bates and others 2008. Managing Land and Water to Feed Nine Billion People and Protect Natural Systems 137 drought. And policy makers can use robust speeds up the hydrological cycle, increased decision-making tools to forge more resil- evaporation will make drought conditions ient international agreements for sharing more prevalent (map 3.1). Most places will resources. This chapter offers specifics on experience more intense and variable pre- applying new tools and technologies to cipitation, often with longer dry periods in manage water, agriculture, and fi sheries between (map 3.2).4 The effects on human and advocates a systemwide approach for activity and natural systems will be wide- coping with climate change across all three spread. Areas that now depend on glaciers sectors. and snowmelt will have more fresh water initially, but supply will then decline over Produce more from water and time.5 The shifts may be so rapid and unpre- protect it better dictable that traditional agricultural and water management practices are no longer Climate change will make it harder to useful. This is already the case for the indig- manage the world's water enous communities in the Cordillera Blanca in Peru, where farmers are facing such rapid People will feel many of the effects of climate changes that their traditional practices are change through water. The entire water failing. The government and scientists are cycle will be affected (figure 3.1). While the starting to work with them to try to find new world as a whole will get wetter as warming solutions.6 Map 3.1 Water availability is projected to change dramatically by the middle of the 21st century in many parts of the world Change in average annual runoff (percent) < ­30 ­30­ ­15 ­15­ ­5 ­5 ­ 5 No data 5­15 15­30 > 30 < 2/3 models agree Sources: Milly and others 2008; Milly, Dunne, and Vecchia 2005. Note: The colors indicate percentage changes in annual runoff values (based on the median of 12 global climate models using the IPCC SRES A1B scenario) from 2041­2060 com- pared with 1900­1970. The white denotes areas where less than two-thirds of the models agree on whether runoff will increase or decrease. Runoff is equal to precipitation minus evaporation, but the values shown here are annual averages, which could mask seasonal variability in precipitation such as an increase in both floods and droughts. Map 3.2 The world will experience both longer dry spells and more intense rainfall events a. Longer dry spells Change in consecutive dry days (number of days) < ­20 ­20 ­ ­10 ­10­ ­5 ­5­0 < 2/3 models agree 0­5 5 ­10 10­20 > 20 b. More intense rainfall Change in rainfall intensity (percent change in simple daily intensity index, SDII) < ­15 ­15 ­ ­10 ­10­ ­5 ­5­0 < 2/3 models agree 0­5 5 ­ 10 10­15 > 15 Source: The World Climate Research Program CMIP3 Multi-model Database (http://www-pcmdi.llnl.gov/ipcc/about_ipcc.php). Analysis by the World Bank. Note: The maps show the median change (based on 8 climate models using SRES A1B) in annual values in 2030­2049, compared with 1980­1999. A "dry" day is defined as one with precipitation less than 1millimeter whereas a "rainy" day has more than 1 millimeter. Precipitation intensity (SDII, or simple daily intensity index) is the total projected annual precipi- tation divided by the number of "rainy" days. White areas show areas of high model disagreement (fewer than two-thirds of the models agree on the sign of change). Managing Land and Water to Feed Nine Billion People and Protect Natural Systems 139 Increasing knowledge about the world's kilometers, whereas Earthtrends reports it water will improve management. To at 58 cubic kilometers. Both reports cite the manage water well, it is critical to know how same source of information. The confusion much water is available in any basin and stems from different interpretations of the what it is used for. This may sound straight- term use (the higher figure includes water forward, but it is not. The UN's World reuse within Egypt, while the lower figure Water Development Report states: "Few does not).8 countries know how much water is being The planet contains a fi xed amount of used and for what purposes, the quantity water, with the form and location vary- and quality of water that is available and ing over space and time.9 Humans have can be withdrawn without serious envi- little control over most of it--saltwater in ronmental consequences, and how much oceans, freshwater in glaciers, water in the is being invested in water infrastructure."7 atmosphere. Most investment concentrates Water accounting is complex. Defi nitions on water in rivers and lakes, but soil mois- and methods vary, and confusion is com- ture and groundwater together account for mon. For example, the Pacific Institute puts 98 percent of the world's available freshwa- the Arab Republic of Egypt's annual renew- ter (figure 3.2).10 Many people worry about able water resources in 2007 at 86.8 cubic how much drinking water is available, Figure 3.2 Freshwater in rivers makes up a very small share of the water available on the planet--and agriculture dominates water use Freshwater resources in the world Oceans Vegetation Wetlands Permafrost 1% 97.5% 0.8% 8.5% Groundwater 30.1% Atmosphere 9.5% Surface Soil moisture Freshwater and 12.2% 2.5% atmosphere 0.4% Rivers 1.6% Glaciers Freshwater 68.7% lakes 67.4% Water abstraction by sector Consumptive use of (rivers, lakes, and groundwater) abstracted water by sector Power Industrial and 10 ­ 11% domestic 7% Domestic and Agriculture other industrial 93% 19 ­ 20% Rivers, lakes and groundwater Evaporation from reservoirs 3 ­ 4% Agriculture 67 ­ 68% Source: Shiklomanov 1999; Shiklomanov and Rodda 2003; Vassolo and Döll 2005. Note: When humans use water, they affect the quantity, timing, or quality of water available for other users. Water for human use typically involves withdrawing water from lakes, rivers, or groundwater and either consuming it so that it reenters the atmospheric part of the hydrological cycle or returning it to the hydrological basin. When irrigated crops use water, it is a consumptive use--it becomes unavailable for use elsewhere in the basin. In contrast, releasing water from a dam to drive hydroelectric turbines is a nonconsump- tive use because the water is available for downstream users but not necessarily at the appropriate time. Withdrawals by a city for municipal supplies are mainly nonconsump- tive, but if the returning water is inadequately treated, the quality of water downstream is affected. 140 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 not realizing that agriculture dominates protocols, from data collection technolo- human water use. Each day, a person gies to new infrastructure design. drinks 2­4 liters of water but eats food that The effects of climate change on hydro- requires 2,000­5,000 liters of water in its logical patterns mean that the past can no production.11 These averages mask consid- longer be used as a guide for future hydro- erable variation. In some basins, industrial logical conditions. So, like other natural and urban use dominates, and more and resource managers, water engineers are more basins will be in that situation given developing new tools that consider impacts the pace of urban growth.12 across a number of scales and time frames Climate change will reduce the natural to help evaluate tradeoffs and make choices water storage of snow and glaciers, which robust to an uncertain future (box 3.1).13 will in turn affect aquifer storage and require water managers to design and oper- Climate change will make applying ate reservoirs differently. Water managers and enforcing sound water policies will have to manage the entire water cycle. even more important They can no longer afford to concentrate on the small share of water in rivers and lakes Allocating water efficiently and limiting and leave groundwater and soil moisture to water consumption to safe levels will become be managed by landowners. Many basins increasingly important with climate change. will experience increased demand, reduced When water is scarce, individual users can availability, and increased variability all at take too much, making water unavailable to the same time. Water managers in those others or harming ecosystems and the ser- places will have less room to maneuver if vices they provide. When consumption in a their decisions are not robust to a variety of basin exceeds the amount of water available, outcomes. Tools are available to help soci- users must use less, and the water must be eties cope with these changes. They range shared according to some process or prin- from policy reform to decision-making ciples. Policy makers have two options: they BOX 3.1 Robust decision making: Changing how water managers do business Traditional decision making under uncer- Southern California's Inland Empire precipitation declines, large changes in tainty uses probability distributions to Utilities Agency has used this technique the price of water imports, and reduc- rank different options for action, based to respond to the effects of climate tions of natural percolation into the on the envelope of risk from the past. But change on its long-term urban water groundwater basin. this approach is inadequate when deci- management plan First, the agency The goal of the process is to reduce sion makers do not know or cannot agree derived probable regional climate pro- the agency's vulnerability if those three on how actions relate to consequences, jections by combining outputs from 21 things happen at the same time. The how likely different events are, or how dif- climate models. Coupled with a water agency identified new management ferent outcomes should be evaluated. As management simulation model, hun- responses including increasing water-use chapter 2 shows, robust decision making is dreds of scenarios explored assump- efficiency, capturing more storm water for an alternative. Robust strategies are those tions about future climate change, the groundwater replenishment, water recy- that perform better than the alternatives quantity and availability of groundwater, cling, and importing more water in wet across a wide range of plausible future urban development, program costs, and years so that in dry years more groundwa- circumstances. They are derived from com- the cost of importing water. Then the ter can be extracted. The agency found puter simulation models that do not pre- agency calculated the present value of that, if all these actions were undertaken, dict the future but create large ensembles costs of different ways to supply water the costs would almost never exceed the of plausible futures to identify candidate under 200 scenarios. They rejected threshold of $3.75 billion. robust strategies and systematically assess any strategy that gave costs above their performance. The process does not $3.75 billion over 35 years. Scenario choose an optimal solution; instead, it discovery analysis concluded that the Source: Groves and others 2008; Groves and finds the strategy that minimizes vulner- costs would be unacceptable if three Lempert 2007; Groves, Yates, and Tebaldi ability to a range of possible risks. things happened at the same time: large 2008. Managing Land and Water to Feed Nine Billion People and Protect Natural Systems 141 can either set and enforce fi xed quantities For irrigation, a consumptive use, pric- for specific users, or they can use prices to ing is more complex. First, the amount encourage users to cut back and even trade of water actually consumed is difficult to among themselves. Either way, designing measure. Second, experience shows that and enforcing good policies require accurate farmers do not reduce consumption until information and strong institutions. the price is several multiples of the cost of Quantitative allocations are most com- providing the service. Yet most countries mon, and it is difficult to do them well. South fi nd it politically unacceptable to charge Africa has one of the most sophisticated much more than is required to recover schemes, though it is still a work in progress. the operational costs. Third, too steep Its 1998 National Water Act stipulates that an increase in the price of surface water water is public property and cannot be pri- will encourage any farmer who can drill vately owned.14 All users must register and into an aquifer to switch to groundwater, license their water use and pay for it, includ- shifting but not eliminating the problem ing river or groundwater extracted at their of overuse.20 own expense. Streamflow reduction activity In most countries the state or another is a category of water use, which means that owner of the water charges the city utility owners of plantation forests must apply for or irrigation agency for the water extracted a license just like an irrigator or a town's from the river or aquifer. This is known water utility. Only plantation forestry has so as bulk water. For a host of technical and far been categorized as a streamflow reduc- political reasons few countries charge tion activity, but rainfed agriculture or water enough for bulk water to affect the way harvesting techniques could follow. Count- resources are allocated between competing ing forestry as a water user makes land use uses.21 Indeed, no country allocates surface compete squarely with other water users. water by price,22 although Australia is mov- The only guaranteed rights to water are for ing toward such a system.23 Although far ecological reserves and to ensure that each from straightforward, fi xed quotas on the person has at least 25 liters daily for basic combined quantity of surface and ground- human needs.15 water allocated to irrigation, or, better, Water is almost always priced below its the amount of water actually consumed value, giving users little incentive to use (evapotranspiration), seem to be politically it efficiently.16 The literature is virtually and administratively more realistic than unanimous in calling for economic instru- pricing to limit overall consumptive use.24 ments to reduce demand.17 Charging for water services (irrigation, drinking water, Tradable water rights could improve water wastewater collection and treatment) can management in the long term but are not also recover the cost of providing the ser- realistic short-term options in most develop- vice and maintaining infrastructure.18 ing countries. Tradable rights have great The role of pricing to influence demand potential for making water allocation more varies for different types of water use. For efficient and for compensating people who municipal water, pricing tends to be effec- forgo their water use.25 Formal tradable tive at reducing demand, especially when water rights schemes are in place in Aus- combined with user outreach. When the tralia, Chile, South Africa, and the western price is high, many utilities and users fi x United States. In Australia, evaluations indi- leaks and use only what they need.19 But cate that trading rights has helped farmers because urban consumption accounts on withstand droughts and spurred innova- average for only 20 percent of water abstrac- tion and investment without government tions, the effects on overall use are limited intervention. (figure 3.2). And because municipal use is But the details of the design greatly affect basically nonconsumptive, the impact of the success of the venture, and establish- reduced use in cities does little to increase ing the necessary institutions is a lengthy availability elsewhere in the basin. process. It took decades to develop this 142 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 capacity in Australia, a country with a long of crucial interim steps before adopting such history of good governance, where custom- a system.30 ers were educated and accustomed to fol- lowing rules, and where allocation rules Climate change will require investing were broadly in place and enforced before in new technologies and improving the the rights system was established.26 Coun- application of existing technologies tries that allow water trading when they do not have the institutional ability to enforce Water storage can help with increased vari- the quotas assigned to each user tend to ability. Storage in rivers, lakes, soil, and increase overextraction considerably (box aquifers is a key aspect of any strategy to 3.2). manage variability--both for droughts Climate change, which makes future (storing water for use in dry periods) and water resources less predictable, complicates for floods (keeping storage capacity avail- the already challenging task of establish- able for excess f lows). Because climate ing tradable water rights.27 Even in a stable change will reduce natural storage in the climate, sophisticated agencies fi nd it dif- form of ice and snow and in aquifers (by ficult to determine in advance how much reducing recharge), many countries will water can safely be allocated to different need increased artificial storage. users, and how much should be set aside for Water planners will need to consider environmental purposes.28 By not properly storage options across the entire landscape. accounting for certain uses (such as planta- Water stored in soil can be used more effi- tion forestry and natural vegetation) or for ciently by managing land cover, particularly changes in user behavior, the schemes in by improving the productivity of rain- Australia and Chile assigned rights for more fed agriculture. Managing groundwater, water than was actually available. They had already challenging, will be more impor- to undergo the painful process of reassign- tant as surface water becomes less reliable. ing or reducing the allocations.29 Properly Groundwater is a cushion for coping with regulated markets for fi xed quantities of unreliable public supplies and rainfall. For water are a good long-term goal, but most example, it supplies 60 percent of irrigated developing countries need to take a number agriculture and 85 percent of rural drinking BOX 3.2 The dangers of establishing a market for water rights before the institutional structures are in place A review based on the Australian experi- rules and agencies to define entitlements, Schemes that allow trading in the ence concludes that "with the benefit of manage allocations, and control the use absence of established and enforced hindsight and emerging experience, it is of water; developing accurate registers water rights can worsen overexploita- becoming clearer that . . . it is necessary early in the process; allowing unused tion. Farmers near the city of Ta'iz, in the to attend to many design issues. Water water to be carried over from year to year; Republic of Yemen, sell their groundwater trading is likely to be successful unam- developing a private brokerage industry; to tankers to supply the city. Before this biguously if and only if allocation and and ensuring timely flow of information market existed, the farmer withdrew use management regimes are designed to all parties). only as much water from the aquifer as for trading and associated governance Some countries have long-standing his crops needed. By increasing the price arrangements prevent over-allocation informal water-trading arrangements. of a unit of water, the trading increases from occurring. Opposition to the devel- The ones that work are often based on the benefits of using groundwater. And opment of markets without attention to customary practices. Farmers in Bitit, because the farmer's extraction from his design detail is justified." Morocco, for example, have traded water well is not controlled, there is no limit to Design concerns include accounting for decades, based on rules established the amount he can extract. As a result, (proper assessment of the interconnected by customary practices. The system the unregulated market accelerates the surface- and groundwater, planning for operates from a detailed list available depletion of the aquifer. climatic shifts to drier conditions, and to the entire community, which identi- expanded consumption by plantation fies each shareholder and specifies the forestry because of public subsidies), and amount of water each is entitled to, Sources: CEDARE 2006; World Bank 2007b; institutional issues (designing separate expressed as hours of flow. Young and McColl, forthcoming. Managing Land and Water to Feed Nine Billion People and Protect Natural Systems 143 water in India as well as half the drinking effects, with the poor sometimes benefit- water received by households in Delhi. Well ing disproportionately.34 The High Dam at managed, groundwater can continue to act Aswan in Egypt, for example, has generated as a natural buffer. But it is far from well net annual economic benefits equivalent to managed. In arid regions across the world, 2 percent of Egypt's gross domestic product aquifers are overexploited. Up to a quarter (GDP).35 It has generated 8 billion kilowatt- of India's annual agricultural harvest is hours of energy, enough to electrify all of the estimated to be at risk because of ground- country's towns and villages. It has allowed water depletion.31 the expansion of agriculture and year-round Improving groundwater management navigation (stimulating investments in Nile requires actions to enhance both supply cruises) and has saved the country's crops (artificial recharge, accelerated natural and infrastructure from droughts and floods. recharge, barriers within aquifers to retard But dams have well-known negative effects as underground f lows) and demand. And well,36 and the tradeoffs need to be weighed groundwater cannot be managed alone--it carefully. Climate change puts a premium on must be integrated with regulation of sur- identifying robust designs: where countries face water.32 Supply enhancing techniques face uncertainty about even whether their are not straightforward. For example, arti- rainfall will increase or decrease, it can be ficial recharge is of limited use when water cost-effective to build structures that are spe- and suitable aquifer storage sites are not in cifically designed to be changed in the future. the same places as the overstressed aquifers; As hydraulic systems increase in complexity, 43 percent of the funds allocated for India's countries need solid hydrological, opera- $6 billion artificial recharge program is tional, economic, and financial analyses and likely to be spent recharging aquifers that capable institutions all the more (box 3.3). are not overexploited.33 Dams will be an important part of the Nonconventional technologies can increase story of climate change and water. And they water availability in some water-scarce will need to be designed with built-in flex- regions. Water supplies can be enhanced ibility to deal with potential precipitation by desalinating seawater or brackish water and runoff changes in their basins. Many of and reusing treated wastewater. Desalina- the best sites for dams are already exploited, tion, which accounted for less than 0.5 per- yet the potential for new dams does exist, cent of all water use in 2004, 37 is set to particularly in Africa. Managed well, dams become more widely used. provide hydropower and protect against Technical developments, including droughts and floods. Comprehensive analy- energy-efficient fi lters, are causing desali- ses of the economic impacts of dams are nation prices to fall, and pilot schemes are rare, but four case studies indicate positive beginning to power desalination plants direct economic effects and large indirect with renewable energy.38 Depending on the BOX 3.3 Managing water resources within the margin of error: Tunisia Tunisia is a good example of the demands dams with conduits to connect them and and dilutes the salinity in the area where on water managers in countries that are to transfer water between different areas water demand is highest. In addition, Tuni- approaching the limits of their resources. of the country. sia treats and reuses one-third of its urban With only 400 cubic meters of renew- As the most promising schemes were wastewater for agriculture and wetlands, able resources per capita, which are developed, the government built addi- and recharges aquifers artificially. Tunisian highly variable and distributed unevenly tional infrastructure in more marginal water managers now face a complex set over time and space, Tunisia has a huge areas. Rivers that flowed to the sea have of decisions: they must optimize water challenge managing its water. Yet in been dammed even when water demand quantity, timing, quality, and energy costs, contrast to its Maghreb neighbors, it has in those basins is not intense. The stored showing the importance of human capac- withstood consecutive droughts without water can be pumped across the mountain ity to manage resources so intensively. rationing water to farmers or resorting to range into the country's principal river supplying cities from barges. It has built basin. The new water both increases supply Source: Louati 2009. 144 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 scale of the plant and the technology, desal- total area under irrigation. Indeed, irrigated inated water can be produced and delivered land is expected to increase by just 9 percent to the utility for as little as $0.50 per cubic between 2000 and 2050.45 And water produc- meter. This remains more expensive than tivity (in this case, agricultural output per conventional sources when freshwater is unit of water allocated to irrigation) will also available. 39 Therefore, desalinated water have to improve, given the increasing water usually makes sense only for the highest- demands of cities, industries, and hydro- value uses, such as urban water supply or power. New technologies have the potential tourist resorts.40 It also tends to be limited to increase water productivity when com- to coastal areas, because inland distribution bined with strong policies and institutions.46 of desalinated water adds to the costs.41 Getting more "crop per drop" involves a complex combination of investments Producing more food without more water and institutional changes. Countries from will not be easy, but some new approaches Armenia to Zambia are investing in new will help. Managing water to meet future infrastructure that delivers the water effi- needs will also involve making water use ciently from the reservoir to the crops, more efficient, particularly in agriculture, reducing evaporative losses. However, as the which accounts for 70 percent of freshwater example of the Moroccan farmers described withdrawals from rivers and groundwater earlier indicates, the investments can work (figure 3.2).42 only if local institutions deliver the water There appears to be scope for increasing reliably, farmers have a voice in decision the productivity of water in rainfed agri- making, and they can get the advice they culture, which provides livelihoods for the need on how to make the most of the new majority of the world's poor, generates more infrastructure or technological develop- than half of the gross value of the world's ments. New infrastructure will help water crops, and accounts for 80 percent of the management only if combined with strong world's crop water use.43 Options, described quantitative limits on each individual's in the next section, include mulching, con- water consumption, covering both ground servation tillage, and similar techniques that and surface water. Otherwise, the increased retain water in the soil so that less is lost to profitability of irrigation will tempt farmers evaporation and more is available to plants. to expand their cultivated area or double- or Other options involve small-scale rainwater triple-crop their fields, drawing ever more storage, sometimes called water harvesting. water from their wells. This is good for the Of the various interventions to increase individual farmer, certainly, but not for the rainfed production, some (mulching, conser- other water users in the basin.47 vation tillage) divert some water that would Good crop management can increase otherwise evaporate unproductively. Oth- water productivity by developing varieties ers (water harvesting, groundwater pumps) resistant to cold so that crops can be grown divert some water that would otherwise have in the winter, when less water is required.48 been available to users downstream. When Growing crops in greenhouses or under water is plentiful, impacts on other users are shade screens also can reduce the evapora- imperceptible, but as water becomes scarcer, tive demand of open fields, though it does the impacts become more important. Once increase production costs.49 When crops die again, comprehensive accounting for water before they produce their yields, the water and integrated planning of land and water at they have consumed is wasted. Therefore local, watershed, and regional scales can make more widespread adoption of drought- and these interventions productive, by ensuring heat-tolerant varieties will increase water as that the tradeoffs are properly evaluated. well as agricultural productivity.50 Irrigated agriculture is expected to pro- Well-timed applications of irrigation duce a greater share of the world's food in the water can also help. If farmers do not know future, as it is more resilient to climate change exactly how much water is needed, they in all but the most water-scarce basins.44 Crop often overirrigate because a little extra productivity per hectare will have to increase, water is less harmful to yields than too because there is little scope for increasing the little water. By monitoring water intake Managing Land and Water to Feed Nine Billion People and Protect Natural Systems 145 and growth throughout the growing sea- farmers' cell phones telling them how many son, farmers can deliver the exact amount hours they should irrigate that day. Acting of water that their crops need and irrigate on this information will allow them to avoid only when really necessary. Remote-sensing overirrigating.53 systems are beginning to allow farmers to see the water needs of plants with great Producing more in agriculture accuracy even before the plants show signs while protecting the environment of stress.51 But because of the technological requirements, precision agriculture of this Climate change will push societies to type is limited to a small number of the accelerate agricultural productivity world's farmers.52 growth Even before this technology becomes Climate change will depress agricultural widely available, it is possible to apply simple yields. Climate change adds several automated systems to help poorer farmers confl icting pressures to agricultural pro- increase the precision of applying irrigation duction. It will affect agriculture directly water. The Moroccan farmers who convert through higher temperatures, greater crop to drip irrigation under the government water demand, more variable rainfall, and scheme discussed earlier will benefit from extreme climate events such as floods and a simple technology that uses a standard droughts. It will increase yields in some irrigation formula adapted to local growing countries but lower them in most of the conditions. Depending on the weather in developing world, reducing global average the area, the system will deliver a message to yields (map 3.3). Map 3.3 Climate change will depress agricultural yields in most countries by 2050 given current agricultural practices and crop varieties Percentage change in yields between present and 2050 No data ­50 ­20 0 20 50 100 Source: Müller and others 2009. Note: The figure shows the projected percentage change in yields of 11 major crops (wheat, rice, maize, millet, field pea, sugar beet, sweet potato, soybean, groundnut, sunflower, and rapeseed) from 2046 to 2055, compared with 1996­2005. The values are the mean of three emission scenarios across five global climate models, assuming no CO2 fertilization (see note 54). Large negative yield impacts are projected in many areas that are highly dependent on agriculture. 146 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 In mid to high latitudes, local increases impact: models that project the effect of cli- in temperature of only 1­3°C, along with mate change on agriculture typically look at associated carbon fertilization54 and rainfall average changes and exclude the effects of changes, may have small beneficial impacts extreme events, variability, and agricultural on crop yields.55 Kazakhstan, the Russian pests, all of which are likely to increase. Federation, and Ukraine are all geographi- Climate change will also make some land cally positioned to benefit from these tem- less suitable for agriculture, particularly in perature increases, but they may not be Africa.62 One study projects that by 2080 able to capitalize fully on the opportuni- land with severe climate or soil constraints ties. Since the breakup of the Soviet Union, in Sub-Saharan Africa will increase by 26 together they have removed 23 million hect- million to 61 million hectares.63 That is ares of arable land from production, almost 9­20 percent of the region's arable land.64 90 percent of which was used for grain pro- duction.56 Although world grain yields have Efforts to mitigate climate change will put been rising on average by about 1.5 percent more pressure on land. In addition to a year since 1991, yields in Kazakhstan and reducing yields, climate change will put pres- Ukraine have fallen, and Russia's yields have sure on farmers and other land managers to risen only slightly. If these countries are to reduce greenhouse gas emissions. In 2004 take advantage of the warming temperatures about 14 percent of global greenhouse gas to increase agricultural production, they will emissions came from agricultural practices. have to build stronger institutions and bet- This includes nitrous oxide from fertilizers; ter infrastructure.57 Even if they do, extreme methane from livestock, rice production, climate events may wipe out the improved and manure storage; and carbon dioxide average conditions: when the increased like- (CO2) from burning biomass, but excludes lihood of extreme climate events is taken CO2 emissions from soil management prac- into consideration for Russia, the years with tices, savannah burning, and deforestation.65 food production shortfalls are projected to Developing regions produce the largest share triple by the 2070s.58 of these greenhouse gas emissions, with Asia, In most developing countries, climate Africa, and Latin America accounting for 80 change is projected to have an adverse percent of the total. effect on current agriculture. In low- Forestry, land use, and land-use change latitude regions even moderate tempera- account for another 17 percent of greenhouse ture increases of another 1­2°C will reduce gas emissions each year, three-quarters of yields of major cereals.59 One assessment of which come from tropical deforestation.66 multiple studies estimates that by the 2080s The remainder is largely from draining world agricultural productivity will decline and burning tropical peatland. About the 3 percent under a high-carbon-emission same amount of carbon is stored in the scenario with carbon fertilization or 16 per- world's peatlands as is stored in the Ama- cent without it.60 For the developing world, zon rainforest. Both are the equivalent of the decline is projected to be even larger, about 9 years of global fossil fuel emissions. with a 9 percent decline with carbon fertil- In equatorial Asia (Indonesia, Malaysia, ization, and 21 percent without. Papua New Guinea), emissions from fires An analysis of 12 food-insecure regions associated with peat draining and defores- using crop models and outputs from 20 tation are comparable to those from fossil global climate models indicates that with- fuels in those countries.67 Emissions related out adaptation Asia and Africa will suffer to livestock production are counted across particularly severe drops in yields by 2030. several emissions categories (agriculture, These losses will include some of the crops forestry, waste), and overall they are esti- critical for regional food security, includ- mated to contribute up to 18 percent of the ing wheat in South Asia, rice in Southeast global total, mostly through methane emis- Asia, and maize in southern Africa.61 These sions from the animals, manure waste, and projections are likely to underestimate the clearing for pasture.68 Managing Land and Water to Feed Nine Billion People and Protect Natural Systems 147 The cultivation of biofuels to mitigate is important to establish guidelines for climate change will create even more com- expansion of biofuels so that other envi- petition for land. Current estimates indi- ronmental goals are not squeezed out (box cate that dedicated energy crop production 3.4). Comprehensive life-cycle accounting takes place on only 1 percent of global ara- for biofuels--which includes their contri- ble land, but biofuel legislation in devel- bution to emission reductions as well as oped and developing countries supports their water and fertilizer use--may slow expanding production. Global ethanol the pace of conversion. production increased from 18 billion liters Second-generation biofuels now under a year in 2000 to 46 billion in 2007, while development, such as algae, jatropha, sweet biodiesel production increased nearly sorghum, and willows, could reduce com- eightfold to 8 billion liters. Land allocated petition with agricultural land for food to biofuels is projected to increase four- crops by using less land or marginal land, fold by 2030, with most of the growth in although some of these developments North America (accounting for 10 per- could still lead to the loss of pasture land cent of arable land in 2030) and Europe and grassland ecosystems. Perennial crops (15 percent).69 Projections indicate that with deeper root systems, such as switch- only 0.4 percent of arable land in Africa grass, can better combat soil and nutrient and about 3 percent in Asia and Latin erosion, require fewer nutrient inputs, and America will be dedicated to biofuel pro- sequester higher rates of carbon than cur- duction by 2030.70 Under some scenarios rent biofuel feedstocks.72 But their water for mitigating climate change, projections needs may prohibit their sustainable pro- beyond 2030 suggest that land allocated duction in arid regions. More research is to producing biofuels by 2100 will grow needed to improve the productivity and to more than 2 billion hectares--a huge emission reduction potential of future figure given that current cropland covers generations of biofuels. "only" 1.6 billion hectares. These scenar- ios project that most of the land for such Growing populations, more carnivorous large-scale biofuel production will origi- palates, and climate change will require nate from conversion of natural forests large increases in agricultural productiv- and pastureland.71 ity. The amount of land needed to feed If demand increases rapidly, biofuels the world in 2050 will depend significantly will be a significant factor in agricultural on how much meat people eat. Meat is a markets, increasing commodity prices. resource-intensive way for humans to con- Much of the current demand for biofuel sume protein, because it requires land for crops is spurred by government targets and pasture and grain feed. The resource impli- subsidies and by high oil prices. Without cations vary with the type of meat and how artificial support the competitiveness of it is produced. Producing 1 kg of beef can biofuels is still poor, with the exception of take as much as 15,000 liters of water if it Brazil's sugarcane ethanol. Nor is it clear is produced in industrial feedlots in the how much biofuels reduce greenhouse gas United States (figure 3.3).73,74 But exten- emissions because of the fossil fuels used sive beef production in Africa requires only during production and the emissions from 146­300 liters per kilogram depending on land clearing. Despite the potential that the weather.75 Per kilogram, beef produc- biofuels have to decrease greenhouse gas tion is also greenhouse-gas intensive, even emissions, the actual net carbon savings compared with other meat production, of current-generation biofuels is under emitting 16 kilograms of CO2 equivalent debate, when production processes and (CO2e) for every kilogram of meat pro- associated land-use changes are factored duced (figure 3.4).76 in to the calculations. In addition, demand Despite the resource implications, for land for biofuels already competes with demand for meat is expected to increase as biodiversity conservation. As a result, it population and incomes grow. Eating more 148 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 BOX 3.4 Palm oil, emission reductions, and avoided deforestation Palm oil plantations represent the conver- cultivation in Indonesia and Malaysia, pro- questionable. Detailed life- cycle analysis gence of many current land-use issues. viding a profitable diversification in liveli- shows that the net reduction in carbon Palm oil is a high-yielding crop with food hoods. However, harvested palm nuts must emissions depends on the land cover and biofuel uses, and its cultivation cre- be delivered to mills for processing within existing before the palm oil plantation ates opportunities for smallholders. But 24 hours of harvesting, so holdings tend to (figure). Significant emission reductions it infringes on tropical forests and their cluster around mills. Thus a high propor- derive from plantations developed many benefits, including greenhouse tion of the area around mills is converted on previous grasslands and cropland, gas mitigation. Cultivation of palm oil to palm oil, either as large tract commercial whereas net emissions will increase has tripled since 1961 to cover 13 million plantations or densely clustered smallhold- greatly if peatland forests are cleared for hectares, with most of the expansion in ings. Certain landscape design practices, producing palm oil. Indonesia and Malaysia and more than such as the creation of agroforestry belts The expansion of the carbon market to half on recently deforested lands. Recent to smooth the transition between palm oil include REDD (Reduced Emissions from announcements for new palm oil conces- plantations and forest patches, can help Deforestation and forest Degradation) is sions in the Brazilian Amazon, Papua New make the plantation landscape less inimi- an important tool to balance the relative Guinea, and Madagascar raise concerns cal to biodiversity while providing further values of palm oil production and defor- that the trend is likely to continue. diversification for smallholders. estation on one hand, and forest protec- Smallholders currently manage 35 to The mitigation value of biodie- tion on the other. This balance will be 40 percent of the land under palm oil sel derived from palm oil is also critical to ensure biodiversity protection and emission reduction. Recent studies show that convert- Emission reductions from biodiesel derived from palm oil differ greatly according to the ing land to palm oil production may be previous land use on the palm oil plantation site. between six to ten times more profitable Emission reduction per ton of biofuel (tCO2) than maintaining the land and receiving 5.0 payments for carbon credits through REDD, should this mechanism be limited 2.5 to the voluntary market. If REDD credits are given the same price as carbon cred- 0.0 its traded in compliance markets, the profitability of land conservation would ­2.5 increase dramatically, perhaps even exceeding profits from palm oil, making ­5.0 agricultural conversion less attractive. ­7.5 Therefore, done right, REDD could realisti- cally reduce deforestation and thereby ­10.0 contribute to a global mitigation effort. ­12.5 Grassland/arable Rubber plantation Forest Forest on peat Sources: Butler, Koh, and Ghazoul, forth- Prior land use coming; Henson 2008; Koh, Levang, and Ghazoul, forthcoming; Koh and Wilcove Source: Henson 2008. 2009; Venter and others 2009. meat will be beneficial for poor consum- other essential services. Obtaining more ers who need the protein and micronutri- land suitable for agricultural production ents.77 But by 2050 the production of beef, is unlikely. Studies indicate that globally poultry, pork, and milk is expected to at the amount of land suitable for agricul- least double from 2000 levels to respond to ture will remain the same in 2080 as it is the demand of larger, wealthier, and more today,79 because increases in suitable land urban populations.78 in the higher latitudes will be largely offset The world will have to meet the grow- by losses in the lower latitudes. ing demand for food, fiber, and biofuel in Therefore agriculture productivity (tons a changing climate that reduces yields-- per hectare) will need to increase. Models while at the same time conserving eco- vary but one study indicates that annual systems that store carbon and provide increases of 1.8 percent a year will be needed Managing Land and Water to Feed Nine Billion People and Protect Natural Systems 149 Figure 3.3 Meat is much more water intensive than major crops (liters of water per kilogram of product) 15,500 4,800 3,900 3,300 2,800 1,800 1,300 1,000 900 900 Beef Pork Chicken Rice Sorghum Soybean Wheat Milk Maize Potato Source: Waterfootprint (https://www.waterfootprint.org), accessed May 15, 2009; Gleick 2008. Note: Figure shows liters of water needed to produce one kilogram of product (or one liter for milk). Water use for beef production only characterizes intensive production systems. up to 2055--almost twice the 1 percent a gation often causes salt to build up in soils, year that would be needed under business as reducing fertility and limiting food produc- usual (figure 3.5).80 This means that yields tion. Salinization currently affects between will have to more than double over 50 years. 20 million and 30 million of the world's 260 Many of the world's breadbaskets, such as million hectares of irrigated land.84 North America, are approaching maxi- Less environmentally deleterious agri- mum feasible yields for major cereals,81 so cultural intensification is essential, par- a significant portion of this yield growth ticularly considering the environmental will need to occur in developing countries. problems associated with further extensi- This means not just an acceleration of yield fication of agriculture. Without increased growth but a reversal of recent slowing: the crop and livestock yields per hectare, pres- yield growth rate for all cereals in develop- sure on land resources will accelerate as crop ing countries slipped from 3.9 percent a and pasture areas expand under extensive year between 1961 and 1990 to 1.4 percent production. Since the middle of the 20th a year between 1990 and 2007.82 century, 680 million hectares, or 20 per- cent of the world's grazing lands, have been Climate change will require highly productive and diverse agricultural landscapes Figure 3.4 Intensive beef production is a heavy producer of greenhouse gas emissions Food item Emissions Productivity gains must not come at the (1 kg) (kg CO2e) Driving distance equivalent (km) expense of soil, water, and biodiversity. Intensive agriculture often damages natu- Potato 0.24 1.2 ral systems. Highly productive agriculture, such as is practiced in much of the devel- Wheat 0.80 4.0 oped world, is usually based on farms that Chicken 4.60 22.7 specialize in a particular crop or animal and on the intensive use of agrochemicals. This Pork 6.40 31.6 kind of farming can damage water quality and quantity. Fertilizer runoff has increased Beef 16.00 79.1 the number of low-oxygen "dead zones" in coastal oceans exponentially since the Source: Williams, Audsley, and Sandars 2006. 1960s: they now cover about 245,000 square Note: The figure shows CO2 equivalent emissions in kilograms resulting from the production (in an industrial coun- try) of 1 kilogram of a specific product. The driving distance equivalent conveys the number of kilometers one must kilometers, mostly in coastal waters of the drive in a gasoline-powered car averaging 11.5 kilometers a liter to produce the given amount of CO2e emissions. developed world (map 3.4).83 Intensive irri- For example, producing 1 kilogram of beef and driving 79.1 kilometers both result in 16 kilograms of emissions. 150 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 Figure 3.5 Agricultural productivity will have to increase even more rapidly because of climate degraded.85 Converting land for agriculture change has already significantly reduced the area of Agricultural productivity index (2005 = 100) many ecosystems (figure 3.6). 300 The Green Revolution illustrates both Need without climate change Need with climate change the immense benefits from increasing agri- 250 Past observations cultural productivity and the shortcom- 200 ings when technology is not supported by appropriate policies and investments to 150 protect natural resources. New technol- 100 ogy, coupled with investments in irrigation and rural infrastructure, drove a doubling 50 of cereal production in Asia between 1970 0 and 1995. The agricultural growth and the 1960 1980 2000 2020 2040 2060 associated decline in food prices during this Year time led to a near doubling of real per cap- Source: Lotze-Campen and others 2009. ita income, and the number of poor people Note: The figure shows the required annual growth in an agricultural productivity index under two scenarios. In fell from about 60 percent of the popula- this index, 100 indicates productivity in 2005. The projections include all major food and feed crops. The green line represents a scenario without climate change of global population increasing to 9 billion in 2055; total tion to 30 percent, even as the population calorie consumption per capita and the dietary share of animal calories increasing in proportion to rising per increased 60 percent.86 Latin America also capita income from economic growth; further trade liberalization (doubling the share of agricultural trade in total production over the next 50 years); cropland continuing to grow at historical rates of 0.8 percent a year; and no experienced significant gains. But in Africa, climate change impacts. The orange line represents a scenario of climate change impacts and associated soci- poor infrastructure, high transport costs, etal responses (IPCC SRES A2): no CO2 fertilization, and agricultural trade reduced to 1995 levels (about 7 percent of total production) on the assumption that climate change-related price volatility triggers protectionism and low investment in irrigation, and pric- that mitigation policy curbs the expansion of cropland (because of forest conservation activities) and increases ing and marketing policies that penalized demand for bioenergy (reaching 100 EJ [1018 joules] globally in 2055). farmers all impeded adoption of the new technologies.87 Despite its overall success, Map 3.4 Intensive agriculture in the developed world has contributed to the proliferation of dead zones Dead zones Source: Diaz and Rosenberg 2008. Note: In the developed world intensive agriculture has often come at high environmental cost, including runoff of excess fertilizers leading to dead zones in coastal areas. Dead zones are defined as extreme hypoxic zones, that is, areas where oxygen concentrations are lower than 0.5 milliliters of oxygen per liter of water. These conditions normally lead to mass mortality of sea organisms, although in some of these zones organisms have been found that can survive at oxygen levels of 0.1 milliliter per liter of water. Managing Land and Water to Feed Nine Billion People and Protect Natural Systems 151 the Green Revolution in many parts of Asia Figure 3.6 Ecosystems have already been extensively converted for agriculture was accompanied by environmental dam- ages stemming from overuse of fertilizer, Mediterranean forests, pesticides, and water. Perverse subsidies and woodlands, and scrub pricing and trade policies that encouraged Temperate forest, monoculture of rice and wheat and heavy steppe, and woodland use of inputs contributed to these environ- Temperate broadleaf mental problems.88 and mixed forests Tropical and subtropical Climate-resilient farming requires diverse dry broadleaf forests income sources, production choices, and Flooded grasslands genetic material. Climate change will and savannas create a less predictable world. Crops will Tropical and subtropical fail more often. One way to buffer the grasslands, savannas, uncertainty is to diversify on all levels (box and shrublands 3.5). The first type of diversification relates Tropical and subtropical coniferous forests to sources of income, including some out- side of agriculture.89 As farms get smaller Deserts and input prices increase, farmers will do this anyway. Indeed, in much of Asia small- Montane grasslands holders and landless workers typically earn and shrublands more than half their total household income Tropical and subtropical from nonagricultural sources.90 moist broadleaf forests Conversion of A second type of diversification involves Temperate original biomes increasing the types of production on the Loss by 1950 coniferous forests Loss between farm. The market opportunities for crop 1950 and 1990 Boreal diversification are expanding in many forests Projected loss by 2050 intensively farmed areas as a result of more open export markets and buoyant national Tundra demand in rapidly growing economies, ­10 0 10 20 30 40 50 60 70 80 90 100 especially in Asia and Latin America.91 In Potential area converted (%) these regions farmers may be able to diver- sify into livestock, horticulture, and spe- Source: Millennium Ecosystem Assessment 2005. cialized agricultural production.92 These Note: The projections are based on four scenarios of how the world will approach ecosystem services and include assumptions about ecosystem management, trade liberalization, technology, and the treatment of activities typically give high returns per public goods. unit of land and are labor intensive, which makes them suitable to small farms. yields will be higher from diverse seeds than The third type of diversification involves from uniform seeds, even though yields in a increasing the genetic variability within "normal" year may be lower. individual crop varieties. Most high- Experiments using standard cultiva- yielding varieties in use on highly produc- tion practices indicate that under increased tive farms were bred on the assumption that CO2 concentrations and higher tempera- the climate varied within a stable envelope; tures (reflecting projections of the Inter- the breeders aimed for seed to be increas- governmental Panel on Climate Change ingly homogenous. In a changing climate, for 2050) older varieties of wheat or barley however, farmers can no longer rely on a may grow faster and have an advantage over handful of varieties that work under a nar- more modern varieties introduced in the row set of environmental conditions. Farm- late 20th century.93 Furthermore, the wild ers will need each batch of seeds to contain relatives of today's crops contain genetic genetic material able to deal with a variety material that may be useful to make com- of climatic conditions. Each year, some mercial crops more adaptable to changing plants flourish whatever the climate that conditions. Increased temperatures and year. Over a number of years the average CO2 levels have a greater positive effect on 152 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 BOX 3.5 Product and market diversification: An economic and ecological alternative for marginal farmers in the tropics Tropical areas face great challenges: the the "designation of origin of Veracruz" passion fruit, alongside coffee. All trees, persistent poverty of rural populations, and by providing subsidies only to farm- herbs, and produce were locally familiar, including indigenous peoples; the deg- ers cultivating high- quality coffee in areas except the cinnamon tree. There is a radation of natural resources; the loss of more than 600 meters above sea level. potentially large market for cinnamon, biodiversity; and the consequences of Because this policy would hurt thousands which is usually imported. The farmers climate change. The volatility of prices of producers living in the low- quality are now learning which practices and for tropical products on the international production area below 600 meters, the configurations hold the best production markets also affects local economies. government invited the Veracruzana potential in this innovative diversified Many farmers around the world have their University to find alternatives to coffee system. own survival mechanisms, but efforts monoculture. A cooperative company pooled differ- to improve livelihoods and address the The diversification of productive low- ent agricultural products in groups with anticipated impacts from climate change land coffee lands found financial sup- similar market values but with different will require innovative institutions and port through the UN Common Fund for exposures to climate, pests, and mar- creative methods for income generation Commodities, with the sponsorship and ket risks. Early results indicate that this and security. supervision of the International Coffee bundling seems to work well, improving One strategy that shows great potential Organization. It started in two municipali- livelihoods and increasing the resilience for climate-smart development is agricul- ties with a pilot group of 1,500 farmers, of the communities. The company has tural and agroforestry product diversifica- living in remote communities with 25­100 been able to sell all product types, several tion. This strategy allows farmers to feed households. of them at a better price than before the themselves and maintain a flow of prod- Many of the farmers had traditionally project started. And in the first two years ucts to sell or barter at the local market produced coffee in a multicrop system, the project introduced a million native despite droughts, pests, or low prices on providing the opportunity to test in each timber trees. international markets. plot different configurations of alterna- Locals report that the practices have Consider small coffee farms in Mexico. tive woody and herbaceous species of reduced erosion and improved soils, ben- In 2001 and 2002 a dramatic drop in the economic and cultural value: Spanish efiting the surrounding ecosystem while international price of coffee pushed cof- cedar and Honduras mahogany trees (for buffering against potential future flood- fee prices in Mexico below production wood and furniture), the Panama rubber ing associated with climate change. costs. To rescue farmers, the Veracruz tree, cinnamon, guava (as food and phy- state government raised the price of cof- tomedicine), jatropha (for food and bio- fee produced in the area by establishing fuel), allspice, cocoa, maize, vanilla, chile, Source: Contributed by Arturo Gomez-Pompa. some weeds than on their cultivated rela- rent protection.97 Geographically fixed tives.94 The genetic material of the weeds and often isolated by habitat destruction, could therefore be used to enhance culti- reserves are ill-equipped to accommodate vars of commercial crops to produce more species range shifts due to climate change. resilient varieties.95 One study of protected areas in South Africa, Mexico, and Western Europe esti- Productive landscapes can integrate bio- mates that between 6 and 20 percent of diversity. While protected areas may be species may be lost by 2050.98 Moreover, the cornerstones of conservation, they will existing land reserves remain under threat never be enough to conserve biodiversity in given future economic pressures and fre- the face of climate change (see focus B on quently weak regulatory and enforcement biodiversity). The world's reserve network systems. In 1999 the International Union roughly quadrupled between 1970 and 2007 for the Conservation of Nature determined to cover about 12 percent of Earth's land,96 that less than a quarter of protected areas but even that is inadequate to conserve bio- in 10 developing countries were adequately diversity. To adequately represent the conti- managed and that more than 10 percent of nent's species in reserves, while capturing a protected areas were already thoroughly large proportion of their geographic ranges, degraded.99 At least 75 percent of protected Africa would have to protect an additional forest areas surveyed in Africa lacked long- 10 percent of its land, almost twice its cur- term funding, even though international Managing Land and Water to Feed Nine Billion People and Protect Natural Systems 153 donors were involved in 94 percent of farms using ecoagricultural practices suf- them.100 fered 58 percent, 70 percent, and 99 per- A landscape-scale approach to land use cent less damage in Honduras, Nicaragua, can encourage greater biodiversity outside and Guatemala, respectively, than farms protected areas, which is essential to allow using conventional techniques.103 In Costa for ecosystem shifts, species dispersal and Rica, vegetative windbreaks and fence rows the promotion of ecosystem services. The boosted farmers' income from pasture and field of ecoagriculture holds promise.101 The coffee while also increasing bird diversity.104 idea is to improve the farmland's productiv- In Zambia the use of leguminous trees105 ity and simultaneously conserve biodiversity and herbaceous cover crops in improved and improve environmental conditions on fallow practices increased soil fertility, surrounding lands. Through the methods suppressed weeds, and controlled erosion, of ecoagriculture, farmers can increase their thereby almost trebling annual net farm agricultural output and reduce their costs, incomes.106 Bee pollination is more effec- reduce agricultural pollution, and create tive when agricultural fields are closer to habitat for biodiversity (figure 3.7). natural or seminatural habitat,107 a finding Effective policies to conserve biodiversity that matters because 87 of the world's 107 give farmers strong incentives to minimize leading food crops depend on animal pol- conversion of natural areas to farmland linators.108 Shade-grown coffee systems can and to protect or even expand high quality protect crops from extreme temperature habitat on their land. Other options include and drought.109 incentives to develop ecological networks In Costa Rica, Nicaragua, and Colombia and corridors between protected areas and silvopastoral systems that integrate trees other habitats. Studies in North America and with pastureland are improving the sus- Europe show that lands withdrawn from con- tainability of cattle production and diver- ventional agricultural production (set-asides) sifying and increasing farmers' incomes.110 unequivocally increase biodiversity.102 Such systems will be particularly useful as Agriculture practices that enhance bio- a climate-change adaptation, because trees diversity often have many co-benefits, such retain their foliage in most droughts, pro- as reducing vulnerability to natural disas- viding fodder and shade and thus stabilizing ters, enhancing farm income and produc- milk and meat production. They also can tivity, and providing resilience to climate improve water quality. Agricultural pro- change. During Hurricane Mitch in 1998 duction and revenues can go together with Figure 3.7 Computer simulation of integrated land use in Colombia. Source: Photograph by Walter Galindo, from the files of Fundación CIPAV (Centro para Investigación en Sistemas Sostenibles de Producción Agropecuaria), Colombia. The photograph represents the Finca "La Sirena," in the Cordillera Central, Valle del Cauca. Arango 2003. Note: The first photo is the real landscape. The second figure is computer generated and shows what the area would look like if farm productivity were increased by using ecoagricultural principles. The increased productivity would reduce grazing pressure on hillsides, protecting watersheds, sequester carbon through afforestation, and increase habitat for biodiversity between fields. 154 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 biodiversity conservation. Indeed, in many (IAASTD) showed that successful agricul- cases intact ecosystems generate more rev- tural development under climate change will enues than converted ones. In Madagascar involve a combination of existing and new managing a 2.2 million hectare forest over approaches.117 First, countries can build on 15 years cost $97 million, when account- the traditional knowledge of farmers. Such ing for the forgone economic benefits that knowledge embodies a wealth of location- would have occurred if the land had been specific adaptation and risk management converted to agriculture. But the benefits of options that can be applied more widely. the well-managed forest (half of which come Second, policies that change the relative from watershed protection and reduced soil prices that farmers face have great poten- erosion) were valued between $150 million tial to encourage practices that will help and $180 million over the same period.111 the world adapt to climate change (by Decades of development experience increasing productivity) and mitigate it show how difficult it is in practice to pro- (by reducing agricultural emissions). tect habitats for biodiversity. New schemes Third, new or unconventional farming are however emerging to give landowners practices can increase productivity and reduce strong fi nancial incentives to stop land carbon emissions. Farmers are beginning conversion. These include ways to generate to adopt "conservation agriculture," which revenues from the services that ecosystems includes minimum tillage (where seeds are provide to society (see focus B), conserva- sowed with minimum soil disturbance and tion easements (which pay farmers to take residue coverage on the soil surface is at least sensitive land out of production),112 and 30 percent), crop residue retention, and crop tradable development rights.113 rotations. These tillage methods can increase yields,118 control soil erosion and runoff,119 Climate change will require faster increase water and nutrient-use efficiency,120 adoption of technologies and approaches reduce production costs, and in many cases that increase productivity, cope with sequester carbon.121 climate change, and reduce emissions In 2008, 100 million hectares, or about 6.3 percent of global arable land, were Several options will need to be pursued farmed with minimum tillage--about dou- simultaneously to increase productivity. ble the amount in 2001.122 Most takeup has Agricultural research and extension has been in developed countries, because the been underfunded in the past decade. The technique has heavy equipment require- share of official development assistance ments and has not been modified for con- for agriculture dropped from 17 percent ditions in Asia and Africa.123 Minimum in 1980 to 4 percent in 2007,114 despite tillage also makes the control of weeds, estimates that rates of return to invest- pests, and diseases more complex, requir- ment in agricultural research and exten- ing better management.124 sion are high (30­50 percent).115 Public Nevertheless, in the rice-wheat farm- expenditures on agricultural research ing system of the Indo- Gangetic plain of and development (R&D) in low- and India, farmers adopted zero-tillage on middle-income countries have increased 1.6 million hectares in 2005.125 In 2007­08 slowly since 1980, from $6 billion in an estimated 20­25 percent of the wheat 1981 to $10 billion in 2000 (measured in two Indian states alone (Haryana and in 2005 purchasing power dollars), and Punjab) was cultivated under minimum private investments remain a small share tillage, corresponding to 1.26 million hect- (6 percent) of agricultural R&D in those ares.126 Yields increased by 5­7 percent, countries.116 Those trends will have to be and costs came down by $52 a hectare.127 reversed if societies are to meet their food About 45 percent of Brazilian cropland is needs. farmed using these practices.128 The use The recently concluded Integrated of minimum tillage will probably con- Assessment of Agricultural Knowledge, tinue to grow, particularly if the tech- Science, and Technology for Development nique becomes eligible for payments for Managing Land and Water to Feed Nine Billion People and Protect Natural Systems 155 soil carbon sequestration in a compliance of fallow land, conservation tillage, cover carbon market. crops, and biochar can all increase carbon Biotechnology could provide a transfor- storage (box 3.7). Draining rice paddies at mational approach to addressing the tradeoffs least once during the growing season and between land and water stress and agricul- applying rice straw waste to the soil in the tural productivity, because it could improve off-season could reduce methane emissions crop productivity, increase crop adaptation by 30 percent.130 Methane emissions from to climatic stresses such as drought and heat, livestock can also be cut by using higher- mitigate greenhouse gas emissions, reduce quality feeds, more precise feeding strate- pesticide and herbicide applications, and gies, and improved grazing practices.131 modify plants for better biofuel feedstocks Better pasture management alone could (box 3.6). There is, however, little likelihood achieve about 30 percent of the greenhouse of genetic modification affecting water pro- gas abatement potential from agriculture ductivity in the short term.129 (1.3 gigatons of CO2e a year by 2030 over Climate- smart farming practices 3 billion hectares globally).132 improve rural livelihoods while mitigat- As countries intensify agricultural pro- ing and adapting to climate change. New duction, the environmental impacts of soil crop varieties, extended crop rotations fertility practices will come to the fore.133 (notably for perennial crops), reduced use The developed world and many places in Asia BOX 3.6 Biotech crops could help farmers adapt to climate change Conventional selection and plant breed- Genes affecting crop yield directly with wild relatives, creating aggressive ing have produced modern varieties and and those associated with adaptation to weeds with higher disease resistance and major productivity gains. In the future a various types of stress have been identi- the rapid evolution of new pest biotypes combination of plant breeding and selec- fied and are being evaluated in the field. adapted to GM plants. However, scientific tion of preferred traits through genetic New varieties could improve the way evidence and 10 years of commercial use techniques (genetic modification, or GM) crops cope with unreliable water sup- show that safeguards, when appropri- is likely to contribute most to producing plies and potentially improve how they ate, can prevent the development of crops better adapted to pests, droughts, convert water. Breeding plants that can resistance in the targeted pests and the and other environmental stresses accom- survive longer periods of drought will be environmental harm from commercial panying climate change. even more critical in adapting to climate cultivation of transgenic crops, such as A number of crops with genetically change. Initial experiments and field test- gene flow to wild relatives. Crop biodi- modified traits have been broadly com- ing with GM crops suggest that progress versity may decrease if a small number of mercialized in the last 12 years. In 2007 may be possible without interfering with GM cultivars displace traditional cultivars, an estimated 114 million hectares were yields during nondrought periods, a but this risk also exists with convention- planted with transgenic crop varieties, problematic tradeoff for drought-tolerant ally bred crop varieties. Impacts on bio- mostly with insect-resistant or herbicide- varieties developed through conventional diversity can be reduced by introducing tolerant traits. More than 90 percent of breeding. Drought-tolerant maize is several varieties of a GM crop, as in India, this acreage was planted in only four nearing commercialization in the United where there are more than 110 varieties of countries (Argentina, Brazil, Canada, and States and is under development for Afri- Bt (Bacillus thuringiensis) cotton. Although the United States). These technologies can and Asian conditions. the track record with GM crops is good, will significantly reduce environmental Nevertheless, GM crops are con- establishing science-based biosafety reg- pollution, increase crop productivity, troversial, and public acceptance and ulatory systems is essential so that risks cut production costs, and reduce nitrous safety must be addressed. The public is and benefits can be evaluated on a case- oxide emissions. To date successful breed- concerned about the ethics of deliber- by- case basis, comparing the potential ing programs have produced crop variet- ately altering genetic material as well as risks with alternative technologies and ies, including cassava and maize, that about potential risks to food safety and taking into account the specific trait and resist a number of pests and diseases, and the environment, and ethical concerns. the agroecological context for using it. herbicide-tolerant varieties of soybean, After more than 10 years of experience, Source: Benbrook 2001; FAO 2005; Gruere, rapeseed, cotton, and maize are available. there has been no documented case of Mehta-Bhatt, and Sengupta 2008; James Farmers using insect-resistant GM crops negative human health impacts from GM 2000; James 2007; James 2008; Normile have reduced the amount of pesticides food crops, yet popular acceptance is still 2006; Phipps and Park 2002; Rosegrant, they use and the number of active ingre- limited. Environmental risks include the Cline, and Valmonte-Santos 2007; World dients in the herbicides they apply. possibility of GM plants cross-pollinating Bank 2007c. 156 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 BOX 3.7 Biochar could sequester carbon and increase yields on a vast scale Scientists investigating some unusually of years, while others suggest that in the need for artificial fertilizers and thus fertile soils in the Amazon basin found some soils the benefits are far less. Nev- the pollution of rivers and streams. The that the soil was altered by ancient ertheless, biochar can sequester carbon potential is there. But there are two chal- charcoal-making processes. The indig- that would otherwise be released into lenges: to demonstrate the chemical enous people burned wet biomass (crop the atmosphere through burning or properties and to develop mechanisms residues and manure) at low tempera- decomposition. for application on a large scale. tures in the almost complete absence of So biochar could have great carbon Research is needed in a number of oxygen. The product was a charcoal-type mitigation potential. To give an idea of areas, including methodologies to mea- solid with a very high carbon content, scale, in the United States waste bio- sure biochar's potential for long-term called biochar. Scientists have repro- mass from forestry and agriculture, plus carbon sequestration; environmental duced this process in modern industrial biomass that could be grown on land risk assessment; biochar's behavior in settings in several countries. that is currently idle, would provide different soil types; economic viability; Biochar appears to be highly stable enough material for the United States and the potential benefits in developing in soil. Studies on the technical and to sequester 30 percent of its fossil fuel countries. economic viability of the technique are emissions using this technique. Biochar continuing, with some results indicat- can also increases soil fertility. It binds to Sources: Lehmann 2007a; Lehmann 2007b; ing that biochar may lock carbon into nutrients and could thus help regener- Sohi and others 2009; Wardle, Nilsson, and the soil for hundreds or even thousands ate degraded lands as well as reduce Zackrisson 2008; Wolf 2008. and Latin America may reduce fertilizer use information services necessary for effec- to reduce both greenhouse gas emissions and tive implementation--a recurring theme the nutrient runoff that harms aquatic eco- of this chapter. systems. Changing the rate and timing of fer- Part of achieving the necessary increase tilizer applications reduces the emissions of in agricultural productivity in the develop- nitrous oxide from soil microbes. Controlled- ing world, sound fertilizer policy includes release nitrogen134 improves efficiency (yield measures to make fertilizers affordable to per unit of nitrogen), but so far it has proved the poor.137 It also includes broader pro- too expensive for many farmers in develop- grams, such as the Farm Inputs Promo- ing countries.135 New biological inhibitors tion program in Kenya that works with that reduce the volatilization of nitrogen local companies and subsidiaries of inter- could achieve many of the same goals more national seed companies to improve agri- cheaply. They are likely to be popular with cultural inputs (by formulating fertilizers farmers because they involve no extra farm using locally available minerals, providing labor and little change in management.136 improved seed varieties, and distributing If producers and farmers have incentives to fertilizer in rural areas) and to promote apply new fertilizer technology and to use sound agronomic practices (correct fer- fertilizers efficiently, many countries could tilizer placement, soil management, and maintain agricultural growth even as they effective weed and pest control). reduce emissions and water pollution. In Sub- Saharan Africa, by contrast, Produce more and protect better in natural soil fertility is low, and coun- fisheries and aquaculture tries cannot avoid using more inorganic Marine ecosystems will have to cope with fertilizer. Integrated adaptive manage- stresses as least as great as those on land ment programs with site-specific testing The oceans have absorbed about half the and monitoring can reduce the risk of anthropogenic emissions released since overfertilizing. But such programs are 1800,138 and more than 80 percent of the still rare in most developing countries heat of global warming.139 The result is a because there has not been enough public warming, acidifying ocean, changing at an investment in the research, extension, and unprecedented pace with impacts across the Managing Land and Water to Feed Nine Billion People and Protect Natural Systems 157 aquatic realm (see focus A on the science of Climate change will create new pres- climate change).140 sures--an expected increase in food prices, increased demand for fish protein, and the Ecosystem-based management can help need to protect marine ecosystems--that coordinate an effective response to fisheries could prompt governments to implement in crisis. Even without climate change, long-advocated reforms. These include between 25 and 30 percent of marine fish reducing catch to sustainable levels, and get- stocks are overexploited, depleted, or ting rid of perverse subsidies, which fuel the recovering from depletion--and are thus overcapacity of fishing fleets.149 The annual yielding less than their maximum poten- number of newly built fishing vessels is less tial. About 50 percent of stocks are fully than 10 percent of the level in the late 1980s, exploited and producing catches at or close but overcapacity is still a problem.150 The to their maximum sustainable limits, with global cost of poor governance of marine no room for further expansion. The pro- capture fisheries is an estimated $50 billion portion of underexploited or moderately a year.151 Rights-based catch shares can pro- exploited stocks declined from 40 percent vide individual and community incentives in the mid-1970s to 20 percent in 2007.141 for sustainable harvests. These schemes can It may be possible to get more value from grant rights to various forms of dedicated the fish caught--for example, by reducing access, including community-based fish- the fish caught unintentionally, estimated ing, as well as impose individual fishing at one-quarter of the world fish catch.142 quotas.152 It is likely that the maximum potential of fi sheries in the world's oceans has been Aquaculture will help meet growing reached, and only more sustainable prac- demand for food tices can maintain the productivity of the Fish and shellfish currently supply about sector.143 8 percent of the world animal protein con- Ecosystem-based management, which sumed.153 With the world population grow- considers an entire ecosystem rather than ing by about 78 million people a year,154 a particular species or site and recognizes fish and shellfish production must grow by humans as integral elements in the sys- about 2.2 million metric tons every year to tem, can effectively protect the structure, maintain current consumption of 29 kilo- functioning, and key processes of coastal grams per person each year.155 If capture and marine ecosystems.144 Policies include fish stocks fail to recover, only aquaculture coastal management, area-based manage- will be able to fill the future demand.156 ment, marine protected areas, limits on Aquaculture contributed 46 percent of fishing effort and gear, licensing, zoning, the world's fish food supply in 2006,157 with and coastal law enforcement. Managing average annual growth (7 percent) outpac- marine ecosystems effectively also involves ing population growth over the last decades. managing activities on land to minimize the Productivity has increased by an order of eutrophication episodes that stress marine magnitude for some species, driving down ecosystems, such as coral reefs, in many prices and expanding product markets.158 parts of the world.145 The economic value Developing countries, mostly in the Asia- of coral reefs can be many times that of the Pacific region, dominate production. Of the agriculture that caused the problems.146 fish eaten in China, 90 percent comes from The developing world already has some aquaculture.159 success stories. A program at Danajon Bank Demand for fi sh from aquaculture is reef in the central Philippines has begun projected to increase (figure 3.8), but cli- increasing fish biomass over the historical mate change will affect aquaculture opera- level.147 Indeed, some developing countries tions worldwide. Rising seas, more severe implement ecosystem-based management storms, and saltwater intrusion in the main more effectively than many developed river deltas of the tropics will damage aqua- countries.148 culture, which is based on species with lim- ited saline tolerance, such as catfish in the 158 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 Figure 3.8 Demand for fish from aquaculture will increase, particularly in Asia and Africa Second, aquaculture can cause environ- Million tons mental problems. Coastal aquaculture has 35 been responsible for 20 to 50 percent of the loss of mangroves worldwide;168 further Aquaculture production in 2003 30 Aquaculture demand in 2020 losses compromise climate resiliency of the ecosystems and make coastal populations 25 more vulnerable to tropical storms. Aqua- 20 culture also can result in the discharge of wastes into marine ecosystems that in some 15 areas contributes to eutrophication. New effluent management techniques--such as 10 recirculation of water,169 better calibration 5 of feed, and integrated and polyculturing in which complementary organisms are raised 0 together to reduce wastes170 --can lessen the China Asia and Pacific Europe Latin America and North Africa the Caribbean America environmental impacts. So can appropriate aquaculture development in underexploited Source: De Silva and Soto 2009. bodies of water, such as rice paddies, irriga- tion canals, and seasonal ponds. Integrated Mekong Delta. Higher water temperatures agriculture-aquaculture schemes promote in temperate zones may exceed the optimal recycling of nutrients, so that wastes from temperature range of cultivated organisms. aquaculture can become an input (fertil- And as temperatures rise, diseases affecting izer) for agriculture and vice-versa, thereby aquaculture are expected to increase both optimizing resource use and reducing pol- in incidence and impact.160 Aquaculture is expected to grow at a lution.171 These systems have diversified rate of 4.5 percent a year between 2010 and income and provided protein for house- 2030.161 But sustainable growth for the sec- holds in many parts of Asia, Latin America, tor entails overcoming two major obstacles. and Sub-Saharan Africa.172 First is the extensive use of fish proteins and oils as fishmeal, which keeps the pres- Building flexible international sure on capture fisheries.162 The growth in agreements aquaculture will have to come from spe- Managing natural resources in order to cope cies not dependent on feed derived from with climate change entails better interna- fishmeal; today, 40 percent of aquaculture tional collaboration. It also demands more depends on industrial feeds, much from reliable international food trade so that marine and coastal ecosystems, which are countries are better placed to cope with already stressed.163 Plant-based aquacul- climate shocks and reduced agricultural ture feeds (such as oil-seed-based feed) are potential. promising,164 and some operations have completely replaced fishmeal with plant- Countries that share watercourses will based feeds in the diets of herbivorous and need to agree on how to manage them omnivorous fish, without compromis- About one-fi fth of the world's renewable ing growth or yields.165 The emphasis on freshwater resources cross or form interna- cultivating herbivorous and omnivorous tional borders, and in some regions, partic- species--currently about 7 percent of total ularly in developing countries, the share is production--makes sense for resource far higher. However, only 1 percent of such efficiency.166 For example, production of waters is covered by any kind of treaty.173 one kilogram of salmon, marine fi nfi sh, Moreover, few of the existing treaties on or shrimp in aquaculture systems is highly international watercourses encompass all resource-intensive, requiring between the countries touching the watercourse in 2.5­5 kilograms of wild fish as feed for one question.174 The United Nations Conven- kilogram of food produced.167 tion on the Law of the Non-Navigational Managing Land and Water to Feed Nine Billion People and Protect Natural Systems 159 Uses of International Watercourses, which new agreements on resource sharing will was adopted by the UN General Assembly need to be negotiated. in 1997, has yet to command sufficient rati- To facilitate adaptation and regulate fications to enter into force.175 fi shery rights, it is important to develop Cooperation among riparian countries is international resource management essential to address water challenges caused regimes, both legal and institutional, and by climate change. Such cooperation can be associated monitoring systems. Such agree- achieved only through inclusive agreements ments might be facilitated by strengthening that make all the riparian countries respon- regional fi sheries management organiza- sible for the joint management and sharing tions.181 The Benguela Current's Large of the watercourse and that are designed Marine Ecosystem Programme is a prom- to address increased variability from both ising development. Running along the west droughts and floods. Typically water agree- coast of Angola, Namibia, and South Africa, ments are based on allocating fixed quanti- the Benguela ecosystem is one of the most ties of water to each party; climate change highly productive in the world, support- makes this concept problematic. Allocations ing a reservoir of biodiversity including based on percentages of flow volume would fi sh, seabirds, and sea mammals. Within better address variability. Even better would the ecosystem there is already evidence be a "benefit- sharing" approach, where the that climate change is shifting the ranges focus is not on water volumes but on the eco- of some key commercial species poleward nomic, social, political, and environmental from the tropics.182 This shift compounds values derived from water use.176 existing stresses from overfi shing, dia- mond mining, and oil and gas extraction. Countries will need to work together to Angola, Namibia, and South Africa estab- better manage fisheries lished the Benguela Current Commission Fish is the most international of food com- in 2006, the first such institute created for modities. One-third of global fish produc- a large marine ecosystem. The three coun- tion is traded internationally, the highest tries committed to integrated management ratio for any primary commodity.177 As of the fishery in order to adapt to climate their fish stocks have declined, European, change.183 North American, and many Asian nations have begun importing more fish from More reliable trade in agricultural developing countries.178 This increased commodities will help countries demand, combined with the overcapital- experiencing unexpected weather ization of some fishing fleets (the European extremes fleet is 40 percent larger than the fish stocks Even if farmers, businesses, governments, can accommodate), is spreading the deple- and water managers dramatically increase tion of marine resources to the southern the productivity of land and water, some Mediterranean, West Africa, and South parts of the world will not have enough America. And despite the multibillion water to always grow all of their food. dollar-a-year international trade in fisher- Deciding how much food to import and ies, developing countries receive relatively how much to grow domestically has impli- little in fees from foreign fishing fleets oper- cations for agricultural productivity and ating in their waters. Even in the rich tuna water management (box 3.8). Seeking food fishery of the western Pacific, small island self-sufficiency when resource endowments developing states receive only about 4 per- and growth potential are inadequate will cent of the value of the tuna taken.179 By impose heavy economic and environmental modifying the distribution of fish stocks, costs. changing food webs, and disrupting the Many countries already import a large physiology of already stressed fi sh spe- share of their food--most Arab countries cies, climate change will only make things import at least half of the food calories they worse.180 Fleets facing further declines in consume--and increasingly harsh condi- stocks may venture even farther afield, and tions mean that all countries need to prepare 160 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 BOX 3.8 Policy makers in Morocco face stark tradeoffs on cereal imports Morocco, with severe water constraints in rainfed areas, or any combination in had to without climate change. Reduc- and a growing population, imports half between (orange line). In other words, a ing net imports could only be achieved its cereals. Even without climate change, robust response to climate change could if Morocco made much higher efficiency if it wishes to maintain cereal imports at require Morocco to implement technical gains domestically. no more than 50 percent of demand with- improvements between 100 percent and out increasing water use, Morocco would 140 percent faster than it would have Source: World Bank, forthcoming a. have to make technical improvements to achieve a combination of two options: either 2 percent more output per unit of Achieving cereal self-sufficiency without increasing water use in Morocco water allocated to irrigated cereals or 1 percent more output per unit of land in Technological progress in irrigation efficiency (annual % change) rainfed areas (blue line in figure). 4.5 Adding in the effects of higher temper- No climate change­50% of 4.0 cereals produced domestically atures and reduced precipitation makes the task more challenging: technological 3.5 With climate change­50% of cereals produced domestically progress will need to be 22­33 percent 3.0 With climate change­60% of faster than without climate change cereals produced domestically (depending on the policy instruments 2.5 selected) (green line in figure). But if the 2.0 country wants more protection against domestic climate shocks to agriculture 1.5 and against market price shocks and 1.0 decides to increase the share of its con- sumption produced domestically from 50 0.5 percent to 60 percent, it has to increase 0.0 water efficiency every year by 4 percent 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 in irrigated agriculture, or by 2.2 percent Technological progress in rainfed yields (annual % change) for failure of domestic crops.184 Climate exported. The rest is consumed where it is change will make today's arid countries grown.188 And only a few countries export drier, compounding the increased demand grain (map 3.5). In thin markets, small from growing income and populations. shifts in either supply or demand can make Therefore, more people will live in regions a big difference in price. Second, per capita that consistently import a large share of global food stocks were at one of the lowest their food every year. In addition, more levels on record. Third, as the market for people will live in countries that experience biofuel increased, some farmers shifted out shocks to domestic agriculture, as climate of food production, contributing signifi- change increases the likelihood and sever- cantly to increases in world food prices. ity of extreme climate events. Several global When countries do not trust interna- scenarios project a 10­40 percent increase tional markets, they respond to price hikes in net imports by developing countries as in ways that can make things worse. In 2008 a result of climate change.185 Trade in cere- many countries restricted exports or con- als is projected to more than double in vol- trolled prices to try to minimize the effects ume by 2050, and trade in meat products to of higher prices on their own populations, more than quadruple.186 And most of the including Argentina, India, Kazakhstan, increased dependence on food imports will Pakistan, Russia, Ukraine, and Vietnam. come in developing countries.187 India banned exports of rice and pulses, As the sharp rise of food prices in 2008 and Argentina raised export taxes on beef, illustrated, the global food market is vola- maize, soybeans, and wheat.189 tile. Why did the prices spike? First, grain Export bans or high export tariffs make markets are thin: only 18 percent of world the international market smaller and more wheat and 6 percent of world rice are volatile. For example, export restrictions on Managing Land and Water to Feed Nine Billion People and Protect Natural Systems 161 Map 3.5 World grain trade depends on exports from a few countries 7.6 33.9 55.5 7.9 56.9 102.2 30.7 52.7 4.3 12.2 4.8 0.1 27.3 17.6 1.1 0.7 20.2 7.92 13.6 11.0 19.7 1.2 27.7 19.4 Amount of cereals 22.1 (million tons) 1.8 Exported Imported Source: FAO 2009c. Note: Annual exports and imports are based on the average over four years (2002­2006). rice in India affect Bangladeshi consumers multinational procurement so that small adversely and dampen the incentives for countries can group together for economies rice farmers in India to invest in agricul- of scale.190 ture, a long-term driver of growth. In addi- A third measure is active management tion, export bans stimulate the formation of stocks. Countries need robust national of cartels, undermine trust in trade, and stockpiling and the latest instruments in encourage protectionism. Domestic price risk hedging, combining small physical controls can also backfire by diverting stockpiles with virtual stockpiles purchased resources from those who need them most through futures and options. Models indi- and by reducing incentives for farmers to cate that futures and options could have produce more food. saved Egypt between 5 and 24 percent of the roughly $2.7 billion it spent purchasing Countries can take measures to improve wheat between November 2007 and October access to markets 2008, when prices were soaring.191 Global Countries can take unilateral action to collective action in managing stocks would improve their access to international food also help prevent extreme price spikes. A markets, a particularly important step for small physical food reserve could allow a small countries whose actions do not affect smooth response to food emergencies. An the market but that nonetheless import a international coordinated global food reserve large share of their food. One of the sim- could reduce pressures to achieve grain self- plest ways is to improve procurement meth- sufficiency. And an innovative virtual reserve ods. Sophisticated measures for issuing could prevent market price spikes and keep tenders to import food, such as electronic prices closer to levels suggested by long-run tendering and bidding and advanced credit market fundamentals without putting the and hedging products, could all help gov- coordinated global reserves at risk.192 ernments get a better deal. Another option Weatherproofi ng transport services is would be to relax national laws that prohibit also critical to ensure year-round access to 162 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 markets, particularly in countries such as flood warnings can reduce flood damage by Ethiopia, with high variability in regional up to 35 percent.197 Much of the develop- rainfall. Increased investments in improv- ing world, particularly in Africa, urgently ing logistics in the supply chain--roads, needs better monitoring and forecasting ports, customs facilities, wholesale mar- systems for both weather and hydrological kets, weighbridges, and warehouses-- change (map 3.6). According to the World would help get more food to consumers at a Meteorological Organization, Africa has lower price. But institutional infrastructure only one weather station per 26,000 square is also needed. Transparency, predictability, kilometers--one-eighth the recommended and honesty in customs and warehousing minimum.198 Data rescue and archiving are as important as the facilities. will also be important because long records Importing countries can also invest in of high-quality data are necessary to fully various parts of the supply chain in pro- understand climate variability. Many of ducing countries. It may also be possible, the world's climate datasets contain digital and indeed less risky, to focus on sup- data back to the 1940s, but only a few have ply chain infrastructure or agricultural digital archives of all available data before research and development in the produc- then.199 ing countries. Better forecasts would improve International rules to regulate trade will decision making remain an important part of the picture In Bangladesh the forecasts for precipita- The World Trade Organization's Doha tion extend only to one to three days; lon- Development Agenda sought to eliminate ger forecasts would allow farmers time to trade barriers and improve market access modify planting, harvesting, and fertilizer for developing countries. But negotiations applications, especially in rainfed crop- were suspended in 2008. One study con- ping areas where food crises can last for cludes there would be a potential loss of many months. There have been significant at least $1.1 trillion in world trade if world improvements in seasonal climate fore- leaders fail to conclude the Doha Round.193 casts (how precipitation and temperature Completing this agreement would be a key over the course of a few months will vary fi rst step in improving international food from the norm), particularly in the trop- trade. Key measures include pulling down ics and in areas affected by the El Niño effective tariff rates and reducing agricul- Southern Oscillation (ENSO).200 The onset tural subsidies and protection by developed of monsoon rainfall in Indonesia and the countries.194 Philippines and the number of rainy days in a season in parts of Africa, Brazil, India, Reliable information is and Southeast Asia can now be predicted fundamental for good natural with greater precision.201 ENSO-based sea- resource management sonal forecasts in South America, South Asia, and Africa have good potential for Investments in weather and climate improving agricultural production and services pay for themselves many times food security.202 For example, in Zimbabwe over, yet these services are sorely lacking subsistence farmers increased yields (rang- in the developing world ing from 17 percent in good rainfall years to Typically the ratio of the economic benefits 3 percent in poor rainfall years) when they to the costs of national meteorological ser- used seasonal forecasts to modify the tim- vices is in the range of 5­10 to 1,195 and a ing or variety of the crops planted.203 2006 estimate suggests it could be 69 to 1 in China.196 Weather and climate services can New remote-sensing and monitoring ameliorate the impacts of extreme events to technologies hold great promise for some degree (see chapters 2 and 7). Accord- sustainability ing to the United Nations International One reason that policy makers have found Strategy for Disaster Reduction, advance it so difficult to curb the overexploitation of Managing Land and Water to Feed Nine Billion People and Protect Natural Systems 163 Map 3.6 Developed countries have more data collection points and longer time series of water monitoring data Coverage period (in years) 0­25 26­50 51­75 76­100 >100 Source: Dataset for global distribution and time series coverage was provided by the Global Runoff Data Center. Note: The map shows the discharge monitoring stations that provide information on river runoff. land and water and their related ecosystems ments in irrigation water-saving techniques, is that neither the managers nor the users difficult in the past (figure 3.9). of the resources have accurate and timely Until recently, measuring groundwa- information. They don't know how much of ter consumption was difficult and expen- the resource is present, how much is being sive in all countries, and it simply was used, or how their actions will affect quan- not done in many developing countries. tities in the future. But new remote-sensing Taking inventories of hundreds of thou- technologies are beginning to fi ll some of sands of private wells and installing and that gap, informing decisions about more reading meters was too costly. But new efficient allocations of water and helping remote-sensing technology can measure with enforcement of water limits. total evaporation and transpiration from One of the most promising applications a geographic area. If the surface water of remote sensing measures water's pro- applied to that area through precipitation ductivity.204 When thermal images from and surface-water irrigation deliveries is satellites are combined with field data on known, the net consumption of ground- crop types and linked to maps from geo- water can be imputed.205 Various countries graphic information systems, scientists can are experimenting with using information measure yields on any geographic scale from new remote-sensing technologies to (the farm, the basin, or the country). That enforce groundwater limits, including allows water managers to make better deci- those Moroccan farmers who are consider- sions about water allocations and to target ing converting to drip irrigation (discussed advisory services to the farmers with low- at the beginning of the chapter). Options est water productivity. It also guides impor- for enforcement include pumps that shut tant investment decisions--say, between off automatically when the farmer exceeds increasing the productivity of rainfed or the evapotranspiration limit and systems irrigated agriculture. And it can help man- that simultaneously send text messages agers measure the actual results of invest- to farmers' cell phones, warning them 164 WO R L D D E V E LO P M E N T R E P O RT 2 0 1 0 Figure 3.9 Remote-sensing techniques are used in the vineyards of Worcester (West Cape, primary productivity. They can even map South Africa) to gauge water productivity the spread of individual invasive plant spe- cies.208 The scales vary, as does the tim- ing of updates. But rapid advances allow Liters of managers to measure with a precision and water per regularity undreamed of only a few years liter of ago. Depending on the satellite and weather wine conditions, the data can be available daily or even every 15 minutes. 150 Research and development will be necessary to take full advantage of these new informa- 300 tion technologies. There is great scope for applying new technologies and information 450 systems to manage natural resource issues associated with climate change. Investments in satellite data for natural resource man- 600 agement can pay off in the long run. But the potential is far from being met, especially in the poorest countries. A study in the Nether- lands concluded that additional investments in satellite observations for water quality management (eutrophication, algal blooms, turbidity), including the capital costs of the Source: Water Watch, www.waterwatch.nl (accessed May 1, 2009). satellite, has a 75 percent probability of pro- Note: Farmers whose fields are red are using one-fourth as much water per liter of wine than those whose fields are shown in blue. In addition to gauging water productivity, governments can also use these techniques ducing fi nancial benefits.209 Research and to target the activities of advisory and enforcement services. development of these tools and their appli- cation in developing countries are thus ripe they are about to exceed their allocation for public and private investment.210 of groundwater, and alert inspectors to monitor those particular farms.206 More reliable information can empower communities and change the Digital maps created from remote-sensing governance of natural resources information will help resource managers Natural resource management often at many levels. Using information from requires governments to set and enforce remote sensing to create digital maps of laws, limits, or prices. Political and socio- all of Africa's soils will be very useful for economic pressures make this very diffi- sustainable land management. Current cult, especially where formal institutions soil maps are 10­30 years old and gener- are weak. But when resource users have the ally not digitized, making them inadequate right information about the impacts of their to inform policies to address soil fertility actions, they can bypass governments and and erosion. An international consortium work together to reduce overexploitation, is using the latest technologies to prepare often increasing their revenues. Making a a digitized global map, starting with the strong economic case for reform can help, African continent. 207 Satellite imagery as in a recent study that highlighted the and new applications now allow scientists global cost of poor governance in marine to measure streamflow, soil moisture and capture fisheries.211 water storage (lakes, reservoirs, aquifers, India offers several examples of bet- snow, and ice) and to forecast floods. They ter information resulting in more efficient also make it possible to show crop yields, agricultural production and welfare gains. crop stress, CO2 uptake, species composi- In the state of Madhya Pradesh a subsidiary tion and richness, land cover and land- of Indian Tobacco Company (ITC) devel- cover change (such as deforestation), and oped a system called eChoupals to lower its Managing Land and Water to Feed Nine Billion People and Protect Natural Systems 165 procurement cost and improve the quality government agencies and overcome broader of soybeans that it received from farmers. governance issues. They can also be tools for The eChoupals are village Internet kiosks governments, working with communities, run by local entrepreneurs who provide to change user behavior. The Hai basin, the price information on soybean futures to most water-scarce in China, is extremely farmers and enable them to sell their pro- important for agriculture. Together with duce directly to ITC, bypassing the middle- two neighboring basins, it produces half men and wholesale market yards (mandis). of China's wheat. Water resources in the Through the eChoupals ITC spends less per Hai basin are polluted, wetland ecosystems ton of produce, and farmers immediately threatened, and groundwater severely over- know the price they will receive, reducing exploited. Every year the basin uses 25 per- waste and inefficiency. The payback period