PAPER: Drivers and challenges for climate compatible development
CDKN is pleased to announce the publication of a new Working Paper by Karen Ellis, Ali Cambray and Alberto Lemma, Drivers and Challenges for Climate Compatible Development. The paper sets out CDKN’s initial thinking on the drivers and challenges affecting climate compatible development (CCD) policy processes, based largely on the programme’s own national and subnational-level experiences.
The authors argue that there is not a straightforward relationship between CCD policies and outcomes such as growth, poverty and equity. There will be winners and losers, and trade-offs among social, economic and environmental goals and between long-term and short-term benefits. This makes the political and institutional dimensions of CCD particularly challenging.
Understanding and managing the political economy of CCD is instrumental to promoting and strengthening climate compatible development outcomes and overcoming barriers to implementation.
The paper sets out some of the key drivers of CCD strategies, as follows:
1. A recognised need at the national level to adapt to climate change in order to bolster resilience, achieve growth and reduce poverty. This is a particularly strong driver for the least developed countries, which are often the ones most likely to be badly affected by climate change.
2. A need for energy security and natural resource efficiency. Energy security is a particularly strong driver for countries dependent on imports of fossil fuels; natural resource efficiency is a strong driver for countries such as China that are growing fast and have a large population.
3. A desire to capitalise on new economic opportunities. These include the development of new industries to meet growing global demand for certain types of green goods and services (e.g. solar energy applications), and new sources of competitiveness arising from improved energy and resource efficiency. While this is a potentially important driver for all countries, high- and middle-income countries tend to have considered these issues the most.
4. A desire to improve access to climate finance and aid. This is another strong driver for most developing countries, although sources of finance may vary between them: middle-income countries are in the strongest position to benefit from carbon markets, given their larger mitigation opportunities; low-income countries are more likely to benefit from new sources of public climate finance from the international donor community.
5. Strong government leadership. This can come from a particular individual within the government, or from a government department or institution. Strong leadership at the sub-national level can lead to wider interest at the national level.
The key barriers to the development of CCD policies, and potential solutions are identified as follows:
1. Costs associated with change. These include both opportunity costs and implementation costs, and can potentially be offset through compensatory mechanisms, for example through carbon markets or facilities such as the Clean Development Mechanism or REDD+ (finance facilities for reduced emissions from deforestation and forest degradation together with conservation, sustainable management and enhancement of forest carbon stocks).
2. Interest groups opposed to change. These range from industries who consider CCD to be a threat to growth, to groups representing the interests of poor people. These challenges can be addressed through the establishment of appropriate compensation mechanisms for those who stand to lose from the reforms; through multi-stakeholder dialogue processes where different views can be expressed and compromise solutions negotiated; and through the organisation of coalitions in favour of reform.
3. A lack of awareness or trusted information about uncertainties, risks, opportunities and trade-offs. The creation of a strong evidence base is needed to identify the costs and benefits of CCD reforms, to provide robust information for sound CCD decision-making, and to build up wider support for CCD policies. Often there are gaps in the information and conflicts over the sources of information used to generate models. This can be addressed through participatory processes, which enhance acceptance of the resulting information as a basis for action.
4. Short-termism. Many governments prioritise the achievement of high growth in the short term over CCD that may be more socially beneficial in the long term. One way to lock in CCD commitments and ensure their implementation for the longer term is to embed them in law and longer-term processes, which reduces their vulnerability to electoral and business cycles.
5. A lack of state capacity to respond to and implement strategies. The development of CCD strategies and the implementation, monitoring and enforcement of associated policies are often limited by the technical or institutional capacity of the responsible government bodies. Support from donors for capacity building is important. Solutions led by civil society also have a role to play, such as voluntary emissions reporting initiatives by the private sector.
6. Institutional constraints. Unclear responsibility across different ministries, or the relative weakness of the lead ministry to assert policies or processes over other ministries, can hamper the design and implementation of CCD policies. Appropriate coordination mechanisms need to be developed to facilitate inter-ministerial discussion and decision-making; these need a clear mandate, long-term funding and appropriate human resources.
7. Technological constraints and uncertainties. Uncertainty about how technological development will evolve, and about the evolution of fossil fuel prices, can act as a strong disincentive to invest in green technologies such as renewable energy. Solutions include policy measures for financial risk-sharing, subsidised credit, government procurement policies, and mechanisms such as feed-in tariffs and advanced market commitments, which can guarantee a certain level of market demand in the future.
CDKN invites readers to correspond on the issues identified in the paper, and to make additional suggestions in relation to drivers and challenges for CCD based on your own experiences. Questions for feedback and discussion include:
- What examples do you have to support, or challenge, the drivers, challenges and solutions identified?
- Which other drivers, challenges and solutions are important?
- How do countries most effectively integrate climate change into their development planning?
- What tools are needed to assess trade-offs and look for triple wins?
- What are the biggest gaps in knowledge and conflicts around sharing of knowledge, and how have they been overcome?
Please download the pdf of the Working Paper here and contact the CDKN Thematic Group on CCD with your responses.
CCD Thematic Group
c/o CDKN Global
7 More London Riverside
London SE1 2RT
Tel: +44 (0) 207 2124111