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FEATURE: CKDN debate highlights the need for a new economic narrative

By Mairi Dupar, Global Public Affairs Coordinator, CDKN

A debate held by the Climate and Development Knowledge Network (CDKN) and Overseas Development Institute (ODI) last week highlighted that compelling economic narratives are needed to drive action on climate compatible development – and that policies must be carefully designed to assist the poorest in society.

CDKN and ODI held the public event on 8 May to debate what motivates leaders to take ambitious action on climate change. Karen Ellis of ODI launched the working paper Drivers and Challenges for Climate Compatible Development, which summarises some of the key incentives and hurdles to action that CDKN has encountered in its three years of technical assistance to developing  countries.

Simon Maxwell introduces the event

Karen Ellis discusses drivers and challenges for climate compatible development

Making the economic case

Top of the incentives for climate action are developing countries’ desire to reduce their climate vulnerability and boost resilience. “This is especially important for low income countries,” said Ms Ellis. “There is a lot of evidence that growth will be hit by climate change, and it has often been quantified. For example, in Ethiopia, economic growth is likely to be halved by climate change by 2025, without adaptation steps. The 2007-2008 UN Human Development Report showed how climate change will make it harder to reach the Millennium Development Goals.

However, Environment Ministries and other domestic proponents of climate action face a tough challenge in convincing Economic and Planning Ministries to adopt this agenda.

We need to quantify the benefits of climate compatible development better than we are doing now, partly by estimating the costs of inaction, partly by showing the cost of business as usual,” said Ms Ellis. The lack of strong quantitative analysis “is making it easy for politicians to ignore these issues” she added.

Simon Maxwell, Executive Chairman of CDKN and Chair of the event, said, “I don’t think we should dismiss short term political cycles, so if we can’t make the economic case within those cycles, then we can’t make headway.”

Managing the wins and losses from climate compatible development

The promise of climate compatible development is to achieve ‘triple wins’ among climate change mitigation, adaptation and development. Development policies should be good for mitigation and adaptation, or, at least, policies which achieve gains in one area shouldn’t undermine prospects for achieving the others, Ms Ellis argued. (See Defining  Climate Compatible Development, 2010).

Are countries achieving triple wins in practice? Emma Tompkins of Southampton University led a team to investigate whether triple wins are being achieved in development projects across coastal zones of Vietnam, Kenya, Ghana and Belize. The research focused on forestry, agriculture, aquaculture and other natural resources-based initiatives.

Our first finding was that triple wins do exist but only when there is an initial policy focus on some aspect of climate change,” said Dr Tompkins, in her formal presentation. “Almost all the climate compatible development initiatives we found came with regrets. The costs aren’t solely accruing to the private sector and end up on the communities whose land may be taken.   For example, mangrove reforestation has potential for triple wins; in one country it was without regrets, but in another it was with regrets, because there was a land redistribution happening.”

The challenge of who benefits, and who loses, from climate compatible development is a challenge as old as development itself, albeit in a new guise. “All the things that can go wrong with development can go wrong with climate compatible development, and we need to be cognisant of that,” said Tom Mitchell of ODI, a senior advisor to CDKN.

Around the world, green growth is being advanced with short term rent seeking, for example, through land grabs. Such abuses don’t necessarily undermine the integrated approaches offered by climate compatible development”, he said. Climate compatible development can be robust, as long as the development part of the equation is inclusive and pro-poor.  It may take a suite of interventions to compensate losers or address equity issues.

There’s also a hard political reality to climate compatible development, according to Simon Maxwell. If societies are going to move toward low-carbon growth, then those with vested interests in fossil fuels will stand to lose. “At a certain point, doesn’t it just take political leadership to do the right thing?” he asked.

Where climate compatible development is working

Colombia provides a national case where integrated climate compatible development approaches are taking root. CDKN’s Claudia Martinez, who advises the Colombia government on green growth, described in a recorded presentation how devastating rains and flooding in 2010 alerted Colombia’s farmers to the potential impacts of climate change. The drop in their yields and 20 percent rise in coffee prices were a sharp wake-up call.

Business leaders need to understand competitiveness in terms of climate change,” said Ms Martinez.  “Now the agriculture sector has really understood it because of the effect of climate change on commodity prices.”  With CDKN support, large- and small-holders in Colombia’s bread basket, the Alto Cauca river basin, are involved in assessing their climate vulnerability and considering climate-smart solutions.

This conversation about the economic case for action is now happening across multiple economic sectors in Colombia. In the tourism sector – for instance, in the heritage-rich coastal city of Cartagena – Ms Martinez and her team have been working with local government and business leaders to redefine competitiveness and win allies for climate action: “We see in Cartagena all the major chains of hotels are willing to build hotels in the coastline. For them to be adaptive, they need to see that sea level rise will be an issue.

The Chamber of Commerce has recognised that “sun and sea moves,” and this is an important mind-shift, added Pippa Heylings, CDKN’s Latin America Director. “The tourism sector is now saying: we need to have a joined up approach” by which businesses foresee and adapt to negative climate impacts by building facilities that reach first world levels of energy efficiency and eco-friendliness.

CDKN Chief Executive Sam Bickersteth concluded, “The evidence base for climate compatible development remains shaky and we need more information to inform policy choices.   Many of the potential solutions will come from sectoral drivers of change such as energy security or moves towards natural capital accounting in global supply chains.” We might hope to see more robust policies and more satisfactory outcomes for climate compatible development when we have better economics of the benefits and costs to back up policy-making.

Read the CDKN Working Paper on Drivers and Challenges for Climate Compatible Development by Karen Ellis, Ali Cambray and Alberto Lemma, listing five drivers and nine challenges, and a range of solutions.

View Simon Maxwell introducing the event

View Karen Ellis presenting the paper on Drivers and Challenges for Climate Compatible Development

View Emma Tompkins’ response to the paper on Drivers and Challenges for Climate Compatible Development

View Claudia Martinez’ response with examples of climate compatible development from Colombia

View the audience’s questions and answers

View Sam Bickersteth’s summary of the event

Read Karen Ellis’ blog on climate compatible development

Read Megan Rowlings write up of the event – How do we get governments interested in climate-smart development?

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