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FEATURE: Charting a course toward climate compatible development – Seven years of CDKN (2010-2017)

Opening Remarks by Sam Bickersteth at the CDKN Conference, London, July 2017.  Additional content draws from discussion throughout the conference.

Read the second part here: a six point plan, and download the full essay as a pdf here.

Over the last seven years, CDKN has made it its mission to be a trailblazer and advocate of climate compatible development in the poorest and most vulnerable nations. Climate compatible development is an objective which means that tackling climate change cannot be at the expense of reducing poverty and achieving human development.

The idea of climate compatible development has gained widespread traction since we first proposed it in 2010. It is now an idea that has become central to the new Sustainable Development Goals (SDGs) and is reflected in the Paris Agreement.

As CDKN moves into a new phase, we are presented with the opportunity to look back over our achievements in the period 2010-17, but also, and perhaps more importantly, to focus on the challenges ahead.

What do we need to do more of to accelerate and catalyse climate compatible development to bring the Earth closer in line with the 2°C (or preferably 1.5°C) target? This question was central to our two-day conference in London, which brought together more than 65 climate and development practitioners from CDKN’s global network. Together, they captured the potential next steps for advancing the climate and development agenda. In this paper, we share latest thinking from CDKN on the state of climate compatible development in 2017 and propose a six-step action plan for accelerating and catalysing climate compatible development.

An integrated approach

From the inception of CDKN we have sought to integrate:

  • Climate and development – our central description of climate compatible development
  • Research into policy and practice – most of our projects have been embedded nationally, engaging us in the political economy of climate and development
  • Evidence building, technical support and knowledge management – we have a significant track record in effective articulation, forging joint understanding of, packaging and sharing experiences in climate compatible development with different audiences at the national and subnational level
  • Global processes into national level actions – our engagement has spanned global processes such as the SDGs, Sendai and the UNFCCC alongside our deep engagement countries.

Much of this came together in December 2015 with the Paris Agreement. COP21 marked a culmination of much of CDKN’s work linking across the dimensions mentioned above, and drawing on much of what we had achieved over the previous five years:

It is at the national level that CDKN’s knowledge and technical assistance has had its greatest impact; CDKN has influenced policies and practices in 33 countries, with more significant change in 13.

CDKN has also produced a wide variety of knowledge products. Some of the most significant reports we have produced include:

Some of the most significant reports and publications we have supported include Turn Down the Heat (World Bank), and the Green Growth Best Practices Report.

What’s happening now?

2017 brings a different global context to 2015, with dramatically increased uncertainty driven by Brexit, weak US leadership, global security risks, increased migration and many other factors. The multilateral triumph of Paris is threatened by the US withdrawal, although the G19 are currently showing remarkable cohesiveness around the irreversibility of the Paris Agreement. On the positive side, the economic and commercial case for accelerated shift from fossil to renewable energies has reached a tipping point, and subnational and non-state actors are increasingly committed to the Paris goals irrespective of global political processes.

Challenges and causes of uncertainty:

  • We are on the verge of a Fourth Industrial Revolution, with the advent of Artificial Intelligence, Virtual Reality, the Internet of Things, Blockchain and more; this will have massive implications for work, access to knowledge, wealth and distribution.
  • Extreme events are increasingly becoming the norm, and tipping points are close at hand. For example, the Larsen C ice sheet – a sheet the size of Delaware – has now broken away from Antarctica. We can also see the effects from extreme heat not only abroad but closer to home; a recent heatwave in UK has been linked to climate change by CDKN’s partners, the World Weather Attribution team.
  • Deforestation continues and is rising again in Brazil; tropical forests in Indonesia and the Mekong have been reduced to small pockets, whilst the less touched Congo basin is now under threat. Deforestation and land use change constitute 17% of emissions –– yet afforestation or land use restoration is currently the only established at scale Negative Emission Technology.
  • Emissions are still rising, and even with the Nationally Determined Contributions (NDCs) agreed in Paris, there is still a large gap of 14 GtCO²e to achieve 2°C limit of 42Gt by 2030. We need to decarbonise at an unprecedented annual rate of 6.5% until 2100 to meet the 2°C target. Developing countries face a raft of emissions-related issues, which are not only costly but also exacerbate fossil fuel dependency in many cases. The desperate need for energy access for billions of people, as well as the need for clean air and the obvious co-benefits to be gained have catapulted this issue to the top of policy-makers’ concerns.

What can we learn from the implementation of NDCs so far?

Many countries seem to be getting on with it, and we are in a changed context where Ministries of Finance, Planning and key sectors are now driving the agenda. But getting ownership, leadership, finance and capability in place across various levels of government is a big task; and NDC targets around adaptation need work to match the more realistic mitigation targets. Because the ambition of the current NDCs does not take the world anywhere near the Paris target, there is therefore an urgent need for significant tightening as the first updates are being prepared

So what about the Finance?

Climate finance for developing countries was estimated to be $42bn last year, with $67bn projected by 2020. However, official climate finance is dwarfed by finance from other sources; for example, green bonds (fixed-income financial instruments linked in some way to climate change solutions), of which issuance in 2017 is expected to be $120-200bn. We know it’s the trillions in wider assets (such as pension funds) that matter the most. There is a diversification of instruments (equity, guarantee, loan and grant) by multilateral funds such as Climate Investment Funds (CIFs) and the Green Climate Fund (GCF), but financing NDCs is fragile with excessive attention on the GCF (whose resources are already set to decline), and a lack of grant finance – especially for adaptation.

It’s important to note that mainstreaming is underway, with 28% of the World Bank portfolio set to be climate related, and the International Development Finance Club (IDFC) has made a significant commitment to climate compatible development in their pre-Marrakesh declaration, but do we know what good looks like in mainstreaming climate action? Are new investments really integrating the best knowledge and practice on climate risk and emissions reducing technologies? Although the GCF and multilateral development banks play a catalytic role, it is domestic resources – public and private – that will be critical to drive transformation.

So what actions have we seen so far in developing countries?

  • The energy transition is well underway, driven by a fall in prices, technology and policy environments with globally 24% of power coming from renewable energy. The potential for a total shift to renewables, as well as the need to fill urgent energy requirements, has been widely recognised: at COP22 48 countries committed to 100% renewables. But despite this, progress is not on track to reach Sustainable Energy for All’s 2030 targets, particularly those on energy efficiency.
  • There has been less progress in the associated transport revolution, which is underway in small vehicles but with a long way to go on trucks, planes and ships where there are increased emissions. France, the UK and the Netherlands are going to all-electric cars within decades; Volvo recently announced an end to the production of non-electric vehicle/hybrid engines. However, except for in the Chinese and Indian markets, technologies like this are not yet emerging in most developing countries, most of which badly need sustainable transport systems.
  • Smart cities are not yet being built, but quite the reverse with ‘unsmart’ construction underway at a colossal speed. However, countries such as India, China and the Philippines are trialling high profile smart cities initiatives. Buildings produce 20% of greenhouse gasses, but decarbonising infrastructure is only estimated to bring an additional 5% cost; there is massive opportunity to get this right in developing countries.
  • Agriculture, forestry and other land use is central to livelihoods and economies in developing countries; approx. 500 million people are dependent on forests. There has been top-down progress with the New York Declaration on Forests, and the commitment from 54 big-brand companies to remove deforestation from their supply chains by 2020; however, these commitments are hard to implement, as trends in Brazil’s deforestation demonstrate. Although it is core to the success of NDCs in developing countries, land use faces extremely complex delivery challenges.
  • Whilst there has been some progress on climate smart agriculture, including in supply chains, the scale of uptake has not yet been evidenced. SMART farming and supply chain management technologies are becoming increasingly normal in developed economies, but it is early days with regards to reducing food waste, shifting diets and reducing livestock emissions. There are hard trade-offs to deal with around behaviour, regulations and incentives; one potential solution is to redirect agriculture subsidies, which are globally worth $580m – more than fossil fuels. There is an urgent need for better understanding, or we may see 70% of emissions coming from agriculture and associated land use alone by 2050.What does this mean for the future?

Technology, knowledge and potentially finance are moving faster than regulations, institutional capability and behavioural change. But the overarching constraint that has dominated the agenda of CDKN has been the capability of institutions, the depth and breadth of human capital and the systems in which they operate.

 Read the second part here: a six point plan for moving forward, and download the full essay as a pdf here.

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