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Climate change – is that a small light at the end of the long tunnel?

Written by Kevin Watkins

If you’re looking for bad news on international development, then look no further than climate change. Energy-related carbon emissions have reached an all-time high. Global warming effects are coming through more quickly and more severely than anticipated. There is a growing risk that advances in human development will be thrown into reverse gear, with increased exposure to drought, floods and extreme weather reinforcing poverty traps. With the 2015 deadline for renegotiating the Kyoto Protocol approaching, global climate negotiations are going nowhere slowly.

All of which makes the occasional glimmer of light a welcome reminder that change is possible.

Last week, President Obama provided the glimmer. His national climate action plan marks the most comprehensive framework for cutting US carbon emissions to date. If implemented, US emissions will be cut by 17% by 2020 (from a baseline of 2005), principally through more stringent pollution standards for power plants, increased energy efficiency standards, doubling renewable energy provision and reduced production of hydroflurocarbons (HFCs) and methane. Researchers at the World Resources Institute have demonstrated that the target can be achieved, with political follow-through.

What has prompted the US administration to act? Extreme weather has played a role. 2012 was the second costliest year on record for climate-related disasters in the United States. Hurricane Sandy and the mid-West drought cost US taxpayers a combined total of US$95bn. Meanwhile, the devastating human impacts of hurricanes, wildfires and tornadoes have fuelled public concerns and created an embryonic (and wafer-thin) bipartisan consensus in favour of climate action.

Political leadership has also played a role. Congress and the American public are deeply divided on climate change. Climate scepticism, informed by pre-enlightenment approaches to science, is deeply embedded in political discourse.  There are no political prizes for bold presidential action. Yet President Obama has shifted national policy in a positive direction. His action plan also calls for renewed engagement internationally. This is vital. Without US leadership and constructive participation, there is no prospect of an ambitious and effective international climate agreement by 2015 - and the recent agreement with China to cooperate on the reduction of HFCs may signal a new mood.

None of this is cause for undue optimism. The US administration’s national action plan may be a big step for the US, but it is a small step towards avoiding dangerous climate change. Global energy investments are locking the world into a high-carbon future and the UNFCCC process is deadlocked: climate change is slipping down the international agenda. Building on the glimmer of light in the US, what else needs to happen to change this picture – and what role can evidence-based research play to make a difference?

There are no easy answers. But it strikes me that there are four key challenges.

  1. Assessing impacts and communicating the evidence. Current scientific and economic modelling exercises provide a limited insight into the scale of the threat to human development. As Nick Stern has pointed out, most models don’t capture the feedback and tipping-point effects that will come with temperature increases of 4-5⁰C, which is where we are headed. The consequences of breaching our planetary ecological boundaries are largely unknown, but almost certainly catastrophic.

    Nor do models capture the lasting effects of increased climate risk on poverty dynamics. It can take a decade for a family affected by drought in East Africa or a flood in an urban slum to restore their productive assets. Extreme events – such as the 2007 flooding in Pakistan or typhoon Bopha, which devastated Mindanao in the Philippines during 2012 – can set back the development of whole countries and regions by years. We need models and analytical frameworks that are better equipped to capture the probabilities of extreme events and their implications for people. As important, we need to project more forcefully the message that failure to avert dangerous climate change will render irrelevant any international commitment to eradicate poverty.

  2. Aligning markets and political imperatives. An ambitious agreement on mitigation will have to be underpinned by a fundamental shift in approaches to carbon pricing. Today’s incentive structures are geared towards producing, not averting, dangerous climate change. If fossil-fuel companies market more than 40% of the coal, oil and gas reserves that underpin their listed value, the 2⁰C threshold will be breached. Their shareholders need to wake up to the risks they are generating. Policy-makers also need to recognise the imperative to align carbon markets with the commitments they are making on the climate. In the EU, political horse-trading has led to an oversupply of allowances and a collapse in carbon prices to €5/tonne (it was €30/tonne in 2008). This actively discourages investment in low-carbon technologies and undermines prospects for the development of a global carbon market.

    To make matters worse, governments around the world are actively subsidising carbon-intensive energy systems. As Shelagh Whitley has argued, this is the opposite of what we need. According to the IMF, the global fossil fuel subsidy is running at $1.9trillion annually, or 2.5 per cent of world GDP. Transferring these resources into national and international programmes aimed at incentivising low carbon growth would transform prospects for avoiding dangerous climate change.

  3. Building trust through fairer financing. Climate negotiations have been hampered by a failure to develop credible financing provisions. Emerging markets, the fastest growing source of carbon emissions, are unlikely to adopt ambitious emission-reduction targets without rich countries picking up part of the bill through energy cooperation. The 2010 Copenhagen Climate Accord included a pledge by rich countries to mobilise $100bn a year by 2020, including US$30bn in fast-start financing. Research by ODI points to some good news mixed with uncertain news on delivery. OECD countries have also allocated resources to fast-start financing. However, there is little clarity over what should be counted as ‘new and additional’ – greater consistency would help to build confidence in this area.

  4. Tackling adaptation. The 2007 Human Development Report coined the term ‘adaptation apartheid’ to capture global disparity in financing for adaption (as a declaration of my interest: I was lead author). If anything, the disparity is even more glaring today. New York mayor Michael Bloomberg has proposed investments of US$20bn to shore up the city’s flood and storm defences in the wake of Hurricane Sandy. As a point of reference, the Kyoto Protocol’s Adaptation Fund, the principal multilateral vehicle for reducing climate vulnerabilities, had a total capitalisation of $380m at the start of 2013.

While climate disasters in rich countries make the media headlines, the social and economic impacts are most damaging in the poorest countries. Economic losses from natural disasters in low-income countries are 14 times higher than in high-income countries when expressed as a share of GDP. Yet donors chronically under-invest in disaster risk reduction.  That is why Tom Mitchell and others at ODI are working to put disaster prevention at the heart of the post-2015 international development goals. If you think disaster is a peripheral issue, then read these links.

Poor people in poor countries are not responsible for the global warming that is elevating climate risks, and they shouldn’t be left to sink or swim with their own limited resources. The Doha climate negotiations in 2012 included a commitment by rich countries to provide finance to counter the 'loss and damage' incurred by poor countries as a result of climate change. Acting on that pledge would redress what is surely one of the gravest sources of injustice in our world. It would also make a new deal on climate in 2015 a more realistic prospect, turning a glimmer of light into a ray of hope.