Friday, October 30, 2009

Stimulus, Justice, and Business in Greening the Developing World

I attended a business leaders luncheon last week organized by the United Nations Association around the idea of Greening the Developing World: Tech's Leading Role (Siemens and TIME co-sponsored). Among the themes one stood out: "Experiment on us!" This came from Minister Modest Mero of Tanzania. He indicated that Africa is an investment opportunity where clean energy pilot projects can take root because they don't have to fight the inertia of creative destruction common in rich countries.

But what is the policy and political landscape for greening development? Robert Orr, the Assistant Secretary-General for Strategic Planning and Policy Coordination, explained the relevance and success of the Clean Development Mechanism in this area. About half of new energy demand and development will be in poorer countries, he said, where 2 billion people live without modern energy access or technology. About one-third of CDM projects to date have involved technology dissemination to these countries.

Orr also made the point that it might be more useful to speak generally of "technology dissemination" instead of "technology transfer." He described the latter as too much of a 1960s–70s term. Recasting the process in this light would help account for co-development, PPPs, and other projects. (While I understand his pragmatic bent here, it does seem to gloss over the justice questions at stake in climate change.)

The CDM for all its faults [PDF] is not an insignificant pool of resources, and lessons have been learned from early implementation efforts. In 2006 some $25 billion was dedicated to projects in the CDM pipeline, $5.7 billion of which went to renewable energy and energy efficiency. But it should have come as no surprise for the UN to learn that money has flowed to the biggest, most profitable projects. As Orr acknowledged, about 80 percent of the projects have occurred in just five countries: Brazil, India, China, Mexico, and the Republic of Korea. Forty-nine other countries account for only 1.5 percent of CDM projects, showing a great need for equity and capacity-building. Orr explained that the UN role should be to help harness the power of the market in a formula that ensures full participation for access to energy.

On the topic of climate ethics, Ambassador Hardeep Singh Puri of India was asked to explain why the West should help countries like India that are its industrial competitors. He answered that you can't solve global climate change without them! He also offered a somewhat rhetorical question of his own: Should the West give to the poorest countries but not to India? Puri estimated that there are more people living in India at the poverty level of the Least Developed Countries than there are total people living in those LDCs.

He said that countries like India offer potential not only as laboratories for new clean energy projects, but also as new markets for green technologies. He stressed that these investments should occur within the existing intellectual property regime (a point also expressed in Sen. John Kerry's Clean Energy Jobs and American Power Act [PDF]). "Accessing technologies" would mean paying for patents, but at affordable rates to promote dissemination of clean technologies. Relying on philanthropy and altruism will go nowhere, he said.

Puri cited renewables and even nuclear as the green technology needs of India, since India still relies heavily on fossil fuels. Biofuels are a non-starter for India in the short and medium term because of land and water shortages, concerns about food security, and commodity price volatility. Puri instead would like to see an increase in public-funded R&D projects that can lead to technology dissemination that also maximizes the common good.

Glenn Prickett of Conservation International broke implementation goals down into three priorities: Efficiency, Forest conservation, and Renewable energy. He cited a McKinsey study [PDF] showing that progress in those areas could account for 75 percent of the global emissions reductions needed by 2020, at a net savings of $14 billion! Of course, this would entail a 50 percent reduction in tropical deforestation, and one roadblock is that public investment in forestry, agriculture, and land-use policies has been dropping.

Energy efficiency solutions, according to Prickett, can be driven by effective standards backed by institutions for enforcement. He pointed out that one of the best ways an "awakening" private sector can contribute is through supply-chain analysis and waste reduction. On a related note, the Kerry climate bill also calls for a voluntary "national product carbon disclosure program," to be based on a review of existing and planned standards such as Carbon Trust's Publicly Available Specification 2050, standards to be developed by the World Resources Institute and the World Business Council for Sustainable Development, and those of the International Standards Organization.

A question was posed to the panel about why the interaction of climate change and land-use issues has been neglected relative to renewables and other investments. Orr responded that food security must be tackled in tandem with climate change, and that technology transfer for adaptation projects that deal with land use could yield huge advances at low cost. Ambassador Puri turned to the case of India, where he said 60 percent of the country lives in rural areas but only 20 percent of the country's GDP comes from agricultural investments. Why the underinvestment? Subsidies in the rich countries! Puri indicated that it's impossible to disentangle climate solutions from the inequities and stagnation of other negotiations such as the WTO Doha Round.

Indeed it is these systemic complexities and inequities that most plague the path to agreement in Copenhagen. But there is nonetheless climate solidarity that transcends national barriers, as evidenced by the massive global call to action organized by on October 24. As I wrote recently, solving climate change has great potential to serve as an organizing principle for Green Diplomacy, in a way that solves geostrategic, security, and development concerns. But it also has the potential to be a Global Green Stimulus, at a time when developing countries have been further battered by the financial failures of rich nations. Administering much of this stimulus in the form of mitigation grants or an adaptation fund is key to answering the major questions of global environmental justice.

[Photo credit: action on the beach of Dar es Salaam, Tanzania (CC).]


Usi Omondiagbe said...

First of all, I would like to commend Glenn Prickett of Conservation International for identifying the importance of forest conservation as a means to lowering global emissions. Other than that, the entire article places too much emphasis on alternative energy, creating the impression that the real intention of this ‘greening’ project is to reduce oil-dependence and stabilize energy prices for developed countries. The mention of "commodity price volatility" in the seventh paragraph says it all. Why on earth should all the concentration be on energy? Is this the only aspect of climate change? True, it is significant, but I expect a genuine ‘greening’ project to be multi-faceted.

Evan O'Neil said...

Usi, Thanks for your comments. You're correct to point out that climate change solutions must be multifaceted. In fact, a significant portion of Clean Development Projects have been in forestry, chemicals, transportation, and other sectors that aren't directly related to electricity. Yet given the systemic nature of energy it's not surprising that the panelists at Greening the Developing World kept coming back to this theme. Ambassador Puri's point about commodity prices was more meant to reinforce his contention that biofuels are not a viable solution for India.

Gabriela Cordeiro Antunes said...

True, the West could help countries like India because you can't solve global climate change without them. However, what can be said about countries like India leading global climate change solutions? If the primary concern of the West and carbon emissions reductions concern Indian and Chinese carbon emission reduction, then who better to develop the technology laboratories for new clean energy projects? India is a new market for green technologies but, the West cannot be the only leader in clean energy solutions. If so, they invented the industries that polluted and now they are developing the answers to pollution. Shouldn't finding solutions be an inclusive process? Reducing the impacts global climate as well as emissions is a goal the entire community should undergo, it promotes "Green Diplomacy."

Christopher Smith said...

In response to Ambassador Puri's rhetorical question of Should the West give to the poorest countries but not to India? I don't believe the West will be giving anything away. Whoever develops ground-breaking anti-greenhouse gas technology like the ability to capture carbon from the atmosphere and convert carbon gas into carbon solids, that can then be disposed of at the bottom of oceans or in space will be putting it up for sale. And the developing world will be eager buyers because all the IPCC climate change forecasts project that the third world will be suffering from the most devastating effects of climate change. The West is in the advantageous position of developing from years of fossil fuel burning while being threatened with the least amount of damage from climate change. The developing world is in the exact opposite position. Another question is would the West fund expensive climate change mitigation projects like the construction of huge ocean surge sheilds like the ones in the Thames and off the coast of the Netherlands to potentially protect coastlines from sea-level rise? The fact that the Clean Development Mechanism has invested 80 percent of their budgets in the five countries who offered the most profitable returns on investment is answer enough.