08 January 2014

The public money available to manage the global environment: Are we using it wisely? Guest blog by Uma Lele

In response to Rob van den Berg's recent blog here is one by Uma Lele, independent scholar, former senior adviser at the World Bank and former IDS Board member.

"Rob Van den Berg, a longtime colleague has called a spade a spade in his blog on these pages. But not only is public money allocated to global environment small potatoes in relation to the resource mobilization potential or the need--it is spent far from optimally.

Most of the $10 billion of available public money is in the form of climate funds which have proliferated. In a paper I co-authored with Aaron Zazueta of Global Environmental Facility, and Benjamin Singer of the UN Forum for Forests we reported a total of 14 World Bank managed climate and carbon funds in 2010. Bilateral funds have also emerged reflecting further fragmentation of the aid architecture. Transaction costs to developing countries in accessing resources have increased without yielding significant benefits. Carbon prices in the EU market have dropped from around 9 Euros a ton in June 2012 to about 3 Euros in June 2013.

The learning curve on designing emission reduction projects is steep, measurement issues in assessing benefits abound and the benefits from this herculean effort are—so far--insignificant. Yet the growth of funds has spawned a consulting/NGO industry in advanced countries. Capacity in developing countries to address their multiple climate related challenges remains scant. The urgent need is to adapt to climate related disasters causing adverse impacts on millions of lives. Hence preparedness is of strategic importance, well demonstrated by the contrasting examples of the responses to hurricanes in October/November 2013 in Odisha, where a million people were moved, and in the Philippines, soon thereafter, where they could not be moved.

Among the mitigation efforts, REDD+ (reducing emissions from deforestation and forest degradation, forest conservation, the sustainable management of forests, and the enhancement of forest carbon stocks) gained momentum but now it too seems to be stalling. REDD+ deals with property rights, community participation, and benefit sharing—all are difficult to achieve in the short run. Carbon sequestration is measurable in principle, but it too is difficult to assess in practice.

Despite this, deforestation rates have slowed in Latin America (most notably in Brazil). Some middle income developing countries have added new forest cover to make up for the lost old growth forests. Tree cover outside forests has increased. This progress has occurred despite the absence of programs to independently verify and certify emissions reductions. It is explained by better law enforcement against illegal logging in Brazil, independent external verification of logging in Cameroon, greater vigilance by civil society organizations, and a growing desire on the part of the middle classes in developing countries to be environmentally responsive. The related carbon sequestration has cost as little as $2.50 per ton.

The current body of evidence supports three key propositions.

First, REDD+ needs to shift from a focus on forest carbon storage as a mitigation strategy to address other forest values, such as biodiversity, watershed protection, forest production, income generation, and social and cultural values of importance to stakeholders in developing countries. The current limited focus is neither sufficient nor sustainable without a land use, land use change, and forestry (LULUCF) approach as the Intergovernmental Panel on Climate Change (IPCC) has stressed. Attention to land change issues is critical, e.g., to agriculture and other uses, as well as to the many underlying issues related to REDD+ (e.g., international trade in commodities and private capital flows, technology transfers, and adaptation to climate change) involving diverse forest and agricultural lands and a large number of people dependent on natural resources.

Second, even with efforts on all these fronts, without mitigation in brown sectors (e.g., housing, transport, and energy) REDD+ is a fig leaf.

Third, stressing mitigation in developing countries alone diverts attention from need for mitigation in developed countries.

Part of making the case for more public money is to show that we can spend what is available in a wise manner. The evidence suggests these propositions will help us do this. "

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