Is carbon neutral green economy a myth?

Green Growth-1In an interesting paper of Environmental Justice, it was questioned that the vision or philosophy of carbon neutral economy or green economy is a myth.  The author of the discussion paper, Kevin Smith narrated that carbon offsets are the modern day indulgences, sold to an increasingly carbon conscious public to absolve their climate sins. The author further stated that if we dig out more, a disturbing picture emerges, where creative accountancy and elaborate shell games cover up the impossibility of verifying genuine climate change benefits, and where communities in the South often have little choice as offset projects are inflicted on them. This discussion paper argues that offsets place disproportionate emphasis on individual lifestyles and carbon footprints, distracting attention from the wider, systemic changes and collective political action that needs to be taken to tackle climate change. Promoting more effective and empowering approaches involves moving away from the marketing gimmicks, celebrity endorsements, technological quick fixes, and the North/South exploitation that the carbon offsets industry embodies[1].

But in reality the picture of carbon neutrality and green economy is not bad, rather encouraging; thanks to the leadership of market leaders like Global Green Growth Institute (GGGI) , which has been relentlessly working with the belief that economic growth and environmental sustainability shall go hand in hand and its integration is essential for the future of humankind. This fundamental vision of GGGI continues to inform and inspire its enduring commitment to the future – a resilient world where one can envisage growth to be strong, inclusive, and sustainable.

A few instances to demonstrate that carbon neutrality and green economic growth is a reality; one may like to go through the well-developed report on ‘Green Growth in Practice: Lessons from Country Experiences’. The report has convincingly described with evidences and rationale that carbon neutrality can be a part of the vision of a nation’s economic planning as well as it can be accelerate the economic growth engine of a nation with timely, cost effective and sustainable investment planning (resources and activities), delivery (implementation) and strong adherence to accountability (post-delivery ownership). Indeed, these principles are reflected in the Ethiopia’s Climate Resilient Green Economy (CRGE) Strategy.

The strategy considers synergies between economic development, poverty reduction, climate change mitigation and resilience across all sectors of the economy, considering agriculture, energy and water as key sectors. In agriculture benefits include increased productivity, enhanced food security, jobs and stability of export income (through crop diversification). In energy and water compelling benefits come from expanding energy access and security and reducing economic and social vulnerability. At the same time, Ethiopia has to manage trade-offs in making policy decisions to improve the lives of the rural poor such as between forest conservation and increasing land for agricultural production. Possible solutions for managing these trade-offs are increasing the productivity of agriculture and providing economic incentives for forest preservation.  Ethiopia’s main framework for green growth focuses on how climate change resilience and greenhouse gas mitigation is crucial to achieving its economic and social goals of becoming a middle-income country by 2025.

The progress in Ethiopia on green economy development is impressive; for instance, the investment framework is in practice, investment and delivery plans for agriculture and climate resilience are developed and put in practices; and an effective results and knowledge development pathways for measuring results and impacts are also in the process of development. Hence, it will be naive to jump into a conclusion that carbon neutral green economy is a myth, rather we may conclude that it is complex, multi-dimensional and multi-sectorial, which needs critical, systemic thought process and a robust system to translate the systemic, contextualized delivery plans into real actions. And, this is the unique value proposition of market leaders like GGGI, who drives and commits itself in this mission!

Keshav C Das

Addis Ababa, May 17, 2015

[1] Red the full paper here: http://www.tni.org/sites/www.tni.org/archives/reports/ctw/carbon_neutral_myth.pdf

Transforming SDGs into realities

Blog.Feb
Development Landscape of Vietnam- Photo Credit:Anna-Selina Kager

Global leaders, think tanks and development practitioners are working tirelessly to agree “a truly transformative agenda” in a new set of development goals that will improve the lives of all people. These new global targets will replace the millennium development goals (MDGs), which reach their deadline at the end of this year. But, how are we moving in achieving a grossly agreed [consensus based] development agendas?  Will the new sustainable development goals [SDGs] have the strategic focus and necessary strengths, which could benefit almost 1 billion people, still living in abject poverty; would the hundreds of thousands of women, dying each year during pregnancy and childbirth be able to overcome this? Could it be able to provide clean cooking and lighting to 3 billion people, who have been still relying on traditional biomass for cooking and heating and 1.2 billion have no access to clean lighting? Similar questions also go for the global health, sanitation, education and human rights. Indeed, a draft set of 17 sustainable development goals (SDGs), with 169 targets have been developed. The proposed goals cover the broad themes of the MDGs – ending poverty and hunger, and improving health, education and gender equality – but also include specific goals to reduce inequality, make cities safe, address climate change and promote peaceful societies. It is hoped that the goals will encourage a more holistic approach to development at national and international level, and offer a chance for more partnerships and collaboration. However, unfortunately, we have not yet seen a universal buy-in of the SDGs by national governments as well as international donor’s communities. There is a general perception that the goals are too many and ‘having too many targets means no targets’. Hence, there is an urgent need to develop a consensus on the targets and goals. Crucially, the next set of goals should be universal, which means all countries would be required to consider them when crafting their national policies.  Indeed, this will be a major challenge. We will also need endorsement of bilateral donors, philanthropists and private sectors on the proposed SDGs and perhaps, private sectors will also be interested to see a focus on market externalities, resources and/or capital. We must not forget that the real test of UNs, global leaders, think tanks, donors and governments’ commitment isn’t the loftiness of the goals; but, it is what they are prepared to do to reach them!

Keshav C Das Senior Advisor SNV Netherlands Development Organisation Kathmandu, February 03, 2015

THE NEXUS: SUSTAINABLE FOOD SECURITY THROUGH WATER SECURITY

ImageMy objective of this blog is to highlight this inter-linkage between food and water security in the special context of India and in general, formulating a few strategic options to enable the players of this sector for adopting appropriate adaptation and mitigation measures in the aegis of climate change.

To begin with, I would like to introduce you to the Emissions Scenarios of the IPCC Special Report.  IPCC has developed a set of scenarios to represent the range of driving forces and emissions in the scenario literature so as to reflect current understanding and knowledge about underlying uncertainties. These scenarios could be summarized as below.

A1. The A1 storyline and scenario family describes a future world of very rapid economic growth, global population that peaks in mid-century and declines thereafter, and the rapid introduction of new and more efficient technologies. Major underlying themes are convergence among regions, capacity building and increased cultural and social interactions, with a substantial reduction in regional differences in per capita income. The A1 scenario family develops into three groups that describe alternative directions of technological change in the energy system. The three A1 groups are distinguished by their technological emphasis: fossil intensive (A1FI), non fossil energy sources (A1T), or a balance across all sources (A1B) (where balanced is defined as not relying too heavily on one particular energy source, on the assumption that similar improvement rates apply to all energy supply and end use technologies).

A2. The A2 storyline and scenario family describes a very heterogeneous world. The underlying theme is self reliance and preservation of local identities. Fertility patterns across regions converge very slowly, which results in continuously increasing population. Economic development is primarily regionally oriented and per capita economic growth and technological change more fragmented and slower than other storylines.

B1. The B1 storyline and scenario family describes a convergent world with the same global population, that peaks in midcentury and declines thereafter, as in the A1 storyline, but with rapid change in economic structures toward a service and information economy, with reductions in material intensity and the introduction of clean and resource efficient technologies. The emphasis is on global solutions to economic, social and environmental sustainability, including improved equity, but without additional climate initiatives.

B2. The B2 storyline and scenario family describes a world in which the emphasis is on local solutions to economic, social and environmental sustainability. It is a world with continuously increasing global population, at a rate lower than A2, intermediate levels of economic development, and less rapid and more diverse technological change than in the B1 and A1 storylines. While the scenario is also oriented towards environmental protection and social equity, it focuses on local and regional levels.

This illustration depicts that food and water security is major concern under the A2, B1 and B2 scenarios. The reasons for this could be the attributes like continuous population growths, slow technological innovations, low energy utilization and slower economic development.

The vulnerability of these scenarios could be further differentiated based on the physical impacts of climate change. The United Nations Development Programme (UNDP) warns that the progress in human develop­ment achieved over the last decade may be slowed down or even reversed by climate change, as new threats emerge to water and food security, agri­cultural production and access, and nutrition and public health. The impacts of climate change – sea level rise, droughts, heat waves, floods and rainfall variation – could, by 2080, push another 600 million people into malnutrition and increase the number of people facing water scarcity by 1.8 billion (UNDP 2008). 

Agriculture constitutes the backbone of most economies of developing countries. It is the largest contributor to GDP; the biggest source of foreign exchange, accounting for about 40% of the foreign currency earn­ings; and the main generator of savings and tax rev­enues. In addition, about two-thirds of manufacturing value-added is based on agricultural raw materials. Agriculture remains crucial for pro-poor economic growth in most developing countries, as rural areas sup­port 70-80% of the total population. More than in any other sector, improvements in agricultural perform­ance have the potential to increase rural incomes and purchasing power for large numbers of people to lift them out of poverty (Wiggins, 2006).

And, climate change, however, is causing the greatest threat to agriculture and food security in the 21st century, particularly in many of the poor, agriculture-based countries of sub-Saharan Africa (SSA), Asia with their low capacity to effectively cope (Shah et al., 2008; Nellemann et al., 2009).  The agriculture of these countries is already under stress as a result of population increase, industrialization and urbanization, competition over resource use, degradation of resources, and insufficient public spending for rural infrastructure and services. The impact of climate change is likely to exacerbate these stresses even further.

The outlook for the coming decades is that agricul­tural productivity needs to continue to increase and will require more water to meet the demands of grow­ing populations. Ensuring equitable access to water and its benefits now and for future generations is a major challenge as scarcity and competition increase. The amount of water allocated to agriculture and water management choices will determine, to a large extent, whether societies achieve economic and social development and environmental sustainability (Molden et al., 2007).

For both rain-fed and irrigated agriculture, the spatial and temporal variation of precipitation is the key. The short-term variability of rainfall is a major risk factor. Soil moisture deficits, crop damage and crop disease are all driven by rainfall and associ­ated humidity. The variability in rainfall intensity and duration makes the performance of agricultural systems in relation to long term climate trends very difficult to anticipate. This is particularly the case for rain-fed production.

Although the different climate change models are not clear with respect to rainfall and periods of drought, temperature projections are generally more reliable. Increased evaporation and evapotranspira­tion with associated soil-moisture deficits will impact rain-fed agriculture (Bates et al., 2008). Recent esti­mates show that for each 1°C rise in average tempera­ture dry-land farm profits in least developing countries will drop by nearly 10% (FAO, 2008). In addition, increased evaporation of open water storage can be expected to reduce water availability for irrigation and hydropower generation.

Despite considerable uncertainty related to the impacts of climate change, the Fourth Assessment Report of the Intergovernmental Panel on Climate Change (IPPC) predicts decreasing rainfall in northern and southern part of the globe and increasing rainfall over the Ethiopian/East African Highlands and a considerable increase in frequency of floods and drought. In India a similar fashion of variation in rainfall pattern and temperature fluctuation is also expected. This signifies that some part of the country will face serious consequences owing to climate change induced water scarcity.

The severity of climate change on food security is prominently visible in four dimensions, viz.,

  1. a.      Food production and availability: Climate affects food production directly through changes in agro-ecological conditions and indirectly by affecting growth and distribution of incomes, and thus demand for agricultural produce. Changes in land suitability, potential yields (e.g. CO2 fertilization) and production of current cultivars are likely. Shifts in land suitability are likely to lead to increases in suitable cropland in higher latitudes and declines of potential cropland in lower latitudes.
  2. b.      Stability of food supplies: Weather conditions are expected to become more variable than at present, with increasing frequency and severity of extreme events. Greater fluctuation in crop yields and local food supplies can adversely affect the stability of food supplies and food security. Climatic fluctuations will be most pronounced in semi-arid and sub-humid regions and are likely to reduce crop yields and livestock numbers and productivity. As these areas are mostly in sub-Saharan Africa and South Asia, the poorest regions with the highest levels of chronic undernourishment will be exposed to the highest degree of instability.
  3. c.       Access to food: Access to food refers to the ability of individuals, communities and countries to purchase food in sufficient quantities and quality. Falling real prices for food and rising real incomes over the last 30 years have led to substantial improvements in access to food in many developing countries. Possible food price increases and declining rates of income growth resulting from climate change may reverse this trend.
  4. d.      Food utilization: Climate change may initiate a vicious circle where infectious diseases, including water-borne diseases, cause or compound hunger, which, in turn, makes the affected population more susceptible to those diseases. Results may include declines in labour productivity and an increase in poverty, morbidity and mortality.  [Source: Schmidhuber and Tubiello; 2007].

With this background, one can visualize that food security, and rural livelihoods are intrinsically linked to water availability and use. Food security is determined by the options people have to secure access to own agricultural production and exchange opportunities. These opportunities are influenced by access to water. Making these water-livelihoods linkages is impor­tant for a more complete understanding of the nature of vulnerability of households to climate-related haz­ards such as drought, and the multi-faceted impacts that water security has on food and livelihood secu­rity. In order to highlight such linkages, there has been a move in recent years towards looking at water issues through sustainable livelihood frameworks (ie. Calow, 2002; Nicol and Slaymaker, 2003). One main feature of climate change adaptation at local level is its attempt to increase the resilience of populations to climate-related hazards. This means assessing the populations at risk of water and food insecurity. Risk is determined by, first, the external hazard and, second, the characteristics of the popu­lation that increase or decrease their susceptibility to the harm caused by the hazard.

Increasing the understanding of water use and livelihood strategies is an important part in the assessment of water stress and drought impacts and, as such, will be key in the assessment of climate change impacts. The concept of ‘water security’ is increasingly used to describe the outcome of the relationship between the availability of water, its accessibility and use. Water security is defined as ‘availability of, and access to, water in sufficient quantity and quality to meet livelihood needs of all households throughout the year, without prejudicing the needs of other users’ (Calow et al., n.a.).

Calow et al. (n.a.) distinguish three links between water, health, production and household income. First, lack of access to adequate water supply, both in quality and quantity, for domestic uses can be a major cause of declining nutritional status and of disease and morbidity. Second, domestic water is often a pro­duction input. Such production is essential for direct household consumption and/or income generation. Third, the amount of time used to collect water, and related health hazards, can be immense, especially for women and girls, and has been well documented (e.g. Magrath and Tesfu, 2006).

Water management for agricultural production is a critical component that needs to adapt in the face of both climate and socio-economic pressures in the coming decades. Changes in water use will be driven by the combined effects of (i) changes in water avail­ability, (ii) changes in water demand for agriculture, as well as from competing sectors including urban development and industrialization, and (iii) changes in water management.

With regard to agricultural production and water, climate change adaptation may include (Bates et al., 2008):

  • Adoption of varieties and species of crops with increased resistance to heat stress, shock and drought. For example, a private-public partnership under the leadership of the African Agricultural Technology Foundation called Water Efficient Maize for Africa (WEMA) intends to develop drought-tolerant African maize. This initiative, though, is not uncontested as it uses biotechnology besides conventional breeding and marker-assisted breeding techniques (www.aatf-africa.org);
  • Modification of irrigation techniques, including amount, timing or technology (e.g. drip irrigation systems);
  • Adoption of water-efficient technologies to ‘harvest’ water, conserve soil moisture (e.g. crop residue retention, zero-tillage), and reduce siltation and saltwater intrusion;
  • Improved water management to prevent waterlogging, erosion and nutrient leaching;
  • Modification of crop calendars, i.e., timing or location of cropping activities;
  • Integration of the crop, livestock, forestry and fishery sectors at farm and catchment levels;
  • Implementation of seasonal climate forecasting;
  • Additional adaptation strategies may involve land-use changes that take advantage of modified agro-climatic conditions.

Water-related adaptation strategies will also affect the livestock sub-sector. Adaptation strategies include improved rotation of pastures, modification of times of grazing, changing animal species and breeds, inte­gration of the crop and livestock systems, including the use of adapted forage crops, and provisions of adequate water supplies.

It is widely believed – and many Climate Change National Adaptation Plans (NAPAs) emphasize that irriga­tion will be a major adaptation approach in the agricultural sector. The problem with this strategy, however, is that adaptation practices that involve increased irrigation water use may place additional stress on water and environmental resources on the one hand, and will be influenced by changes in water availability resulting from climate change on the other.

The IPCC (Bates et al., 2008) concludes that, if widely adopted, adaptation strategies in agricultural production systems have a substantial potential to offset negative climate change impacts and can even take advantage of positive ones. At the same time, they can contribute to an increase in agricultural pro­duction sustainably. They further conclude, however, that not much is known about how effective and widely adopted the different adaptation strategies really are. Reasons for this include complex decision making processes; the diversity of responses across regions; time lags in implementation; and possible economic, institutional and cultural barriers to change. Government support that would help poor smallholders to adapt is very limited. On top of this, developing countries have received less than 10% of the money promised by rich countries to help them adapt to global warming (Vidal, 2009).

Policy attention, by national governments and trans-national bodies will, increasingly, have to focus on the coordination of water uses across transbound­ary river-basins and across different sectors, and arbi­tration in increasing conflicts over water.

If precipitation decreases, and the demand for additional irrigation water is to be satisfied, then other demands (e.g. manufacturing, industry, urban consumption, etc.) will become much more diffi­cult to satisfy. Climate change and increased water demand for agriculture in future decades is antici­pated to be an added challenge to transboundary framework agreements, increasing the potential for conflict.

Unilateral measures for adapting to climate-change-related water shortages by, for example, increasing storage capacity upstream, increas­ing investment in irrigation infrastructure and efficient water-use technologies, or revising land tenure and land use arrangements, can lead to increased competition for water resources. Regulation at national and trans-national levels needs, therefore, to be enhanced to deal with the unintended consequences of increased consumptive water use upstream, resulting in downstream users being deprived of the water on which they depend for their livelihoods.

To sum up, a number of adaptation options in agriculture face a dilemma. Increasing water availability and increas­ing the reliability of water in agriculture, i.e. through irrigation, is one of the preferred options to increase productivity and contribute to poverty reduction. In addition, the interrelations between adaptation and mitigation need to be carefully considered (Bates et al., 2008). At best, adaptation and mitigation strat­egies exhibit synergies. Positive examples include many carbon-sequestration practices involving reduced tillage, increased crop cover, including agro-forestry, and use of improved rotation systems. These lead to production systems that are more resilient to climate variability, thus providing good adaptation in view of increased pressure on water and soil resource. In the worst case, they are counter-productive. In relation to water, examples of adaptation strategies that run counter to mitigation are those that depend on energy to deliver water and, therefore, produce additional greenhouse gas emissions. On the other hand, some mitigation strategies may have negative adaptation consequences, such as increasing the dependence on biofuel crops, which may compete for water and land resources, reduce biodiversity and increase mono-cropping, increasing vulnerability to climatic extremes.

Short-term plans to address food insecurity pro­vide access to water resources, or encourage eco­nomic growth must be placed in the context of future climate change, to ensure that short-term activities in a particular area do not increase vulnerability to climate change in the long term. Policy attention is needed in the following areas:

  1. Developing long-term water policies and related strategies, taking into account country-specific legal, institutional, economic, social, physical and environmental conditions
  2. Increasing water productivity by promoting efficient irrigation and drainage systems
  3. Improved watershed and resource management, integrating the different natural resources – water, soil, flora and fauna
  4. Enhancing water availability through better use of groundwater storage, enhancing groundwater recharge where feasible, and increasing surface water storage.
  5. Institutional and governance reforms that balance demand and supply across sectors and that mainstream climate change adaptation;
  6. Enhancing stakeholder participation in water development and climate change adaptation;
  7. Improve information and early warning systems to provide land and water users with timely and adequate information and knowledge about availability and suitability of resources to promote sustainable agriculture
  8. Human resource, capacity and skills development of policy makers and end-users to help them deal with new challenges;
  9. Increase investments in agriculture and rural development.

References:

  1. Bates, B.C., Kundzewicz, Z.W., Wu, S. and Palutikof, J.P. (eds) (2008) ‘Climate Change and Water’. Technical Paper of the Intergovernmental Panel on Climate Change. Geneva: IPCC Secretariat.
  2. FAO (2008) ‘Hunger on the rise’ http://www.fao.org/newsroom/EN/news/2008/1000923/index.html, accessed 20/02/2009).
  3. FAO (2008) ‘Water for Agriculture and Energy in Africa: The Challenges of Climate Change’. Ministerial Conference on Water for Agriculture and Energy in Africa: The Challenges of Climate Change. December. Sirte, Libyan Arab Jamahiriya.
  4. FAO (2008) ‘Water for Agriculture in Africa: Resources and Challenges in the Context of Climate Change’. Ministerial Conference on Water for Agriculture and Energy in Africa: The Challenges of Climate Change. December. Sirte, Libyan Arab Jamahiriya.
  5. IPCC (2007). Fourth Assessment Report, Working Group-I, II and III
  6. Magrath, P. and Tesfu, M. (2006) Meeting the needs for water and sanitation of people living with HIV/AIDS in Addis Ababa, Ethiopia. Addis Ababa: WaterAid Ethiopia.
  7. Molden, D. (ed.) (2007) Water for Food, Water for Life. London: Earthscan and Colombo: International Water Management Institute.
  8. Nellemann, C., MacDevette, M., Manders, T., Eickhout, B., Svihus, B., Prins, A. and Kaltenborn, B. (eds) (2009) The Environmental Food Crisis. The environment’s role in averting future food crises. A UNEP rapid response assessment. Arendal, UNDP.
  9. ODI (2009) Climate change and Water.
  10. Schmidhuber, J. and Tubiello, F. N. (2007) ‘Global food security under climate change’, PNAS 104 (50): 19703-08.
  11. Shah, M., Fischer, G. and van Velthuizen, H. (2008) Food Security and Sustainable Agriculture. The Challenges of Climate Change in Sub-Saharan Africa. Laxenburg: International Institute for Applied Systems Analysis.
  12. UNDP (2008) Fighting Climate Change – Human Solidarity in a Divided World. New York: UNDP.
  13. Vidal, J. (2009) ‘Rich nations failing to meet climate aid pledges’, The Guardian, 20 February.
  14. Wiggins, S. (2006) Agricultural growth and poverty reduction: A scoping study. Working Paper No. 2 on Globalization, Growth and Poverty. Ottawa: IDRC.
  15. Wiggins S. (2008) ‘Rising Food Prices – A global crisis’. Briefing paper No 37. London: ODI. 

Keshav C Das

Senior Advisor, SNV Netherlands Development Organsiation

HOW COULD BUSINESSES PROMOTE ENVIRONMENTAL RESPONSIBILITY?

1.1: Introduction-

Despite extensive economic growth and increases in the quality of life over the last century, concern remains that the era of industrialization has had substantial negative effects on the natural environment and that these effects diminish the vitality and sustainability of our economic systems[i]. In addition to the localized problems pollution, recent scientific discoveries have revealed global scale effects such as ozone depletion and climate change[ii]. The long-term economic impacts of these effects may be quite substantial as a large portion of the world’s economic output is dependent upon the viability of natural systems.

Environmental sustainability and fight against climate change is a long-term strategic issue for the modern world within the broader context of sustainable development. It is an established fact now that climate change has the potential to alter the ability of the earth’s physical and biological systems. It impacts different regions and sectors differently based on their sensitivity and adaptive capacity, and therefore, vulnerability.

The role of businesses in resolving such environmental challenges is emerging as a subject of high importance. Businesses are considered as a central force of economic development, as it generates growth and serves as a vehicle for innovation and change. For businesses, this is more important to consider as there is high level of socio-economical and political accountability under the widely accepted domain of green assets management. Businesses have huge social and environmental responsibilities. These responsibilities should be fulfilled while venturing for profits in the business. This philosophy of environmental accountability helps companies in two ways, viz., establishing businesses as ethical brand and secondly developing a market niche in the present competitive market. Companies understand these concerns and therefore, to a great extent many businesses have been adopting ‘green marketing policies’ and ‘Energy Efficient Technologies’. Remarkably, this trend has affected both the forward and backward linkages of product life cycle.

Of late, businesses have been attempting to interlink with other companies with similar vision and mandate to create a true international business domain, which is environmentally responsive. This is possible through transfer of efficient technologies from technologically sound entities to businesses, which implies that there should also be an appropriate symbiosis between Research & development entities and businesses with basic motive to propagate efficient –affordable and commercial profitable innovations. In another word, businesses do not need merely businessmen, rather need ecological entrepreneurs, who will have charisma and power to modulate negative environmental changes and capabilities to create new opportunities.

Image

1.2: Motives of environmental responsibility-

Historically, much of big business has pursued investment, production and marketing strategies that have resulted directly in extensive waste and degradation of natural resources or encouraged consumption patterns that do the same. Logging and mining enterprises, pulp and paper mills, agribusiness, oil, chemical, cement, iron and steel companies, as well as many other enterprises, have degraded  natural resources as well as global climate.

Now, there are signs that businesses are on the verge of recasting their relationship to both the environment and their stakeholders. Many companies are adopting a discourse and policies that suggest that businesses can simultaneously make profits and be good citizens. There appears to be a growing recognition that the increasing freedom enjoyed by business during the era of the so-called Washington Consensus[1]needs to be complemented by increased responsibility[iii].

There could be two basic motives, for which businesses implement and practice environmentally responsive behaviors, Viz., (i). Existing environmental law and regulations compel businesses to execute certain mandatory practices and therefore, companies adopt environmental measures as per statutory norms and guidelines and (ii). Businesses indentify a profit motive in the negative externalities of environment degradation and attempt to capitalize on the market failures, conceded from the exploitation of environment.

Indeed, pressures from stakeholders have also acted as catalyst for this transition.  Companies respond to the numerous pressures[2] that exist in their external and internal environments today, from a wide range of stakeholders that are pushing for greater environmental and social responsibility[iv]. A third source of pressures can be termed institutional and includes a proliferation of “best of” rankings, the steady emergence of global principles and standards that raise public expectations about  these responsibilities, and new reporting initiatives emphasizing the triple bottom lines of economic, social, and environmental performance. 

This necessitates a new relationship for businesses with the environment and society. It is as much an approach to promote economic growth and competitive advantage as it is to encourage environmental responsibility.

 

1.3: Environmental Sustainability in Businesses-

However as debriefed above, true environmentally responsible businesses should have action plan for creating environmental sustainability which could perform beyond mandatory and standard legislation related to environmental and social protection. The environmental sustainability of businesses should not be a ‘Greenwash[3][v]’ but it should actually reduce negative environmental impact and develop an ecologically resilient society, which should meet the needs and requirements of the present without compromising the ability of future generations to meet their own needs. The planet Earth needs to be capable of supporting ongoing and future business practices if they are to be considered genuinely sustainable from both an ecological and an economic perspective. There is no simple solution to this situation, but different perspectives may contribute to create conditions and models of sustainable business practices, which are ethical demands of environmental sustainability. It is visualized that businesses can fulfill the ethical demands of environmental sustainability through two major approaches, Viz., Internally-oriented Environmental Responsibility Practices and externally-oriented Green Management Practices.   A few specific measures under these two approaches have been explained below.

1.3.1: Internally-oriented Environmental Responsibility Practices-

 

It is felt that businesses should focus on the internal management of materials, products, and processes that have potentially negative environmental impacts and that add costs to and reduce efficiency in their operations. Businesses must recognize that proactive environmental management can also be good business, leading to more efficient, cost-effective and profitable results. Therefore, internally-oriented practices that contribute to sustainable development include: 1) enhanced regulatory compliance to reduce the Business’s negative environmental impacts of hazardous emissions in communities in which they are located; 2) adoption of pollution prevention and clean manufacturing practices that eliminate pollution before it occurs; 3) redesign of products and processes to achieve more beneficial environmental impacts for customers and communities; 4) materials reduction, recycling and reuse; and resource conservation.

  1. 1.      Enhanced Regulatory Compliance-

Businesses should adopt voluntary proactive environmental management systems that go well beyond what local or national regulations require. Notably, businesses like Kodak, SmithKlein have created their own corporate environmental and safety standards that meet international guidelines[4]. These corporate standards are often more stringent than the requirements adopted by governments and are usually applied by all of their facilities worldwide[vi],[vii],[viii].

 

 

  1. 2.      Pollution Prevention and Clean Manufacturing Practices-

Businesses should adopt clean manufacturing practices that prevent pollution before it occurs not only in their own operations but also among their suppliers, vendors and contractors. There should be a company mandate for making substantial investments in cleaner manufacturing technology[5] to improve supply chain performance which will ensure to introduce pollution-prevention measures in production and distribution system[ix].

At the same length, it is found that clean manufacturing system is possible through technology u innovation, upgradation and retrofit.

  1. a.      Technology Innovation, upgradation and retrofit-

Continuous efforts for technology innovation and scaling up those technologies commercially should also considered by businesses.[6] Similarly, businesses should remove obsolete and inefficient technologies and adopt efficient technologies which could produce more outputs with less energy consumption. For example, companies, which has needs of steam and power, could installed high pressure boilers to fulfill the steam requirement as well as produce power through installing efficient turbines. In a similar fashion companies should also try to adopt waste heat recovery, which could have otherwise vented to the atmosphere and could pollute the environment[7].  

 

  1. 3.      Improving Process and Product Efficiency-

In continuation of the previous two measures, businesses should also have internal policies for improving processes, involved in the backward and forward linkages of any production process. This measure should aim to produce efficient products, which are environment friendly, recyclable, non-toxic and sustainable[8]. Therefore, process optimization is the thumb role for this measure, which also includes use of renewable source of energy for production processes[x],[xi].

 

  1. a.      Paradigm shift in Energy Source-

Businesses should use feedstock of renewable origin to meet the energy demand in their production and distribution or marketing mechanisms. Those feedstocks should less carbon intensive, having ZERO probability to emit Green House Gases [GHGs] and which could fulfill all the process requirement of the business operations[9].

  1. 4.         Waste Treatment and Management-

Companies should also take due care to produce least possible ‘‘effluents and hazardous byproducts, and that least volume should also be treated and managed to convert to energy [Waste to Energy] so that it could be reused in the production processes[10]. Existing waste-management practices can provide effective mitigation of GHG emissions[xii]. A wide range of mature, environmentally-effective technologies are available to mitigate emissions and provide public health, environmental protection, and sustainable development co-benefits. Collectively, these technologies can directly reduce GHG emissions or avoid significant GHG generation[11]

1.3.2: Externally-oriented Green Management Practices-

It is a widely accepted fact that businesses should develop a symbiosis with stakeholders, environmental interest groups, and communities to address important environmental problems and it could be practiced in three ways:

1) Incentives for companies’ employees and managers to collaborate with external stakeholders on environmental improvement projects[12];

2) Philanthropic activities that support community, national, and international efforts to improve environmental conditions[13]; and

 3) Strategic alliances between businesses and environmental and public interest groups to solve crucial environmental problems[14].

In addition to the aforesaid two broad categories, it is felt that business should also adopt green marketing practices, along with capacity development of its human resources and other timely measures. A brief description of a few strategies is given below.

  1. A.     Green Labeling:

It is felt that going green for the sake of being different is not enough. Aside from differentiating oneself, going green has to be relevant to his target customers. It has to mean something to them[15]. Passing this message to consumer is also very important. Based on the recent trends, it could be recommended that blogs or social networking sites are extremely effective to promote green products.

  1. B.     Human Resource Development:

Developing skills of human recourse of businesses is also an important strategy for environmental sustainability.  Both the frontline workers and middle and senior level managers should be trained on ‘green technology’. The human resources of businesses should be change agents for transforming the businesses and its operations. Companies could arrange periodic training and capacity development programs and can ensure appropriate adoption of efficient and timely green initiatives in the companies.

  1. Mandatory Carbon Disclosure:

As a precautionary and proactive approach businesses should practice a detail accounting of their carbon footprint in a defined time frame. This accounting should illustrate the strategy, targets, performance, and benchmarking of how the companies are working to reduce its impact on and adapt to changing environment and climate[16]. This will benefit businesses in two ways; viz., in managing the emissions, if there is any and enhancing efficiencies of the different process with appropriate adoption of new technologies.

  1. GHGs mechanisms of environmental markets:

Indeed, companies could also take help of the current market mechanisms of environmental domain, such as Clean Development Mechanism [CDM], Joint Implementation [JI] and emission trading. These measures are in place under Kyoto Protocol could also ensure efficient technology transfer and enable businesses under the recently concluded COP-15’s mandate on ‘Technology Innovation’.

1.4: Conclusion-

Therefore, to conclude, it could be reiterated that businesses should emerge with proactive company policies, highlighting a mandate to fulfill socio-economic and environmental ethics as well as percolating the co-benefits of those measures to the masses. Businesses must represent a desire to integrate the economic, environmental and societal aspects of its business to achieve sustained financial success, safeguard the environment and develop the company’s reputation as a respected corporate citizen. In order to make alliances and partnerships between businesses and external stakeholders work, the World Business Council for Sustainable Development points out those businesses must develop an integrated approach to environmental management, have committed top management leadership, see employees as partners, and continuously pursue positive actions[xiii]. However, for this approach, businesses must develop a management culture that explicitly recognizes the importance of social and environmental responsibility. Openness and accountability are essential to earn the trust. 

 

It is believed that if businesses realistically and carefully make attempts for sustainable development, it can reduce the adverse environmental impacts of business operations on local communities, develop clean manufacturing and pollution prevention processes and technologies, explore environmentally neutral or beneficial products and services, and help conserve natural resources and improve environmental conditions around the world. And, indeed, businesses will need to integrate this sustainable development policy, and associated programs and standards fully in all activities and all functions as an essential element of management.

 


[1] The term refers to the common approach towards the debt crisis adopted by Washington-based institutions such as the World Bank, the IMF and the US government in the late 1980s. An approach that emphasized the need for structural reforms in developing countries associated with more open economies, privatization of state-owned enterprises, deregulation and the down-sizing of the state.  

[2] This pressure for greater responsibility comes from primary stakeholders, such as owners, employees and customers, who can be viewed as being on the ‘inside’ of the businesses.  Secondary stakeholders including non-governmental organizations (NGOs), activists, and governments are also seeking greater environmental responsibility. 

[3] Greenwash: .Disinformation disseminated by an organization so as to present an environmentally responsible public image. (The Concise Oxford English Dictionary, 1999), or the attempt by corporations to hide the unpleasant environmental facts of their activities by adopting an environmental discourse or specific policies and practices that appear to be environment-friendly but do little, if anything, to change the relationship of business to the environment.

 

[4] Kodak uses a “Business Unit Evaluation Guide” to measure how well business unit managers integrate environmental responsibility into business plans and track progress in environmental performance semi-annually. The Sony Corporation plans to have all of its production and non-manufacturing facilities in Japan certified with ISO 14001 standards.

 

[5] The 3M Corporation carries out pollution prevention programs within its own plants and designs products that prevent pollution for its customers. General Motors is adapting its materials accounting systems, its material safety data sheet management systems, and its materials inventory control systems to generate environmental regulatory reports and to support pollution prevention initiatives.

 

Through a process known as “Design Manufacturing Waste Out” (DMWO), Proctor & Gamble is finding ways of reducing or eliminating manufacturing wastes. Bristol-Myers Squibb conducts product life cycle (PLC) reviews to identify and reduce potentially negative environmental impacts at all stages of a product’s life from raw material acquisition, design, marketing, manufacturing and packaging, to distribution, customer use, and ultimate disposal.

 

[6] It could be recommended that each business should have a division for monitoring the efficacy of the currently practiced technologies in the company and a mandate should be in place to enhance the productivity of these current technologies with a focus on sustainable development. A classical example in this front could be the development of amorphous based solar technology, which has higher efficiency and applicability in different geographical areas.

[7] Businesses should also focus on developing green assets, whether that is building or other infrastructure. Buildings, which account for approximately half of all annual energy and greenhouse gas emissions, are an important target area for any strategy addressing climate change and environmental sustainability. Whilst new commercial buildings increasingly address sustainability considerations, incorporating green technology in the refurbishment process of older buildings presents many technical, financial and social challenges. Therefore, companies should also practice and take care of this aspect by adopting current green building policies.

 

[8] Monsanto is developing biotechnology-improved higher-yielding seeds for agriculture that reduce the need for externally applied insecticides, and that reduces the raw materials, fuel and associated manufacturing and transportation inputs associated with insecticides. Monsanto seeks to develop a line of agricultural products that lead to higher productivity, soil conservation, less insecticide and energy use, and better habitat protection.

Intel seeks to reduce the power consumption of personal computers and is designing computer subsystems that use advanced power management techniques during operation and when in standby mode. Dell Corporation is producing personal computer chassis that are recyclable and upgradeable, extending their life cycle and reducing disposal problems.

 

[9] Indeed, a typical example in this front in the contemporary time is the innovation and adopting the ‘Green Coal’ technology, which is in the process of replacing of ‘fossils based coal’ in near future. At the same length, adopting green technologies for energy sources, like wind, solar, biomass based fuel as well as biofuel could be another few avenues, which could be ventured by businesses.

[10] Waste reduction, recycling, or reuse not only relieves pressures on natural resources and virgin materials, but also helps solve waste disposal and treatment problems for customers and communities. Ford Motor Company’s worldwide stamping, casting and forging operations use more than 2 million tons of recycled metals a year. Proctor & Gamble eliminated 30 million pounds of waste materials in 2008 alone by reducing packaging for its laundry, cleaning and household products. In addition it used 979 million pounds of post consumer recycled materials in its packages.

 

[11] PepsiCo, for example, initiated energy conservation programs that have saved more than 4.6 million kilowatts of electricity since the programs’ inception, preventing the emission of 1.5 pounds of carbon dioxide, 5.8 grams of sulfur dioxide and 2.5 grams of nitrogen oxide for every kilowatt hour saved.

Weyerhaeuser invested $240 million to improve productivity and environmental performance at its paper mill in Saskatchewan, Canada, that reduced natural gas use by 80 percent, increase energy self-sufficiency and reduce air emissions by as much as 90 percent. It reduced wastewater discharges by 90 percent and water usage by recycling 35 million gallons of effluent and storm water runoff into its Arkansas paper mill’s process water.

[12] Alcoa offers awards and incentives to its employees in plants around the world to work with community groups on innovative ways of preserving the natural environment and cleaning up environmental problems.

[13] Businesses also provide financial support or use their corporate resources to develop educational programs for environmental protection and sustainable development. Compaq Computer Corporation donates equipment for use in wildlife refuges, parks, and research facilities that benefit the environment and provide environmental training programs. It sponsors middle school teachers to attend environmental training programs that help them develop the knowledge and skills to strengthen environmental courses in their schools.

[14] Chevron, for example, sees its alliance with the World Wildlife Fund, the national government, local communities, and joint venture partners in Papua New Guinea to protect Lake Katubu from accidental releases and contamination and to promote nature based tourism as an important contribution to sustainable development.

 

[15] The majority of consumers today are not yet prepared to pay a premium or to sacrifice product performance to buy green products. Environmentally-conscious consumers are not a homogeneous group. According to J. Ottoman, author of the Green Marketing Book, traditional demographics are not enough to determine the intent to purchase green products. What really entice green purchases are consumers’ feelings of being able to act on these issues, or empowerment. In other words, if consumers believe that they can make a difference, they will be more inclined to buy green products.

[16] The Carbon Disclosure Project launched in 2000 to collect and distribute high quality information that motivates investors, corporations and governments to take action to prevent dangerous climate change. 2,500 organizations in some 60 countries around the world now measure and disclose their greenhouse gas emissions and climate change strategies through CDP, in order that they can set reduction targets and make performance improvement

 


[i] World Resources Institute, 2004. World Resources 2002–2004. World Resources Institute, Washington, D.C.

[ii] United Nations, 1999. UNEP Global Environmental Outlook 2000 and United Nations, 2004. UNEP 2004 Annual Report.

[iii] UNRISD, States of Disarray: The Social Effects of Globalization, UNRISD, Geneva, distributed by Earthscan, London, 1995.

[iv] The classic reference is R. Edward Freeman’s Strategic Management:  A Stakeholder  Approach.  Boston:  Pitman, 1984. 

[v] Greer, J. and K. Bruno  Greenwash: The Reality Behind Corporate Environmentalism, Third World Network, Penang, 1996.

[vi] Eastman Kodak Corporation, Health, Safety and Environment 1996 Report, Rochester,

NY: Eastman Kodak Corporation, 1998.

[vii] Sony, Environmental Report 1997, Tokyo, Japan: Sony Corporation, 1998.

[viii] BP Amoco, Environmental and Social Report 1998, London: BPAmoco, 1999.

[ix] Proctor & Gamble, 1998 Environmental Progress Update, Cincinnati, OH: Proctor & Gamble, 1999.

[x] Monsanto Company, Sustainable Development, St. Louis, MO: Monsanto, 2005.

[xi] Cooper Industries, 1996 Environmental Report, Houston, TX: Cooper Industries, 2002.

[xii] Weyerhaeuser Corporation, 2000 Annual Environmental Performance Report, Tacoma, WA: Weyerhaeuser, 2000.

[xiii] World Business Council for Sustainable Development, “Meeting Changing Expectations:

Corporate Social Responsibility,” Geneva, Switzerland: WBCSD, 2008.

 

Keshav C Das

Advisor, Climate Change, Sustainability 

Is it an economic decision to stop subsidies on fossil fuels in developing countries?

It is hard to make judgment on a report, which is published by the International Monetary Fund (IMF). It is more difficult to make a ‘politically correct’ statement on the same report, if that is linked to the global politics and affects the national economies of developing countries like India.

I am facing a situation of this kind, while reading the recently published report of IMF with the title, ENERGY SUBSIDY REFORM: LESSONS AND IMPLICATIONS[1], where IMF is arguing to get rid of $1.9 trillion in energy subsidies. The justification for stopping subsidy mechanism in the energy sector (mainly in the fossil fuel) is that –if we want to tackle the negative externalities of global warming/climate change, make sure that fossil fuels are priced properly and not subsidized. That’s the core idea behind the IMF report, which argues that the world “misprices” fossil fuels to the tune of some $1.9 trillion per year. Eliminating these subsidies, the IMF argues, and replacing them with appropriate carbon taxes could cut global greenhouse-gas emissions by 13 percent, curtail air pollution, and shore up the finances of many poorer countries now in debt trouble.

This is far simpler than done! Actually, IMF’s economic vision on energy subsidies has its origin in the creation of the subsidy mechanism during the peak period of the world’s industrial era. During this period, it was believed that subsidy was inevitable for development and enhanced gross domestic products. And, now, in the new frame of thinking for low emission development pathway, subsidy is argued to be counterproductive for development.

However, by considering the enormous needs for energy sources and the increased aspirations of new economic powers like China and India, a complete halt of energy subsidy policies sounds like a untested and one sided political decisions. This also appears like an ‘occultist movement’ for having ‘controls’ on the emerging economics in the pretext of low emission development agenda. It is believed particularly to be biased ‘understanding on energy subsidies’, as most of the developing countries (like India, Indonesia) are now promoting renewable energy solutions for generating powers to meet the nation’s need for economic progress and development. Of course, while executing this dream, developing nations are also depending on the fossil fuels with minimum subsidy and increased subsidy in the renewable. The best example of this regulated subsidy policy is prevalent in Indonesia, where, subsidy in LPGs has been changed to promote renewable.

ImageIn India, the present per capita energy consumption (500 kWh) is rather small, only ¼th of World average and about 1/13th of developed nations. India aspires to reach at least the global average by 2050, which would require it to produce about 1300 GW of electricity, ten times more than the present value of about 130 GW. Of the present electricity generation, about 80% of the resources are fossil fuels, gydro about 15%, renewable about 2% and nuclear about 3%.  The good news about India is that there is now remarkable subsidy provision for renewable (e.g., solar) and businesses and people have been responding positively to this paradigm shift.

Hence, subsidy for fossil fuels is predominantly a phenomenon of developed nations and has been producing negative environmental externalities for centuries. Climate change is a global problem and needs to be tackled urgently. This development punch-line on climate change has been in the discussion tables for last 3-4 decades. However, nothing remarkable has been achieved even in the COP.18. Hence, report like the IMF’s latest makes little sense in absence of a trust worthy political commitments of developed nations. Indeed, we’ll wait and watch what would be delivered in COP.19, Poland on this front.  

 

Note: Also read my another post on subsidy: https://keshavcdas.wordpress.com/2012/05/04/why-do-we-need-subsidy-for-promotion-of-cleantech/

Why environmental issues are important for business?

Jan2013Business can’t sustain without a sustainable production and consumption value chain development. Environmental sustainability is now conceived and implemented in regular business operations of companies not merely as a ‘green washing’ approach, rather, for most companies these days; sustainability is the core of corporate strategy. The rationale for this paradigm shift in the corporate strategy [from the old school of thoughts-produce more with less cost] is mainly powered with energy efficiency, process management, introduction of cleantech, green growth etc.

In one of the recent global survey of McKinsey[1], it is stated- companies know that consumers and employees care about the environment, and their interest often presents real business opportunities and risks. According to the survey, an emerging key environmental concern is biodiversity, or the diversity of species, variety of ecosystems, and variability of genes. The survey found that a majority of executives (59 percent), see biodiversity as more of an opportunity than a risk for their companies. They identify a variety of potential opportunities, such as bolstering corporate reputations with environmentally conscious stakeholders by acting to preserve biodiversity and developing new products or ideas from renewable natural resources. The positive outlook on biodiversity is in stark contrast to executives’ views on climate change in late 2007, when only 29 percent saw the issue as more of an opportunity than a threat[2]. Perhaps, addressing climate change over the past few years has changed some executives’ views on the potential upside of environmental issues.

Based on the ongoing discussion in the World Economic Forum (Davos) and the deliberations of Lord Stern, author of the government-commissioned review on climate change that became the reference work for politicians and green campaigners as well as the stern warning of Jim Yong Kim, the new president of the World Bank, are two significant statements in the beginning of 2013, which reaffirms the severity of the climate change problem and necessities to take up this issue as a market determinant, and perhaps, also as a business’s core activities. While Mr. Kim pledged to make tackling climate change as a priority of his 5 year term, he stated that “there will be water and food fights everywhere”. Lord Stern regretted that he underestimated the risks of climate change in his much referred Stern Review Report of 2006 and he now believed that he could have been more ‘blunt’. He said: “Looking back, I underestimated the risks. The planet and the atmosphere seem to be absorbing less carbon than we expected, and emissions are rising pretty strongly. Some of the effects are coming through more quickly than we thought then.”

With these concerns of two world leaders, the critical question for companies and businesses is: should they capitalize on this increasing threat of climate change and aligned their corporate environmental sustainability strategy? The answer is certainly YES. The corporate strategy should be to engage in these environmental value chains through market-based solutions that can quickly and effectively deploy capital to appropriate projects. The companies should use the market more effectively, and look for options with new climate finance mechanism and tools (like nationally appropriate mitigation actions-NAMAs), which will not only bring new investment opportunities to fund private sector sustainability and carbon reduction projects but also create new windows for profits. With corporate strategy ever more sensitive to climate risks and environmental sustainability, the business can adopt for greening of supply chains as a bright spot of opportunity for corporate investment in offsetting – and in some cases “insetting” – particularly in the realm of agriculture[3].

Keshav C Das, Senior Advisor, Climate Finance, REDD, and Renewable Energy

SNV Netherlands Development Organisation

REDD and Doha Gateway: An Expectation Gap

ImageAfter an anticipated delay at the UN climate talks in Doha, Abdullah bin Hamad Al-Attiyah, President of COP18, took less than a minute to hammer through a series of ‘decisions’. He then declared the creation of the ‘Doha Gateway’. Immediately after this declaration, Christiana Figueres, Executive Secretary of UNFCCC tweeted: ‘All #COP18 decisions adopted by acclamation. We have a Second Commitment Period of the Kyoto Protocol!’

 By maintaining the tradition of UN climate change conferences, the COP18 presented a new package of climate change expectations; this was in continuation of the Berlin Mandate, the Marrakesh Accords, the Bali Road Map, the Copenhagen Accord, the Cancun Agreements and the Durban Platform. The package of ‘Doha Climate Gateway’ decisions included amendments to the Kyoto Protocol to establish its second commitment period, an affirmation on the need to move towards a legally binding agreement that applies to all countries by 2020, a re-affirmation to continue efforts to scale up climate finance (Green Climate Fund) to help developing countries respond to climate change and developing a loss and damage mechanism.

Within a few hours of this development, the social media networks and corridors of Doha Convention Centre were heated up with frustration of environmental activists. The reaction of parties to the Doha climate deal was tepid and a few parties stated that Doha outcome is not revolutionary but a way forward, which is sufficient to expect more progress on increasing ambition in future.

Indeed, this expectation gap is also applicable for the REDD sector. Doha could not give a decision on verifying carbon emissions from deforestation. Many were expecting to get robust decisions on monitoring, reporting and verification (MRV[*]) of carbon emissions which would be linked with setting up reference emissions levels – the baseline from which countries measure their success in reducing emissions. This did not happen when negotiations on verifications issues were turned into financing and a deadlock was shaped between Brazil (a potential beneficiary of REDD+) and Norway (one of the largest funders REDD) regarding the language governing the standards by which deforestation-related emissions would be verified.

Norway has been advocating for an independent, transparent and internationally accepted verification process, which could enable REDD countries to move forward to the REDD+ implementation phase in a few years time, whereas Brazil and other developing countries have been calling for internal (national) verification requirements and denied to accept an external verification mechanism. It is important to mention here that many developing countries do not have the necessary technical prowess and capacities of Brazil to carry out verification of its own; and therefore, the proposition of having an independent and internationally accepted verification process sounds legitimate. Nevertheless, the key negotiation point on the MRV should have been on the ‘degree of independence of the verification processes’, which could have been helpful to decide how independent the verification process needs to be and how much would be achieved merely with bilateral agreements.  

With respect to the financing matters of REDD, countries struggled to come to an agreement in the LCA (Long-term Cooperative Action) negotiations meeting. However, the irony is that the final LCA Text (FCCC/AWGLCA/2012/L.4) did not make a decision on how REDD should be financed, instead, the LCA decided to ‘undertake a work programme on results-based finance in 2013, including two in-session workshops, subject to the availability of supplementary resources, to progress the full implementation of the activities referred to in decision 1/CP.16, paragraph 70’.

The LCA text also invites parties to submit their views on coordinating and implementing REDD, providing ‘adequate and predictable’ finance and technical support, and the institutional arrangements required for REDD.  The LCA text further requests that SBSTA considers ‘how non-market-based approaches, such as joint mitigation and adaptation’ could support the implementation of REDD. Indeed, all these ‘affirmations and requests’ exhibit good intentions of parties; which is not only an effort to find a market based solution of deforestation but also an attempt to find ‘ways to incentivize non-carbon benefits’. The real question is- do the future REDD negotiations in 2013 could derive and present a ‘complete, ambitious and implementable package’ to move forward to the REDD+ implementation phase?

Perhaps, a direct answer to this question is not yet present. The concern is that due to a lack of meaningful commitments to reduce greenhouse gas emissions by 2015, progress on REDD+ may be held hostage until larger political issues can be sorted out. However, it does look like forests and REDD+ are going to be considered as an integral part of the next international treaty on climate change in 2020.

Keshav C Das, Senior Advisor, Climate Finance


[*] The dispute over verification took place in the SBSTA negotiation meeting. The draft conclusions proposed by the Chair of SBSTA (FCCC/SBSTA/2012/L.31) stated that the discussions will continue at the next SBSTA meeting, which will take place in June 2013 in Bonn.