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| The World Bank and climate change | | |
CS Dasgupta
Climate change will be the theme of the next issue of the World Bank’s annual World Development Report. Entitled Development in a Changing Climate, the report will be published in September 2009, shortly before a crucial United Nations climate change conference to be held in Copenhagen. The World Bank has circulated a concept note outlining the main features of the report. Noting that it will be issued in a politically charged atmosphere, the concept note promises that the World Development Report, 2010, will “refrain from taking positions on issues under negotiation” and will “argue for development concerns to be central to the negotiation process”. A closer perusal of the concept note, however, leaves one in no doubt that the World Bank will renege on both promises. The propositions set out in the concept note reflect the negotiating positions of the developed countries and, if accepted, will undermine the development imperatives of poorer countries.
The basic issue in dispute between the developed and the developing countries is whether the outcome of the Copenhagen conference should require all countries, rich and poor, to enhance implementation of their respective commitments under the UN Framework Convention on Climate Change, or whether the balance of commitments set out in the universally accepted convention should be radically revised in favour of affluent industrialized countries. Developing countries point out that it was agreed at the Bali conference, less than two years ago, that the objective will be limited to “enhanced implementation of the convention” and that the outcome should correspond to the principles and provisions of the convention. This has not prevented the industrialized countries from insisting that a substantial share of their responsibilities under the convention should be shifted to the shoulders of poorer countries.
The convention draws its inspiration from principles of equity. It reflects the “common but differentiated responsibilities” and differing capacities of developed and developing countries. Ever since the advent of the Industrial Revolution, the developed countries have been consuming huge quantities of coal and oil, and this has led to correspondingly high levels of carbon dioxide emissions. This is the primary cause of global climate change. If all countries had the same per capita emissions as, say, India, the world would not have faced a climate-change problem. The provisions of the convention reflect the fact that the developed countries are primarily responsible for causing climate change, and also that they possess much greater financial and technological capacity to contribute to a solution.
Hence the convention places on the developed countries the primary responsibility for preventing or, at least limiting, climate change. They are required to reduce their greenhouse gas emissions in a time-bound manner, and also to provide financial and technological support to developing countries to address climate change. Developing countries are expected to take all possible no-cost measures to moderate their rising emissions, but are not required to implement measures involving additional costs, unless developed countries compensate them fully for these costs. The convention specifically recognizes that the “extent to which developing countries will effectively implement their commitments under the convention will depend on the effective implementation by developed country parties of their commitments under the convention related to financial resources and transfer of technology”.
The record of the developed countries in implementing their commitments has so far been very disappointing. Far from registering a sharp decline, the total emissions of these countries have actually increased since 2000. Their record of transferring financial and technological assets to developing countries has been equally disappointing.
Instead of scaling up their efforts to meet the objectives of the convention, the developed countries are seeking to transfer a large share of their responsibilities to the shoulders of poorer countries. They are bringing heavy pressure to bear on countries like India to accept new commitments involving substantial additional costs for which they may or may not receive even partial compensation.
The World Bank is throwing its weight in favour of the developed countries in this debate. The World Development Report, 2010 is designed to provide ammunition to the affluent countries in the North-South skirmishes at the Copenhagen negotiations at the end of the year. The concept note reveals that the World Bank report will argue that “financial burden-sharing between developed and developing countries must be part of any fair deal on climate change”. In other words, the existing provisions of the convention should be scrapped so that developed countries are no longer required to bear the full incremental costs of agreed measures taken by developing countries to curb their greenhouse gas emissions. The World Bank fails to explain why this should be regarded as “fair”. The concept note itself acknowledges, “Today’s global warming was caused in good part by emissions from rich countries. This supports the argument that rich countries should be the ones to take the lead in reducing emissions … and to compensate developing countries for the additional mitigation and adaptation costs they need to incur within lower incomes and capacity.”
The UN convention is based precisely on these facts. How can it be “fair” to shift part of the financial obligations of affluent countries responsible for causing climate change to the shoulders of poorer countries whose responsibility is negligible? The Bank obviously has difficulty in negotiating an unfamiliar ethical terrain.
The concept note goes on to warn that “achieving fairness through fiscal transfers risks donor fatigue”. This is another instance of the Bank’s failure to grasp the “polluter pays” principle which applies in cases of environmental degradation. Developed countries responsible for causing climate change are, indeed, unwilling to pay for clearing up the damage they have caused, but this delinquency on their part can hardly be described as “donor fatigue”. The fiscal transfers in question are in the nature of compensation, not aid. They are certainly not “donations” and the polluters are not “donors”.
The World Bank argues that developing countries should accept legal commitments to reducing their emissions since reductions in developed countries will not, by themselves, suffice to contain climate change within acceptable limits. This is the standard red herring introduced by the industrialized countries. Nobody disputes the need for measures to prevent avoidable increases in emissions originating in developing countries. The only question is: who pays for it? The UN convention requires developed countries to meet the additional costs involved in such measures. The affluent countries, supported by the World Bank, are asking the developing countries to meet substantial additional costs.
Developed countries are responsible for causing climate change, but developing countries will be its worst victims because they lack the financial, technological and human resources needed for coping with its impact with any degree of success. Poverty is the root cause of the vulnerability of developing countries to climate change. In order to cope with climate change, poor countries must achieve rapid economic and social development in the struggle against poverty. In this context, the UN convention explicitly states, “economic and social development and poverty eradication are the first and overriding priorities of the developing country parties”. Failure to achieve rapid development will condemn present as well as future generations in developing countries to suffer the impact of climate change without any significant coping capacity.
The World Bank’s prescriptions require developing countries to bear the costs of mitigation actions which should properly be financed by industrial countries. This would divert scarce resources from the national economic and social development priorities of developing countries, slow down their growth and undermine their efforts to build up at least a minimal capacity to cope with the impact of climate change.
The author, a retired diplomat, led the Indian delegation in the negotiations leading to the UN Framework Convention on Climate Change
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