International
Turning climate challenges into development opportunities
“The two defining challenges of our century” Professor Lord Stern told a lunchtime audience yesterday, “are climate change and world poverty”. Indeed the interplay between the two will be one of the critical factors in progress towards the Millennium Development Goals in Africa. To paraphrase Stern: climate change has the potential to undermine and reverse recent gains in reducing extreme poverty, but actions to combat it must not be an obstacle to economic development in places like Africa.
As Director of Policy for the Commission for Africa and lead author of the Stern Review on the economics of climate change, Stern is well placed to make such a judgement. His emphasis on providing a low carbon development path is critical to avoiding accusations that Western countries are kicking away the ladder of coal and oil based economic growth that they all took. A window of opportunity in this area is the proposed IMF Green Fund announced by Dominique Strauss-Khan during his trip to Africa earlier this month. If realised, the Fund would focus on helping developing countries grow without large increases in their CO2 emissions.
A further opportunity will be the recommendations of the UN High Level Panel on Climate Finance, to which Stern was recently appointed. An idea of Ethiopian Prime Minister Meles Zenawi at Copenhagen, the Panel’s role is to find ways to reach the Copenhagen Accord’s target of $100bn annually for poor countries by 2020. With public finances tight, and the risk of development assistance being diverted to climate very real, it makes sense that the Panel focus on finding innovative new sources of revenue. These will include carbon taxes, use of the IMF’s Special Drawing Rights, and aviation and maritime levies.
Stern’s defining challenges of poverty and climate could therefore be seen as an opportunity if taken together. Funding a ‘greening’ of Africa’s legitimate aspiration for economic growth is a sensible tool to both mitigate carbon emissions and intensify the battle against extreme poverty. It is now up to the developed world to keep their financial promises made at Copenhagen and let the process begin.
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