Battling climate change and poverty

Niveen Wahish , Thursday 13 Oct 2022

Experts at a Cairo seminar this week concurred that climate action must be mindful of poverty reduction and development

Climate change and poverty

The world must take a holistic approach to dealing with climate action, Mahmoud Mohieldin, high level champion for the UN COP27 Climate Change Conference, told a seminar in Cairo this week.

There is no value in climate action that could result in more poverty or compromise on improvements in living standards or have a negative impact on the labour market, he stressed.

The seminar, part of “The Road to COP27 Distinguished Lecture Series,” was organised by the Egyptian Centre for Economic Studies, the Economic Research Centre, the Institute for National Planning, and the Centre for Economic and Financial Research Studies, together with the World Bank.

“A reductionist approach to climate change has resulted in negative results on sustainable development without achieving much on the climate action front,” Mohieldin said, calling instead for a holistic approach that deals with climate action within a sustainable development framework especially in developing economies and emerging markets.

Stephane Hallegatte, a senior climate change advisor in the sustainable development practice group at the World Bank, agreed. According to Hallegatte, a recent World Bank report showed that world poverty has stopped decreasing over the past few years, as it had been doing for decades before.

He said that the main challenge the world must face is the adaptation imperative of how to ensure successful development and poverty reduction while combating a changing climate.

“Any climate action that could mean more people in poverty is counterproductive. If the goal is to slow down climate change, we need to make sure climate action does not slow down poverty reduction,” he said.

Hallegatte showed how GDP was less impacted when adaptation interventions were introduced in five countries in the African Sahel. Household surveys to find out why people failed to exit poverty had showed that they were most affected by spikes in food prices and loss of income from agriculture, natural disasters such as drought, as well as diseases and health shocks, he said.

To build resilience, he said in his presentation titled “Climate and Development: Synergies and Trade-Offs 2022”, development needs to be inclusive, offering better education and higher agricultural productivity, infrastructure development and access to markets, financial inclusion and private sector development, stronger and more efficient social protection systems, and universal access to healthcare.

He noted that the infrastructure needed for development must be designed for tomorrow’s risks. “Three per cent is the average increase in infrastructure costs to build more resilient infrastructure,” he said, yet it means $4 in net benefit for each $1 invested in infrastructure resilience. In the meantime, the cost of delaying action by one year would cost $100 billion.

Nonetheless, there are limits to what adaptation can achieve, Hallegatte said, and climate change will continue and temperatures will continue to rise until emissions reach net zero. He acknowledged that the rich countries must play a greater role in reducing emissions, but he said all countries will have to act.

He recommended that developing and emerging economies adopt a development model based on new technologies and innovation such as wind and solar energy. “There are barriers to developing countries accessing those cheap and promising technologies, and we need those barriers to go,” he said.

Some 150 years after the invention of the domestic electricity supply, some 600 million people are still without access to electricity, added Homi Kharas, deputy director for the global economy and development programme at the Brookings Institution in Washington.

“We cannot continue to have this slow diffusion of technology.”

He noted that research has shown that financing is the biggest problem for developing economies. He invited international financial institutions to come up with a way to reduce the cost of capital and make it more affordable and put them on an equal footing with the advanced economies.

A certain amount of capital has to come in a concessional way, especially to cover activity that does not have a revenue stream, he said. “International financial institutions can expand their financing, broaden their instruments to mobilise additional private finance, and do it in a way to not generate more debt,” he said.

*A version of this article appears in print in the 13 October, 2022 edition of Al-Ahram Weekly.

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