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in negotiations on North-South trade relations, the developing countries have gained substantial influence over negotiations on global environ-mental policy, which has become a new arena in the North-South conflict (Sachs, 1993). In this pol-icy field, the South can impose conditions on the North because the North is reliant on the South’s cooperation on many environmental issues: ‘The developing countries’ newly acquired negoti-ating power in global environmental policy is not directly based on their economic or, indeed, mili-tary potential but on their opportunity, due to the functioning of the global ecological system, to damage the environment in the industrialized countries, either intentionally or as a result of fail-ings on the part of the state’ (Biermann, 1998).
The developing countries’ increased nego-tiating power in the global environmental pol-icy field does not only have positive implications for sustainability policy, however. The elites in these countries are often dependent on increased resource consumption and regard environmen-tal protection as a luxury which only the wealthy countries can afford. They claim the right to exploit their abundant natural resources (such as tropical forests and marine economic zones) and oppose the new ‘eco-imperialism’ which, in their view, is simply an attempt to restrict their sovereign rights over their natural resources under the pretext of protecting the global environment. It was the OPEC countries which exerted their geo strategic influence as suppliers of a scarce resource in order to block moves to reconfigure global energy sys-tems, with Saudi Arabia, the leading power within OPEC, throwing its weight behind the US Gov-ernment’s strategy rejecting the Kyoto Proto-col. The CIS states – some of which belong to the Middle Eastern ‘energy ellipse’, but all of which face major adaptation and poverty problems – have also shown little interest in any ‘green-ing’ of the patterns of production and consump-tion. Many developing countries – notably those with the greatest influence in the international political and economic arena – are applying the brakes rather than driving forward policies geared towards sustainability. They have opted in favour of this role because they give primacy to economic growth and have yet to fully accept the correla-tions between poverty and environmental degra-dation. Any hope that the South could ‘go green’
in tandem with its economic development, as has occurred at least to some extent in the North due to the shift towards post-materialist values, is an illusion (Jänicke, 1998).
4. Failed states and anarchic tendencies: Since the end of the Cold War, the global political
situa-tion has not become more peaceful; on the con-trary, it is now more turbulent and conflict-rid-den. Although the number of inter-state wars has decreased, numerous ethnic and political con-flicts have broken out. War and conflict have a major and adverse impact on countries’ ranking in UNDP’s Human Development Index and, accord-ing to FAO, are the cause of half the famines in Africa (FAO, 2003b). In a rising number of Afri-can countries, legal and administrative structures have collapsed, along with the state’s monopoly of force, leaving a power vacuum in which warlords have been able to establish repressive regimes.
This group of failed states poses a security and development problem by destabilizing entire regions, impeding the development of at least a partly ordered economic and social life and under-mining any viable development cooperation. But they have also become an environmental prob-lem because the warlords and their militias, but also the governments, ruthlessly exploit the nat-ural resource base for their own enrichment and for weapons procurement. The international com-munity has so far been reluctant to intervene with preventive and, if necessary, repressive measures to restore peace and thus create the conditions for development.
These trends must be taken into account in the fol-lowing analysis of key international policy processes and institutions operating in the fields of environ-mental protection and poverty reduction.
4.2
Assessment of key policy processes and institutions
This chapter will explore international policy pro-cesses in the fields of environment and development on a comparative basis. The intention is not to pro-vide a comprehensive overview of all the relevant policy processes or actors but to focus on processes and actors which play a key role in the nexus between environmental policy and poverty eradication. It also discusses the WTO and the IMF – two institutions whose primary purpose is not poverty reduction or environmental protection but whose activities none-theless substantially influence the prospects for suc-cessful global development and environmental pol-icy.
Each section starts with a brief description of the specific policy processes and actors. This is followed by a qualitative assessment of the impacts of these processes on poverty reduction and global environ-mental problems. The questions whether, and how, environmental protection measures also have posi-116 4 Linkages among international environment and development policy spheres
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tive effects on poverty reduction and whether suc-cesses in poverty reduction can trigger improvements in the environmental field will also be explored.
The analysis of poverty reduction policies is based on the dimensions of poverty discussed in Section 3.2 above and the associated international goals. Simi-larly, the analysis of environmental impacts is based on the environmental aspects explored in Section 3.3 and the associated environmental guard rails.
The overall assessment identifies the policy pro-cesses which are especially suitable for environmen-tal protection and poverty reduction. The aim is also to illustrate the conditions under which individual policy processes can be especially effective in com-bating poverty or addressing global environmental problems and to determine whether positive syner-gies can be generated between the two policy areas.
Finally, various policy processes will also be exam-ined in terms of their financial resources, enabling a judgement to be made on whether reinforcing these policy processes is desirable and/or feasible.
4.2.1
Framework Convention on Climate Change
4.2.1.1
Purpose and goals
The United Nations Framework Convention on Cli-mate Change (UNFCCC) was signed by 154 countries at the UN Conference on Environment and Devel-opment in 1992. It entered into force on 21 March 1994 and by May 2004, had been signed or ratified by 189 countries. The ultimate objective of the Con-vention is the stabilization of greenhouse gas con-centrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system. Such a level should be achieved within a time-frame sufficient to allow ecosystems to adapt naturally to climate change, to ensure that food production is not threatened and to enable economic development to proceed in a sustainable manner (Article 2 UNFCCC). In accordance with the prin-ciple of common but differentiated responsibilities, the industrialized countries pledge to take the lead in combating climate change and the adverse effects thereof (Article 3 (1) UNFCCC).
The Convention makes several references to pov-erty. For example, the Preamble states that ‘responses to climate change should be coordinated with social and economic development in an integrated manner with a view to avoiding adverse impacts on the lat-ter, taking into full account the legitimate priority needs of developing countries for the achievement
of sustained economic growth and the eradication of poverty’. Article 4 (7) addresses this priority: in rela-tion to the implementarela-tion of commitments, it is fully taken into account that ‘economic and social devel-opment and poverty eradication are the first and overriding priorities’ of the developing countries.
The Kyoto Protocol
The Kyoto Protocol, adopted at the Third Session of the Conference of the Parties to the UN Framework Convention on Climate Change (COP 3) in Decem-ber 1997, sets binding numerical targets for the limi-tation and reduction of greenhouse gas emissions – carbon dioxide, methane, nitrous oxide, hydrofluoro-carbons, perfluorocarbons and sulphur hexafluoride – for the industrialized and transition countries dur-ing the period 2008-2012. No numerical targets for the reduction of emissions were set for the devel-oping countries, but they are required to report on their emissions. By September 2004, the Kyoto Pro-tocol had been ratified by 125 countries and was thus recognized as binding. For the Protocol to enter into force, it must be ratified by 55 Parties to the Con-vention, incorporating as many industrialized coun-tries as accounted in total for at least 55 per cent of the total carbon dioxide emissions for 1990 of Annex I countries (Article 25 (1)). Following Russia’s deci-sion to ratify the Kyoto Protocol, it entered into force on 16 February 2005. The EU adopted a separate decision to introduce an emissions trading scheme irrespective of the status of the Kyoto Protocol. The EU Member States thus have the opportunity to grant limited recognition to credits from the project-based Kyoto instruments, i.e. the Clean Development Mechanism (CDM) and Joint Implementation (JI).
4.2.1.2
Effect upon the nexus of poverty and climate change
The goals of the Framework Convention on Climate Change are both to prevent future climate change and to adapt to climate change. As the poorer countries will be particularly hard hit by the predicted impacts of climate change (Section 3.3.1), and since climate change is also likely to exacerbate poverty, policies aimed at preventing climate change will have a posi-tive impact on eradicating poverty. However, this is a long-term correlation, and the positive impacts are to be expected only over a period of several dec-ades. An immediate benefit to the developing coun-tries may arise through the combination of emissions prevention and sustainable development, as envis-aged in the Kyoto Protocol in relation to CDM. How-ever, measures which assist the developing countries
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to adapt to climate change will also become increas-ingly important.
Preventing climate change
Poverty reduction in the developing countries is gen-erally accompanied by a rise in per capita energy and resource use and therefore also an increase in green-house gas emissions. The Climate Change Conven-tion and the Kyoto Protocol take account of this cor-relation in that emission limitation and reduction targets have only been agreed for the industrialized countries to date. However, in order to achieve the ultimate objective of the UNFCCC – namely to pre-vent dangerous anthropogenic interference with the climate system – economic development in all coun-tries must be decoupled from the emission of green-house gases over the medium term. The UNFCCC therefore regulates support for the transfer of ‘cli-mate-friendly’ technologies to the developing coun-tries, along with human and institutional capacity-building to tackle climate-relevant emissions.
Clean Development Mechanism
Article 12 (2) of the Kyoto Protocol defines the purpose of the Clean Development Mechanism: to assist the developing countries in achieving sustain-able development and in contributing to the ultimate objective of the UNFCCC, and to assist the industri-alized countries in achieving compliance with their quantified emission limitation and reduction com-mitments. The CDM offers private investors incen-tives to carry out greenhouse gas reduction projects in developing countries. The investors benefit from certified emission reductions which they can use as a contribution to fulfil their domestic emission reduc-tion commitments. Alternatively, the certificates may be traded in an emissions trading scheme. The CDM thus offers the opportunity to mobilize additional funds for developing countries, especially in the field of renewables and energy efficiency.
Ideally, the relevant projects in the specific host country should promote sustainable development, e.g. by reducing water or air pollution or by cre ating jobs. The decision whether a CDM project can be classified as sustainable is entirely a matter for the host country (Ott, 2001), whose priorities therefore determine whether CDM projects will be targeted towards poverty reduction or, alternatively, towards other aspects of sustainable development. However, the developing countries’ scope for action largely depends on the supply situation. If CDM projects are in short supply, developing countries could step back from their aim of gaining development benefit from projects so as not to jeopardize potential investment (McGuigan et al., 2002).
For the developing countries, CDM offers an opportunity to raise funds and promote sustainable development. For the industrialized countries, on the other hand, it is a way of complying with emission reduction commitments at low cost. It is likely, there-fore, that investors from the industrialized coun-tries will favour projects which hold out the prom-ise of maximum emission reductions at minimal cost.
These are not necessarily projects which should be prioritized from a sustainable development perspec-tive (Austin et al., 1999). For example, afforestation projects based on fast-growing, monocultural tree plantations may be problematical (WBGU, 2001a;
OECD, 2002a). Analyses of CDM projects currently being planned show that the number of small-scale projects in the field of renewables and energy effi-ciency is declining while the number of large-scale end-of-pipe projects is rising. These projects typically reduce the proportion of greenhouse gases such as CH4 or HFC emitted by industrial plants, but have few direct economic, social or environmental bene-fits contributing to sustainable development (Ellis et al., 2004). Studies also indicate that without further conditionalities, the majority of projects will be car-ried out in those developing countries which already attract the lion’s share of foreign direct investment (Michaelowa et al., 2003) or those with significantly increasing emissions that are therefore offering con-siderable potential for avoiding emissions (Troni et al., 2002). This largely excludes the poorest coun-tries.
The type of CDM projects being carried out and therefore their potential to foster poverty reduc-tion can be influenced by pooling investments within designated funds. The World Bank, for example, has launched the Community Development Carbon Fund which focuses on small-scale projects in poor rural communities in the developing countries. The CDM evaluation procedure ensures the projects’
environmental relevance, while a further CDCF-specific evaluation verifies their impact on poverty reduction. At the same time, transaction costs are reduced and the risks spread, thus giving smaller investors access to the CDM as well. Other oppor-tunities are afforded by investors’ voluntary commit-ments to specific standards, such as the Gold Standard launched by the World Wildlife Fund, which certifies CDM projects fulfilling a list of specific sustainability criteria (WWF, 2004).
Investors are responsible for financing the addi-tional costs of CDM projects against a reference project which does not involve emissions reduction.
These additional costs must be covered by the certi-fied emission reductions whose value, in turn, largely depends on their tradability and therefore on the Kyoto Protocol’s entry into force and/or the number 118 4 Linkages among international environment and development policy spheres
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of participating states. Following a vote in the Euro-pean Parliament in April 2004, EuroEuro-pean compa-nies will be able to count credits from CDM projects towards their obligations under the EU’s emissions trading scheme, which will also influence the demand for CDM projects. However, the option of hosting CDM projects is only available to countries which have ratified the Kyoto Protocol. To date (July 2004), just 23 out of 47 LDCs have ratified the Protocol.
Maintaining carbon stocks
At present, the Kyoto Protocol does not provide any incentives to conserve the natural carbon stocks of terrestrial ecosystems, such as primary forests, wet-lands and grasswet-lands, in the developing countries.
WBGU considers that such incentives are required and, in previous reports, has called for the introduc-tion of a relevant addiintroduc-tional protocol. This should define commitments relating to the conservation of these natural carbon stocks and offer economic incentives to encourage a shift away from destruc-tive land use (WBGU, 2003). The conservation and sustainable use of these ecosystems would bene-fit poor people and indigenous communities, which rely on them as natural life-support systems (Section 3.3.4). Furthermore, in the resource-rich developing countries, tradable non utilization commitment cer-tificates could help to reduce poverty (Section 5.6).
The protection of ecosystems also accords with the principles of the Convention on Biological Diver-sity (CBD), so negotiations on an additional proto-col must tie in with the objectives of the CBD (Sec-tion 4.2.2). Measures to combat desertifica(Sec-tion, e.g.
by preventing erosion, also help to conserve nat ural carbon stocks in soil, so here too, synergies can be anticipated and generated between the UNCCD (Section 4.2.3) and UNFCCC. Cooperation between the various Conventions is therefore appropriate and useful.
Adapting to climate change
The impacts of present and future climate change vary considerably from region to region, so the design of potential adaptation measures must also vary. The Third Assessment Report produced by the IPCC summarizes the current state of knowledge about the regional manifestations of climate change and thus offers a basis on which to develop national adaptation strategies (IPCC, 2001a, b). For almost all the poor countries, this will necessitate reforms in the agricul-tural and water management sectors, for ex ample.
Many of these countries will also have to adopt meas-ures to protect against storm damage, flooding and soil erosion. Many measures one can think of (e.g.
improved water management, protecting coastlines by mangrove planting, better safety of buildings to
protect against storm damage, establishment of early warning systems) reduce poor communities’ overall vulnerability to environmental changes and natural disasters. In other words, they are no-regret meas-ures which will promote sustainable development irrespective of climate change (ADB et al., 2003).
Adaptation to the impacts of climate change should therefore become an integral component of national development strategies.
Although the need for adaptation to climate change is mentioned in many parts of the Conven-tion, attention has only recently started to focus on practical implementation and financing, largely as a result of pressure from the developing countries.
4.2.1.3 Financing
Article 4 of the UNFCCC states that the indus-trialized countries and other developed Annex II countries shall provide new and additional finan-cial resources for the developing countries in com-plying with their obligations (preparation of country reports, etc.) and for the development and enhance-ment of their capacities and technologies for adapta-tion to and prevenadapta-tion of climate change. The Global Environment Facility (GEF) operates as the financial mechanism of the UNFCCC and other multilateral environmental agreements. From 1991 to 2002, GEF allocated some US$1,500 million in grants to climate change projects; this funding has leveraged an addi-tional US$5,000 million in cofinancing contributions from the private sector (Section 4.2.8). Most of these financial resources were allocated to projects aimed at mitigating climate change (UNFCCC, 2002a). The GEF has established four Operational Programs in the field of climate protection:
1. Removal of Barriers to Energy Efficiency and Energy Conservation,
2. Promoting the Adoption of Renewable Energy by Removing Barriers and Reducing Implementa-tion Costs,
3. Reducing the Long-Term Costs of Low Green-house Gas Emitting Energy Technologies, 4. Promoting Environmentally Sustainable
Trans-port.
At the Seventh Session of the Conference of the Par-ties to the Climate Change Convention (COP 7) in Marrakesh in 2001, the launch of three new funds was
At the Seventh Session of the Conference of the Par-ties to the Climate Change Convention (COP 7) in Marrakesh in 2001, the launch of three new funds was