In Paris in 2015, leaders from 192 nations committed to limit the increase of global average temperatures since pre-industrial levels to well below 2°C, while pursuing efforts to stay within 1.5°C. Today 131 countries, responsible for 73% of global emissions, have now adopted or are considering net-zero emission targets – and these targets have put the Paris Agreement’s goals within reach.
But achieving those goals will require each country to take a unique path. And many will require financial support to deploy new technologies, protect natural storehouses of carbon, and help communities adapt to the changes that are already underway.
Climate finance stands as one of the critical pillars for global efforts to combat the climate crisis. Financing a rapid transition to a net-zero emission, climate-resilient economy will require significantly more investment, investment in a different set of assets, and investment that addresses the humanitarian imperative of social inclusion and poverty alleviation.
While the recent G7 summit did not result in significant new financial pledges, global leaders did reiterate their commitment to achieving the $100 billion per year of climate finance that has long been promised. The leaders specifically called for “more finance contributing to adaptation and resilience, disaster risk and insurance, as well as support for nature and nature-based solutions”.
Developed nations typically emit a majority of their greenhouse gases through their transportation, electricity or manufacturing sectors. But developing nations’ biggest climate impact often comes from land use and deforestation.
Ecosystem-based approaches can therefore provide some 30% of the global climate mitigation needed to meet the Paris Agreement targets.
Invest in Nature
Investments in nature and ecosystems can also deliver tangible benefits beyond their value as a climate tool. These approaches often help to secure livelihoods for local people, for example. A recent report by McKinsey highlights the return-on-investment of protecting nature versus other approaches.
As one example, it notes that coral reefs reduce wave energy and thus protect nearly 200 million people in India, Indonesia, the Philippines and elsewhere from extreme storm damage. The alternative – constructing artificial storm barriers – would cost roughly 15 times more than simply protecting or restoring the reefs
Here are the key ingredients to make these initiatives successful and durable.
1. It’s important to make space for everyone at the table. National and local governments, local communities and indigenous peoples, the private sector and civil society all have a role to play in both design and implementation.
2. It is also critical to recognize the gender dimensions of ecosystem-based approaches and women’s contribution to the preservation and restoration of ecosystems. Ensuring that climate initiatives are country-owned and country-driven, that they are gender responsive, and have the consent, full support and participation of each of these stakeholders, stands as the critical first test for every climate initiative, but especially for those designed to protect landscapes and seascapes.
3. And following on from this principle, any benefits – financial or otherwise – derived from the initiative should be shared equitably with the people who call the affected area home. They are, after all, the most critical allies for long-term sustainable management.
4. Nature and ecosystem-based approaches should be designed using the best science, measurements, and metrics to ensure the achievement of real benefits for climate, nature, and people. Early steps should include identifying local and regional causes of nature loss, developing a deeper understanding of expected local climate impacts, and assessing the trade-offs of different resource management practices to maximize positive outcomes.
5. Pressures on ecosystems from human activities and climate change should be carefully and regularly assessed, including those from any policies that may inadvertently be incentivizing unsustainable use. Based on this assessment, goals should be established, needed interventions identified and costed, and clear timelines established for action by all partners. Finally, a plan should be developed to measure progress and assess the need for adaptive action.
6. There needs to be a strategy to guarantee the long-term success of investments. This requires a clear vision for ensuring stable and sustained funding and local management.
In Bhutan, for example, organizations worked with the government, community stakeholders, civil society, and several private foundations and individual donors to secure the funding needed for long-term protection of a 5 million-acre network of forests, rivers, and other natural resources representing half of the country’s territory.
Bhutan is one of the very few carbon-negative countries on Earth, and its rivers contribute to a network of Himalayan river systems that deliver water to hundreds of millions of people. Keeping the country’s ecosystems intact will help it stay that way.
It’s clear that nature – and those securing its ecosystem services – have big roles to play in addressing the climate crisis. In many places, protecting, managing, and restoring landscapes and seascapes holds the key to delivering tangible benefits for nature and local people, while also securing the emission-reduction and resiliency benefits we need to meet the goals of the Paris Agreement.
By adhering to the key ingredients outlined above, nature and ecosystem-based investments can deliver lasting benefits that put people first, build community resilience to climate change, and drive real progress toward sustainable development.
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Steve Ovett, the famous British middle-distance athlete, won the 800-metres gold medal at the Moscow Olympics of 1980. Just a few days later, he was about to win a 5,000-metres race at London’s Crystal Palace. Known for his burst of acceleration on the home stretch, he had supreme confidence in his ability to out-sprint rivals. With the final 100 metres remaining,
[wptelegram-join-channel link=”https://t.me/s/upsctree” text=”Join @upsctree on Telegram”]Ovett waved to the crowd and raised a hand in triumph. But he had celebrated a bit too early. At the finishing line, Ireland’s John Treacy edged past Ovett. For those few moments, Ovett had lost his sense of reality and ignored the possibility of a negative event.
This analogy works well for the India story and our policy failures , including during the ongoing covid pandemic. While we have never been as well prepared or had significant successes in terms of growth stability as Ovett did in his illustrious running career, we tend to celebrate too early. Indeed, we have done so many times before.
It is as if we’re convinced that India is destined for greater heights, come what may, and so we never run through the finish line. Do we and our policymakers suffer from a collective optimism bias, which, as the Nobel Prize winner Daniel Kahneman once wrote, “may well be the most significant of the cognitive biases”? The optimism bias arises from mistaken beliefs which form expectations that are better than the reality. It makes us underestimate chances of a negative outcome and ignore warnings repeatedly.
The Indian economy had a dream run for five years from 2003-04 to 2007-08, with an average annual growth rate of around 9%. Many believed that India was on its way to clocking consistent double-digit growth and comparisons with China were rife. It was conveniently overlooked that this output expansion had come mainly came from a few sectors: automobiles, telecom and business services.
Indians were made to believe that we could sprint without high-quality education, healthcare, infrastructure or banking sectors, which form the backbone of any stable economy. The plan was to build them as we went along, but then in the euphoria of short-term success, it got lost.
India’s exports of goods grew from $20 billion in 1990-91 to over $310 billion in 2019-20. Looking at these absolute figures it would seem as if India has arrived on the world stage. However, India’s share of global trade has moved up only marginally. Even now, the country accounts for less than 2% of the world’s goods exports.
More importantly, hidden behind this performance was the role played by one sector that should have never made it to India’s list of exports—refined petroleum. The share of refined petroleum exports in India’s goods exports increased from 1.4% in 1996-97 to over 18% in 2011-12.
An import-intensive sector with low labour intensity, exports of refined petroleum zoomed because of the then policy regime of a retail price ceiling on petroleum products in the domestic market. While we have done well in the export of services, our share is still less than 4% of world exports.
India seemed to emerge from the 2008 global financial crisis relatively unscathed. But, a temporary demand push had played a role in the revival—the incomes of many households, both rural and urban, had shot up. Fiscal stimulus to the rural economy and implementation of the Sixth Pay Commission scales had led to the salaries of around 20% of organized-sector employees jumping up. We celebrated, but once again, neither did we resolve the crisis brewing elsewhere in India’s banking sector, nor did we improve our capacity for healthcare or quality education.
Employment saw little economy-wide growth in our boom years. Manufacturing jobs, if anything, shrank. But we continued to celebrate. Youth flocked to low-productivity service-sector jobs, such as those in hotels and restaurants, security and other services. The dependence on such jobs on one hand and high-skilled services on the other was bound to make Indian society more unequal.
And then, there is agriculture, an elephant in the room. If and when farm-sector reforms get implemented, celebrations would once again be premature. The vast majority of India’s farmers have small plots of land, and though these farms are at least as productive as larger ones, net absolute incomes from small plots can only be meagre.
A further rise in farm productivity and consequent increase in supply, if not matched by a demand rise, especially with access to export markets, would result in downward pressure on market prices for farm produce and a further decline in the net incomes of small farmers.
We should learn from what John Treacy did right. He didn’t give up, and pushed for the finish line like it was his only chance at winning. Treacy had years of long-distance practice. The same goes for our economy. A long grind is required to build up its base before we can win and celebrate. And Ovett did not blame anyone for his loss. We play the blame game. Everyone else, right from China and the US to ‘greedy corporates’, seems to be responsible for our failures.
We have lowered absolute poverty levels and had technology-based successes like Aadhaar and digital access to public services. But there are no short cuts to good quality and adequate healthcare and education services. We must remain optimistic but stay firmly away from the optimism bias.
In the end, it is not about how we start, but how we finish. The disastrous second wave of covid and our inability to manage it is a ghastly reminder of this fact.