Smart Policies that Work for Planet Earth - Ah-ha! Week


By Lisa Autz

Image courtesy of Andrea Della Adriano.

Discussing economic policy and climate change often runs us into a trap. Our choices feel diminished to either trashing the system or crashing the planet.

As the issue often becomes deadlocked and polarized, researchers are looking for ways to realistically re-conceive an economy that considers our planet alongside our profits. As such, economists and other experts at the World Data Bank and ClimateWorks Foundation are eager to ignite a sense of hope in reconfiguring economics’ GDP-growth obsession into a more holistic practice.

The “Adding up the Benefits” report released in June presents several proposals of policies and projects that aim to improve our economy, our environment, and our health. Proposals from Brazil, China, India, Mexico, the US, and the European Union were worked on.

The report laid out four specific projects that were showcased as ideal intersects to match GDP growth with climate stability using newly formed macroeconomic tools. Bus Rapid Transit (BRT) in India, Sanitary waste management in Brazil, agricultural waste management in Mexico, and clean cook stoves in China were all outlined in the report to collectively reduce 355 to 520 million tons of CO2 emissions and save over a million lives.

With enlightening figures, the calculated report overtly intends to nudge government authorities to go forth with their next effective policy action. It encourages policies that stimulate a shift in cleaner public transit and better energy efficiency for industries and infrastructure.

The impact of cleaner public transportation is exemplified by India’s new BRT. Though the World Bank-supported system has suffered speed bumps in planning and implementation, it is calculated to create 128,000 jobs and reduce greenhouse gas emissions by about 42 million tons in the next 20 years.

Surabi Menon, ClimateWorks Foundation director of research and a leading researcher on the report, explains to BTR what these holistic predictions bring to knowledge that past calculations lacked.

“A lot of literature reports that exist try to look at the socioeconomic benefits… but you don’t really see the full picture,” says Menon. “We look at tools that help put together a compelling rationale for why sustainably development and the economy go together.”

Using new modeling tools, researchers are able to measure the multiple benefits of reducing emissions of several pollutants, assess better design methods, and analyze policies and projects. With their advanced data, they are able to find a common ground of climate action and economic development.

Developed countries often have a stronger tension to combine economic growth with environmental conservation. The developing nations, however, hold a heavier pressure in pursuing economic prosperity to save a larger portion of the population from debasing poverty. The latter is often the case with China, where the quest for economic development is often prioritized over pollution.

The fact that the bank is involved in China’s alliance with the Global Clean Stoves Initiative is all the more impacting. The program deploys the country 70 million eco-friendly cook stoves to give the population an alternatives to traditional methods of cooking that burn wood or dung (which is practiced by an estimated 80 percent of the population). The pollution avoidance by the cook-stove program is estimated to save one million premature deaths, not to mention offer an economic gain of $11 billion.

Jane Ebinger, Manager of Climate Change Policy at the World Data Bank, spoke with BTR on how these types of figures are a growing necessity for officials to understand their decisions.

“Increasingly, these officials want to know if there are investments and efforts that can advance their development priorities and, at the same time, address impacts of our warming world,” says Ebinger. “Ultimately, all policy makers, whether in government cabinets or corporate boardrooms, need to understand where they can get development and climate benefits from the decisions they make.”

Though the estimates produce an effort to mobilize action, the report places a disclaimer on the calculations as “optimistic” and states they should be viewed as a project-level evaluation.

“[The data is] optimistic because we expect the policies to be fully implemented,” says Menon. “A policy might be adopted but not fully implemented.”

Additionally, transaction costs, risks, and market distortions are not taken into consideration according to the release.

While the Brazilian and Mexican waste management programs have not yet been fully implemented, their projections provide better chances of full enactment.

Mexico’s largest sector of greenhouse gas emission comes from its agriculture industry. As of 2013, 90 percent of its pig and dairy farms were installed with solar energy and biogas (an alternative fuel from waste) to maintain reusable source of energy. The reduced agricultural emission, and cut of energy costs by 11 percent, is calculated to stimulate the country’s economy by a growth of $1.1 billion.

Brazil’s solid waste management project also uses renewable energy, except in the form of methane gas. In 2011, a $50 million loan was taken from the World Bank in order to transform methane gas and other wastes into electricity for over six different landfill sites in the country. The framework found that the new system would create 44,000 jobs and give a $13.3 billion GDP boost to the country.

Environmentally speaking, the aggregate findings of all these policies and projects fully implemented could account for a 30 percent global reduction in greenhouse gas emissions needed by 2030, as well as decrease the global warming rate from four degrees Celsius to two. As for economics, collective implementation could mean a $1.8 trillion economic output.

As a result of global agreements to mitigate temperature rise, America’s new Clean Power Plan aims to cut 30 percent of carbon emissions by 2030. Although, the same trap arises as lawmakers and business owners remain skeptical of its adverse impact on energy prices.

The inaction costs will continue to rise every day, according to Rachel Kyte, World Bank Group vice president and special envoy for climate change. Ultimately, its adverse effects might soon outweigh any temporary price hike.

She proposes that the “study makes the case for actions that save lives, create jobs, grow economies and, at the same time, slow the rate of climate change. We place ourselves and our children at peril if we ignore these opportunities.”