Insights: WRI's Blog

When it comes to overseas development finance, China is definitely a country to watch. Due to the country’s unprecedented economic growth, China’s overseas investments have increased exponentially in recent years. Between 2009 and 2010, two Chinese state-owned banks lent more money to other developing nations than the World Bank did. In fact, between 2002 and 2011, China’s outward foreign direct investment (OFDI) stock grew from $29 billion to more than $424 billion.

But what factors are driving all of this growth? What areas of the world are on the receiving end of China’s OFDI flows? And what sorts of social and environmental standards are in place for banks’ and enterprises’ investments? WRI seeks to answer these questions and provide additional background information in its recently updated slide deck, “Emerging Actors in Development Finance: A Closer Look at China’s Overseas Investment.”

Sarah Cohen, an intern with WRI's Markets and Enterprise Program, also contributed to this blog post.

Do you have colleagues who roll their eyes when they hear the words “environment” or “sustainability?” The sad truth is that environmental issues are not always a passion for everyone at every organization. However, climate change and other environmental challenges are shaping tomorrow’s markets—so how do you draw connections between sustainability and business value for those who may not see it right away?

Today, WRI is releasing a guide to address this question and many more related to corporate sustainability. The guide—which was road-tested this summer by a dozen major companies like Target, Method, and Staples—adds a sustainability component to the traditional Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis that corporations have relied on for more than 50 years. Our sustainability SWOT, or “sSWOT,” is designed to help corporate sustainability champions engage colleagues, customers, suppliers, and even competitors to identify links to business risks and brainstorm new business opportunities.

"Think globally, act locally" is a slogan that aptly describes what I witnessed last week at the 4th Annual Southeast Florida Climate Leadership Summit. At the event, local government officials from four counties gathered to discuss how to mitigate and adapt to climate change’s impacts.

Yep, you heard that correctly – government officials in the United States—in a “purple” state, no less—came together in a bipartisan manner to address climate change mitigation and adaptation. In fact, mayors, members of Congress, county commissioners, and officials in charge of water issues in the state discussed how to move forward with action plans in response to sea-level rise – a climate change impact which is not theoretical, but happening now.

Putting Aside Partisanship for Action

Unlike Congress, these public officials aren't debating the facts of climate change and its impacts or whether we should act. They see current effects and understand that in the face of streets flooding more regularly, drinking water supplies threatened by salinization, and models showing that some neighborhoods could become uninhabitable, what political party you support is irrelevant. Climate change impacts like sea level rise don't discriminate between Democrats and Republicans.

Governments, corporations, and development agencies are increasingly interested in putting a dollar value on ecosystems in order to balance conservation and development needs, a concept known as “economic valuation.” For example, St. Maarten’s government recently established the country’s first marine national park after a local organization found that the area’s coastal ecosystems contribute $58 million per year through tourism and fisheries. Belize enacted a host of new fishing regulations based on a WRI valuation, which found that coral reef- and mangrove-associated tourism contributes $150 million-$196 million per year to the country’s economy. And in Bonaire, park managers used economic valuation to justify the Bonaire Marine Park’s establishment of user fees—making it one of the few self-financed marine parks in the Caribbean.

These stories show that economic valuation can indeed lead to better coastal policy, conserving these ecosystems and securing their important economic contributions. However, according to new WRI research, these cases tend to be the exception in the Caribbean.

Economic Valuation and Coastal Policy in the Caribbean

In the Caribbean, there is keen interest in economic valuation of coastal ecosystems to inform policy and improve natural resource management. But while the literature on the value of coral reefs and mangroves in the Caribbean continues to grow, these ecosystems continue to decline.

WRI and the Marine Ecosystem Services Partnership (MESP) took a closer look at the impact of previous economic valuation studies in the Caribbean. Out of more than 200 studies of the economic value of the Caribbean’s marine ecosystem goods and services, we were only able to identify 13 that actually influenced marine and coastal management policies, such as those in Bonaire, St. Maarten, and Belize.

Forests are vitally important for the global environment, economy, and population. The forest sector employs 13.7 million workers and contributes to about 1 percent of the global GDP. Plus, an estimated 500 million people around the world directly depend on forests for their livelihoods.

But forests are also under threat. From 2000-2010, about 15 million hectares of the world’s forests were cleared, and a 2004 assessment estimated that 8-10 percent of the global wood trade is of illegal origin. In addition to deforestation, illegal logging can cause government revenue losses, poverty, unfair competition with legally sourced goods, unplanned and uncontrolled forest management, conflicts, and other illicit activities that can occur in instances where illegal logging’s proceeds are linked to organized crime and corruption.

But there are solutions. One way to improve forest management across the globe is for businesses, governments, and citizens to seek out and demand sustainably harvested wood and paper products.

Today, WRI and the World Business Council for Sustainable Development (WBCSD) released the third edition of a guide that helps businesses develop sustainable policies and seek out sustainably harvested wood and paper products. The updated guide, Sustainable Procurement of Wood and Paper-Based Products, is accompanied by a revamped website.

This piece originally appeared on CNN.com.

After two weeks of climate negotiations in Doha, bleary-eyed ministers, negotiators, and advocates are headed back home to the various regions around the world. Few, if any, are leaving entirely satisfied.

The pace of progress on climate change is still too slow, and the political will for greater ambition remains elusive. That said, these talks did achieve the basic goal of extending the Kyoto Protocol and moving countries onto a single negotiating track toward a new climate agreement by 2015. This leaves the door open for more progress ahead.

This year's talks took place against the backdrop of two disturbing trends. On the one hand, there are multiple signs that climate change is here, and its impacts are already being felt around the world. On the other hand, the world remains tied to the consumption of fossil fuels that drive more and more greenhouse gas emissions into the atmosphere. With each passing day that we don't shift directions, we are increasingly locking ourselves into a more unstable climate future.

The real question is: Can the international talks have a real impact on climate change?

This post was co-written with Saurabh Lall, Research Director of Aspen Network of Development Entrepreneurs (ANDE). ANDE is a global network of over 170 member organizations that focus on the potential of small and growing businesses (SGBs) around the world to create economic, social and environmental impact.

Over the past few years, we have seen tremendous growth in impact investing, investments made to generate both a financial and a social/environmental return. The sector now manages about US$40 billion.

While this growth on the supply side of mission-driven capital has been tremendous, we must now focus on the demand side—in other words, the entrepreneurs themselves. It’s essential to ensure that there are enough entrepreneurs and small and growing businesses (SGBs) out there to address today’s complex, global challenges. These businesses must also have the capacity to take on the type of capital that impact investors have to offer. Accelerators and incubators are and will be increasingly critical to achieving these goals.

Accelerators are groups that provide business development support to enterprises with existing customers and revenue, while incubators typically serve earlier stage enterprises (pre-customers and pre-revenue). These types of groups can help grow environmental entrepreneurship by ensuring that demand meets supply; in other words, a strong pipeline of deals is ready to meet the growing supply of capital.

This week, the Natural Resources Defense Council (NRDC) released a new proposal detailing how they would like the U.S. Environmental Protection Agency (EPA) to reduce greenhouse gas (GHG) emissions from existing power plants. Their analysis predicts that their proposal would reduce power sector GHG emissions 26 percent below 2005 levels in 2020, or 17 percent below 2011 levels.

Standards for existing plants are essential if the United States is to make meaningful strides toward a low-carbon economy. NRDC’s proposal provides a valuable contribution to the ongoing discussion about how best to design these standards.

U.S. Emissions Are on an Unsustainable Path

Even though the United States has made progress on reducing emissions – most notably through the Obama administration’s new standards for passenger vehicles – we need more action if the country is to prevent climate change’s worst impacts. While U.S. energy emissions have fallen nearly 9 percent below 2005 levels, these trends are not expected to continue without ambitious new climate and energy policies. This is the clear takeaway from both the U.S. Energy Information Administration’s Annual Energy Outlook 2012 and a recent analysis by Dallas Burtraw and Matthew Woerman at Resources for the Future.

In the UNFCCC international climate negotiations, “ambition” refers to countries’ collective will to cut greenhouse gas (GHG) emissions enough to keep global average temperature increase below 2°C. While most countries have made international pledges to limit GHG emissions, these pledges are not “ambitious” enough to add up to the GHG cuts needed to meet the 2°C temperature goal. That’s why many groups are calling on parties in Doha to step up their commitments. Equally important, though, is ensuring that countries are effective in implementing domestic policies that meet – or exceed – the international commitments they have made already.

What Makes for an Effective Domestic Climate Policy?

The “implementation deficit” – a difference between the expected and actual amount of emissions reductions of an enacted policy—stems from a lack of complete implementation of a climate policy. This kind of “deficit” is well documented in a number of policy sectors, with significant implications for the countries’ abilities to meet GHG-reduction targets. Conversely, when climate policies are effectively implemented, they demonstrate that mitigation actions can work, in turn encouraging other countries to adopt similar policies and actions.

The effectiveness of any policy depends on several key factors, including:

Doha, Qatar, may not the first place that you’d pick for a global conference—many people would be hard-pressed to find it on a map. Yet, it’s the location of this year’s global UN climate negotiations (COP 18).

It’s midway through the final week of the negotiations, yet there’s an eerie calm in the sprawling conference hall. The scene here is different than the past two years (in Durban and Cancun, respectively), both of which were filled with tension and even moments of drama. Certainly, no one expected a major breakthrough this year, but the lack of urgency here is disquieting.

The Climate Change Risks Are Increasingly Clear

What’s happening inside the conference center stands in stark contrast to what we’re witnessing outside. Just yesterday, an unusual and massive storm, Typhoon Bopha, swept across the Philippines, taking hundreds of lives and displacing thousands more. While typhoons are common in the Philippines, this storm is the most southern on record and arrived particularly late in the season. Meanwhile, people in the eastern United States and Caribbean are still recovering from Hurricane Sandy. And, in India, a new report warns that more droughts loom as monsoons will bring 70 percent less water in the years ahead.