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sustainable development

How Are China’s Overseas Investments Affecting the Environment?

Chinese overseas investments are rapidly increasing. As of 2011, China’s outward foreign direct investments (OFDI) spread across 132 countries and regions and topped USD 60 billion annually, ranking ninth globally according to U.N. Conference on Trade and Development statistics. A significant amount of this increasing OFDI goes to the energy and resources sectors—much of it in Asia, Africa, and Latin America.

But there are two sides to China’s OFDI coin. On the one side, these investments can benefit China and recipient countries, generating revenue and improving quality of life. However, like any country’s overseas investments, without the right policies and safeguards in place, these investments can fund projects that harm the environment and local communities.

WRI‘s new issue brief surveys the progress and challenges China faces in regulating the environmental and social impacts of its overseas investments. I sat down with WRI senior associate and China expert, Hu Tao, to talk about China’s overseas investment landscape. Before joining WRI, Tao worked as a senior environmental economist with China’s Ministry of Environmental Protection (MEP). Here’s what he had to say:

The End of Poverty? The World Bank and the Shared Prosperity Agenda

Within our lifetimes, the world could be free of widespread, extreme poverty, replaced instead with shared prosperity and environmental and fiscal balance. That was the vision World Bank President Jim Yong Kim outlined at his first Spring Meetings in Washington, D.C. last week.

In a period of economic uncertainty, social exclusion, and climate and environmental crises, these goals hold immense promise. At the same time, for an institution already grappling with its redefined role in the coming decades, the Bank’s current capacity to support this vision will be tested.

The Common Vision for the World Bank Group that was approved by the World Bank’s Development Committee on April 20th includes two goals the Bank will work towards:

  • alleviating extreme poverty by dropping the percentage of people living on less than U.S.$ 1.25 a day to 3 percent by 2030, and

  • promoting shared prosperity by fostering income growth of the bottom 40 percent of the population in every country

These two core goals are supplemented by the Bank’s understanding that they cannot be achieved without credible action to ensure environmental sustainability, especially on climate change.

Food and Fuel: 2 Grand Challenges Facing Us this Earth Day

Since the very first Earth Day more than four decades ago, the environmental movement has tackled a wide range of problems, including air pollution, contaminated water, deforestation, biodiversity loss, and more. But this Earth Day, I propose that there are two fundamental issues the movement must address over the coming decade if it is ever to defuse the tension between development and the environment. In fact, these two issues underlie many, if not most, of the world’s environmental challenges.

I’m referring here to the human quest for food and the human quest for fuel.

Unsustainable Food Production

Food production has significant―but often underestimated―impacts on the environment. Take climate, for instance: About one-quarter of the world’s annual greenhouse gas emissions are agriculture-related. In particular, nearly 13 percent of global emissions comes from livestock, fertilizer use, and farm-related energy consumption, while another 11 percent results from the clearing of forests and other ecosystems, primarily for agriculture.

5 Steps to Improve the World Bank’s Social and Environmental Safeguards

The World Bank’s annual spring meetings take place this week in Washington, D.C. One big topic on the agenda is how to update the World Bank’s “safeguard” policies. Created in the early 1990s, these policies ensure that the Bank considers the social and environmental effects of proposed projects. For example, the safeguards require those borrowing money to assess the project’s environmental impacts and to compensate households who are negatively affected.

The full suite of safeguards is now under review for the first time. Among other things, the Bank hopes to make its safeguard policies reflect changes in the global economic and political landscape that have occurred in recent decades.

World Bank Safeguards vs. National Safeguards

One question on the table is how the World Bank safeguards should interact with national systems already in place in recipient countries. Since the creation of the Bank’s safeguards, many countries have strengthened their own rules and institutions to ensure that large-scale projects are implemented in a manner that protects people and the environment. These include, for instance, laws requiring environmental impact assessments, or government agencies to oversee land use changes. Relying on these domestic systems can potentially improve protection of people and the environment. National laws, for example, allow governments and citizens to work within their own familiar structures, and they’re sometimes more appropriate for local circumstances than Bank policies.

Connecting Sustainable Transport to Urban Development in India

This post also appears on TheCityFix.com.

In 2011, nearly 350 million people lived in Indian cities. More than 300 million new residents will join them over the next few decades to become part of the new urban India. This population boom will stress an already-pressured urban infrastructure system, especially with regard to transportation.

Indeed, Indian cities have become synonymous with congestion, noise, and air pollution. Each year, 135,000 people die in traffic crashes on Indian roads. Currently, India has 120 million vehicles, a number that is steadily growing. In 2010, outdoor air pollution contributed to more than 620,000 premature deaths. Plus, urban transport’s energy use and greenhouse gas emissions are set to increase almost seven-fold in the next 20 years.

This trend is clearly not sustainable if India’s city residents want to have any sort of quality of life in the future. In order to reverse course, the country must begin scaling sustainable transport and ensuring that it is integrated with land development. This is a topic we’ll discuss extensively during next week’s CONNECTKaro, a sustainable transport and urban development conference co-hosted by EMBARQ India, WRI’s center for sustainable transport in India.

Lord Nicholas Stern Identifies 3 Obstacles to International Climate Action

Six years after the release of the landmark Stern Review on the Economics of Climate Change, Lord Nicholas Stern revealed yesterday the most challenging hurdle ahead for international climate action. Overcoming this obstacle is not a matter of figuring out the scientific or policy pathways needed to curb climate change—nor is it determining what technologies to adopt or what investments must be made. “What’s missing is the political will,” said Stern.

The famed economist elaborated on this problem during an address yesterday hosted by WRI and the International Monetary Fund (IMF), “Fostering Growth and Poverty Reduction in a World of Immense Risk.” Dr. Andrew Steer, WRI’s president, and Christine Lagarde, managing director of the IMF, provided opening remarks, articulating the serious economic and human risks climate change poses. Stern focused on the main hurdle to mitigating these risks—political will.

The problem, according to Stern, reflects a lack of understanding in three main areas: climate change’s real risks, the benefits of an alternative pathway, and the need for collaboration and mutual understanding.

The Private Sector and International Development: A Love Affair, or Cold Feet?

The private sector is a crucial partner in advancing sustainable development, and bilateral aid agencies are grappling with ways to learn from and leverage the activities of companies and markets. As the worlds of business and of aid increasingly intersect—and as development budgets are reined in even as demands on them grow—the pressure is to do more in partnership with the private sector. The real challenge, though, is to do better.

This was the headline message from a recent roundtable discussion with representatives from nine bilateral donor agencies and invitees from the private sector, co-organized by WRI and the International Institute for Environment and Development (IIED) in London (see notes from the roundtable).

Both sides desire a strengthened relationship. Donor agencies see the private sector as an indispensable partner for improving the effectiveness and efficiency of aid. Agencies are looking for important sources of ideas, technology, and financing to scale up development solutions.

One example is the Africa Enterprise Challenge Fund (AECF), which is funded by the Australian, British, Danish, Dutch, and Swedish aid agencies. AECF is improving livelihoods of poor people in rural Africa by supporting innovation and new business models to help small-scale farmers adapt to climate change and promote investment in the generation of low-cost, clean, renewable energy.

Private sector actors seek clearer policy signals and more consistent support from donor agencies, particularly in understanding and navigating local politics. They also seek opportunities to develop new products and new markets, benefiting from the “de-risking” role that the public sector can play.

What Do We Need to Know in a Changing Climate? A Research Agenda to Support Adaptation

As the world continues to feel the effects of drought, sea level rise, and more volatile weather, it’s clear that adaptation efforts have never been more imperative. These initiatives are critically important in order to protect communities—especially in impoverished places—from the worsening impacts of climate change.

WRI’s Vulnerability & Adaptation team has been working to ensure that adaptation is a central component of the international development agenda. Over the past few years, WRI and its partners have conducted practical research and analysis on three continents across a broad spectrum of adaptation topics, including monitoring and evaluation; case studies on information use for adaptation; the role of national institutions; and a broad set of decision-making principles for a changing climate. But what have we learned from the results of these efforts? And how can we ensure that global adaptation efforts are conducted effectively and efficiently?

We recently stepped back and evaluated the work we’ve done to try and answer these questions. One of our clearest conclusions is that much remains to be learned about “what works” in adaptation. The results of our efforts point toward five areas of long-term, practical, applied research that could help provide a foundation for effective adaptation moving forward: adaptation success, critical thresholds, adaptation options, information systems, and institutions.

4 Ways the Green Climate Fund Can Support "Readiness" for Climate Finance

Research shows that developing countries will need about $531 billion of additional investments in clean energy technologies each year in order to limit global temperature rise to 2° C above pre-industrial levels, thus preventing climate change’s worst impacts. While developed countries have pledged to provide $100 billion of climate finance per year, this amount is well below what’s needed to help developing nations mitigate and adapt to climate change.

So how can countries bridge this funding gap? The answer lies in part on how well developing countries implement “readiness” activities, as well how effectively developed nations and international institutions like the Green Climate Fund (GCF) can mobilize finance to support them.

The Need for Readiness

To attract investments on the scale required, developing country governments must provide an attractive investment climate—one that encourages public and private sector investors to put their money into climate-friendly projects like solar and wind energy. On their end, developed countries need to offer financial and technical support for “readiness” activities that create the right conditions for said investments. Readiness includes any activity that makes a country better positioned to attract investments in climate-friendly projects or technologies. A few examples include: developing a policy to promote energy efficiency in industry; passing a law that gives a new or existing institution the mandate to promote renewable energy; conducting an assessment of a country’s wind energy resources; or strengthening a bank’s capacity to lend to small businesses in low-carbon sectors. International institutions such as the GCF can play a big role in supporting readiness activities, thereby helping developing nations attract the investments that will help them transition onto a low-carbon, climate-resilient development path.

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