Increased industrialization in Asia has created countless hurdles for communities to protect themselves from pollution. Important government information—such as the amount of pollutants being discharged by nearby factories or results from local air and water quality monitoring—still isn’t readily accessible in user-friendly formats. This practice often leaves the public entirely out of decision-making processes on issues like regulating pollution or expanding industrial factories. In many cases, the public lack the information they need to understand and shield themselves from harmful environmental, social, and health impacts.
This state of affairs recently prompted a group of government officials, NGOs, local community representatives, and academics to demand government action to change the status quo. Last week, representatives from China, Indonesia, Japan, Mongolia, the Philippines, and Thailand released the Jakarta Declaration for Strengthening the Right to Environmental Information for People and the Environment. The Declaration urges governments to improve access to information on air and water quality pollution in Asia—and offers a detailed road map on how to do so.
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:
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.
Worldwide, one out of every five people lacks access to modern electricity. Affordability, quality of service, and social and environmental impacts pose great challenges in providing people with the power they need for lighting, cooking, and other activities. Good governance involving open and inclusive practices is essential to overcoming these pressing obstacles.
Three years after a political uprising overthrew the president of Kyrgyzstan, challenges still exist in the country’s energy sector. Before the revolution, the central Asian country suffered rolling blackouts, poor service, and skyrocketing prices, ultimately leading to nationwide revolts and the ouster of President Kurmanbek Bakiyev. Again this past winter, half of the people in the nation’s capital experienced a major blackout, leaving them without access to electricity during the coldest months of the year. The city still faces 900 outages per week.
High energy demand, outdated transmission equipment, and power theft all put increasing stress on energy supplies, but issues of corruption and basic transparency exacerbate the crisis. Civil society groups are turning their attention to these issues to help improve Kyrgyzstan’s energy situation.
These groups are working with a government initiative to open up the decision-making processes in a sector that has traditionally hidden behind closed doors. Their efforts to increase transparency are essential to creating meaningful reform in the Kyrgyz energy sector.
This post originally appeared on the Climate Development and Knowledge Network's (CDKN) website.
Having recently left the bustling streets and warm hospitality of Addis Ababa, Ethiopia, I’m taking a moment to reflect on all that I have learned at CDKN’s workshop on “Climate Finance in East Africa.” Representatives of government departments and research institutes from Ethiopia, Kenya, Rwanda, Tanzania, and Uganda--as well as members of the donor community and international think-tanks--reflected on their experiences and the challenges faced in mobilizing and effectively deploying climate change finance.
I was inspired by the sense of optimism and confidence among participants as they discussed the ways in which their countries are tackling the climate change challenge. And I was struck by the effort and considerable progress that these East African countries have already made, despite limited resources and numerous obstacles.
Climate Action in East Africa
For example, last month Kenya launched a holistic national climate change action plan, following a comprehensive planning process that brought together all key government ministries, subnational governments, civil society, the private sector, and development partners.
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.
UPDATE, 4/19/13: Fourteen Latin American and Caribbean (LAC) countries adopted an ambitious Plan of Action to improve access rights on April 17, 2013. Read WRI's press release for more details about the Plan of Action for the LAC Principle 10 Regional Declaration.
Many of these conflicts occur because countries lack strong laws and practices that encourage the public’s access to information and early participation in government decision-making. Without these laws in place, citizens can’t legally obtain information on projects like proposed oil wells or highways—or engage in the decision-making processes about developing and approving these projects. Governments can then make decisions without considering the impact on local citizens. The resulting social, environmental, or health costs often fall disproportionately on the affected communities. (See our video, "Sunita," for more information on the need for access to information laws).
But the situation in the LAC region could be poised to change, depending on what happens at a meeting this week. Representatives from 13 countries and two observer countries will meet with civil society groups in Guadalajara, Mexico, to finalize a two-year action plan on implementing the LAC Principle 10 Regional Declaration. If attendees come up with a strong plan, several LAC countries will come closer to adopting a plan for improving environmental justice and public participation rights across the region.
Rural farmers depend on land and natural resources for food, income, and their physical well-being. But what happens when national or local governments prevent rural people and communities from farming their land?
All governments have the authority to restrict the use of private land, usually for public interest purposes, such as environmental management or biodiversity conservation. In these cases, the affected individuals should be compensated for their losses even though the land remains theirs. Problems arise when governments routinely restrict the use of private property for ordinary government business or for meeting short-term political ends. With weak rights to their property and insecure tenure arrangements, local people stop investing in their land and natural resources. In many countries, governments restrict the use of private property without consulting the landholders or providing compensation. With courts too expensive to access, poor people have few opportunities for recourse.
How do governments balance the benefits to the national public with the rights of local citizens? Can these national benefits be achieved without restricting rural people’s land use? To find out, watch WRI’s new animated video, “A Farmer in Africa.”
Ministers and senior officials from developed countries will gather this Thursday in Washington, D.C. to tackle one of the world’s foremost challenges: how to mobilize private sector capital to reduce greenhouse gas (GHG) emissions in developing countries and help them adapt to climate change’s impacts. The meeting, organized by the U.S. State Department, comes on the heels of another meeting of climate finance experts and researchers in Paris, organized by the Organisation for Economic Cooperation and Development (OECD).
This global attention on climate finance comes at a critical moment: Research shows that the world will need to invest at least $5.7 trillion in clean water, sustainable transport, renewable energy, and other green infrastructure annually by 2020 in order to keep global temperature rise below 2 degrees Celsius, thus preventing climate change’s worst impacts. We’re currently directing only about $360 billion annually toward these activities.
While these discussions are necessary, what’s more important is whether or not ministers and officials are talking about the right issues and asking the right questions. Addressing three questions—on the correct investment figures, the most effective policy and financing tools, and the importance of collaboration—will be critical to ensure that the April 11th Ministerial Meeting on Mobilizing Climate Finance achieves meaningful results.
This is the first installment of our blog series, Climate Finance FAQs. The series explores the often nebulous world of climate finance, providing clarity on some of the key terms and current issues. Read more posts in this series.
Surprising as it may sound, there is no standard definition of climate finance. In fact, there are many differing views on what type of funding constitutes climate finance, how it should be delivered, and how much money developing nations will need to mitigate climate change and adapt to its impacts. This vortex of information can be confusing to navigate. Here, we'll do our best to break down all of the components that define “climate finance.”
Defining Climate Finance: Broadly to Narrowly
In its broadest interpretation, climate finance refers to the flow of funds toward activities that reduce greenhouse gas emissions or help society adapt to climate change’s impacts. It is the totality of flows directed to climate change projects—the same way that “infrastructure finance” refers to the financing of infrastructure, or “consumer finance” refers to providing credit for purchases of big-ticket household items.
The term is most frequently used in the context of international political negotiations on climate change. In this context, climate finance—or international climate finance—is used to describe financial flows from developed to developing countries for climate change mitigation/adaptation activities, like building solar power plants or walls to protect from sea level rise. This interpretation builds off the premise that developed countries have an obligation to help developing countries transform their economies to become less carbon-intensive and more resilient to climate change.
In 2010, the U.S. Congress passed, and President Obama ratified, a pioneering law that requires emissions targets and timetables for a U.S. government agency, and the development of a human rights policy for an export credit agency.
The legislation, a first of its kind, was incorporated into the 2010 Appropriations Bill and requires the U.S. Overseas Private Investment Corporation (OPIC) to take action on climate change and to develop - and publish - binding internal environmental and human rights guidelines.
They are also mandated to implement a revised climate change mitigation plan to phase down greenhouse gas (GHG) emissions associated with projects and sub-projects they finance by at least 30% in 10 years and 50% in 15 years over 2008 levels. This marks the first time that a U.S. government agency has set a target and timetable on its emissions reductions. In August 2010, under the leadership of new president Elizabeth Littlefield, OPIC took this mandate one step further, and adopted progressive environmental and human rights guidelines that have set the gold standard for financial institutions worldwide.
WRI played a key role in the outcome, engaging with Congress on the issue over three years, along with a wider coalition of NGOs. WRI served as a key resource for legislators in the U.S. Congress who drafted the legislation. The legal requirement builds on WRI’s earlier work to get OPIC to adopt a voluntary greenhouse gas initiative in 2007 to reduce its emissions by 20% over 10 years as well as a February 2010 landmark settlement of a 2002 lawsuit filed against OPIC by Friends of the Earth, Greenpeace and several U.S. cities affected by climate change, to which they alleged OPIC’s investments had made a substantial contribution.
The settlement required OPIC to establish a goal of reducing its emissions by 20% over the next 10 years, to conduct full environmental impact assessments for projects that emit significant amounts of carbon dioxide (CO2) and to publicly report its emissions from these projects annually. In August 2010, OPIC released their environmental and human rights guidelines, which strongly reflect the inputs and recommendations of WRI.
Communities dependent on natural resources have long faced injustice in both the Philippines and India. Now, thanks to the work of WRI and its national partners in The Access Initiative, victims of pollution and environmental degradation have a better chance in getting redress before special environmental courts and tribunals.
India: The National Environmental Appellate Authority (NEAA) of India is an administrative court that hears appeals against project approvals where an Environmental impact Assessment was legally required and which had a longstanding reputation for almost always siding with developers against communities. TAI partners challenged several NEAA decisions before the New Delhi High Court and were victorious. Not only did the Court agree with the criticisms leveled against the NEAA, but TAI’s efforts made it clear that the institution needed far reaching reform.
Independently, the Ministry of Forests and Environment introduced a Green Tribunal Bill in the Indian Congress which sought to abolish the NEAA and establish a green tribunal that would hear environmental disputes throughout the country. Concerned that some clauses would limit the scope of environmental dispute resolution, TAI partners successfully developed a critique of the bill and a nationwide campaign for its reform, resulting in ministerial level meetings and the incorporation of most of TAI’s proposed revisions in the final bill, passed in May 2010.
Philippines: In April 2010, the Philippine Supreme Court adopted official “procedures for environmental cases” to be used for civil, criminal and special civil actions brought before the country’s regional, metropolitan and municipal trial courts. This guidance has enabled the Philippines newly established network of environmental courts - the most extensive in any country worldwide - to avoid long-winded and expensive cases. The newly established procedures include provisions to simplify trials, make them speedier, and lower their cost, including by awarding fee waivers for the poor. They also enable courts to monitor and ensure enforcement of judgments.
TAI Philippines, a coalition of NGOs led by the Ateneo de Manila School of Government, drafted the groundbreaking “bench book” for the Philippines’ new environmental courts, supported by WRI which provided finance and training support. In an early demonstration of the effect of these new procedures, plaintiffs in 150 separate villages are filing a collective suit to compel the government to plan water use in the face of climate change.
With a lending portfolio of $18 billion in 2010, the International Finance Corporation (IFC) promotes private investment in developing countries. Its lending has been guided since 2006 by a set of Performance Standards on Environmental and Social Sustainability which the IFC applies to all investment projects to minimize their impact on the environment and on affected communities. Large-scale infrastructure projects, extractive industries operations, and other projects often pose serious environmental and social risks, including to human rights.
Over the past decade, WRI has been leveraging its expertise on ecosystems and biodiversity, climate change, and governance to help shape the environmental and social policies of international financial institutions like the IFC, and to promote sustainable private investment in client countries.
WRI actively advised IFC on its 2011 revision of the IFC performance standards which strengthened the environmental and social safeguards it applies to projects worldwide. IFC staff making a case for robust requirements to assess risks on ecosystem services, climate change, and indigenous peoples’ rights, also had access to the following WRI body of work:
Our effort to mainstream ecosystem services in decision-making and the documented use of our ecosystem services review tools within the private sector.
Our work demonstrating that the concept of “Free Prior Informed Consent” makes a good business case for large-scale, high-impact projects to ensure local civil society buy in.
IFC standards are globally influential among international project financiers seeking to manage the environmental and social risks of projects in the developing world. More than 60 leading international institutions have committed to adhere to IFC’s Performance Standards in their project-finance lending under the rubric of the Equator Principles. Banks in emerging economies including China and Brazil often refer to the IFC Performance Standards as they develop national environmental and social guidelines.
Decisions about how to generate, deliver and pay for electricity have a profound effect on people’s lives. WRI’s Electricity Governance Initiative (EGI) promotes transparent, inclusive and accountable decision-making in the electricity sector, with the goal of helping countries can develop more equitable and sustainable electricity policies. The partnership works in India, Indonesia, Thailand, South Africa, and the Philippines, five countries with rapidly growing emissions from power generation. Since 2005, we have worked with civil society organizations to complete national assessments of electricity governance and advocate for improvements. More than thirty organizations around the world are partners in the Initiative.
This breakthrough resulted from the opening up South Africa’s national electricity planning process, in which EGI played a key role.
Civil society organizations were invited to participate in a new open and consultative process to develop the Integrated Resource Plan for 2010-2030. EGI partners in South Africa produced and shared relevant and timely analyses of the draft plan, held public workshops with government officials, parliamentarians, and civil society groups, and drew media attention to key components of the plan. The result was the government’s heightened focus on the clean energy options of renewables and efficiency. In addition, the South African Department of Energy committed to develop a research agenda to address issues that arose during the public process.
The National Green Tribunal (NGT) Act, passed by the Indian Parliament in May 2010, established a court to deal with environmental disputes throughout the country. Though hailed as a progressive mechanism for victims of pollution and environmental degradation to seek redress, the government delayed putting in place the needed infrastructure, staff, and judges for over a year. The deadlock was broken when environmental groups that are part of The Access Initiative in India took the issue to the Supreme Court, which ruled in their favor, forcing the government to implement the tribunal.
This turn of events underlines the influence and effectiveness of The Access Initiative (TAI) which is co-led by WRI. Established in 1999, TAI is the largest network of civil society organizations in the world dedicated to ensuring that citizens have the right and ability to influence decisions about the natural resources that sustain their communities. TAI-India has become a visible and influential player in India’s environmental governance arena.
Following the Supreme Court’s intervention, India’s National Green Tribunal started functioning on July 4, 2011, hearing thirty-five cases in the first two weeks. TAI India members won another victory when they brought to the media’s attention a stipulation in the Act requiring petitioners, when filing for environmental damages, to pay one percent of the compensation claimed. Following media coverage, the Minister for Environment and Forests, immediately withdrew the regulation requiring fees, which would have deterred poor people from seeking the tribunal’s help.
Indian citizens will now have unfettered access to an environmental court – an important step in advancing environmental rights in the world’s largest democracy. Although the court now functions in only New Delhi, the government plans to expand its presence to five other locations.
A social entrepreneur invests the little working capital she has to bring solar electricity to a community that –like 1.2 billion people worldwide– lacks access to electricity. The community used to use dirty, expensive and choking kerosene for light to cook by and for children to learn by. The entrepreneur knows she can recoup her costs, because people are willing to pay for reliable, high-quality, clean energy – and it will be even less than what they used to pay for kerosene. Sounds like a good news story, right?
Three months later, the government utility extends the electrical grid to this same community, despite official plans showing it would take at least another four years. While this could be good news for the community, one unintended consequence is that this undermines the entrepreneur’s investment, wiping out their working capital, and deterring investors from supporting decentralized clean energy projects in other communities that lack access to electricity.
Few countries are unaffected by China’s overseas investments. The country’s outward foreign direct investments (OFDI) have grownfrom $29 billion in 2002 to more than $424 billion in 2011. While these investments can bring economic opportunities to recipient countries, they also have the potential to create negative economic, social, and environmental impacts and spur tension with local communities.
To address these risks, China’s Ministry of Commerce (MOFCOM) and Ministry of Environment (MEP)—with support from several think tanks—recently issued Guidelines on Environmental Protection and Cooperation. These Guidelines are the first-ever to establish criteria for Chinese companies’ behaviors when doing business overseas—including their environmental impact. But what exactly do the Guidelines cover, and how effective will they be? Here, we’ll answer these questions and more.
Tracking these funds and ensuring that they are delivered effectively is a huge undertaking. Developed countries report their climate finance contributions in periodic national communications submitted to the UNFCCC. However, because countries use multiple methods for reporting and often provide insufficient information, the data gathered are of limited use.
WRI was one of the first organizations to emphasize the importance of transparency of climate finance as part of any new international climate agreement. In the lead up to the UNFCCC conference in Cancun, held in December 2010, our climate team assessed existing finance reporting systems, provided specific guidelines for improvement, and put forward a common reporting format. The team then helped mobilize coalitions to secure support. The result was a mandate at Cancun calling for revised and enhanced reporting guidelines. If fully implemented, these will help donors and recipients better assess and understand the flow and effectiveness of climate finance, and ensure its alignment with other development priorities.
WRI remains active in the UNFCCC process because we believe all nations must act to reduce their greenhouse gas emissions if we are to contain rising temperatures within the limits to which humanity can adapt. Our work on climate finance and in other key policy areas is making a difference in the international climate negotiations.
Promoting forest protection and sustainable agriculture in the Amazon region is vital for local livelihoods and biodiversity, as well as for global climate regulation.
In early 2011, the state legislature of Mato Grosso, Brazil passed a controversial new state zoning law (ZSEE) that opened up 50,000 km2 of new forest areas for conversion to agriculture. In February 2012, following a high-profile civil society campaign and a public civil action suit, the law was suspended through an injunction by Mato Grosso’s State Court. The injunction states: “It is true that… there were… vices of form capable of undermining the law… However, more important is that by reason of these vices, there was impairment of natural goods and services and sustainable development, so there is a risk of impairment of human life. This is the strongest argument that… imposes the granting of the injunction.” In March 2012, Brazil’s Federal Zoning Commission ordered the state government to redraft legislation.
The Instituto Centro de Vida (ICV) – a founding partner of the Governance of Forests Initiative (GFI) – led the successful campaign by producing and distributing their analysis of the ZSEE / MT. This analysis was then used by civil society – including indigenous peoples, social movements, and researchers – as well as legislators and prosecutors in Mato Grosso. Civil society used all opportunities—such as seminars, public events, and protest letters—to denounce the new law. Meetings with more 250 people in attendance were convened.
Curbing Forest Loss
Within a month of the Governor sanctioning the new ZSEE, IMAZON, the other GFI partner in Brazil, documented a more than 500 percent spike in deforestation in Mato Grosso. The immediate public outcry, enforcement actions by the state, and the start of the state case in September, however, acted as immediate deterrents, and the rate of deforestation stabilized. However, without the decisions taken by the State Court and the Federal Zoning Commission, this increase in deforestation would likely have lasted longer, as the law effectively sanctioned past clearing and allowed new areas to be cleared.
These decisions marked an important victory for democratic decision-making and government accountability in a region where the rule of law relating to forests and agriculture is sometimes circumvented for political and economic gain.
Making Change Happen: WRI’s Role
GFI is a set of civil society organization partners in the United States, Brazil, Cameroon, and Indonesia dedicated to improving forest governance through evidence-based advocacy.
In 2010, WRI helped ICV to conduct a governance assessment of the Mato Grosso ZSEE process using a diagnostic tool, the GFI Framework of Indicators (v.1), developed by WRI, ICV, and IMAZON. ICV collected information and conducted interviews to compile a record of expert and civil society inputs into the bill’s drafting over 10 years, from 2000-2010. Armed with this evidence, ICV was able to quickly demonstrate the problems with the new law and start the outcry that led to this outcome.