The accepted wisdom is that you can’t have economic growth and mitigate against climate change at the same time. Not so, according to a new study. Ethiopia was one of three global case studies taking part in a year-long research project to prove this theory. The implications, for the world, are enormous.
Achieving economic growth and prosperity while reducing climate change isn’t – contrary to popular opinion – a contradiction in terms, according to global research and a new international report that drew on Ethiopia’s experiences.
Launched jointly in the Ethiopian capital, Addis Ababa, and in New York, the New Climate Economy (NCE) is the flagship project of the Global Commission on the Economy and Climate, an independent initiative founded in September 2013 to examine whether lasting economic growth, while also tackling the risks of climate change, is achievable. However, the NCE’s seismic message that both are possible has, not surprisingly, been a headline grabber.
“The notion that economic prosperity is inconsistent with combating climate change has been shown to be a false one that doesn’t hold,” says Helen Mountford, director of economics at the Washington-based World Resources Institute, and future NCE Global Program Director. “It’s an old-fashioned idea.” This economic and environmental turnaround has been made possible by structural and technological changes unfolding in the global economy, and by opportunities for greater economic efficiency, according to the NCE report.
But the next 15 years will be critical: the global economy will grow by more than half, a billion more people will move to live in cities, and rapid technological advances will continue to change businesses and lives. It’s estimated around $90 trillion will be invested in infrastructure in the world’s urban, land use and energy systems. How all these changes are managed, the report argues, will shape future patterns of growth, productivity and living standards.
Achieving economic growth and prosperity while reducing climate change isn’t – contrary to popular opinion – a contradiction in terms, according to global research and a new international report that drew on Ethiopia’s experiences.
“Humankind is facing one of the biggest challenges in history, and science has rested its case,” Felipe Calderón, former President of Mexico, and NCE chairman, said during the New York launch. “But the main obstacle is the general perception that combating climate change implies economic reductions that governments and businesses don’t want.”
Hence the report seeks to inform economic decision-makers in both public and private sectors – especially CEOs of major companies and the heads of major global economic organizations – many of whom recognize the serious risks posed by climate change but also must juggle more immediate concerns such as jobs, economic competitiveness and poverty.
If such decision makers can be brought onside, the hope is that well-designed policies, initiated by them, can make growth and climate objectives mutually reinforcing in both the short and medium terms. While in the longer term, if climate change is not tackled, it is feared that growth itself will be at risk.
Ethiopia’s example
Addis Ababa doesn’t usually share a mantle with New York, but it did during the 16th September launch of the NCE because Ethiopia is one of three countries – China and India being the other two – serving as case studies for research into issues such as macroeconomic policy and impacts; innovation, energy, finance, cities; and agriculture, forests and land use.
Ethiopia was also one of the Global Commission on the Economy and Climate’s seven founding members – the others being Colombia, Indonesia, Norway, South Korea, Sweden and the UK. The Ethiopian Development Research Institute played an important role in a global partnership of leading institutes informing the NCE report.
One of the most critical challenges facing developing countries is achieving economic prosperity that is sustainable and counters climate change – a lesson that Ethiopia knows better than most. Northern Ethiopia suffered significant soil erosion and degradation before attempts were made to counter ecological destruction.
Ethiopia has moved on to recognizing how its abundance of waterways offers huge hydroelectric generation potential. Today, massive public infrastructure works are attempting to harness this potential. Ethiopia now finds itself an authority on how to achieve economic growth in a sustainable manner.
“Ethiopians can give answers whereas often in industrialized countries people aren’t sure what to do,” Yvo de Boer, director general of Global Green Growth Institute, an international organization focused on economic growth and environmental sustainability, said. “Ethiopians should be asked.”
Opinion on this is somewhat more restrained within Ethiopia itself. “Regarding lessons from Ethiopia, I believe that we are still in the learning phase regarding building a green economy,” says Getahun Moges, director general of the Ethiopian Energy Authority.
“However, its bold action in anticipation of future gains is something countries need to focus on – I believe every country has potential regarding building green economy, the issue is whether there is enough political appetite for this against short-term interests.”
Despite the sustainability challenges Ethiopia still undoubtedly faces, its role as an important case study of a developing economy has empowered the NCE to come up with what those behind it think is a solid game plan to offer to the world.
“By focusing on cities, land use, and renewable and low-carbon energy sources, while increasing resource efficiency, investing in infrastructure and stimulating innovation, a wider economy and better environment are achievable for countries at all levels of development,” says Trevor Manuel, a member of the Global Commission on the Economy and Climate, and a former Finance Minister of South Africa, now Minister and chairperson of the South African Planning Commission.
Africa led?
Some argue Africa can provide a global example when it comes to economic growth and tackling climate change due to its circumstances. “Africa can be a world leader in terms of climate change solutions,” says Carlos Lopes, executive secretary for UNECA. “It can make sure that commodities are transformed nearer to their sources and thereby reduce CO2 – it doesn’t make sense for things to be sent from Africa to Asia to be manufactured and then shipped to Europe.”
Such action would likely have an additional benefit of reducing many social pressures that continually cause problems in Africa, Lopes adds. Others, however, feel that rather than Africa providing an example to countries in other continents, the emphasis should squarely be on finding African solutions that work for its countries.
“Africa needs to find its own paths to climate resilience since its circumstances are so different from many other parts of the world,” says environmental economist Gunnar Köhlin, director of Sweden-based Environment for Development Initiative. “Sub-Saharan Africa has still not invested fully in a mature energy generation and distribution system. There are therefore still many choices to be made in supplying households with energy that is both not aggravating climate change and at the same time is resilient to the impacts of climate change.”
On the global stage, the hope is that the NCE and its findings will encourage future agreement and cooperation when nations discuss and implement international climate change policies, allowing the ghosts of the Kyoto Protocol and the Copenhagen Accord – previous efforts judged ineffective – to be laid to rest.
But others point out how previous sustainability initiatives have struggled to achieve tangible results, especially in Africa, begging the question: What will be different this time?
“In the last 10 to 15 years, new policy developments have started to take hold,” Mountford says. ”Yes, there have been failures, but there have been many successes and so we have taken stock of these – now we are at a tipping point, with the lessons learned from these recent experiences and significant technological innovations giving us new opportunities.”
In light of this, the NCE and its recommended 10-point Global Action Plan give cause for celebration, says Manuel, adding: “For too long we’ve been told that there you can’t develop and mitigate – this report inverts that logic and demonstrates that it’s possible to do both. Africans across the board will benefit from this.”
The true test of the NCE’s merit and value will come at the next major convention on climate change due in the French capital, Paris, in 2015, when world leaders will wrestle with, and attempt to agree on, international strategy.
“Some academics say we are too optimistic,” Manuel says. “But if you are from the developing world and you don’t have optimism then you have nothing.”
[AfricanBusinessMagazine]