After four decades of little or not growth, the Jamaican economy is expected to grow at 1-2% over the medium term. The country is confronted by serious social issues that predominantly affect youth, such as high levels of crime and violence and high unemployment.
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Climate change is a clear and dire threat to Latin America and the Caribbean. A threat in which the region has had little or no role in the making, but in which it is already an important part of the ... Show More +solution.Dear friends, I appreciate this opportunity to address you on this important and timely topic. The report we are launching today is the third in the Turn Down the Heat series and, for the first time, covers our region.This report is based on the findings of a global research series commissioned by the World Bank to the Potsdam Institute for Climate Impact Research and Climate Analytics.We thought a stand-alone report for Latin America and the Caribbean would add value to the solutions-focused discussion already taking place in the region.In this regard, I would like to thank Cindy Arnson and the Latin America Program at the Wilson Center for partnering with us to further the discussion on the development implications of climate change for Latin America and the Caribbean.The challenges climate change poses to development are significant: the economic, social, and political costs of unchecked climate change make it one of the most important areas of action for decision-makers today.This report makes it clear in a scientifically rigorous way why tackling climate change is so important for Latin America and the Caribbean.Being aware of these challenges is a necessary first step to prepare and implement policy responses, both in a catastrophic four degree scenario or in the two degree world we are already moving towards.I would like to highlight some of my takeaways, based on the report’s findings:The first is that a four degree world can and must be avoided.The projections for our region in a four degree warming scenario are daunting:Almost all land area in the region – 90% – will likely be subject to heat events that are currently experienced only every 700 years.The Amazon basin and many highly inhabited areas are expected to experience extreme droughts.The Andean glaciers will be gone by the end of the century. Glacial melt will at first raise the risks of floods and then result in drought for the communities that depend on them.Category 4 or 5 hurricanes may occur more frequently and more powerfully. This, together with a one meter sea-level rise will have devastating impacts, especially on the Caribbean.A 4 degree world would mean that Rio de Janeiro and Barranquilla would have to cope with a massive 1.4 meter rise in sea level.We are already living in a world that is close to one degree above what it would be if not for human activity, on the path to reach two degrees. The report finds that a 1.5 degree global temperature increase is already locked in, and some of the impacts associated with a two degree warming are already being felt.Events such as the massive 2005 and 2010 Amazon droughts, the increase in frequency in Atlantic hurricanes, and the 90% loss of tropical glaciers are clear evidence of this.Even a two degree world would be highly damaging to Latin America and the Caribbean, jeopardizing decades of development achievements.The number of severe hurricanes will increase by 40%, with double the energy of the current average.Ecological changes would endanger up to 70% of Brazil’s soya bean and 45% of Mexico’s corn.Bleaching of coral reefs would increase and the Caribbean fish catch volume would decrease by up to 50%.Now, the good news is that we can avoid the worst impacts of a 4-degree world, while continuing to prepare for a world that is 1.5 to 2 degrees warmer. So, my second key takeaway is that we need to move faster.As a Latin American, I am greatly encouraged that the region is showing that there is no room for complacency regarding mitigation.It has preserved its forests more than any other region,It is the most bio-diverse region in the world,It has the largest freshwater reserves and is home to the Amazon, the world’s largest carbon sink,It also historically has had the cleanest energy matrix of any region.Latin America has a special responsibility to the world in this respect. We must continue to avoid deforestation, avoid the current trend towards dirtier energy, work to reduce air pollution in the cities, and emphasize climate friendly solutions, such as in agriculture.It is clear that the world’s greatest emitters of greenhouse gases need to demonstrate decisive leadership to solve the climate change crisis. But Latin America and the Caribbean has not been waiting, and should not wait, for what others can do.Climate change even at today’s level of close to 1 degree already requires adaptation. The region is doing much to prepare for a 2-degree world while avoiding a 4-degree one.Chile plans to drive a renewable energy boom, with a law to generate 20 per cent of its energy from renewable sources by 2025.Mexico – which could see its GDP decrease between 3.5 to 4 percent due to climate impacts – has set the target of reaching 35 per cent of renewable energy use by 2024.Moreover, Latin America and the Caribbean has become a hotbed of innovation, focusing investment on green transportation systems, clean energy, as well as payments for environmental services and forest conservation programs, that combine advanced technology with the knowledge of local communities.Innovations such as climate-smart agricultural practices offer promise to Latin America and the Caribbean to manage the climate risks to agricultural productivity, ensure food security, and advance the region’s potential as a global ‘bread-basket’.On the governance agenda, Latin America is leading in legislation to prevent or mitigate the effects of atmospheric change. We find examples in Bolivia, Ecuador, and Costa Rica. Brazil has also shown leadership by enacting one of the world’s most effective conservation regimes in the Amazon, greatly containing deforestation.In summary, many countries in the region have shown that they are willing to take action today. The fact that the COP negotiations are taking place in Lima shows not only the leadership Peru has taken, but also that the entire region seeks to find, incubate, pilot, and apply solutions to climate change that are globally replicable. Latin American and Caribbean countries are not alone in advancing the agenda. My third key message is that there are partnership structures in place to support countries’ action agendas.Multilateral development banks like the IDB and the WBG, national development banks, and international funds like the Global Environmental Facility, and the Adaptation Fund have been crucial partners in providing financial and technical support for country-led action. An example would be an innovative weather insurance mechanism for Uruguay that we presented to our Board this morning. This new hedging instrument protects the country’s energy sector against climate and oil price vulnerabilities.The Climate Investment Fund, a joint fund by the World Bank Group and other multilateral development banks for country-led investments in clean technology, renewable energy, and climate resilience, co-finances investments in 13 countries of the region.The Green Climate Fund, once operational, is envisaged as a mechanism for scaled-up financial support to enable countries meet the additional costs that climate change places on economic growth.The region has made incredible advances on the socio-economic front in the last decade. It has achieved steady and dramatic declines in poverty, cutting extreme poverty by half since 2003.Since 2011 and for the first time in recorded history, there are more people in the middle class than in poverty in Latin America.The rise of the Latin American middle class represents a historic achievement for a region long associated with wealth inequality, especially at a time when other regions have become more unequal.All these gains, however, may be jeopardized by the hazardous effects of climate change. Climate change is not only an environmental challenge, it is a fundamental threat to Latin America’s development that risks undoing the hard won achievements of the recent decades.To quote World Bank Group President Jim Kim: “We will never end poverty if we don’t tackle climate change.”To conclude I would like to reiterate that there are options at our disposal to avoid the most disastrous impacts of climate change. We also know that the window for action is rapidly closing.Emission reductions are urgent, especially in the world’s largest economies and the recent agreement between the US and China is a first promising step in this direction.The report launched today is a reminder for everyone that the benefits of strong, timely action on climate change, to promote clean, low-carbon pathways and avoid locking in unsustainable growth strategies, far outweigh the costs.Seeing the track record of Latin American and Caribbean countries, I am confident we can scale up successes achieved to date to guarantee a climate-resilient region for future generations.I am also confident that the region will continue to set a high bar for international action to minimize future climate risks and maximize future climate resilience.Thank you. Show Less -
WASHINGTON, December 2, 2014 — Development policies based on new insights into how people actually think and make decisions will help governments and civil society achieve development goals more effec... Show More +tively. A richer and more accurate understanding of human behavior can make it easier to tackle such difficult development challenges as increasing productivity, breaking the cycle of poverty from one generation to the next, and acting on climate change, finds a new World Bank report.World Development Report 2015: Mind, Society, and Behavior, examines early, exciting work that suggests ways of diagnosing and solving the psychological and social factors that influence development. The new approaches are complements to a host of other standard economic tools.People do not always make deliberative, independent decisions based on careful self-interested calculations, the report finds. Rather, they tend to think quickly and to use mental shortcuts and shared mindsets. By factoring this in, governments and other actors can design programs that make it easier for individuals to cooperate in the pursuit of shared goals.For instance, in an experiment in Colombia involving a modified cash transfer program, part of the funds for beneficiaries were automatically saved and then given as a lump sum at the time when researchers knew decisions about school enrollment for the next year were typically made. This adjustment, designed to encourage people to focus on schooling decisions, increased enrollments for the following year.“Understanding how people make choices doesn’t help just those who sell bars of soap or new cars – it also can help us in the field of development become more effective in delivering programs to the poor and vulnerable,” said World Bank Group President Jim Yong Kim. “In the case of Ebola, for instance, we must tackle stigma, inaccurate understanding of disease transmission, mistaken panic, and other biases and misconceptions. Having a deeper understanding of how people think can ensure that we improve our responses now and in the future, whether in tackling an epidemic or in taking on a global challenge like climate action.”To inspire a fresh look at how development work is done, the report outlines three principles of human decision making: thinking automatically, thinking socially, and thinking with mental models. Much of human thinking is automatic and depends on whatever comes to mind most effortlessly. All people are deeply social and many will cooperate as long as others do too, and they are influenced by social networks and norms. Finally, most people do not invent new concepts; rather they use mental models drawn from their societies and shared histories to interpret their experiences.Interventions need to take account of these insights and be designed through a ‘learning by doing’ approach. The factors and mindsets affecting decisions are local and contextual. It is hard to predict in advance which aspects of program design and implementation will drive the choices people will make."Marketers and politicians have long understood the role of psychology and social preferences in driving individual choice," said Kaushik Basu, Senior Vice President and Chief Economist of the World Bank, "This report distills new and growing scientific evidence on this broader understanding of human behavior so that it can be used to promote development. Standard economic policies are effective only after the right cognitive propensities and social norms are in place. As such, this WDR can play a major role in enhancing the power of economic policymaking, including standard fiscal and monetary policies. My only worry is that it will be read more diligently by private marketers selling wares and politicians running for office than by people designing development interventions."The report applies the three principles to multiple areas, including early childhood development, productivity, household finance, health and health care, and climate change “A key implication from recent research is that poverty is a cognitive tax, and policy towards the poor can be designed to reduce some of the damaging effects of poverty on the ability to make choices and plan for the future,” said Karla Hoff, WDR co-director.Take the case of sugar cane farmers in India, who were asked to participate in a series of cognitive tests before and after receiving their harvest income. They did much better after the harvest, when resources were less scarce, reflecting the equivalent of an increase of roughly 10 IQ points.Policy makers should try to move crucial decisions out of periods when mental resources are scarce. This may mean shifting school enrollment decisions to periods when poor farmers’ seasonal income is higher. There may also be ways of simplifying typically complex decisions such as applying to a higher education program. These ideas apply to any initiative in which good decision making is a challenge.Poverty in childhood, which is often accompanied by high stress and neglect from parents, can impair cognitive development, according to the report, so public programs that provide early childhood stimulation are critical. A 20-year study in Jamaica found that a program aimed at altering the way mothers interacted with their infants led to an increase in earnings by 25 percent once those children became adults, as compared to others who did not participate in the program.The report cites several illustrative examples of innovative approaches to development, including:Changing social norms by posting stickers on buses in Kenya that encouraged passengers to complain to reckless drivers, which ultimately halved the number of insurance claims involving injury or deathDeploying commitment devices such as a lockable metal box with a passbook households used to write the name of a preventive health product, which increased savings and resulted in an increase of up to 75 percent in investment in preventive health products in KenyaCreating social incentives by publicizing water consumption figures in Bogota, Colombia and naming individuals who were helping conserve water during a severe shortage, which led to citywide water savings.Using social networks to amplify the effects of information programs in Malawi, where a small performance incentive to encourage farmers to communicate to peers the benefits of a new agricultural technology was a cost-effective way to increase the take-up of the technology Using status awards and indicators, like the UN’s Gender Empowerment Measure or the World Bank’s own Doing Business results, to motivate policymakers and firmsCreating entertainment education, like ‘Scandal!’, a television soap opera in South Africa that carried messages on financial literacy, which led to lower rates of gambling and better financial decision making among viewers.The report stresses that focusing more closely on correctly defining and diagnosing problems can lead to better designed interventions. Since even experts’ initial assumptions about the causes of behavior can be wrong, the implementation period should test several interventions, each based on different assumptions about choice and behavior. After adoption, the interventions’ effects should inform new rounds of definition, diagnosis, design, implementation, and testing. The process of refinement should continue as interventions are scaled up.“The arguments and findings in this report provide a new rationale for public action. Governments should take action not only when markets fail, but when there is good evidence that policies can help people overcome the psychological and social obstacles to good decision making,” said Varun Gauri, WDR co-director. Show Less -