Speeches & Transcripts

Climate Change Is a Challenge For Sustainable Development

Rachel Kyte

Gaidar Forum

Moscow, Russian Federation

January 15, 2014

As Prepared for Delivery

Climate change is the most significant challenge to achieving sustainable development, and it threatens to drag millions of people into grinding poverty. 

At the same time, we have never had better know-how and solutions available to avert the crisis and create opportunities for a better life for people all over the world.

Climate change is not just a long-term issue. It is happening today, and it entails uncertainties for policy makers trying to shape the future.

EFFECTS ON RUSSIA

In 2008, the Russian National Hydrometeorological Service (Roshydromet) found that winter temperatures had increased by 2 to 3 degrees Celsius in Siberia over the previous 120-150 years, while average global temperature rose about 0.7 degrees during the same period.

Russia is projected to cross the 2°C threshold earlier than the world on average if significant and effective mitigation is not forthcoming. By 2100, the northern half of Asia, including Russia, is likely to experience a temperature increase of 6 to 16°C, compared to approximately 4°C global mean temperature increase.

While warming might have some potential gains for Russia, the adverse effects include more floods, windstorms, heat waves, forest fires, and the melting of permafrost.

Globally, permafrost is thought to hold about 1,700 gigatons of carbon – and near-shore seabeds in the Eastern Siberian Sea hold a similar amount in methane hydrates that could potentially be destabilized in a warmer world, as well. This is compared to 850 gigatons of carbon currently in the Earth’s atmosphere. Of this, 190 gigatons are stored just in the upper 30 cm of permafrost, the layers that area most vulnerable to melting and the irreversible release of methane. The release of even a small portion into the atmosphere could dramatically compound the challenge already presented from anthropogenic sources, potentially wiping out any hard-won mitigation gains.

Russia hosts perhaps 70 percent of methane in circumpolar permafrost, as well as the methane hydrates in the East Siberian Sea. Permafrost warming of up to 2°C in parts of the European Russia has already been observed.

Russia will be front and center for any efforts to deal with thawing permafrost and Russian leadership is much needed to better understand its effects for the global climate as well as finding solutions for effective adaptation. There is no time to lose.

In Yakutsk, collapsing ground caused by melting permafrost has damaged buildings, airport runways, and other infrastructure. In 2010, the Ministry of Emergency Situations estimated that a quarter of the housing stock in Russia’s Far North would be destroyed by 2030.

Analyses indicate that about 60 percent of infrastructure in the Usa Basin in Northeast European Russia is located in the "high risk" permafrost area, which is projected to thaw in the future. This region is an area of high industrial and urban development, like coal mines, hydrocarbon extraction sites, railways, and pipelines. Yet the timing of this thaw remains uncertain – potentially a few decades or as long off as a century away.

DECISION MAKING UNDER UNCERTAINTY

Policy makers all over the world are facing similar challenges. While we certainly know that the climate will change, there is great uncertainty as to what the local or regional impacts will be and what will be the impacts on societies and economies.  Coupled with this is often great disagreement among policy makers about underlying assumptions and priorities for action.

Many decisions to be made today have long-term consequences and are sensitive to climate conditions – water, energy, agriculture, fisheries and forests, and disasters risk management. We simply can’t afford to get it wrong.

However, sound decision making is possible if we use a different approach. Rather than making decisions that are optimized to a prediction of the future, decision makers should seek to identify decisions that are sound no matter what the future brings. Such decisions are called “robust.”

For example, Metropolitan Lima already has major water challenges: shortages and a rapidly growing population with 2 million underserved urban poor. Climate models suggest that precipitation could decrease by as much as 15 percent, or increase by as much as 23 percent. The World Bank is partnering with Lima to apply tested, state-of-the-art methodologies like Robust Decision Making to help Lima identify no-regret, robust investments. These include, for example, multi-year water storage systems to manage droughts and better management of demand for water. This can help increase Lima’s long-term water security, despite an increasingly unpredictable future.

WORKING WHERE IT MATTERS MOST

Each country will need to find its own ways to deal with uncertainties and find its best options for low-carbon growth and emissions reduction. While they vary, every country has them.  

One example: Russia has made remarkable progress since 2005 in reducing the flaring of gas from oil production, but it is still the world’s largest gas flarer. And it is situated in a region from where black carbon from the flares reaches the Arctic snow and ice cap, which diminishes the cap’s reflective power (albedo). The World Bank Group is appreciative of the successful cooperation with Russia's Khanty-Mansiysk region in the Global Gas Flaring Reduction partnership (GGFR). With more Russian partners, in particular from Russian state oil companies, the impact could be even greater.

Russia’s forests provide the largest land-based carbon storage in the world. Better forest management and improving forest fire response – a long-standing field of cooperation between Russia and the World Bank Group – are another example to reconcile growth and emissions reductions.

Options for countries all over the world include a mix of technology development that lowers air pollution; increasing investment in renewable energy and energy efficiency, expanding urban public transport; improving waste and water management; and better planning for when disasters strike.

Each of these climate actions can be designed to bring short-term benefits and lower current and future emissions.

To move forward on the global level at the required scale, we must drive mitigation action in top-emitting countries, get prices and incentives right, get finance flowing towards low-carbon green growth, and work where it matters most.

Prices: Putting a price on carbon and removing harmful fossil fuel subsidies are necessary steps towards directing investment to low-carbon growth and avoiding a 4°C warmer world. We are working with others to help lay the groundwork for a robust price on carbon and supporting the removal of harmful fossil fuel subsidies. An ambitious global agreement could help establish stronger carbon prices and should include commitments to accelerate fossil fuel subsidy reform and other fiscal or tax policy measures in support of low carbon and climate resilient development.

Finance flowing: Progress on the provision of climate finance is critical. Governments must deliver a clear strategy for mobilizing the promised $100 billion in climate finance. This $100 billion is doubly important in that it must be used to mobilize effectively private investment and other finance.

Climate change increases the costs of development in the poorest countries by between 25 and 30 percent.  For developing countries, the annual cost of infrastructure that is resilient to climate change is around $1.2 trillion to $1.5 trillion, resulting in a yearly $700 billion gap in financing. It will take combining efforts of development banks, financial institutions, export credit agencies, institutional investors, and public budgets to meet the climate and development challenge.

All public finance should be used to leverage private capital and fill gaps in the market where private finance is not flowing. Also, it must be deployed in a way that the least amount leverages the maximum amount from public and/or private sources. We are not dealing with how to jump start something in which the private sector is not interested, but how we create the framework within which the now small but significant momentum is captured, disseminated, and accelerated and the speed-bumps are removed and setbacks avoided.

At the World Bank Group we are committed to working where it matters most:

By 2050 two-thirds of the world’s population will be living in cities. Helping developing country cities access private financing and achieve low-carbon, climate-resilient growth and avoid locking in carbon intensive infrastructure is one of the smartest investments we can make. Every dollar invested in building creditworthiness of a developing country city will mobilize $100 dollars in private financing for low-carbon and climate-resilient infrastructure.

To feed 9 billion people nutritiously by 2050 we need to make agriculture resilient, more productive in changing landscapes, and aggressively reduce food waste. Making agriculture work for the people and the environment is one of the most pressing tasks at hand. We need climate-smart agriculture that increases yields and incomes, builds resilience, and reduces emissions while potentially capturing carbon. 

The World Bank Group supports the Sustainable Energy for All goals of doubling both the rate of improvement of energy efficiency and the share of renewable energy in the global energy mix from 18 percent to 36 percent by 2030. Reaching these goals is key to low-carbon growth.