Low-carbon Development for Least Developed Countries | Low Carbon Economy

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This paper examines the rationale for Least Developed Countries (LDCs) to pursue low-carbon growth paths, and identifies areas where such countries can contribute to mitigation whilst retaining a focus on poverty reduction. It argues low-carbon growth paths, appropriate to the needs of LDCs, ought to be explored now. Policies for low-carbon development offer an opportunity to share in the benefits of green growth, address a range of existing market and government failures in LDCs, and provide low-cost options for global emissions reductions. Synergies between poverty alleviation and emissions reduction exist in the forestry and agriculture sectors, as well as rural electrification. But elsewhere there may be trade-offs, for instance in the transport and industrial sectors. Where additional costs are involved, these should not be borne by poor people, making it vital that an international framework is in place to assist LDCs, with rich countries compensating them for measures they undertake that go beyond their immediate development interests.
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  Oxfam Discussion Papers Low Carbon Development For Least Developed Countries  Alex Bowen and Sam Fankhauser Grantham   Research   Institute   on   Climate   Change   and   the   Environment   and   Centre   for   Climate   Change   Economics   and   Policy,   London   School   of    Economics   and   Political   Science    August 2011 This paper examines the rationale for Least Developed Countries (LDCs) to pursue low-carbon growth paths, and identifies areas where such countries can contribute to mitigation whilst retaining a focus on poverty reduction. It argues low-carbon growth paths, appropriate to the needs of LDCs, ought to be explored now. Policies for low-carbon development offer an opportunity to share in the benefits of green growth, address a range of existing market and government failures in LDCs, and provide low-cost options for global emissions reductions. Synergies between poverty alleviation and emissions reduction exist in the forestry and agriculture sectors, as well as rural electrification. But elsewhere there may be trade-offs, for instance in the transport and industrial sectors. Where additional costs are involved, these should not be borne by poor people, making it vital that an international framework is in place to assist LDCs, with rich countries compensating them for measures they undertake that go beyond their immediate development interests. Oxfam Discussion Papers Oxfam Discussion Papers are written to contribute to public debate and to invite feedback on development and humanitarian policy issues. They are ’work in progress’ documents, and do not necessarily constitute final publications or reflect Oxfam policy positions. The views and recommendations expressed are those of the author and not necessarily those of Oxfam. For more information, or to comment on this paper, email Sarah Best (sbest@oxfam.org.uk) www.oxfam.org/grow  For Least Developed Countries , Oxfam Discussion paper, Month Year 2 CONTENTS EXECUTIVE SUMMARY ............................................................................................................................. 3   1. INTRODUCTION ..................................................................................................................................... 4   2. Climate change mitigation, adaptation, and development................................................................ 6   3. Low-cost options for greenhouse gas emission reductions in LDCs ............................................. 10   4. A low-carbon development path for poor countries ......................................................................... 12   5. Conclusions ............................................................................................................................................... 15   REFERENCES ............................................................................................................................................... 16   NOTES ........................................................................................................................................................... 18   ACKNOWLEDGEMENTS ......................................................................................................................... 23    For Least Developed Countries , Oxfam Discussion paper, Month Year 3 EXECUTIVE SUMMARY The global community has to act collectively to halt climate change. But such collective action must take into account the development needs of Least Developed Countries (LDCs), which are likely to be hit earliest and hardest while having the least capacity for adaptation. The priority of such countries remains poverty alleviation and the achievement of the Millennium Development Goals, but the three challenges of limiting climate change, adapting to its consequences, and reducing poverty have to be faced together. This will require LDCs eventually to follow a development path that differs from those trodden by today’s industrial countries and emerging market economies. There is no room in the long run for high-emission economies and high-carbon growth is unsustainable, given the possible consequences for fossil-fuel supplies and climate change impacts. And there are some advantages for LDCs of low-carbon growth in certain circumstances. For instance, in tackling broader market and government failures, which inhibit productivity and well-being – like inadequate incentives for appropriate technology development and deployment – or increasing energy security and addressing local health and environmental problems. By far the most important sources of greenhouse gas emissions in LDCs derive from land-use change, in particular deforestation. Since halting forest loss is also a major development and local environmental issue, tackling land-use change is therefore a key priority of low-carbon development. Synergies between poverty alleviation and emission reduction also exist with rural electrification, where renewable energy solutions are often least costly. And strengthening the capacity of the public sector to provide public goods such as energy infrastructure can help development in general, not just low-carbon development. But elsewhere there may be trade-offs between development and low-carbon objectives, for instance as much-needed investment in transport infrastructure leads to rising emissions.  Adoption of low-carbon development paths by LDCs, as appropriate to their needs, should be conditional on the global costs of decarbonisation being shared equally. So, where reduction of emissions in LDCs introduces costs, rich people – not poor people – should bear these. This makes it crucial that an international framework is in place to assist LDCs and compensate them for measures they undertake that go beyond their immediate development interests.  For Least Developed Countries , Oxfam Discussion paper, Month Year 4 1. INTRODUCTION The threat that human-induced climate change poses to the Least Developed Countries (LDCs) is profound. Greater dependence on rain-fed agriculture and forestry as sources of employment and income makes them more vulnerable to climatic changes and variability. Many LDCs are already subject to climatic stress because of their location in the Tropics and other areas subject to high incidences of weather-related shocks – such as storms, drought, flooding and extremes of temperature – and to high temperatures. In poor countries, but not middle-income or rich ones, higher temperatures are correlated with lower subsequent growth of GDP per capita. 1  Unusually high temperatures can raise mortality in rural areas sharply by reducing agricultural incomes. 2  Low incomes have made it more difficult to recover from past weather-related challenges and to prepare for future disasters. Many poor countries have been caught in a poverty trap due at least in part to weather-related disasters, with the high frequency of shocks eroding social and physical capital. 3  Climate change is likely to exacerbate these problems, entailing rising global mean temperatures and major alterations in precipitation and increases in the incidence of storms, floods and drought. 4  Recent scientific evidence suggests that many of the threats are even worse than thought three years ago. 5  The risks are amplified by the fact that the precise climatic changes that will afflict particular locations, while often likely to be considerable, are uncertain. It is therefore essential for LDCs that the world puts in place effective policies to cut back drastically greenhouse gas emissions. LDCs need a global deal. And a global deal will have to involve all countries with substantial emissions, including some like India and China where large numbers of people still live in poverty. But why should a global deal mean that smaller and less-developed countries, especially those already having difficulty sustaining per capita income growth, adopt low-carbon development strategies? The contribution of LDCs to the greenhouse gas problem is, after all, very small. LDCs accounted for just over 4% of global greenhouse gas emissions in 2005 and only 0.3% of cumulative carbon dioxide emissions from energy. 6  While global emissions were 6.8 tonnes of CO 2  equivalent per head in 2005, the average for LDCs was only 2.4 tonnes per head; countries such as Ethiopia, Haiti and Afghanistan had average emissions of 1 tonne per head or less. 7  Despite these contrasts between the world as a whole on the one hand and the LDCs on the other, we argue here that LDCs should indeed seek to follow low-carbon development paths appropriate to their development needs – if certain conditions are satisfied. Why? First, tackling many of the market and government failures that stand in the way of low-carbon development would enhance productivity and well-being in LDCs themselves. Second, if a global deal is eventually achieved, technological progress around the world will be redirected towards low-carbon options. If LDCs are ultimately to share in growth from this source, their growth will have to be ‘green’ too. Third, LDCs offer the world some relatively cheap options for reducing emissions, particularly from agriculture, land-use change and deforestation. The rest of the world has good reason, on efficiency grounds, to encourage LDCs to exploit these options to minimise the global costs of decarbonisation. However, there should be a quid pro quo for carrying out reductions in global greenhouse emissions where it is cheapest to do so, so that the global costs of decarbonisation are shared equitably. 8  Hence one condition that should be satisfied is that, where reducing greenhouse gas emissions in LDCs entails costs, poor people should not bear these costs. Rich people should pay towards LDC mitigation burdens, on top of any assistance to help LDCs deal with the impacts of climate change. It must also be possible to switch towards low-carbon growth cheaply in the first place. That depends on whether it is in practice possible to put in place the right incentives to correct market and government failures and hence achieve the ‘win-win’ outcomes that in principle could be attained. This paper considers these issues in greater detail. First, the advantages for LDCs of low-carbon growth in certain circumstances are discussed, together with the reasons why early action is desirable. The case sometimes advanced for LDCs to focus overwhelmingly on adaptation to climate change, including through
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