Climate Change and Poverty Reduction Links – the why and how of integrated

planning

Usman Iftikhar Policy Advisor

Poverty Group, BDPUNDP New York

Outline of the presentation

• Why the need to understand the nexus between climate change and poverty in its multi-dimensions?

• About the UNDP Climate-Poverty Toolkit• What are the climate-poverty links, and how are they

expected to manifest through different transmission mechanisms?

• How can they be measured?• What can be done in response? (details in 2nd

presentation)• Specific example of climate, agriculture, food

security and poverty links and approaches to assess.

Poverty and the Environment – the first two way relationship

Poverty is multidimensionalMDGs part of the story (income, food , education, health

and environment)

1987 – Brundtland Commission ReportPoverty both cause and effect of environment problemsDegradation of local commons by the poor further

entrenched poverty

Taken further by Millennium Ecosystem Assessment linking ecosystem services and well-being (2005)

Ecosystems Services-Well Being Nexus

Ecosystems jointly owned asset generating

LivelihoodsFood SecurityEnergy AccessHealthGender Reduced vulnerability

VulnerabilitiesIncentives weak

Ecosystems matter more for poor (Zimbabwe)

Degrading ecosystems undermine key asset

Climate change: cause….

• Green house gases (GHG)

– Carbon dioxide• Fossil fuel use• Land use changes

– Methane and nitrous oxide

• Agriculture

Source: IPCC

….and effect

• Trap radiations

• Warming– Air and ocean

temperatures up– Snow and ice melting– Average sea level rise

• Accelerate ecosystem degradation

Source: IPCC

Three generalized impacts

• Long term changes in averages– Temperature– Precipitation– Sea levels

• Changes in variability– More weather variation from year to year

• Droughts and floods– More frequent, and worse extreme weather events

• Hurricanes

Complicating Matters – Poverty, Climate, Ecosystems Nexus

• Climate system and ecosystems linked – e.g. as forests decline, climate worsens and as climate worsens, forests change

• Climatic shocks hasten decline in ecosystem services

• Global commons alters incentives for mitigation

Climate change shifts the PEN – the second two-way relationship

• sustained economic growth is necessary but not sufficient;• economic growth in sectors that provide employment,

production and entrepreneurship opportunities to the poor. – These include sectors where the poor are more likely to find their livelihoods

such as agriculture, fishing, forestry and other natural resources; and others where unskilled labor is important.

• redistribution of the benefits of growth through public spending in the provision of equitable, quality services (in health, energy, education, water and sanitation and others) for the poor

– that helps improve their – and their children’s –skills and productivity. – In turn, the poor boost growth when they are equipped with assets and

resources to actively take part in the development process;

Evidence and lessons learned on poverty and inequality reduction intra/inter generationally

Evidence and lessons learned on poverty and inequality reduction intra/inter generationally

• pro-active focus on women, the excluded, and hard to reach population groups who may need special help to gain access to employment and quality services.

– These may have important multiplier effects, positively affecting several dimensions of well-being – for example, educated mothers tend to have better nourished and educated children;

• empowering the poor and marginalized – including women – to play an effective role in the decisions that determine their long term well-being;

• providing protection against negative shocks – including those arising from global crises such as those due to high food prices – so as to avoid slowdowns or reversals in poverty reduction.

Implications for LeCRD and Green Economy for Poverty Reduction

• maintains growth and reduces emissions for the economy, while promoting the creation of jobs and other economic opportunities in sectors that predominantly employ the poor;

• generates adequate amounts of public revenues to allow investment in quality services with equitable access by the poor;

• retains biodiversity and ecosystem services, while seeking to maintain in sustainable supply of food as well as livelihoods of the poor who are dependent on them;

• enhances energy and resource efficiency in the economy, including through the equitable access to energy by the poor and the promotion of its efficient use;

• ensures resilience to environmental (and other) risks through developing adaptive capacities.

Supporting countries to shift to Pro-Poor LeCRD/green economy

Provide capacity and policy support to partner countries on nationally-led pro-poor LeCRD/green economy actions:

•Institutional arrangements and reform; coordination structures and alignment for national policy coherence•Integrated assessments to link and assess the impacts of climate risks and ecological scarcities on growth and multi-dimensional poverty•Prioritizing pro-poor green economy policy response and innovative options•Costing and budgeting of policy responses and identifying and accessing a variety of climate and environmental financing mechanisms•Identifying and addressing implementation bottlenecks

Climate-Poverty Toolkit (coming soon)Integrated Assessments

• Allow Ministries of Planning, Finance, and other sectoral ministries to effectively integrate prospective climate and risks into their development planning frameworks by:

– Synthesizing and condensing existing knowledge on how prospective climate change vulnerabilities and risks, operating through transmission mechanisms, link to the multiple dimensions of poverty.

– Producing an objective review of assessment methodologies (from the climate vulnerability assessments and economic and social impact assessments) to inform country level understanding of:

Climate-Poverty Toolkit

• The types of assessment methodologies available for informing climate and development decisions, and the likely outputs that such assessments produce

• The combination (s) of methodologies which, when applied, can help to bridge the gap between the findings of climate risks/vulnerabilities assessments and growth/multi-dimensional poverty impacts assessments, by working through specific transmission mechanisms.

• Knowledge and information gaps that would need to be addressed, even after existing methodologies are applied

• Go beyond GDP – Models often model poverty impacts through GDP – not always a good guide for policy.

• Be credible but practical in its application.

Global Climate Change

Extreme events & variability: Floods, Droughts, Coastal

storms, etc.

Slow onset, continuous hazards:

e.g. changes in temperature and

precipitation

Impacts on Sectors: Food Security, Health, Ecosystems, Gender, &

Labor Productivity

Direct Impact: Assets, Property Destroyed, Lives

Lost, etc.

Growth Impacts

Impact on Multi-dimensions of Poverty

Short-Term Effects (Shocks) Long-Term Effects (Stresses)

Variability in temperature, rainfall, and disasters

Average changes in temperature, rainfall, and sea-levels

The Climate-Poverty-Development Nexus

Dual Impact on Growth:•Income Growth through decreased employment, productivity, and capital investment•Proceeds from Growth: decreases in social spending (e.g., education, health, water, sanitation, energy, etc.)

Shocks and changes to ecosystems and other sectors affect levels of capital accumulation

and expectations of future investment

March 2012

The Climate-Poverty-Development Nexus

Global Climate Change

Extreme events & variability: Floods, Droughts, Coastal

storms, etc.

Slow onset, continuous hazards:

e.g. changes in temperature and

precipitation

Impacts on Sectors: Food Security, Health, Ecosystems, Gender, &

Labor Productivity

Direct Impact: Assets, Property

Destroyed, Lives Lost, etc.

Growth Impacts

Impact on Multi-dimensions of Poverty

Short-Term Effects (Shocks)

Long-Term Effects (Stresses)

Variability in temperature, rainfall, and disasters

Average changes in temperature, rainfall, and sea-levels

Dual Impact on Growth:Income Growth through decreased employment, productivity, and capital investmentProceeds from Growth: decreases in social safety (e.g., education, health, water, sanitation, energy, etc.)

Shocks and changes to ecosystems and other sectors

affect levels of capital accumulation and

expectations of future investment

Climate science processors: What’s happening to your climate?Resources to help policy makers understand changes in climate and climate stressors specific to their country or region.

Climate impacts screening tools: What are the expected effects?Broad indices that assess vulnerability and impacts.

Sectoral tools for impacts and adaptations: How can you adapt?Address specific sectors in the context of climate change.

Poverty measurement and assessment tools: How do we apply a poverty lens to these effects?Mechanisms to measure levels of and reductions in poverty.

Tools & Methodologies

Focus: Food SecurityInputs, Outputs, and Implementation

Tools & Methodologies

Example:Agricultural Sector

Inputs: Living standards surveys, Census data, surveys on eating habits or nutritional contents of food, health indicatorsOutputs: Survey of the distributional impacts of climate change adaptations on poverty; Net benefits to impoverished areas and groups, Implementation: Poverty and Social Impact Analyses; Combined PRSI and NAPA approach; Measurements of the impacts and improvements of adaptation to the poor

1. Climate Science Processors: What will happen to the climate?

2. Climate impacts screening tools: What are the expected effects?

3. Sectoral tools for impacts and adaptations: How can you adapt?

4. Poverty measurement and assessment tools: How do we apply a poverty lens to these effects?

Inputs: Historical temperature and precipitation data, IPCC GCM scenariosOutputs: Projections temperature and precipitationImplementation: Combine historical data and projected changes to generate projections under various scenarios

Inputs: Projections of temperature and precipitation, geographic dataOutputs: Understanding of geographical zones (where to focus efforts) and production (types of crops and livestock, irrigated versus rain-fed)Implementation: FAOstat, World Bank Portal, World Bank Development Indicators

Inputs: Types of crops and livestock, elevation, temperature, rainfall, soil type, market prices of cropsOutputs: Costs and changes in yields across climate scenarios for each adaptation, irrigation demand, net economic benefits Implementation: Aquacrop, CropWat, CLIRUN, WEAP, stakeholder meetings, economic analyses

Determining Changes in Climate with Respect to Agricultural Productivity

Evaluating the Impacts and Most Effective Agricultural Adaptation to Climate Change

Analyzing Expected Effects of Climate Change on Agriculture

Applying a Poverty Lens on impacts and Agricultural Adaptations

Policy implications – for pro-poor LeCRD/GE

• Transitioning to LeCRD/Green Economy– Understanding how poor can be effected in transition and

identify interventions (jobs can be lost, re-skilling needed for new industries)

• Use social protection to make transition possible

• Making LeCRD/Green Economy pro-poor– Reconciling pro-poor growth with green growth

• Policy instruments to enable private sector to innovate and adopt technologies

• Redistribute growth benefits to build assets• Invest in sectors that matter to the poor for livelihoods – agriculture,

forests, fisheries to increase productivity in a changing climate

Policy implications – for pro-poor LeCRD/GE

• Making the LeCRD/Green Economy pro-poor– Building resilience to climatic shocks

• Social protection policies and programmes linked to climate change impacts/natural disasters

• Through accelerating poverty reduction and building assets (wealth and human capital) to build (auto) adaptive capacity

• Pro-poor adaptation - which generates jobs such as through building protective infrastructure

• Diversifying livelihoods including away from climate-sensitive ones• Identifying additional elements to climate-proof specific MDGs as part of

the efforts to accelerate and sustain MDG gains • New instruments for risk sharing• Linking Climate finance to the achievement of poverty reduction and the

MDGs

Toolkit is due to be completed in July 2012, and we are looking forward to piloting the

application in a few countries before finalizing ….

Thank you!