strategies for climate resilience and sustainable growth

Strategies for Climate Resilience and Sustainable Growth

Table of Contents

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Foreword: Wolf-Dieter Zumpfort

I. Tackling Climate Change with Market-Based Instruments:Can Emerging Economies and Industrialized Countries Jointly Achieve a Breakthrough?

Gabriel Quadri de la Torre: Tackling Climate Change with Market-Based Instruments

Market Mechanisms in Emerging Economies and Developing CountriesKátja Abreu: Stopping Deforestation: The Agriculture and Livestock Confederation in Brazil Thomas Koenen: The Challenge of Climate and ChangeWalter Hirche: Common Understanding in Times of Climate ChangeChito Gascon: Action Plans to Prepare for Natural Disasters

Political Economy and InnovationValerie Bockstette: On the Concept of Shared Value Barun Mitra: Competition is Innovation – Putting India’s Economy into PerspectiveGunnar Still: Innovative Products for Environmental Goals

II. Adapting for Tomorrow Opportunities and Risks of Climate-Resilient Growth

Sir Graham Watson: Adapting for TomorrowPaula Baker: Climate Change Being Close to our Citizens

Lessons Learned? Past Experience of AdaptationJulian Morris: Win-Win or Lose-Lose: Which Policy to Address Climate Change?Gullög Nordquist: Proof from History – How Do Humans Adapt to Changes in Environment?

Sectoral Case StudiesPier Vellinga: Making Climate-ProofOliver Blank: Smart Cities – How to Become a Smart City?Frank Raes: Climate Action as DevelopmentKonar Mutafoğlu: Perspectives of a Bilateral Financing Institution

Global Capacities and ConstraintsRob Swart: Europe is Vulnerable, TooArianto A. Patunru: Cooperation on Adaptation and Mitigation – Southeast AsiaCarlos Muñoz Piña: Smart Regulation in Mexico

Finance for AdaptationPaul Renier: Finance for Adaptation StrategiesAxel Michaelowa: A Market Mechanism for Adaptation to Climate Change

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The Public and Private Sector as Drivers of AdaptationSandeep Chamling Rai: The Public Sector’s Stake in Reducing VulnerabilityNana Künkel: Adaptation to Climate Change – A Case for Business?Humberto Delgado Rosa: Opportunities and Risks of Climate-Resilient Growth

III. Resource Management: Transatlantic Experiences – New Ideas and Innovative Solutions for Developing Countries?

Sustainable DevelopmentJulian Morris: Property Rights and Sustainable DevelopmentLyuba Zarsky: Can Extractive Industries Promote Sustainable Development?Maximilian Auffhammer: The Carbon Tax – Solution or Scenario?

The American Debate on Energy Management Robert Holste: Clean Energy Accounts for National SecurityCarlton Carroll: Can Yesterday’s Energy Be Tomorrow’s Relief?Corey Johnson and Tim Boersma: The Genie is Out of the Bottle: Shale Gas in the Security Debate

Water ManagementRachel M. Dawson: A Question of WaterThomas W. Beauduy: Guarding the Susquehanna River BasinJoe Navari: Between Waterfowls and Water Rights – Managing WetlandsJerry G. Schulte: Biodiversity Instead of Pollution: The Ohio River Valley Water Sanitation Commission

Waste ManagementAnne Steinhauer: Napa Valley Vinters as an Example of Local Sustainability PracticesScott Hutchings: Conversion Technologies and a Changing Industry: Innovation, Sustainability and the Future of WasteJoe McDermott: Pioneering Resource Efficiency: From Recycling to BiosolidsHeidi Sanborn: Extended Producer Responsibility – Another Polluter Pays Principle?

Land Use ManagementSherry Greenberg: California Land Use – The Peace Dividend and Base ClosuresJohn A. Russo: Redeveloping the Alameda Naval Station

The Green Tea Party MovementTerry L. Anderson: Serving Budget Cuts and Environmental Quality

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Foreword

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In early 2012, the board of the Friedrich Naumann Founda-tion approved a new strategy for our work abroad. Addres-sing an urgent global issue for the first time, it states: “Climate change is a global challenge with enormous eco-nomic and social consequences. For liberals especially, itimplies a regulatory challenge: How are market-based incentives used to promote ecologically sensible behavioureffectively? How should the principle of liability be desig-ned in relation to ecology? Which regulatory framework is required to achieve sensible adjustments to climatechange?”

At the occasion of three consecutive kick-off conferencesin Berlin, Brussels, and San Francisco, experts from diffe-rent backgrounds provided their insights, views and know-ledge in response to these questions.

At the conference in Berlin, which was co-hosted by theGerman Federation of Industry (BDI), we focussed on jointaction between industrialised countries and emerging economies. We believe that it is essential to find commonground to mitigate carbon emissions and adapt to achanging environment. Innovation and technology in theprivate sector must be key elements of any roadmap thateventually leads to low-carbon markets. Our goal is cou-pled with encouraging efficient behaviour towards bothecology and energy usage.

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In 2050, we expect a world population of about nine bil-lion. The largest part will be most likely living in emergingeconomies. Understanding the emerging economies’ inte-rests in achieving higher living standards, benefits ofgrowth and social mobility, we seek to make progress insustainable development by shifting towards renewableenergy sources and built climate-resilient facilities.

At the conference in Brussels, which was hosted by the Alliance of Liberals and Democrats for Europe (ALDE group)in the Committee of the Regions, the increasing role ofadaptation policies was widely discussed, particularly thoseof infrastructure design, archaeology, water scarcity andwater management. Other practical examples were geoen-gineering in coastal areas, floating houses and exports offloating greenhouses. The idea was to inform thoroughlyabout existing and future research and findings. Withinthis domain, we challenged the quest for adequate finan-cial mechanisms targeted at climate resilience in regionswhich are highly sensitive to weather variability.

In San Francisco, we dealt with the implications of waterand waste management, energy security and land useplanning. As mankind has already severely affected theplanet’s ecosystem, such as environmental degradation andresource exploitation, we tried to identify most efficientalternative solutions of (natural) resources management.

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Foreword

At our workshop, North American examples and bestpractices from environmental and economic perspectiveswere presented with the intention of learning from theirmethods and of designing them further.

Now, this publication is intended to highlight the key mes-sages and present the most enlightening ideas that weregiven by our speakers. In Berlin, we clearly had politicaland economic discussions on the choice of market-basedinstruments for emerging economies. In Brussels, we sha-red scientific knowledge on adaptation and took advice ofexperts on the regional and global level. In San Francisco,we talked in round table format about approaches of resources management, the case of shale gas and on howto make progress for a sustainable world in future.

We thank the German Federal Ministry for Economic Co-operation and Development (BMZ) for providing new fun-ding for international dialogue on coordinated action andcooperation, aiming at mitigating carbon emissions andadapting to climate change. The conferences held havegiven useful input for numerous follow-up measures un-dertaken by the foundation and its partner organisations in emerging economies and developing countries. The Councilof Asian Liberals and Democrats (CALD) and the LiberalNetwork for Latin America (RELIAL) are also involved in thistopic. CALD has published a joint statement and RELIAL

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recently organised a seminar on “Liberal Proposals by LatinAmerica for Low-Carbon Growth and Tackling ClimateChange.”

This booklet is more a documentary mirroring different approaches and various angles than a coherent textbook.In addition, we have launched media live streams for theBerlin and Brussels conferences. Recordings, longer versions of our speakers’ papers and a documentary filmare available at www.climate.fnst.org.

I wish you all inspired reading!

Potsdam, April 2012

Dr Wolf-Dieter Zumpfort

Vice-Chairman of the Board of Directors, Friedrich-Naumann-Stiftung für die Freiheit

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Dr Gabriel Quadri de la TorreDirector, Sistemas Integrales de Gestión Ambiental (SIGEA), Mexico City, Mexicohttp://pagina.sigea.com.mx

Tackling Climate Change with Market-Based Instruments

Climate change mitigation policies in emerging economies should bepart of a comprehensive vision of long term sustainable development,featuring as key elements: competitiveness, dynamic economic growth,energy efficiency and energy security, balanced fiscal policies, biodiver-sity conservation, protection of property rights and the rule of law.

The most important drivers of emissions growth in México are gasolinesubsidies, electricity and agriculture subsidies. Similar to this are ineffi-ciencies within the national oil monopoly, housing policies (subsidies,and subsidized mortgages that promote urban sprawl) and potentiallybio-fuels. Economic growth can either take a high or a low emissionspath depending on the relative prices for energy. In turn, this depends toa large extent on the amount of subsidy and nature of tax policies. In anumber of emerging economies deforestation is a major contributor toemissions and is mainly driven by agriculture subsidies, uncertainty ofland property rights, weakness of the rule of law and absence of correct

I. Tackling Climate Change with Market-Based Instruments:Can Emerging Economies and Industrialized Countries Jointly Achieve a Breakthrough? International Conference, Berlin, 23 February, 2012


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incentives to landowners for the production of environmental and car-bon public goods. Correct and efficient climate change policies and/orpolicy instruments are well known. No doubt there are some specialcases in which virtuous formulas may be found but broadly speaking thetoolbox is quite restricted to:

• Removal of gasoline, diesel and electricity subsidies.

• Structural reform in energy sectors promoting private investment and competition (in México, there are state monopolies in oil and gas, and electricity).

• Green fiscal reform (carbon tax – less income taxes).

• Agriculture subsidies removal or their re-design as payments for environmental services and carbon related public goods.

• Contracts for payment for environmental services to land owners (conservation and carbon sequestration).

• Feed-in tariffs, renewable portfolio standards or renewable energy certificates for utilities.

• Urban development and housing policies promoting high density and compact cities.

• New and extensive protected areas in tropical regions.

• Local government-federal policies towards methane capture in land- fills and public transport, congestion and parking charges, etcetera.

• Various policies regarding methane capture in livestock industry, WWTP, and industrial gases.

• Cap and trade across selected industrial sectors.

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1 Source: ICTSD Global Platform

Market Mechanisms in Emerging Economies and Developing Countries

Senator Kátja AbreuChairwoman, The Agriculture and Livestock Confederation of Brazil (CNA)http://www.ictsdclimate.org

Stopping Deforestation: The Agriculture and Livestock Confederation of Brazil

The Agriculture and Livestock Confederation of Brazil (CAN) is the lea-ding organization in the agricultural sector covering agriculture, live-stock, fishing, forests and rural extractive processes. With headquartersin Brasília, CAN is the main decision-making forum for Brazil’s ruralproducers acting in defence of framers’ rights, livestock producers andtheir socioeconomic interests. It represents and exerts influence on pu-blic authorities to raise support for actively developing the agricultureand livestock sector.1

Brazilian food production is a major source of income in the country.The agriculture and livestock industry accounts for 20 per cent of theGDP and 37 per cent of employment. We have taken a green develop-ment during the last 40 years. In total, only 27 per cent of the nationalterritory is being used for agricultural production although 61 per centof our country consists of rain forests.

In 2009 Brazil voluntarily agreed at the climate conference in Copenha-gen to reduce emissions by 36 per cent to 38 per cent by 2022, whichwas also approved by congress. By this step forward, Brazil serves asrole model for Latin America. It also replaced conservative-style farmingof newer techniques by shifting to high-tech in farming. Furthermore,60 per cent in agriculture already uses the technique of direct plantingon straw because ploughing the soil has always implied carbon emissi-ons. Likewise, dry and nutrition poor land is re-natured, biomass is in-jected into soil and more animals can be raised per hectare.

Our objective is to downsize and eventually stop deforestation, whichwill dramatically reduce carbon emissions. About 61 per cent of forestsare protected and demonstrate a high share of protected areas in Brazil.


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Dr Thomas Koenen Managing Director Department of Climate and Sustainable DevelopmentBDI, Federation of German Industries, Berlin, Germanyhttp://www.bdi.eu

The Challenge of Climate and Change

Which are the key factors that differentiate the climate challenge fromother major issues of international concern such as the provision of food,water and energy in a growing world population, security issues etc.?

Two unique features mark climate change. First, climate change is by farmore complex than any other challenge mankind has ever faced andscience is far from fully understanding its interrelated factors. Second,climate change as such constitutes a clear threat to mankind.

Climate change cannot be a topic only being mastered by politiciansand tackled by governments. Climate policy will ideally be understood aspart of broader economic policies. The complex questions and challen-ges that come with such an understanding of economic policies canonly be tackled successfully if the innovative strength of businesses istaken on board. The Federation of German Industries` (BDI) mission is tostrengthen Germany as a country with broad and sophisticated indus-tries that help facing the challenges of tomorrow.

Walter HircheMember, The German Council for Sustainable Development / former Parliamentary State Secretary at the Federal Ministry for the Environ-ment, Nature Conservation and Nuclear Safety, Berlin, Germanyhttp://www.nachhaltigkeitsrat.de

Common Understanding in Times of Climate Change

The German Council’s mandate for Sustainable Development states thatthe “aim of having a policy of sustainable development is to establish avaluable platform for the purposes of conserving the environment andof promoting quality of life, social coherence within society as well asan integrated form of economic development both in Germany and on


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2 Maplecroft ( a risk assesment firm) 3 http://maplecroft.com/about/news/ccvi.html

an international scale. The objective behind doing so is to find a fair andeven balance between the needs of the present-day generation and theperspectives of life of generations to come.”

Substantial progress has actually been achieved in the last 15 years.Today it is more intensely talked about concrete policies that have to becreated transparently at the national and international level. The two-degree target is an example for a top-down approach but the instrumentsto achieve this goal must be variable and of a market-economy nature.

In the context of emerging economies some common understanding isstrongly needed to balance criticism that arose when financial supportfor climate policies was granted because at the same time funds forglobal environment facilities and the Official Development Assistance(ODA) were capped.

Chito GasconUndersecretary for Political Affairs, Office of the Political Advisor at Office of the President of the Philippineshttp://www.pcoo.gov.ph

Action Plans to Prepare for Natural Disasters

The government of the Liberal Party of the Philippines places great em-phasis on the issue of climate change, particularly in pursuing adapta-tion and mitigation measures to respond to the impact of climatechange. Given the archipelago’s geographical location in the basin ofthe Pacific and its densely populated coastal areas at the edge of theso-called ‘Ring of Fire’, the Philippines are highly prone to earthquakes,typhoons and volcanic eruptions.

In fact, a recently released climate change vulnerability index2 whichtook into account 42 social, economic and environmental factors, suchas exposure to climate related natural disasters, availability of naturalresources, sea-level rise, adapting capacity, population patterns, level ofdevelopment, ranked the Philippines 6th out of 170 countries.3

4 Republic Act 9729, enacted by the Philippine Congress on23 October 2009 5 Philippine National Framework Strategy on Climate Change adopted on April 2010

Actions taken to combat the threats resulting of climate change willcomprise incentives, which aim at creating partnerships both at the in-ternational and national level. In 2009, the Philippine’s congress passedthe Climate Change Act4 to establish a constitutional mandate and toformulate plans for preparing to natural disasters and attract foreign fi-nance projects. Within this plan, public financing prioritizes adaptationmeasures to reduce vulnerability and risks to local communities, parti-cularly targeting at the protection for the poor. At the same time, thisstrategy provides a policy environment to encourage the private sectorto participate and optimize mitigation opportunities for sustainable de-velopment.

An action plan5 has been set up to focus on seven priority areas for thenext ten years. These priority areas include the promotion of climate-friendly industries and services, stabilization of the sustainable energysector, capacity building and enhanced policies of the government thatare outlined as:

• Creation of green jobs and promoting sustainable consumption and production

• Energy efficiency policies as well as both conservation and rehabilitation of the current energy infrastructure

• Developing renewable energy sources

• Enhancing public transportation

• Better research and development

• Capacity building on the local level

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Political Economy and Innovation

Valerie BockstetteDirector, FSG – Social Impact Consultants, Geneva, Switzerlandhttp://www.fsg.org

On the Concept of Shared Value

The concept of shared value will become a pivotal approach for the nextwave of economic growth. According to the business managementscholars Michael E. Porter and Mark R. Kramer6, societal needs, not justconventional economic ones, define markets. In recent years businesshas increasingly been viewed as a major cause of social, environmental,and economic problems (…). This diminished trust in business leads poli-tical leaders to set policies that undermine competitiveness and sapeconomic growth (…). The concept of Shared Value (…) emphasizes theconnections between business success and societal progress when com-panies act on three levels:

• Developing new products and markets E.g. IBM no longer produces laptops but helps cities to better manage their data so that cities can use their resources more efficiently.

• New understanding of resource productivity E.g. Alcoa uses aluminium as key raw material. Alcoa recognized that recycling rates in the US were not very high. Every year millions of aluminium cans are being thrown away but to Alcoa these represent a resource that is reason enough to fix the recycling problem.

• Building up local clusters E.g. Audi wants to manufacture a green energy car but was hampered by a storage problem: excess wind or solar energy could not be sto- red, and thus not fed into production processes. If Audi, which is a car-maker, not an energy company, manages to find a solution for the storage problem, not just their problem will be solved, but society and the environment gain as well.

6 “Creating Shard Value”, Harvard Business Review, January/February 2011, http://hbr.org/2011/01/the-big-idea-creating-shared-value

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Barun MitraManaging Trustee, Liberty Institute, New Delhi, Indiahttp://indefenceofliberty.orghttp://www.challengingclimate.org

Competition is Innovation – Putting India’s Economy into Perspective

Innovation is an illustration of personal freedom to ask questions, to explore possible alternatives, to fail repeatedly and once in a while tocome up with something that is dazzling and spectacular. Innovation isalso an illustration of political freedom that many of us aspire anddream of; it is not merely a problem-solving tool.

With regard to economic policies, competition is more important thaninnovation because it unleashes energy and uncertainty, which forcesevery economic actor to decide on methods of innovation, such as theIndian automobile market.

The Indian car market developed a policy that virtually restricts any newinnovation deriving from countries like Germany. It imposes an importduty of 100 per cent to enable the support of manufacturing at home.

The Indian automobile market is still very small, which means that itmakes no economic sense to locally manufacture latest models, whichwill initially sell only a relatively few units. Every new model that is seenon the roads of Germany may take years to get to India. Indeed most newmodels with latest technological advances will never get to India. This isa man-made problem and is partly sustained by some of the ideas fromthe West that preaches the virtues of lower conservation to the masses,while protecting the special privileges of the rich and powerful.

India does not need a United Nations Framework Convention on ClimateChange (UNFCCC) to identify its problems. Rather than debating whet-her global warming is being caused by human action, the question toask would be whether it is possible to create an environment in whichevery country, community or people would be able to access the bestthat is available at the time, adopt it, improve upon it and move on be-cause. In the end productivity and efficiency are able to protect the en-vironment.

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7 www.thyssen-krupp-steel-europe.com

Professor Gunnar StillThyssenKrupp Steel Europe, Duisburg, Germanyhttp://www.thyssenkrupp-steel-europe.com/de

Innovative Products for Environmental Goals

ThyssenKrupp Steel Europe is prepared to take precautionary measuresto protect the environment and face the upcoming challenge of climatechange: “On the one hand, production facilities and processes are beingoptimized to reduce greenhouse gas emissions to an unavoidable mini-mum. On the other hand the development of steel continues to ensurethat its applications make an ever-increasing contribution to protectingthe environment. For example, lighter steel auto bodies save more CO2over the course of their useful life span than is generated in the pro-duction of the steel used. Modern electrical steel grades for transfor-mers ensure 99 per cent efficiency in the conversion of energy. Nume-rous steel applications in the renewable energy sector such as wind andwater power or in photovoltaic systems demonstrate that steel materialsolutions are indispensable for effective climate protection.” 7

In future more solid, thinner and endurable steel will be needed, as steelhas lots of applications in concurrency to other materials and only byless weight, higher resistance and lower material price it could becomethe best choice. Although there is clearly prevailing need for innovativeproducts in order to meet environmental goals, innovation in the steelsector is very costly. A trade-off exists with regard to expensive climatepolicies, which force companies to slow down innovation. Instead eco-nomic policies should stimulate innovation and R&D because innovationis highly linked to creativity. Cross-links unexpectedly allow us to go to-wards those goals to which we truly aspire.

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The pioneering role of Germany’s environmental agenda is not wrongbut the question arises to what extent Germany seeks to move ahead incomparison to other countries’ progress records. With regard to climatechange, Germany currently drives along a lonely road. Although theKyoto Protocol is now being prolonged, only the European Union, Nor-way, Switzerland, and maybe New Zealand and Australia are willing tosign the next round, while the rest of world decided to opt out. At thisstage it is important to generally reconsider whether it has a positiveimpact to send more money to the global level or whether it makesmore sense now to invest in further innovation at the national level.

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Sir Graham WatsonMember of European Parliament, President of ELDR and Chairman of the Climate Parliament, Brussels, Belgiumhttp://www.eldr.eu

Adapting for Tomorrow

The likely impacts of unabated climate change are now well documen-ted – higher global temperatures, dwindling water resources, rising sealevels, more precarious food security, an unprecedented spread in tropi-cal diseases and an increased frequency of extreme weather events. Insum, it will mean a hotter, drier, hungrier, sicker and more disaster-prone world.

As the Chairman of a global network of MPs and MEPs from all main-stream political parties campaigning to increase government investmentin renewable energy and electricity supergrids called the Climate Parlia-ment, colleagues and I are working hard to try and make climate resi-lient growth a reality. In addition to this, in my role as President of theELDR party, ELDR has decided to make the energy transition our maincampaign theme for 2012.

In 2008 the European Climate Foundation brought together a group ofexperts and opinion-makers to study how the EU's targets of an 80 percent cut in CO2 emissions by 2050 can be made a reality. The Roadmap2050 study looked in particular at how to decarbonise the power supply

II. Adapting for TomorrowOpportunities and Risks of Climate-Resilient GrowthInternational Conference, Brussels, 28 February, 2012

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Adapting For Tomorrow

and studied various scenarios combining renewables (40 per cent, 60 percent and 80 per cent) with Carbon Capture & Storage and nuclear, as wellas a 100 per cent renewables scenario. Power generation accounts for aquarter of greenhouse gas emissions, so is an important place to start.

People often assume that high-renewable energy scenarios are too va-riable to provide sufficient reliability, too expensive and require a break-through in the technology. The Roadmap 2050 study busted all thesemyths.

Renewables do suffer from intermittency – they stop and start. But wecan overcome intermittency if we join up many different sources of re-newable energy over a large area. In Europe for example, we can con-nect the wind power generated in Northern Europe to solar power fromthe sunny Mediterranean, and biomass from Eastern Europe to hydro inNorway and the Alps. When the wind stops blowing in Scotland, chan-ces are the sun is shining in Seville. When the skies cloud over inGreece, the biomass incinerators in Poland can be fired up, or the flood-gates can be opened on the dams in Austria.

Adaptation to climate change is also about finding ways to live withless water, higher temperatures, higher sea levels and changed weatherpatterns. Adaptation is about reducing the adverse effects of climatechange and reducing our vulnerability to those effects. Examples ofadaptation that we must implement include planting different kinds ofcrop, bolstering flood defences, diversifying the economy and makinginsurance schemes work better.

It is without a doubt the developing world and small island states thatwill be hit the hardest and the soonest. In the developing world, it willbe the eldest, the youngest and the women who again will bear morethan their fair share of the burdens. It is important to remember the glo-bal injustice of climate impacts when thinking about climate adaptation.As to the EU's role in climate change adaptation, due to the local natureof adaptation most initiatives need to be taken at local, regional and ina few cases national level. After all, much adaptation provides local (andnot national or global) benefits. But the EU should be helping to financeadaptation efforts in the developing world. Fortunately, CommissionerAndris Piebalgs understands this. In 2011 the EU mobilised 2.34 billionEuros in fast start finance for developing countries.

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There is a risk however that people will think adaptation is the answerto our climate-related woes. I am not of the opinion that adaptation inits strictest sense is an alternative to mitigation, as some people seemto claim. Adaptation does not replace mitigation of greenhouse gasemissions. The safest and most predictable method of moderating cli-mate change remains early action to reduce CO2 emissions. Both adap-tation and mitigation need to be pursued in parallel, complementingeach other. We need to find a balance between climate mitigation andadaptation, and we need to find that balance in a time of economic cri-sis, with scarce financial resources.

Adaptation is sadly unavoidable – our climate is changing and will con-tinue to change. The IPCC estimates that, even if we manage to containthe level of greenhouse gas emissions, past emissions have already madean average rise in temperatures of 0.6°C in coming decades inevitable.So adaptation is a must. In the most vulnerable countries such as Ethio-pia, Bangladesh or the Maldives, it is a choice between adapt or die. Thelonger we wait the more adaptation will cost – so we must act now.

Paula BakerMember of Basingstoke and Deane Council, United Kingdom, Deputy Coordinator, Commission for the Environment, Climate Changeand Energy, Committee of the Regions, Brussels, Belgiumhttp://www.basingstoke.gov.ukhttp://cor.europa.eu

Climate Change Being Close to our Citizens

The Committee of the Regions is the EU's assembly of regional and localrepresentatives. We are all elected representatives, Councillors, regionalministers or Mayors. We come here to bring practical experiences fromour home communities to bear on EU legislative proposals. We alsowork in the opposite direction, to keep our home communities in touchwith EU policies. The European Commission, the European Parliamentand the Council are obliged to consult the Committee in policy areas affecting regions and cities. It can appeal to the EU Court of Justice ifits rights are infringed or it believes that an EU law violates the subsi-diarity principle or fails to respect regional or local powers.

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If we look at the reaction many people have to changes brought on bythe current economic crisis – we see denial of the problem and dis-agreement with the solutions. That shows us how difficult it could be topersuade our residents to adapt to change, whether it is a reaction todemographic changes, lifestyle aspirations, changes in diets or pressureon resources such as water, food and energy. We must also not forgetthat adaptation on its own is not enough – we must also mitigate ourimpacts on the environment.

Much can be done (and is being done) by Local Authorities, sometimesdespite a lack of action by their national governments. The local level isvital. It’s good to have ambitions, but the public sector at a local levelmust be engaged and empowered to ensure that ambitions are actuallyimplemented. Local authorities have many powers that can achieveadaptation to climate change – land use planning to ensure growth is inthe right places, standards (for insulation or drainage systems for exam-ple) to protect residents from extreme weather events. We have muchinfluence through the way we use our own purchasing power, we canexert influence on our national government and, most importantly, weinfluence our local residents and can explain and encourage them tomake the changes to their lifestyles that adaptation will cause. So therole of local authorities is going to be vital to drive adaptations. Therecan be problems, which are political or institutional in source. We talkedabout subsidies and those, which have been harmful. We had referencesto taxation and the role of market barriers. Adaptation can have a per-sonal imperative that I think we should all bear in mind. I am not sure ifthe barriers are simple to describe, as political and institutional. This isall about people and what are the drivers in our lives. It is the impact onus in our own lives and how we assess our future life chances and ourchildren’s future life chances. Do we have a dialogue with our represen-tatives at the local level about what measures will give us and our chil-dren better chances in life? Without that political dialogue at the locallevel we risk failing with adaptation. That takes me round to the role oflocal and regional governments.

We are the people who are closest to individual citizens and we shouldbe the ones totally in tune with the issues that are inspiring, or irritatingthem. We need to have that in our minds when we are carrying out ourresponsibilities at a local level, whether it is about housing and the stan-

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8 Southgate, D. (2011) Weathering Global Warming in Agriculture, Los Angeles: Reason Foundation, Policy Study 395.

dards of housing. Or whether it is about land-use planning and lookingat the shape of the area where we live and move around and what isgoing to affect that in the future. I think the task for us is to make surethat we are communicating with our residents about the big issues thatcould be affecting their lives, because we need to have a shared andcommon understanding about environmental impacts and why we are incertain instances proposing changes to the way that we all live our lives.

Coping with the challenges of change on a global and local level leadsus to realise that both is relevant. For example, one of the issues thatremain, in spite of previous mitigation actions, is our individual house-hold emission. That is very good proof of our need to have dialogue andinformation exchange about adaptation. Once you can do that thenthere are many things that the local and regional authorities can influ-ence to change how their immediate neighbourhood works. We need tohave resilience, to future changes, whether they are caused by climatechange or not. We know that things are changing and they are changingvery fast at the moment. We will only be successful in adaptation if wework with our communities.

Lessons Learned? Past Experience of Adaptation

Julian MorrisVice-President, Reason Foundation, Washington, D.C., United Stateshttp://reason.org

Win-Win or Lose-Lose: Which Policy to Address Climate Change?

When considering the best policy to address climate change, it seemsreasonable to begin by asking what impact climate change is likely tohave. Southgate8 looks at the likely impact of climate change on foodproduction. He concludes that a rise in temperature is unlikely to reduceproductivity considerably as long as individuals and companies continueto be able to make investments in the development of new technologies,so that agricultural productivity continues to outpace population growth.

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9 Reiter, P. (2007) Human ecology and human behavior: climate change and health in perspective, Civil SocietyCoalition on Climate Change Working Paper. 10 Keatinge, W. (2004) “Illness and mortality from heat and cold: will global warming matter?” in Environmentand Health – Myths and Realities (eds. Okonski and Morris). London: International Policy Press. .

However, there are barriers to such adaptation, most of which comefrom government intervention. Government ownership of land and water lead to perverse, inefficient, and often environmentally less suit-able uses. Government regulation of land uses often has a similarly de-trimental impact, since it precludes many private sector innovations.Likewise, government subsidies often have perverse consequences, suchas encouraging the production of crops unsuitable to the terrain andover-abstraction of water. Southgate argues that adaptation will takeplace most rapidly and at least cost if government gets out of the way.

When land and water are owned privately, the owners have incentivesto put those resources to their highest-valued use. That means applyingeffective conservation measures, such as no-till farming and drip-feedirrigation. Private ownership also provides both the incentives and themeans to develop better, more efficient technologies.

Reiter 9 analysed the supposed impacts of climate change on health. Hefound that, contrary to claims made by others, rates of malaria have notrisen as a result of climate change. Rather, in wealthy countries, malariarates have declined dramatically as a result of a combination of, interalia, changes in animal husbandry practices (people no longer live closeto animals), drainage of swamps (where mosquitoes breed), the use ofinsecticides and larvicides, and air conditioning. Meanwhile, in poorercountries, malaria rates declined after about 1960, in large part as a re-sult of using highly effective, long-lasting insecticides such as DDT, butare now rising again, in large part because of reduced usage of these in-secticides.

Other health impacts are also highly dependent on wealth, with peoplein richer countries generally being far less susceptible to death as a re-sult of extreme temperatures than people in poor countries10. Thus, anincrease in wealth will by itself likely reduce the rate of mortality fromextreme temperatures because people will be better able to afford cleanand efficient heating and cooling systems, as well as having greater access to medical facilities.

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11 Goklany, I. M. (2011) Wealth and Safety: The Amazing Decline in Deathsfrom Extreme Weather in an Era of Global Warming,1900–2010, Los Angeles: Reason Foundation, Policy Study 393.

But increased wealth also brings the capacity to invest in other strate-gic disease-reducing activities, such as more effective preventive mea-sures for vector-borne diseases.

Goklany11 shows that mortality and mortality rates from weather-relatednatural disasters have declined dramatically over the past century. Thereasons for this are many and varied but include increased wealth, bet-ter building materials, and more reliable warning systems. While theeconomic damage done by such extreme events has risen, the main rea-son for this is that wealth has increased both in aggregate and on ave-rage. Goklany shows that as a proportion of total wealth in the US, theimpact of extreme weather events has remained largely constant overthe past century.

In sum, if we are concerned about the impact of gradual climate change,then we should focus on policies that can reduce the harms people facetoday that might be made worse in the future. Creating an environmentin which economic development can take place by removing perversegovernment interventions seems in general the best form of insurance.It would enable people to become wealthier and less dependent on we-ather-related activities, so that they are more resilient to all manner offuture challenges.

Such policies would be “win-win” in that they would increase rates ofeconomic development regardless of what happens to the climate. Bycontrast, most policies aiming to “mitigate” climate change seek to re-duce emissions of greenhouse gases (GHGs), which would come at asignificant price in terms of lower productivity and fewer new resilienttechnologies because resources would be diverted into the research, de-velopment and production of low-GHG technologies. Paradoxically, such“mitigation” may end up being a “lose-lose” strategy because it wouldnot only slow down economic development but, in part as a by-productof that, it would reduce the capacity of people in poor countries toadapt to a changing environment.

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12Urban Mind. Cultural and Environmental Dynamics http://www.arkeologi.uu.se/Forskning/Projekt/Urban_Mind/

Professor Gullög NordquistProfessor and Head of Department of Classical Archealogy and Ancient History, University of Uppsala, Sweden http://www.arkeologi.uu.se

Proof from History – How Do Humans Adapt to Changes in Environment?

Humans are as species adaptable and have therefore spread all over ourglobe. Humans have adapted to different environments by creating so-cial, economic and political structures, found food, shaped clothes, shel-ter and objects, from first pyrotechnology, using fire to cook food, makeobjects etc. to the establishment of large organizations, such as statesand EU, all the time adjusting society, economy, technology and naturalsurroundings to fit human ideas and needs. The human minds and cul-tures have needed to change since life patterns have changed in diffe-rent intricate ways. External pressure though e.g. climate change orenvironmental degradation may necessitate radical change in people’sway of living, as many examples in the past can show12.

We need a firm sequence of events, when studying how past environ-mental changes and cultural responses interact, in order to avoid thetemptation to see any casual connection as explanatory. It is temptingto fit all change into the same explanation, but dramatic changes inhuman societies rarely depend on one cause only. Many factors lay be-hind the Roman Empire’s disappearance in the West; most of thempeople hardly perceived at the time. But the fact of its change and fi-nally disappearance affected people over large areas of Europe.

It is important to recognize that the results of e.g. climatic or environ-mental stress and/or events may depend on the way they are perceivedand met by the people affected by them. Humans’ possibilities to actand react are determined within the framework of their culture, ideolo-gies and technology, their social hierarchies, power structure, networksetc. A radical external change, in e.g. climate, may as a consequence necessitate societal change, but those afflicted by it largely govern the direction. This will also be different depending on your own or your

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group’s place in the society. Such reaction and strategies will decidelong term developments, since it will start new lines of exploring anddeveloping, usually not at all foreseen.

Can we learn from the past? We cannot directly translate successfulstrategies of the past into our modern world, into our social and politi-cal strategies. Our society requires of us to use our tools, our ideology. But we cannot avoid change, we will need to adapt, even if we do notknow or agree on its causes and realize that all actions we take (or donot take) have long-term effects. The way we act and react, formulatestrategies, plan etc. depend on our own social frames and structures,our ideologies, power structures etc. We are generally not prepared orcapable to look outside that frame at least not as a group. Study of thepast may open our eyes to alternatives and encourage us to look outsideour modern limitations, whether by trying new ways of using old tech-nologies or offering a more realistic way of looking at ourselves. Infor-mation from the past provides a diversity of options to the modernplanners and policy makers.

Sectoral Case Studies

Professor Pier VellingaDirector/Chairman of the Netherlands’ National Research Program:Knowledge for Climate; Professor on Climate Change, Wageningen University and Vrije Universiteit Amsterdam, The Netherlands http://www.wageningenuniversity.nlhttp://www.vu.nl/

Making ‘Climate-Proof’

Even with the best estimate of global average temperature rise underscenarios with major emission reduction efforts, we are very likely toend up by the end of this century with two to three degree temperaturerise of which already one degree has already occurred over the last 50to 100 years. When emissions would continue in business as usual glo-bal temperatures could go up by three to six degrees. The worldwidecost of damage due to climate change has been roughly estimated bythe World Bank to be in the order of 100 billion US-Dollars per year,starting from 2020 onwards. There are different estimates as well bothhigher and lower ones.

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These costs can significantly be reduced by innovation and anticipatoryinvestments in reducing vulnerability. Many adaptation measures and investigations have co-benefits. When you design and implement adap-tation measures the co-benefits could carry a lot of costs of adaptationaway. But to captures such benefits requires both political and foresightskills.

What is extremely relevant for the Netherlands and other low-lying Deltaareas is the melting of the Greenland ice cap. The rather rapid melt is asurprise to major parts of the scientific community. Whether it is tempo-rary (local climate variety) or the start of a trend (climate change / glo-bal warming) is not fully certain. But the odds are it is a response to theglobally rising temperatures. The glacial decay is in the order of 200 bil-lion tons of melting ice per year. What is equally surprising is the mel-ting on the Antarctic ice sheet. Not just where it is expected: the WestAntarctic Ice sheet, but also at other places on the continent. Antarcticais now a net producer of water (and subsequent sea level rise).

How to handle the rise in sea level now underway? Along the North Seacoast we now expect a rise in sea level of some 20-30 cm in the next 40years. This we can handle. But sea level rise is likely to accelerate thereafter up to 1 meter in 2100 and more beyond.

In the Netherlands, the present yearly costs of water management andcoastal protection are in the order of 0.2 per cent of GDP. Additionalcosts for a 1 meter sea-level in 100 year would roughly double the ye-arly cost, thus up to 0.4 per cent of GDP (0.4 per cent of GDP is about 2 billon Euro). This figure is relatively small. It implies that the Dutcheconomy and population is not likely to retreat from the sea. The bene-fits of working and living close to the sea clearly outweigh the cost ofadaptation to sea level rise, at least for the forth-coming century.

The additional coastal protection cost for the Netherlands is estimatedto be in the order of one billion euro. This is to protect about 10 millionpeople along a coastal stretch of some 300 km. Extrapolating these costto the global level comes down to an amount of 50 billion Euros peryear to protect the (about) 500 million people living in coastal areas. Inthe Netherlands we explored different strategies.

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• The offensive strategy: building a new and strong coastal ring dike some 20 kilometres offshore. This is technically possible and many engineers would like to go for it. There is enough sand in the North Sea to build such a dike. But from the water ecological perspective it is not a preferred solution because of far reaching impacts.

• In the second scenario we would continue like now – shorten the coastal line and reinforce the existing dikes and coastal protection works and keep the sea out. The problem with this solution is the water that comes down from the rivers. It cannot flow freely into the North Sea anymore. Especially during a westerly storm the river water would pile with major risk of flooding.

• In a third scenario we would keep the estuaries as open as possible. This implies a much greater length of coastline to be protected. There would also be more salt penetration, which is negative for agriculture. The advantage of this third scenario is that the rivers will run freely into the North Sea.

• The fourth scenario is to move investments and people to higher grounds in the east of the Netherlands and Germany. But it turns out that moving houses and industry is much more expensive than raising dikes. So it is very unlikely that the economic activities and people will move upward and eastward.

Given the preference for scenario three which is keeping the estuariesopen and reinforcing the dikes of many kilometres, the question is howto reinforce the dikes. We could make them higher. But they still mayfail under extreme water level. The alternative is to make them signifi-cantly wider. Such that the dikes would not be able to break anymoreduring the time the water is extremely high. The water could wash overthe top of the dike and some dike erosion could occur. But when thedike is wide enough it would not break. As a consequence only a relati-vely small quantity of water would flow into the polders and only littledamage would occur.

Beside the idea of building broad, unbreakable dikes more innovation isgoing on, for example in aquaculture and salt water agriculture. This isa typical response to rising sea levels and increasing water quantitiesfrom rainfall and rivers. Floating cities and floating greenhouses (horti-

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culture) are additional examples of adaptation path ways. Such newpractices and the technology involved are likely to create new interna-tional markets for those investing in it now. Another innovative ap-proach is to harvest rainwater and to store in underground for later usein periods of drought. In the meantime these underground fresh waterreservoirs can keep the brackish groundwater at (sea) bay.

Indeed the Netherlands’ national government together with regionalgovernments, major cities and private sector companies initiated a majorresearch and innovation program. A budget of 100 million euro was al-located to develop climate-proofing strategies including new technolo-gies and proposals for institutional changes. A co-creation program has been developed that includes academic and applied researchers, consul-tancy firms, project developers, contractors, and entrepreneurs from thesectors such as agriculture and transport. Eight regions – hot spots –were selected to find and test innovative solutions that would createco-benefits.

The notion of co-creation is rather typical for the approach we havetaken in this national exercise. Co-creation in this case means that theowners of the problem work closely together with the researchers andinnovators in a multidisciplinary setting with the goal to find optimalsolutions.

In conclusion, Research and Innovation (R&I) can help to bring downthe costs of adaptation to Climate Change. R&I in a setting aimed atco-creation is likely to pay off. Many adaptation measures can be car-ried out such that are multiple co-benefits. Of course adaptation to cli-mate change is not a free lunch. Major efforts are required in research,innovation and co-creation and major political hurdles have to be takento implement specific measures in a timely way. Like in the case of miti-gation (reducing greenhouse gas emissions) research, innovation andcooperation can bring down the cost dramatically. In practice, however,the institutional change that required is the major bottleneck in imple-menting cost effective solutions.

Indeed the most critical factors are: first, to get political support for R&Iinvestments and second, to mobilise and support political consistency inplanning and implementation.

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Dr Oliver BlankDirector European Affairs, The German Electrical and Electronics Industry (ZVEI), Secretary General T&D Europe, Brussels, Belgiumhttp://www.zvei-akademie.dehttp://www.tdeurope.eu

Smart Cities – How to Become a Smart City?

According to the United Nations (UN), 80 per cent of economic growthin developing and transitional countries will be generated in cities. ZVEItogether with the Institute for Future Studies and Technology Assessmenttherefore has initiated the drafting of a number of "roadmaps" on "waterand sewage" (2009), on "Energy" (2009) and on "Megacities" (2010).

Clean water is a human right: Nevertheless 1 billion people are withoutaccess to clean water. Expansion of demand requires an expansion ofcapacities including drinking water purification, desalination in aridcountries, refurbishment in order to stop the current 50 per cent lea-kage and sewage treatment. The cumulative water infrastructure de-mand by 2030 will require investments of 23 trillion US dollars.

Transportation is a key challenge: Traffic will double by 2050; air trafficwill double by 2020. E-mobility is a key technology in an integratedtransportation system that is free of CO2 emissions, energy efficient andsilent, and one good solution for future transport. Cumulative transpor-tation infrastructure investments are at 9.5 trillion US Dollar by 2030.

Sustainable energy supply: We need more reliable, economical and envi-ronmentally friendly power. We can get there with decentralised powergeneration on the basis of renewables and a smart grid for intelligentenergy distribution. Energy efficiency plays a key role. Technologies areavailable; demand-side energy management is needed to increase effi-ciency. Investments into cumulative energy infrastructure needed are 9 trillion US Dollar by 2030.

The integration of technologies is the key for a successful transforma-tion of cities into smart cities. This includes manufacturing, energy ge-neration, transmission and distribution and energy storage, transpor-tation and mobility, smart appliances, smart buildings, embedded soft-ware and systems and smart meters. No sector employs more experts

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13 Thanks to Julian Wilson for his useful comments to the first draft.

needed for this transformation than the electrotechnical and electronicsindustry (E+E) industries. We have the technological solutions to makethe megatrends become real life.

Smart Cities need smart solutions for their energy grid, buildings,lighting, mobility, safety and security and factories. Innovations in thatarea improve the quality of life in rapidly growing agglomerations.Smart Cities will be the places where future jobs and wealth are crea-ted. They are the home of the "brains" of the future. Smart cities willneed to cater for different living concepts. Developing smart cities is acomplex task, as they are not built from scratch but on the basis of re-novation and transformation of existing infrastructures. Therefore smartcities need a holistic approach and an improved network of intelligentsystems.

The European Electrical Engineering Industry in its "Electra 2"-Report(2012) launches a "Smart Cities initiative". Cornerstone of this initiativeis a "Checklist for mayors on how to become a smart city". Main recom-mendations are: City councils must take the lead; steer and coordinatetransformation; develop a clear vision; get insight into the legal side ofthe transformation; get insight into finance and resources; set bench-mark dates and monitor progress; look for local and financial partners;investigate all financial constructions; check EU funding opportunities;analyze different project structures (e.g. project finance model vs. cor-porate finance model).

Dr Frank RaesHead of Unit, Climate Risk Management, Institute for Environment andSustainability, Joint Research Centre, European Commission, Ispra, Italy http://ies.jrc.ec.europa.eu

Climate Action as Development 13

There is mounting evidence that human activities are changing theEarths climate. Over the past 20 years and in 4 assessment reports, theIntergovernmental Panel on Climate Change (IPCC) has shown that theevidence is not only mounting but also ever more coherent. Basic un-

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14 Pielke R., et al., Lifting the taboo on adaptation, Nature, 445, 597-598, 2007.15 climate-adapt.eea.europa.eu

derstanding, observations and model calculations provide an ever moreconsistent picture of the human impacts on climate in the past, and give a solid basis to manage the risks of climate change in the future. Itis known what needs to be done and why: that is the scientific-techno-logical question as it is outlined and answered in the IPCC reports. Howto come to climate action and for whom: that is the political question,for which there is not yet an internationally agreed answer. Sciencedoes outline the risks of climate change. Based on that knowledge po-licy makers, i.e. those people in ministries and e.g. the European Com-mission, do try and device policies and measures to deal with the risk.Eventually, it is the decision maker, the politician, who takes the risk indeciding to spend resources for this problem or another. Managing acomplex problem like climate change, which touches on all aspects ofdaily live, is obviously not only a scientific-technological problem, butneeds to be embedded in a larger political discourse.

AdaptationWhile fighting for a 2°C world is still high on the agenda of the UNFCCCand the EU, it becomes ever more necessary to start and prepare for bothit and the possibility of a + 3°C world through dedicated adaptation po-licies. Adaptation has for a long time been taboo in climate policy cir-cles, as it was considered a means of diverting attention and resourcesfrom mitigation efforts14. Today, adaptation to a 2°C world is well accep-ted, as an essential second leg of climate action. The European Commis-sion is preparing an adaptation strategy that will be presented to the EUCouncil and Parliament in 2013. It will look to promote mainstreamingadaptation concerns into common European policies at both the formu-lation and revision stages, as well as exploiting the potential of marketbased instruments, e.g. insurance, to strengthen adaptive capacity. It willalso seek to develop adaptation to future climate change as an extensionof protection against current weather related disasters. The Strategy willfurther seek to strengthen the knowledge base on adaptation throughmore research on the impacts of global warming, which is lagging be-hind research that has elucidated the link between greenhouse gas emis-sions and global warming. In the mean time the Commission has createdCLIMATE-ADAPT15, a web-based platform to exchange information onadaptation between countries, regions, cities and practitioners in Europewho are already engaged in adaptation.

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16 IPPC, Climate Change 2007 Synthesis Report. Contribution of Working Groups I, II and III to the Fourth Assessment Report of the Intergovernmental Panel on Climate Change [Core Writing Team, Pachauri, R.K. andResinger, A. (eds), IPCC, Geneva, Switzerland, 104 pp., 2007; Meinshausen M., et al, Greenhouse-gas emissiontargets for limiting global warming to 2 degrC, Nature, 458, 1158-1163, 2009. 17 Lenton T., et al., Tipping elements in the Earth's climate system, PNAS, 105, 1786-1793, 2008; Schellnhuber H.-J., Tipping elements in the Earth System, PNAS, 106, 20561-20563, 2009.

Climate impacts will however be most felt in societies that are most vul-nerable to the impacts of climate change: the often poor people in thelow lying deltas of the Ganges, Mekong and other large rivers, millions ofAfrican farmers who depend on rain fed agriculture, people in mega-cityslums in the South. Making these population groups resilient to climatechange is a prerequisite for their further development.

Limits to adaptationIn a world in which people pursue personal wealth rather than environ-mental quality, there is little chance to remain below + 4°C16. This im-plies unprecedented changes in the world we live in, with possiblepassing of irreversible thresholds or tipping points17, leading to variouslythe melting of the Greenland ice cap with a resulting multi-meter sea-level rise, a shutdown of the Atlantic thermohaline circulations, majorbiome shifts in the Amazonian rainforest, collapse of agriculture in sub-Saharan Africa. For the more vulnerable regions this may require migra-tion of their population or complete transformation of their society,rather than an incremental adaptation of existing activities. More syste-matic research is required to assess the potential climate impacts of a + 4°C world, including feedbacks, thresholds, etc. It has become clear,however, that there are limits in sight as to how much climate changesociety can adapt to. These limits can be of a behavioural, institutionaland economic nature, or a complicated unmanageable mixture of them.This calls again for enhanced efforts in mitigation, using all availableapproaches.

Climate Action as DevelopmentClimate change and hence climate action – whether mitigation, adapta-tion or even reengineering – is related to many fundamental aspects ofour societies. CO2 emissions are tightly linked to the economy. Curbingemissions will require a less carbon intensive way of production. Alsoconsumption patterns need to be changed through a different social be-haviour and a greater sense for the common good. The developed worldmay have to come to terms with seeking increasing well-being underconditions of economic stability rather than via growth. With its links to

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environmental, economic and social issues, climate change policy is ar-guably potentially the most concrete driver towards sustainable deve-lopment, albeit not a yet successful one.

In discussion of sustainable development it is seldom discussed wherewe want to develop to. That is of course a political question because itis linked to value systems. In his book “Development as Freedom” Amar-tya Sen argues that development ought to be towards more freedom, sothat people can be actively involved in shaping their own destiny. Thatrequires political freedom, access to social facilities (health, education),access to economic opportunities (markets), trust and protective secu-rity for the weakest. Values such as justice or care for environmentemerge from a joint cultivation of these various aspects of freedom. Clearly this goal is not only to be realized in developing countries; manyaspects of it are still relevant to the developed world. The argument ofSen is anyway that while development is towards freedom, freedom it-self is a precondition for development. So there are, or there should betight iterations between development and freedom.

A benign climate, and hence climate action is a precondition for the de-velopment of hundreds of millions in the world. By the same token, de-velopment through poverty eradication, halting brutalization of people,health improvement, trusts building, etc. is a requirement for people tobe able to deal with climate change. Climate action, whether mitigationor adaptation, has therefore to fit within a socio-economic system thatis functioning according to firmer sustainability principles, implyingtight iterations between adaptation, mitigation, and issues regardingdevelopment.

Dr Konar MutafoğluSector Economist, KfW Entwicklungsbank, Strategy and Policy Division Water and Solid Waste, Frankfurt, Germany http://www.kfw-entwicklungsbank.de

Perspectives of a Bilateral Financing Institution

As a bilateral development financing institution, KfW Entwicklungsbankhas a long-time experience in financing projects and programmes in de-veloping countries, in countries in transition as well as in emerging eco-

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nomies. These activities form part of German development cooperationand are based on both grants and loans depending on the types of pro-jects financed and the overall characteristics of the partner countries. In2011, total new commitments of KfW Entwicklungsbank amounted toaround 4.5 billion Euros originating from the federal budget and fromown funds at the capital market. Around 2.2 billion Euros of these newcommitments addressed mitigation of greenhouse gas emissions andadaptation to climate change. These figures indicate the strong role ofclimate action within the current project portfolio.

While financing measures to mitigate greenhouse gas emissions remainimportant as an integral part of the activities of KfW Entwicklungsbank,adaptation to climate change is evolving as further field of financing.The approach of KfW Entwicklungsbank uses two channels to addressadaptation to climate change. On one hand, all new projects undergo asystematic climate-proofing process since 2011. This procedure makessure that the design of projects takes the anticipated effects of climatechange fully into consideration. This procedure is mandatory, regardlessof the sector in which the activities take place. To this end, KfW Ent-wicklungsbank makes use of available sources of climate data and –where required – conducts in-depth assessments that shed light on po-tential climate impacts in the project region as well as suitable measu-res to alleviate these impacts. This climate-proofing process ensuresthat climate change does not threaten the intended development out-comes of a project.

On the other hand, the bank also increasingly finances projects thatspecifically address climate risks and the impact of climate variabilityand climate change in the partner countries. Adaptation projects followa particular logic by systematically analyzing climate risks in the projectarea and by identifying the vulnerable people and ecosystems. Buildingon this analysis, appropriate measures are selected that increase theadaptive capacity and lower the vulnerability of communities. However,it should be noted that the specific activities pursued will in many casesnot be entirely different from regular development projects. Examplesare the improved efficiency of water use in drought prone areas, such asthe reuse of treated wastewater or the introduction of efficient irriga-tion in agriculture.

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The evolution of the portfolio reflects the increased level of activities asregards adaptation to climate change. From all new commitments in2011 around 450 million Euro addressed adaptation – be it as a princi-pal or a significant objective of the activities. Around two thirds ofthese funds flowed into agriculture and water projects, two sectors thatare especially affected by the mostly negative impacts in form of risingtemperatures, changes in precipitation and runoff and extreme eventssuch as floods or prolonged droughts. Around two thirds of the abovecommitments were directed to the African continent and the MiddleEast, where climate variability and climate change already pose signifi-cant challenges. The above mentioned numbers provide a single-yearsnapshot and may fluctuate throughout years, yet they are indicative.

While activities in the field of adaptation to climate change can benefitfrom the experience gained in many sectors of development coopera-tion, new challenges arise as well. One example is climate data, whichare essential for identifying climate risks and appropriate alleviationmeasures. For this purpose, KfW Entwicklungsbank increasingly coope-rates with scientific institutions that provide data as well as know-howto practitioners in development cooperation. These efforts are importantin both strands of addressing adaptation, be it in the context of main-streaming adaptation within the portfolio or in the context of designingadaptation projects.

Global Capacities and Constraints

Dr Rob SwartCoordinator of International Climate Change Adaptation Research, Wageningen University and Research Centre, The Netherlandshttp://www.wur.nl

Europe is Vulnerable, Too

In Europe, the development of adaptation policies started relatively late,well after the turn of the century. During the international negotiationsin the context of European climate policy and the United Nations Fra-mework Convention on Climate Change (UNFCCC), the emphasis hasrightly been on mitigation in the developed world and on adaptation in

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18 IPCC (Intergovernmental Panel on Climate Change), 2007. Contribution of Working Group II to the FourthAssessment Report of the Intergovernmental Panel on Climate Change, 2007 M. L. Parry, O. F. Canziani, J. P. Palutikof, P. J. van der Linden and C. E. Hanson (eds). Cambridge University Press, Cambridge, United King-dom and New York, NY, USA. 19 EEA (European Environment Agency), 2008. Impacts of Europe's changing climate – 2008 indicator-basedassessment. EEA Report No 4/2008, EEA Copenhagen 20 Ciscar, J. C., A. Iglesias, L. Feyen, L. Szabó, D. Van Regemorter, B. Amelung, R. Nicholls, P. Watkiss, O.B. Christensen, R. Dankers, L. Garrote, C. M. Goodess, A. Hunt, A. Moreno, J. Richards, and A. Soria, 2011 "Physical and economic consequences of climate change in Europe". PNAS January 31, 201121 EC, 2007. Green paper. From the Commission to the Council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions. Adapting to climate change in Europe –options for EU action (No. COM(2007) 354 final {SEC(2007) 849}). Brussels: Commission of the EuropeanCommunities.

the more vulnerable developing regions. A European focus on adapta-tion may have taken the pressure away from the need to reduce green-house gas emissions. However, with important assessments like those ofthe IPCC18, the European Environment Agency19 and research projectssuch as PESETA20, it became increasingly clear that impacts of climatechange were already observed in various natural and economic systemsand projections suggested that these impacts would be exacerbated byclimate change in the future. The number of time series for observedchanges in ecological, hydrological and cryosphere systems consistentwith observed temperature changes reported in the IPCC report is largerfor Europe than for any other part of the world, due to significant in-vestments in climate change research. Also the number of research pro-jects addressing future climate change and associated impacts is consi-derable, leading to a significant scientific capacity to assess futurechanges and response options. Nevertheless, a comprehensive, consis-tent picture of future impacts is largely missing because impact analysisin Europe is based on a wide variety of (IPCC SRES) climate change sce-narios, and usually only potential impacts are analysed. The latter is be-cause neither comprehensive analysis of impacts avoided by mitigation(e.g., EU 2°C target) has yet been done, nor a comprehensive analysis ofvulnerability or impacts to be avoided by adaptation. The main reasonfor this is that methodologies and indicators for the assessment of avoi-ded impacts and residual impacts are still controversial.

Europe takes adaptation initiatives at all levelsAfter Finland issued the first national adaptation strategy, other coun-tries, regions and the European Commission have followed suit. In Brus-sels, after the publication and discussion of a Green Paper21, in 2009 a

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22 EC, 2009. White paper – Adapting to climate change: Towards a European framework for action(COM(2009) 147 final). Brussels: Commission of the European Communities. 23 EC, 2011. A Budget for Europe 2020. SEC(2011) 867 final/SEC(2011) 868 final. Brussels: Commission of theEuropean Communities IEEP, 2012. Practical Options for Climate Change Mainstreaming in the 2014-2020 EUBudget. Background document for the workshop on ‘Practical Options for Climate Change Mainstreaming inthe 2014-2020 EU Budget’, 1 February 2012, Brussels.

White Paper22 was released. This White Paper aims at the publication ofa European Adaptation Strategy in 2013. Objectives of that strategy willbe to “climate-proof” EU policies and directives; to integrate adaptationinto EU’s funding programmes; to consider new policies, e.g. spatialplanning as an integration tool; to integrate adaptation in EU externalrelations (developing countries); enhancing the knowledge base, e.g. regarding regional scale and information on costs; involvement of civilsociety, business sector organisations and enhanced information ex-change; and support member states. In addition to large investments inresearch, as part of the development of a sound knowledge base theCommission is developing an information system on climate change impacts, vulnerability and adaptation, called Climate-Adapt, which willbe hosted by the European Environment Agency.

The EU has already placed climate change at the heart of its externalrelations. It is now a regular item on the agenda of its policy dialoguewith partner countries in the developing world. The main avenues forincorporating climate change concerns in development collaboration arethe mainstreaming of adaptation in general, the integration of climatechange adaptation and disaster risk reduction, and pursuing synergiesmitigation and adaptation (e.g., via sustainable forestry, ecosystem-based approaches and rural development. Another piece of evidencethat Europe is serious about climate change is that the European Com-mission envisions that at least 20 per cent of the EU budget should sup-port climate change activities (i.e., >200 billion Euro over 7 years). Thiswould be achieved through the ‘mainstreaming’ of climate change obli-gations across different funding instruments, i.e. cohesion, agriculture,research and innovation, and external action. The main goal would beto ensure the effective decarbonisation and resilience of a wide range ofactivities and investments23.

At the level of the member states, a major part of the countries haveadopted National Adaptation Strategies. Strong points of these strate-gies are that they the often include plans for targeted research pro-

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24 Biesbroek, G. R., R. J. Swart, T. R. Carter, C. Cowan, T. Henrichs, H. Mela, M. D. Morecroft, and D. Rey, 2010.Europe adapts to climate change: Comparing National Adaptation Strategies. Global Environmental Change,Volume 20, Issue 3, August 2010, Pages 440-450; Swart, R. J., Biesbroek, G. R., Binnerup, S. Carter, T. R., Cowan,C., Henrichs, T., Loquen, S., Mela, H., Morecroft, M. D., Reese, M., and D. Rey, 2009. ‘Europe Adapts to ClimateChange: Comparing National Adaptation Strategies (no. 01/2009). Partnership for European EnvironmentalResearch (PEER), Helsinki, pp 160 25 Ribeiro, M. M. C. Losenno, T. Dworak, E. Massey and R. Swart, 2009. Design of guidelines for the elaborationof Regional Climate Change Adaptations Strategies. Final Report, Ecologic/European Commission

grammes; plans for the implementation, monitoring and funding ofadaptation, and planned coordination between sectors and administra-tive levels. Weak is that these are often only plans, and the implementa-tion lags behind: coordination between levels and sectors is still poor,stakeholder involvement is often inadequate, responsibilities betweenadministrative levels are often unclear, and there is still a lack of con-text-specific adaptation knowledge, both with regard to expected cli-mate impacts as to the costs and benefits of adaptation options24. Theseweaknesses as well as insufficient resources, lack of public support, andlack of political priority, especially with the current financial crisis, cur-rently delay the implementation of the national strategies. With the ex-ception of a few countries, usually only “local” climate change impactsare being addressed by the strategies. Climate change impacts in otherregions, e.g. through trade (agricultural and forestry products) or migra-tion, can have consequences for Europe that are as yet not explored.

In parallel with the National Adaptation Strategies, also regions, provin-ces, states in federal countries, and metropolitan regions in Europe aredeveloping climate change adaptation strategies. The European Com-mission has issued guidelines to support other regions to do the same25.Interestingly, while climate change adaptation and mitigation are lar-gely disconnected in national policy processes, at the local level (e.g., incities) synergies and trade-offs are sometimes taken into account. Alsoat these subnational levels, implementation is often still lagging. Poten-tially, changing the framing of climate change from purely a risk to alsoan opportunity may accelerate policy action. Examples are the export ofadaptation knowledge (e.g. the Dutch Delta experiences), beach tourismin the Baltic countries and increased productivity or opportunities fornew crops (e.g. wine in northern countries) and the latter at least forsmall to moderate increases of temperature and with adequate water.

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Dr Arianto A. PatunruSenior Research Associate, Institute for Economic and Social Research,University of Indonesia, Jakarta, Indonesiahttp://www.lpem.org

Cooperation on Adaptation and Mitigation – Southeast Asia

Managing climate change is an issue of public goods, which means it isnot economically attractive to any private party to do it alone despitethe benefits of doing so. Therefore, climate change is prone to free ri-ding. Nevertheless, any action will affect others, such as when being leftuncompensated, the latter will be forced to move down to a lower uti-lity and thus, towards a negative externality. The problem of climatechange is not contained in an isolated place. It is almost impossible tolocalize it within a small range neighbourhood. Due to these characte-ristics of the climate change problem, it is imperative for all affectedparties to cooperate.

The idea of international cooperation in terms of environmental causes,such as climate change mitigation and adaptation, is essentially abouthow developed countries can help developing countries to reduce emis-sion levels by proper compensation. One of the important aspects of in-ternational cooperation is recognized in funds that often require a loopprocess where assistance is given with conditionality. It is rather com-mon and in fact can be used to help the recipient country developing itsown structure or system to support global initiatives for a green eco-nomy. Cooperation can also be conducted using existing organizations.Many of these organizations have already developed initiatives that ad-dress environmental problems in a coordinated way. In addition to this“developed-developing countries cooperation”, there is need for a co-operation system between developing countries. Most naturally this isformed on the basis of geographical proximity, e.g. Southeast Asiancountries; each country is prone to the externality that originates fromany other country in the region (for example on NOx and SOx pollution).

Clean energy is one of the areas in which cooperation among develo-ping countries is needed, as energy demand is always rising in a develo-ping economy. But the demand is often met with a supply of energythat produces a negative externality to the economy. That is, the supplyof clean energy has been limited. Many Southeast Asian economies are“victims” of high oil prices, but they continue to pervasively subsidize

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energy. Countries spend up to 25 per cent on energy subsidies, for exam-ple Malaysia (15 billion US-Dollar in 2009), and Indonesia (15 billionUS-Dollar in 2010). In 2008 the overall fossil fuel consumption subsidiesamounted to 557 billion US-Dollar, of which non-OECD countries wereresponsible for 400 billion US-Dollar. These energy subsidies distort pri-ces and have negative effects on the environment as it can support per-vasive activities that lead to environmental degradation or encourageover-consumption. Although energy is subsidized for economic develop-ment and poverty alleviation, subsidies for oil and other energy sourcesmainly benefit higher income groups and capital-intensive industries.

While pursuing cooperation with other countries, each individual coun-try should continue improving its own domestic policies and develop-ment practices. Agriculture in Indonesia is still the most importantsector in terms of the large share of poor population working in it.Hence, any policy regarding this sector should take poverty issues intoaccount. Simply requesting low carbon agricultural practices might nottackle the root of the problem. The fact that many poor Indonesians arestuck in the agriculture sector is related to the rigid labour marketwhere the movement across sectors (from agriculture to more value-ad-ding manufacturing) is relatively hindered. Furthermore, the ratio ofland per farmer is very small (currently majority of Indonesian farmersare landless peasants and farmers who own less than 0.5 hectare ofland). It keeps reducing due to the fixed resource of land versus increa-sed labour force in the sector. This leads to low levels of productivityand sustainability. Therefore, it would be more logical if the policy inthis sector aims to increase productivity (in a more sustainable manner)and to improve farmers’ access to wider opportunities like manufactu-ring. This also applies to the peat and forestry sector.

With regard to energy and transportation, the government’s attempt toreduce dependency on fossil fuel and to move towards renewables iscommendable. However, the key culprit of Indonesians’ dependence offossil fuel is – as abovementioned – due to heavily subsidized prices. Thecheap price of gasoline has made riding private vehicles far more at-tractive than public transportation. In addition, the availability and re-liability of mass transportation is still low which leads to low incentivesfor consumers to reduce their use of private vehicles (and hence fossilfuel). Due to this heavy subsidy on fossil fuels, incentives for businessesto develop renewables remain little and it is not easy to competeagainst subsidized fuel.

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Dr Carlos Muñoz PiñaAdvisor, Instituto Tecnológico Autónomo de México, Mexico City, Mexico http://www.itam.mx

Smart Regulation in Mexico

How do we adapt from a liberal point of view? Subsidies create marketdistortions by not allowing the market to cooperate and to reflect theopportunity cost of water, energy etc. which causes an economic andenvironmental problem. Although lower prices enable firms or house-holds to use more of the respective resource in the short run, the choiceregarding technology will not be the efficient one in the long run. In theend, this new efficient technology will not be chosen due to artificiallyset low prices.

In Mexico, the main environmental problem is water shortage. What isthe policy to adapt to frequent droughts? An economy has to rely onmore groundwater. Protecting the aqua sphere becomes a priority. Thegovernment has to take into account the sustainability aspect of aquasphere, which is a clear adaptation policy.

What does this have to do with subsidies? 77 per cent of aqua sphere isused for agriculture in a country that has the water scarcity of Israeland the water technology of Indonesia. Electricity is highly subsidisedwhich makes the rise of water pumps cheap. Thus, water resources areover-used as a result of the wrong price signals. In the field of agricul-ture, the government pays three-fourth of the total cost of electricity.Illegal farmers do not have a legal water concession and pay only halfof the tariffs. In addition, property rights are not being respected, e.g.farmers extract more water without a permit.

In the ITA’s research group, a new policy-design has been developed. Itaims at reducing the vulnerability to climate change and to adapt to thescarcity of water. The OECD and WTO recommend decoupling subsidiesto separate support for farmers from price distortions. In this case, pricesubsidies for electricity are abolished and farmers are supported directly.The new market priced electricity then leads to a lesser use of waterpumps and a more careful use of the scarce resource water. As a sideeffect, incentives are created to improve new technologies for wateringthe fields.

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However, any government that increases prices of electricity for farmerswill obviously face tough elections. In the end, democracy means com-municating ideas. Our policy idea for the agricultural sector is to startwith a website, which becomes accessible with an electro ID that auto-matically calculates the environmental allowance of the respectiveelectoral district which means that farmers receive information onwater over-exploitation, deforestation, wildlife preservation and air pol-lution. Firstly, this is important as citizens are often unaware whether aplace is overexploited, or not. By providing information to citizens sup-port for policy is gained. Secondly, farmers as interest group are tryingto exert influence on congress people. If congress does not recognizethe future benefits of this policy, it will not be supported. However, byempowering citizens through such a website this policy is likely to deve-lop and grow into a useful programme that can be adopted and eventu-ally implemented.

Finance for Adaptation

Paul RenierDeputy Head of Unit, DG for Development and Cooperation – EuropeAid,DEVCO C2, European Commission, Brussels, Belgiumhttp://ec.europa.eu/europeaid

Finance for Adaptation Strategies

Some of the developing countries have already actively been involved inthe preparation of adaptation plans by preparing National AdaptationProgrammes for Action (NAPAs); however, these are not usually integra-ted in proper national programmes or development strategies. NAPAshave therefore suffered from a general lack of support. More recentlythe development of National Adaptation Plans (NAPs) seems to be bet-ter integrated in domestic frameworks and it is hoped that proper sup-port will be provided to implement them.

Among the ways a country can access funding, there is the bilateral co-operation, the multilateral funding (through United Nations channels orunder United Nations Framework Convention on Climate Change, deve-lopment banks, or the national budget of developing countries.

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The aid effectiveness principles should be applied to climate financingand can be enhanced by increasing country ownership both by basingsupport directly on the development strategies of the developing coun-tries and by using country systems (budget support).

Streamlining of assistance between different donors is another are forimprovement. The coordination between the European Union (EU) andother partners can be further improved by means of joint financing, pro-gramming and management, delegated cooperation with the EU mem-ber states and multi-donor trust funds. Corresponding performanceassessment frameworks should be aligned with national monitoring sys-tems. An effective response to climate change should be addressedthrough dialogue, capacity building and actions.

A flagship initiative the Commission developed is the Global ClimateChange Alliance, which targets support to the most climate vulnerablecountries. There is a strong focus on the integration of climate changeinto poverty reducing efforts, adaptation in water and agriculture, Re-ducing Emissions from Deforestation and Degradation (REDD), Clean De-velopment Mechanism (CDM) and Disaster Risk Reduction (DRR). Budgetsupport is the preferred modality, but there are also other opportunitiesto work with joint financing, programming and management So far atotal of 200 million Euro in 2008-2011 have been allocated and morethan 60 million Euro are planned for 2012 and 2013.

The core of the European Commission cooperation, which is carried for-ward by means of the European Development Fund (EDF), the EuropeanNeighbourhood and Partnership Instrument (ENPI) and the DevelopmentCooperation Instrument (DCI), is a commitment for climate-relevant in-terventions, especially in the fields of water, agriculture, forestry, fishe-ries, rural development, energy efficiency, renewable energy and conser-vation. The Commission promotes adaptation and mitigation synergiesand the commitments have totalled more or less 3 billion Euro since2002. However, since the strategies are still very project-oriented amove to more strategically interventions is needed.

The EU Investment Facilities mobilise additional funding for investmentsby leveraging loans and partner the countries' contributions to establish

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better infrastructure interconnections, by promoting an equitable deve-lopment and job creation and by addressing threats to the environment,including climate change.

In conclusion, Official Development Assistance (ODA) will remain an im-portant source of funding: it should focus on the mainstreaming and in-tegration of the CC, enhance the importance of ownership but will notbe able to cover all needs. As far as the private sector is concerned, theinvolvement will be less obvious than with mitigation; however, it mightbe possible in some 'niche' sectors such as water efficiency, agriculturalproduction and ecosystem services. Loans could be effective to mobilisethe private sector in the above-mentioned niches, while the EU invest-ment could facilitate 'climate windows'. A global agreement and inno-vative financing mechanisms (AGFs) are strongly needed; they couldtake several forms, such as a tax on international transactions, interna-tional levies, bunker fuels, a debt swap for adaptation.

Dr Axel MichaelowaPerspectives GmbH, Hamburg, Germany; Center for Comparative and International Studies, University of Zurich, Switzerlandhttp://www.perspectives.cchttp://www.uzh.ch

A Market Mechanism for Adaptation to Climate Change

The relevance of adaptation is steadily increasing in international climatepolicy. While several funds have been established to finance adaptationactivities in developing countries particularly vulnerable to climatechange, the available funds are far below the level needed. Thus, inter-national adaptation instruments should be as efficient as possible.

In other policy fields market-based mechanisms have been used to ma-ximize efficiency. So far however, there is almost no experience withmarket-based mechanisms, such as taxes, performance-based paymentsand tradable allowances for climate change adaptation, whereas theyhave been successfully applied in the case of climate change mitigationduring the last two decades.

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For any of market-based mechanisms, common metrics are needed tocompare the effectiveness of projects. While mitigation projects can becompared by the widely accepted unit of “tonnes of CO2equivalent”, theinternational community has not agreed on any common metric for cli-mate change adaptation. Even within development agencies, each adap-tation project is evaluated with a wide range of indicators, which areoften project-specific, so comparison is not possible.

Furthermore, development agencies mainly assess direct outputs ofadaptation projects (e.g. knowledge, infrastructure), while the real im-pact on peoples’ lives is not quantified and compared. Therefore, the in-troduction of universal impact indicators (“adaptation units”) for climatechange adaption projects would be beneficial. Given the ethical difficul-ties to monetize human lives and environmental benefits, we propose touse three indicators for the adaptive effect:

• Saved Wealth (SW) is measured by a mixed index of absolute and relative wealth savings, in order to both include economic value and vulnerability to climate change.

• Saved Health (SH) is estimated by an established method in the health sector, the Disability Adjusted Life Years (DALYs).

• Environmental Benefits (EB) measures those environmental benefits and services that are not economically quantified in the SW indicator.

Once such common metrics of adaptation metrics are introduced, anadaptation market mechanisms based on quotas of adaptive benefitscould be established: each industrialized nation or company could com-mit to achieve a certain amount of adaptation units (measured in SW orSH). Such committers could directly invest in projects to achieve theadaptation units or buy certified adaptation units from companies orother nations, who can deliver adaptive benefits at lower costs.

Similar to emission trading systems, governments could also obligecompanies to achieve a specific amount of adaptation units. We canlearn from climate change mitigation that monitoring and independentverification will be key to guarantee the stability and integrity of anadaptation market mechanism. Some challenges to be resolved are the

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highly politicized process of adaptation funding and the impreciseknowledge about future impacts of climate change, which may lead toinefficient spending.

The Public and Private Sector as Drivers of Adaptation

Sandeep Chamling RaiSenior Advisor Adaptation Policy, Global Climate and Energy InitiativeWorld Wildlife Fund International, Singaporehttp://www.wwf.sg

The Public Sector’s Stake in Reducing Vulnerability

Adaptation and the UNFCCCAdaptation within the UNFCCC is moving in slower pace than it shouldto meet the challenges that are caused by climate change. In the 17thConference of Parties (COP-17) to United Nation Framework Conventionon Climate Change (UNFCCC) that took place in Durban South Africa inDecember 2011 we were able to get some concrete decisions on theadaptation negotiation track.

Decisions included the operationalization of the Cancun Adaptation Fra-mework by adopting decisions on the composition, modalities and gui-delines for the Adaptation Committee, as well as initial guidelines forthe formulation of National Adaptation Plans (NAP) and a work plan onloss and damage for year 2012. Our intention was to identify and ex-plore possibilities on addressing the issue resulting from a slow onset ofclimate change impacts.

Future Adaptation ChallengesAlthough we were able to fulfil some goals of adaptation at the UNFCCC,some challenges remain. They include fulfilling the commitment doneby developed country parties on adaptation financing for vulnerable developing countries; likewise support for the development and imple-mentation of National Adaptation Plans for Least Developing countries(LDC) as well as setting up an international compensation/rehabilitationmechanism to address loss and damage (e.g. sea level rise, loss of eco-system and its services, loss in arable land, desertification, climate in-duce migration).

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Trust building between developing and developed countries is also oneof the bigger challenges. UNFCCC has decided that the Least DevelopedCountries (LDC) will prepare National Adaptation Plans (NAPs) to iden-tify their medium and long-term adaptation needs. Developed countrieswill provide financial and technical support for their formulation andimplementation. We have to ensure that this promise will be kept. We should not repeat the same mistake that happened during the imple-mentation of the National Adaptation Program of Actions (NAPAs)where LDC countries were asked to develop their short-term adaptationneeds but lacked financial support from developed countries. This inci-dent weakened the trust of developing countries towards developedcountries.

Studies have shown that the implementation of existing NAPA projectsfor LDC countries requires approximately 2 billion US-Dollar funding.Yet less than a quarter of total funding has been collected so far. Deve-loped countries need to fulfil their financial commitments and buildtrust among the parties.

In 2010, the World Bank estimated that with the approximately estima-ted 2°C global warming by 2050 above pre-industrial state, adaptationfinancing in the range of 70-100 billion US-Dollar is annually needed.However, with the current mitigation target pledge in the UNFCCC, weare likely to hit a 4°C rise in temperatures. The big challenge is to limitglobal warming to 2°C and to secure adaptation finance to adapt to fu-ture climate change impacts. Equally, there is a need to establish inter-national compensation/rehabilitation mechanisms, which addresses theissues that cannot be solved by adaptation.

Public sector as driver for adaptationThe public sector as a driver for adaptation plays an overarching rolebecause it can create a level playing field for climate smart investmentand development that reduces failed adaptation strategies. The publicsector is able to drive adaptation through appropriate responses by po-licy, regulation, public funding and best practices. Key areas includeplanning guidance and regulation (e.g. building specification for ex-treme weather), coastal zone management, disaster risk reduction andpreparedness, early warning systems, public sector learning on adapta-tion, adaptation planning etc.

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The public sector can support and encourage multi- and cross sectorcollaborations and partnerships, bringing together different skills andperspectives for addressing complex and interrelated challenges. It isable to drive the need to address short-term needs; sets priorities formedium and long-term planning and support no/low regret adaptationoptions and pathways. The public sector has a stake in managing andaddressing trade offs to ensure inter- and intra generational equity, effective and fair management of shared natural resources (e.g. fresh-water) in a changing climate. The public sector is vital for supportingand sharing sound science and for communicating adaptation past experience.

Moreover, the public sector is responsible for addressing the needs ofthe poorest and most vulnerable in society to manage and protect thenatural environment and natural resource base on which mankind de-pends. The public sector ensures that financial and technical supportreaches those who depend on it (e.g. from North to South, from nationalgovernments to most vulnerable communities and places).

Private sector as driver for adaptationThe private sector plays a valuable role for adaptation, in particularwhen it comes to innovation. The private sector has the capacity to in-novate and produce new technology to adapt to change. It is importantfor the government (public sector) to support companies in overcomingbarriers to investment, to harness resources and innovation.

Civil society as driver for adaptationThe civil society also plays an important role on adaptation. It can chal-lenge, influence and hold to account, underline and fill gaps in the workof the public and private sector. Civil society drives demand, highlightsneeds, exerts political influence, provides and communicates impactsthat follow a lessons learned approach.

ConclusionAdaptation is becoming an increasing concern today, as we are not ableto take effective actions to mitigate climate change. However, we haveto be aware that adaptation is not an alternative form to mitigation be-cause of the limit to adapt to any kind of climate change impacts. Aneffective adaptation measure involves all sectors. However, the public

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sector accounts for the most important role in adaptation by buildingresilience and reducing vulnerability towards climate change impacts indeveloping countries.

Dr Nana KünkelEnvironment and Climate Change Division, Competence Centre for Climate Change, Gesellschaft für Internationale Zusammenarbeit, Eschborn, Germanyhttp://www.giz.de

Adaptation to Climate Change – A Case for Business?

While climate change adaptation has typically been dominated by pu-blic sector interventions, successful adaptation will depend on the en-gagement of both public and private sector. In many developing countries,small- and medium-sized enterprises (SME), as well as the supply chainsand production facilities of large companies face multiple climate-indu-ced risks. Climate change poses not only physical risks to properties andfacilities but also disrupts supply chains and the demand for products.However, a risk for one business may represent an opportunity for anot-her. The World Bank estimates a demand of up to 171 billion US-Dollarfor new adaptation products and services.

Useful approaches seem to be:

1. Understanding risks for private sector and offering tools to manage themThe incorporation of risk-management into businesses that are vulnera-ble to climate change (e.g. water scarcity for agribusi- ness, food andbeverages industry) is one pathway to adaptation in the private sector.Climate-related risks are increasingly evaluated by the insurance andreinsurance industries, resulting in new products and the identificationof new client groups. Many of the new business activities will be foundat the “bottom of the pyramid” – i.e., at the start of the supply chain,often in developing countries. Examples include Cafédirect, the UK’s lar-gest fair-trade coffee and tea company, which has worked togetherwith GIZ to train its suppliers in adaptation methods. Climate Proofingfor Development is one tool that can support companies in adaptationrisk assessment.

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2. Understanding business opportunities and identifying promisingfields of actionA study commissioned by GIZ identified the following promising fieldsof action for businesses: » raising agricultural productivity, » informationand communication technologies, » index insurance and financial tools,» decentralized services for water and energy and » disaster prepared-ness and infrastructure. The private sector can play an important role indisseminating technologies that assist other actors in adapting to cli-mate change. GIZ is currently preparing a training that will help busi-nesses in developing countries create and deploy new products andservices that support adaptation.

3. Promoting innovative technologiesGIZ pilots incentive mechanisms for early action and supports pilotmeasures that demonstrate the effectiveness of innovative technologiesfor climate change adaptation. An example for a public-private partner-ship is the “buried diffuser”, developed at the Arid Regions Institute inTunisia and manufactured and distributed by Chahbani Technologies(Chahtech). This underground irrigation technique enhances irrigationeffciency and can thus play an important role in regions that increa-singly face climate-related water shortages. GIZ and Chahtech are cooperating to improve agricultural, touristic and urban water manage-ment in the Tunisian Médenine region. In addition, GIZ has launched theIMPACT Business Award to reward enterprises that showcase outstan-ding business models in combating climate change. Over 130 submissi-ons were received, with 30 per cent addressing adaptation and 70 percent, mitigation of greenhouse gases.

Particularly in supply chain or value chain settings, approaches thatbring together stakeholders from different stages of the chain on therisks and opportunities stemming from climate change and that stimu-late joint action across different stages hold much promise.

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Humberto Delgado Rosa Director for Mainstreaming Adaptation and Low-Carbon TechnologyDG Climate Action, European Commissionhttp://ec.europa.eu/clima

Opportunities and Risks of Climate-Resilient Growth

It is my pleasure and honour to address you in this International Confe-rence, for which the Friedrich Naumann Foundation is to be praised. Inreplacing Director-General for Climate Action, Jos Delbeke, and as re-cently appointed Director for Mainstreaming Adaptation and Low Car-bon Technology, this gives me the opportunity to share with you thevision we in the European Commission have on how adaptation shouldbe developed in Europe, and on the role of both the private and the pu-blic sector to promote it.

Let me first refer to the reasons why adaptation has an increasingly im-portant role to play. Not many years ago, adaptation was more a priorityfor developing countries, in particular those most vulnerable to climateimpacts and less prone to have many emissions to reduce. For developedcountries, including the EU, the attention was more on mitigation. Thathas changed considerably, with adaptation tending to be seen as a fullsecond pillar of climate change policy.

Looking to the recent history of international climate change negotia-tions, one can recognise the climax point reached in 2007, when theBali Roadmap was approved, under great public attention brought fromthe IPCC reports, the Stern Report, Al Gore's film and book, and theNobel Peace Price. An anticlimax followed in 2009, when the Copenha-gen Accord left everyone with a sense of deceived expectations, in spiteof the direct involvement of over 100 heads of state and government.The Cancún and Durban Conferences that followed reopened the pros-pects for a new global deal to be forged up go 2015, but it is unlikelythat a new climax is to be attained in the climate change internationalarena in the coming years.

This is where the role of adaptation can fill in a relevant role for climatechange policy. While the climate keeps degrading from delayed globalaction, the consequences of climate change and of extreme weatherevents increase, and so do the inherent risks, costs and losses. To act inorder to protect lives and livelihoods and to turn our societies more cli-

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mate resilient will thus gain an increasing sense and appeal. Further-more, the benefits of adaptation action are more prone to be grasped by the public opinion, whenever floods, droughts, forest fires, coastalerosion or heat and cold waves strike nearby, than are the benefits ofreducing emissions. The adaptation rewards are reaped locally, while the mitigation rewards are reaped globally. Thus, and in sum, adaptationwill have a fundamental role to play, not only preparing to withstand aharsher climate, but also to keep conditions for political momentum onthe climate crisis.

The rationale for adapting comes from the fact that even if the worldwould cease all greenhouse gas emissions tomorrow, still we wouldneed to adapt to the unavoidable adverse effects of climate change. Butwhen it comes to justify action, we should keep well in mind that thecosts of early action outweigh by far the costs of inaction or of delayedaction. This cost-benefits side of adaptation is something we should always keep in mind when promoting climate strategies and policies. To give you one example picked from the estimates for inland floodingin a study commissioned by the EC (ClimateCost project), a minimumprotection level against floods in Europe is estimated to cost around 3 billion euro per year, while it could result in about 20 billion euro peryear of avoided costs. These kinds of benefits, together with the poten-tial benefits for growth and jobs that lay in adaptation action, make astrong case that adds to risk avoidance.

After the adoption of the White Paper on Adaptation in April 2009, inthe European Commission we are now in the implementing phase, witha view to have a EU Adaptation Strategy adopted by March 2013, cove-ring the next 10 years. One of the implementation actions run by the ECis mainstreaming climate adaptation across the range of all relevant EUpolicies and financial instruments. For instance, the EC has proposedthat at least 20% of the EU budget expenditure under the new Multi-annual Financial Framework for 2014-2020 is to be spent on activitiesto tackle climate change, be it as mitigation or as adaptation. As a sub-stantial part of the EU budget is implemented and co-financed by theMember States, such mainstreaming of climate action will have a consi-derable multiplier effect and will direct national funding towards cli-mate goals. However, estimates show that public available funds willnot be sufficient without private investment.

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In order to leverage private investments it is first important to addressfavourable business conditions. Key barriers to private investment inadaptation are a difficult business environment, project risks, inade-quate access to finance and insufficient risk-adjusted returns. Public interventions can address these barriers by supporting risks-mitigationinstruments, promoting better access to finance and giving revenuesupport. The potential for Public-Private Partnerships (PPPs) is also to beexplored. PPPs can be a useful tool to combine financial and knowledgeresources from both the public and private domains on specific projects.National and local-level adaptation and disaster risk reduction, as wellas management plans, could specify areas where private sector invest-ment and innovation are deemed essential, and identify a clear role forthe private sector to contribute to the shaping of a climate resilient society and economy. When developing guidelines for strategies andplans on adaptation, we intend to take this into consideration.

It should be kept in mind that business and private activity as such areaffected by climate change, and thus benefit from adapting. In additionto the physical risks it may bring, climate change will affect areas suchas supply chains, logistics and raw materials costs, in turn impacting oncompanies' profitability. Some economic activities will be more affectedthan others, thus it is crucial that the private sector increases its aware-ness and self-assessment capacities, in order to integrate climate adap-tation considerations in overall risk assessment and management plans.The private sector should aim at gaining knowledge and capacities todeal with climate risks, and at reaching an adequate level of auto-adaptation.

In this context, strengthening the knowledge base for adaptation emer-ges as one of the fundamental orientations of the EC's White Paper. Tofulfil it, we will be launching in March this year the EU Climate-Adaptinformation platform, the web-based clearinghouse mechanism onadaptation. It will contain information on expected climate impacts,vulnerable sectors and regions, national and regional strategies and action plans, case-studies on adaptation and adaptation tools, projects,reports, guidelines, etc. Although it is oriented towards policy-making,private actors will also find there a wealth of information and ideas fortheir own adaptation activities.

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One further important aspect is to integrate climate risk assessment and prevention into the project design and business operations, as thatcan reduce costs and increase benefits in the medium and long term.We have to ensure that new infrastructure and other key-assets andactivities are shaped in a climate resilient way. That is why we in the EC intend to give priority to the revision of standards for infrastructure,and to the development of guidelines for project management and otheraspects of climate risk assessment and prevention. The enhancement of the functioning of the insurance market for it to better serve andtake into consideration adaptation is also a priority. Through adequatepremium policies, insurance can induce and enhance the appropriatedeployment of investments and actions for adaptation by the privatesector.

Apart from understanding and removing the barriers that may reduceprivate action in adaptation, we are also keen in fostering the businessopportunities that adaptation may entail for early movers. The benefitsof adaptation measures for companies can actually be twofold, bothfrom avoided costs and from direct revenues that may arise from adap-tation activities, services and technologies that can be profitable.

What we want to achieve from our goals of promoting and main-streaming adaptation is not only to help build a society that is more resilient and more sustainable. We also want to grab the opportunitiesand no regret measures that adaptation has to offer, contributing to the smart growth and green economy that underlies the strategy forEurope up to 2020 and beyond.

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Sustainable Development

Julian MorrisVice-President, Reason Foundation, Washington, D.C., United Stateshttp://reason.org

Property Rights and Sustainable Development

In The Other Path, Hernando de Soto, Enrique Ghersi and Mario Ghibel-lini documented the plight of their fellow countrymen in Peru, most ofwhom are denied the right to own and transact formally. They must,instead, rely upon informal mechanisms to enforce contracts, propertyrights and other relationships. Whilst such informal mechanisms – cus-toms and norms, for example – work well for groups that are relativelyhomogenous and where there is little trade with outsiders, they imposesignificant constraints on the ability for groups to improve their lot. So-cieties that have adopted formal institutions – such as property rights,markets, contract law, tort law, and trademarks – have tended to domuch better economically and socially than societies that have reliedprimarily on informal institutions.

Property rights are capital; they give people incentives to invest in theirland and they give people an asset against which to borrow, so that theymight become entrepreneurs. As in Peru, the 700 million rural poor inIndia are not oppressed by multinational companies. Most of them have

III. Resource Management: Transatlantic Experiences – New Ideas and Innovative Solutions for Developing Countries?International Conference, San Francisco, 15 until 18 March, 2012

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Resource Management – New Ideas and Innovative Solutions

never even heard of multinational companies and those that have pro-bably dream of working for them. No, India’s rural poor are oppressed bytenure rules, which make it difficult for them to rent, buy or sell pro-perty formally. Land transactions typically involve paying large bribes tolocal officials, who have a vested interest in maintaining the status quo.

Property rights are created in order to resolve competing claims over re-sources. Thus, if 10 men all graze their cattle on the same piece of landand there are no rules governing how much each man can graze, theneach man has a strong incentive to graze as much of the available landas possible. Under such a system – known as ‘open access’ – the cattlewill quickly denude the land and, in the absence of free land on whichto move the cattle, will die.

Historically, open access has been a rarity, occurring only when land isso plentiful that ownership is not necessary, or when people are preven-ted from owning property. In most cases, before the tragedy occurs, theusers of the land would see the advantage of either dividing it up intoindividual plots or creating rules for using it that reduce the likelihoodof denudation. In either case, the land has been privatised – made theexclusive property of one or more people. If the land is split into plots itbecomes ‘several’ or ‘individual’ property; if the owners agree to com-mon rules it is called ‘common’ property.

Privatisation is expected to occur when the costs of exclusion (that is,the costs of limiting access to a piece of previously open land, for exam-ple by fencing and policing) are equal to or less than the external costs(which, in this case, means the costs associated with the denudation ofthe land). But the costs of exclusion will depend upon the exclusiontechnologies available. Wherever there are externalities present (such asthe threat of encroachment by cattle belonging to other ranchers), userswould have an incentive to produce new and cheaper exclusion techno-logies. So, over time, we would expect more and more land to becomeprivately owned and the sum of external costs to decline precipitously.

Land that is owned privately (whether individually or in common) will ingeneral be better managed than land that is unowned or owned by thestate. This is because the owner(s) know that they will reap the benefitsfrom any investments made in the land, so they have stronger incenti-

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26 Stahl, M. (1993): ‘Land Degradation in East Africa’, Ambio, Vol. 22, No. 8, December, pp. 505-8. 27 St Helen’s Smelting Co v Tipping (1865) 11 All ER 1483.

ves to make those investments. Going back to our cattle-rancher exam-ple: those who graze more cattle than their land can support will soon cease to be cattle ranchers. That creates a strong incentive to discoverthe ‘carrying capacity’ of the land – and to increase it through new tech-nologies. Entrepreneurial peasants constantly introduce new crops andproduction methods, creating an environment of diverse agriculture.

Technological innovation not only enables peasants to improve their lot,it also benefits those with whom they trade by lowering the cost of pur-chasing food and other goods and reducing the risk of famine. But agro-diversity will be stifled if those who might innovate new technologiesare not allowed to benefit from the investments they make through theownership of property. The individual’s incentive to invest in his landand innovate new methods of production will be greater when he canown and exchange property. Thus, Michael Stahl 26 concludes:

‘At the farm level, the presence or absence of clearly defined propertyrights makes the difference between active interest in investing in soil conservation measures or apparent indifference to environmental degradation’

Individual property rights also encourage pollution prevention. In theEnglish common law for example, if the owner of property A emits asubstance that causes damage to property B, then the owner of A mustcompensate the owner of B for the harm caused. Thus, even at theheight of the industrial revolution a smelting works in an industrial areawas enjoined for causing damage to shrubs and trees on a nearby pro-perty27. There remains an ancient maxim, sic utere tuo ut alienum nonlaedas, roughly translated as “so use your own as not to harm another.”Widely applied in the courts of law this rule would protect not only theproperty of the owner but also neighbouring properties and even theenvironment – and society – as a whole.

Property also begets wealth. Once a person owns property, he or she canuse it as collateral against a loan. Because such collateral gives the len-der security, they will be willing to offer loans at lower rates. So property

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reduces the cost of becoming an entrepreneur. Of course, some of theseentrepreneurs will fail and they may have their property repossessed bythe lender. But at least they will have had the opportunity to try to es-cape from poverty and, of course, most will be no worse than if they neverhad the property in the first place. In any case, many will succeed in theirendeavours. Some may become wealthy; most will simply be less poor.

Professor Lyuba ZarskyAssociate Professor, Graduate School of International Policy and Management, Monterey Institute of International Studies, Monterey, United Stateshttp://www.miis.edu

Can Extractive Industries Promote Sustainable Development?

Extractive industries, which are inherently unsustainable, can be con-sidered to contribute to sustainable development if they generate “netbenefits” – an excess of benefits over costs-to local communities andhost governments. Given complex economic, environmental, social andcultural trade-offs – and the fact that local communities bear virtuallyall the costs – local communities must be privileged in assessing “netbenefits”. Key elements to determine whether a mining project is likelyto bring net benefits over both the operating and post-closure phases are:

1) Evidence of free, prior and informed consent

2) Level and distribution of mine earnings

3) Assessment of total economic benefits (wages, procurement, multiplier effects)

4) Investment of royalties and taxes in building productive capacities that can sustain livelihoods after mine closure

5) Environmental risk, assessed by the adequacy of company manage-ment and government oversight

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My co-author Leonardo Stanley and I used this framework to assess thecontroversial Marlin gold and silver mine in the highlands of Guatemala.In 2005, local indigenous communities rejected the mine by a vote ofover 95 per cent in special plebiscites called consultas. In a report pu-blished by the Global Development and Environment Institute, we found that Guatemala captured only 15 per cent of mine earnings in royaltiesand taxes between 2006 and 2009. Law sets Guatemala’s all-mineralsroyalty rate at only 1 per cent. By comparison, South Africa sets a roy-alty rate of around 28 per cent.

We found that economic benefits were significant, especially if unveri-fied company data on local procurement is accurate. The mine genera-tes about 2000 jobs, about half of which go to locals. Data constraintsmade it impossible to assess indirect jobs and multiplier effects butbased on case studies elsewhere, they could be substantial. However,the jobs will dry up when the mine closes and we found little evidencethat mine revenues are being invested in building sustainable productivecapacities. In fact, there is a widespread general lack of transparencyand fiscal accountability.

Environmental risk stems primarily from the potential for widespreadcontamination of water by heavy metals in an agricultural area. Wefound that risk is high because government regulatory oversight is weakand there is no third party monitoring of water quality. Company ma-nagement of cyanide is up to a good standard but there is no publicmine closure plan and only 1 million US-Dollars to put towards mineclosure. Moreover, the mine was built to specifications that did not takeclimate change into account. High-intensity floods could breach the mi-ne’s tailings pond and increase heavy metals seepage from waste rock.The number of high-intensity floods in Guatemala between 1990-2009was nearly 300 per cent greater than between 1980-1989.

We conclude that the Marlin mine is highly unlikely to generate “netbenefits” for Guatemala and that the capture of net benefits requiresrobust governance capacity by host states.

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Professor Maximilian AuffhammerAssociate Professor, Department of Agricultural and Resource Economics, University of California, Berkeley, United Stateshttp://are.berkeley.edu

The Carbon Tax – Solution or Scenario?

Energy, Air Quality, Climate Change and Development are highly pivotalissues when it comes to transatlantic experiences in this sector in thesearch for new ideas and innovative solutions for developing countries.

Emissions of greenhouse gases continue to increase at a record pace,even in the face of a Global economic and financial crisis. Much of thisgrowth comes from rapidly developing countries. China’s CO2 in theyear 2010 were 142 per cent higher than its emissions in 2000. To putthis into perspective, the growth in emissions from 2009-2010 wasequivalent to the emissions of Spain. If we just added the increase inemissions over year 2000 emissions over the past decade, this is almostequivalent to the total annual emissions of the US. If we are to slowdown global growth of greenhouse gases, we have to rely on effectivepolicy. Given the lack of success in designing a follow up agreement tothe Kyoto protocol, the search is on for feasible and incentive compati-ble alterna-tives. A significant carbon tax imposed by the G20 countriesis such a solution. Developing countries find it difficult to collect in-come taxes, which are distortionary. A carbon tax is easily collected up-stream and non-distortionary. Further, countries participating in such ascheme could enforce this tax with their trading partners by enforcing a border adjustment.

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The American Debate on Energy Management

Robert HolsteDeputy Director, Government RelationsThe Pew Charitable Trusts, Washington, D.C., United Stateshttp://www.pewtrusts.org

Clean Energy Accounts for National Security

In the United States, the debate on energy management has led to thedevelopment of the Pew Clean Energy Program to accelerate the cleanenergy economy over the next five years for national security, economicand environmental benefits. The idea is to bring together economic, sci-ence and military experts to increase awareness of the need for nationalenergy policies in service of our economy, national security and climateand to make the US more energy independent, prosperous and secure.These key changes to US energy policy are foreseen to be adopted infour sectors, which are industry, utilities, transportation, R&D. However,political frameworks for these goals are needed.

Pew’s objectives are to increase (fuel) economy and encourage theadoption of electric vehicles, to foster the US innovation through ex-panded energy R&D and to ensure that the electric and industrial sectorbecomes cleaner and more efficient.

Pew links clean energy with national security. The investment trends inboth global and domestic economies require complying with the De-partment of Defense (DoD). According to General David H. Petraeus, “byreducing demand for fuel we will improve operational capability, reducerisk to our forces, and ultimately, strengthen our security.” Despite alloperational risks and costs, the DoD has a long history of innovation,scale and purchasing power with partners in the private sector, researchand innovation in the development system.

Pew mainly commits to two approaches. Firstly, economic opportunitiesresult from the emerging domestic and clean energy economy. Secondly,national security risks are associated with US energy posture. Job growthin the clean energy economy outperformed overall job growth in almost

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all states in the US between 1998 and 2007. The emphasis of cleanenergy investment that comprises wind, small-hydro, biomass andwaste-to-energy, solar, geothermal, marine can be measured in GDP:when comparing Germany and the United States, Germany is scaled at1.4 per cent, while the US being at 0.23 per cent and France at 0.15 percent: a lot can be done in future.

Carlton CarrollDeputy Director of Media RelationsAmerican Petroleum Institute, Washington, D.C., United Stateshttp://www.api.org

Can Yesterday’s Energy Be Tomorrow’s Relief?

There are two views of the future of oil and natural gas: one view isthat it is “yesterday’s energy” and that we need to focus all efforts intorenewable energy. The other view is that oil and natural gas is the onlyproven energy that we can rely on for abundant and affordable supplies.The truth is somewhere in between: We need to continue producing oiland natural gas as we look new sources of energy.

America’s oil and natural gas companies are spending an enormousamount of money and resources developing the alternative energy sour-ces we will use in the future. In fact, they spend more than the U.S. go-vernment and nearly as much as the rest of the private sector combined. But by the government’s own estimates, we will continue to rely on oiland natural gas for more than the majority of our energy well into fu-ture. In fact, the US will require 10 per cent more energy in 2035 thanin 2010 with more than half of it to be met by oil and gas. Also, the USoil and natural gas production is increasing as a result of technologicalinnovation.

Because of this continued dependence, controlling the price of oil seemsto be on the minds of our politicians. Many factors affect the price ofoil, such as geopolitical risks, weather, inventories, global economicgrowth, speculation, hedging, investment, exchange rates and inflation.But in the end, it comes down to supply and demand.

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The U.S. is a major producer of oil and natural gas and has the power toincrease this supply substantially because of new technologies and dis-coveries. In fact, with new production coming online in the U.S., Ca-nada, and Brazil, many analysts are saying the energy superpowers arenow shifting away from OPEC and to the Americas.

And there are many advantages to a healthy U.S. oil and gas industrythat provides the energy we need today while also developing the re-sources that we will use tomorrow.

The industry already supports 9.2 million well paying jobs in the U.S.and pays the federal government 86 million US-Dollar a day in reve-nues. These companies are owned by millions of Americans who havepension funds, 401(k)s, IRAs and other investment accounts, so they dowell when the industry does well.

However, the industry can do a lot more for the economy, for govern-ment revenues, and for U.S. energy security. Eighty-seven percent of federal offshore acreage is currently off limits to development. TheObama Administration recently denied the Keystone XL pipeline thatwould bring new supplies of oil from Canada’s oil sands. And now tenfederal agencies are considering new regulations on hydrologic fractu-ring, the technology that makes much of the new development possible.

Instead of raising taxes on an industry that already pays at much higherrates than other industries, we advocate that the administration allowmore access to America’s vast resources for responsible development.This would lead to more government revenue in the log run, the crea-tion of up to one million new American jobs, and an increase of U.S.production that would allow us to get 100 percent of our liquid fuelsfrom North American sources in just 15 years.

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Dr Corey JohnsonAssistant Professor, Transatlantic Academy, German Marshall Fund of the United States, Washington, D.C., United Stateshttp://www.gmfus.org

Tim BoersmaPhD Student, Transatlantic Academy, German Marshall Fund of the United States, Washington, D.C., United Stateshttp://www.gmfus.org

The Genie is Out of the Bottle: Shale Gas in the Security Debate

Examining the global shale gas potential according to data by the EnergyInformation Administration shows that next to the United States andother parts of North America, also China, Argentina, South Africa andparts of Europe have great potential for future shale gas exploitation.

In the United States the “genie” clearly is out of the bottle. Enormousgrowth of shale gas extraction are predicted, though geological andeconomic uncertainties remain and make long term impacts of shalegas on the market for natural gas extremely difficult to predict. Someinteresting ongoing debates are whether or not the U.S. should exportsome of its gas in the form of liquefied natural gas (LNG) and whethermore gas should be used to generate electricity. Opponents of exportsargue that the gas should be used for domestic consumption. Eitherway, with wellhead prices being as low as they currently are, somethingneeds to change in order to incentivize companies to invest in drillingnew wells.

Furthermore, the states in the U.S. clearly show different speeds ofadoption of shale gas exploitation. Texas, Oklahoma and Pennsylvaniawere mentioned as early adopters. These states are currently developingtheir regulatory regimes, to counter some of the still existing environ-mental concerns that have been linked to shale gas, such as ground-water contamination, methane leakage and anthropogenic seismicity.Other states, such as New York and Delaware, are contemplating whet-her or not to extract the alleged resources under their soils.

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Some areas in the European Union show potential for shale gas, mostnotably Poland, France and parts of Scandinavia. But shale gas will notbe developed in the short term in Europe. Currently a dozen companiesare investigating cores they have gotten out of the ground, in particularin Poland, which is the only early adopter at this time. Even if the reser-ves prove to be commercially extractable, many obstacles will have tobe overcome before large-scale development can take place. On the otherside of the spectrum, France and Bulgaria have outright banned thetechnology used to extract shale gas, while many EU member states –such as the United Kingdom, Germany and the Netherlands – are con-templating and doing additional research on the environmental and so-cietal concerns. Meanwhile European institutions are deliberating whatto think of shale gas – if anything at all – and whether the existing re-gulatory frameworks are sufficient to cover the environmental concernsmentioned before.

All this leads to a broad research agenda on the leakage of methane andfracking fluids, the overall carbon footprint of shale gas (as compared tofor instance coal or conventional natural gas) and seismicity caused byreinjection of flow back water into the well. Furthermore it is importantto study the ripple impacts of shale gas on renewable energy ambitions,with and without obligatory renewable legislation in place.

Water Management

Rachel M. Dawson Legislative Representative, Water Resources Team, National Wildlife Federation, Washington, D.C., United Stateshttp://www.nwf.org

A Question of Water

It has been said that our search for safe, reliable sources of fresh watercould one day soon rival our search of oil. For many developing coun-tries, there is often no greater concern than securing clean sources ofwater. As we face growing human populations and a changing climate,it is important to recognize that water is a finite resource, and couldpresent tremendous challenges for future health, security, and environ-mental well-being.

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Recently, the 6th World Water Forum was held in France, and broughttogether delegates from more than 180 countries to address some ofthe world's biggest water-related challenges. French President NicolasSarkozy said, “There will be no sustainable development while the ques-tion of water remains unsolved.” Yet, these challenges are likely to per-sist globally without significant and coordinated planning and action.

The situation in the United States is representative of nearly all majorwater concerns across the globe. Our country experiences regular inci-dences of scarcity in the West, frequent flooding and Midwest, protrac-ted legal battles over water rights in the south and aging infrastructurein the East. Water supplies in the United States must meet the varyingdemands of agriculture, energy development, transportation and manu-facturing – and still provide abundant and safe drinking water for a growing population.

Lastly, I would like to highlight a succinct summary statement from theWestern States Water Council, who recently released a “Vision onWater” at a conference in Washington, DC last week. The state, “A se-cure and sustainable future is increasingly uncertain given our climate,aging and often inadequate water infrastructure, limited knowledge re-garding available supplies and existing and future needs and uses, andcompeting and sometimes undefined or ill-defined water rights. Effecti-vely addressing these challenges will require a collaborative, cooperativeeffort among states and stakeholders that transcends political and geo-graphic boundaries.”

Thomas W. Beauduy Deputy Executive Director & Counsel, Susquehanna River Basin Commission, Harrisburg, Pennsylvania, United Stateshttp://www.srbc.net

Guarding the Susquehanna River Basin

Responsible, sustainable water resources management is a societalchallenge that touches every corner of the globe. Like other resourcemanagement issues, there are cultural, political, economic and environ-mental factors interwoven into the fabric of that challenge. And whilethere are significant benefits to be derived from the proper manage-

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ment of water resources in any free market society, especially those related to economic security, there is nonetheless an important govern-mental role in providing the framework for long-term sustainable utili-zation of the resource, rather than destructive exploitation. In the end,the framework is really a governance issue, and thought needs to begiven in shaping or evolving an institutional framework that fosters orincentivizes that long-term sustainability.

The Susquehanna River Basin Commission is a case in point. Establishedpursuant a federal-interstate compact, the Commission is vested withthe authority and responsibility to manage the water resources of theBasin at a major watershed scale (approximately 71,000 square kilome-ters) through a power-sharing arrangement under which the memberjurisdictions (Pennsylvania, New York, Maryland and the Federal govern-ment) delegated their respective sovereign authorities over water re-sources management to the Commission. In short, the Commissionrepresents a forum for the joint exercise of that sovereign authority tofacilitate holistic management at a natural watershed scale, rather thanat a political jurisdictional scale. The Governors of each of the memberstates, and the President of the United States, each appoint a Commis-sioner. Through their respective commissioners, the four jurisdictionsjoin in making the appropriate management decisions for the utilizationand conservation of the Basin’s water resources.

Utilizing its authority to allocate the waters of the Basin, not only to individual water users but also between and among the jurisdictionalmembers, the Commission has developed a regulatory program gover-ning ground and surface water withdrawals, and consumptive use ofthat water. Under the program, the Commission has established appro-priate thresholds and standards to ensure sustainable utilization of theresource, avoid societal or environmental impacts from improper exploi-tation, and provide the uniformity and consistency necessary to protectpublic and environmental health, and at the same time facilitate econo-mic growth.

It is a governance structure that simultaneously respects its sovereignmembers and promotes management policy at a larger basin scale. Atthat scale, its standards and incentives are appropriately tempered topromote sound, responsible management of the resource, and allow themarket to decide how best to achieve them.

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Joe Navari Real Estate Specialist, Ducks Unlimited, Inc, Rancho Cordova, California, United Stateshttp://www.ducks.org

Between Waterfowls and Water Rights – Managing Wetlands

Ducks Unlimited (DU) is an international non-profit organization wor-king to protect, restore, and manage wetlands and associated habitatsfor North America’s migratory waterfowl. These habitats also benefitother wildlife and people. In much of the Western US DU is not onlyworking to protect the landscape, but also the water on that landscape.The water is a fundamental part of the larger ecosystem especially forwaterfowl. Much of the western US receives less than 10-18 inches ofannual precipitation thus water is a scarce commodity for all livingthings throughout the Western United States.

In California most of the rights to use water are owned by agriculturallandowners. These rights allow the landowners to remove water fromnatural flows for activities associated with farming, drinking, manu-facturing, or for wildlife uses. This is the simplest right often referred toas a „riparian right“. Some large landowners have adjudicated waterrights. Adjudicated water rights supply water as part of a judicial pro-cess which distributes water to a collective of landowners most oftenrepresented by a water district or water company. These adjudicatedwater rights are also called „appropriative water rights“. The State ofCalifornia Water Resources Control Board manages and enforces theserights in the State.

DU acquires lands that are beneficial for the future of waterfowl in theWest. In order to have waterfowl you need water, thus all the propertywe protect must also have good water rights. DU is looking for proper-ties that have the necessary water to support large populations of mi-gratory birds. Once a property is found and it is deemed important tomigratory birds, DU must now find funding to purchase the property orpurchase an interest in said property.

Funding for the purchase of land and/or water comes from many sour-ces including grants from State and Federal agencies, private foundati-ons, environmental mitigation, and private individuals. Once a property

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is identified we work to get the project funded through one or someti-mes multiple sources identified above. This funding is often in the milli-ons of dollars.

DU acquires both fee simple interests and conservation easements. A fee simple interest in land is just that a property that is owned by a person or company that takes title to a deed of ownership. Conservationeasements are deeds that read like contracts where by DU can purchaseindividual landownership rights from a fee simple owner. For example,Farmer Joe would like to sell a conservation easement to DU for100,000 US-Dollar. For consideration of 100,000 US-Dollar farmer Joesells the rights to subdivide the property, the agricultural right, the rightto sell his water. The extinguishment of these rights makes up the valueof the conservation easement. Now DU owns these rights and can pro-tect the existing water, wetland or grasslands associated with the pro-perty. Every conservation easement is different and allows or disallowscertain management practices to benefit the conservation purpose writ-ten into the easement. Conservation easements can be written for anyduration, but DU only does easements in perpetuity.

Jerry G. Schulte Manager, Source Water Protection and Emergency Response, Ohio River Valley Water Sanitation Commission (ORSANCO), United Stateshttp://www.orsanco.org

Biodiversity Instead of Pollution: The Ohio River Valley Water Sanitation Commission

The Ohio River Valley Water Sanitation Commission (ORSANCO) wasestablished on June 30, 1948 to control and abate pollution in the OhioRiver Basin. ORSANCO is an interstate commission representing eightstates and the federal government. Member states include: Illinois, In-diana, Kentucky, New York, Ohio, Pennsylvania, Virginia, and West Virgi-nia. The Ohio River is 1,580 km long with a catchment of 528.358 km2.It is a multi-use resource serving water based commerce, as well asdrinking water and industrial water intakes. It receives waste waterfrom more than 600 permitted discharges and 1,300 combined sewage

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overflows (during rain events) and supports 40 coal fired electric power plants. The Ohio River has a diverse habitat that includes islands andbackwaters and has a fishery comprised of over 150 species of fish use-ful for recreational and commercial fishery.

ORSANCO operates programs to improve water quality in the Ohio Riverand its tributaries including: setting waste water discharge standards;performing biological assessments; monitoring for the chemical andphysical properties of the waterways; and conducting special surveysand studies. ORSANCO also coordinates emergency response activitiesfor spills or accidental discharges to the river, and promotes public par-ticipation in programs, such as the Ohio River Sweep and the River Wat-chers Volunteer Monitoring Program.

ORSANCO is governed by 27 Commissions (3 from each state, appointedby their respective Governor, and 3 from the federal government, ap-pointed by the U.S. President). ORSANCO is funded by annual state con-tributions and federal grants with a total annual budget of 3.7 millionUS-Dollar.

While this Commission was created to abate water pollution and ad-dress water quality issues, it is currently evaluating its possible role ininterstate water resource management. As water becomes an increa-singly valuable commodity, and, as only a small percentage of the OhioRiver municipal and industrial interests use flow, a large quantity ofwater exists in this resource that could be diverted and used away fromits original course. Establishing one entity to facilitate discussions bet-ween states and federal agencies regarding water allocation and with-drawals, inter-basin transfers and drought and flood management planscould be a very useful role where in ORSANCO could provide additionalservices to its member states.

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Waste Management

Anne SteinhauerCommunity Relations Manager, Napa Valley Vinters, St. Helena, California, United Stateshttp://www.napavintners.com

Napa Valley Vinters as an Example of Local Sustainability Practices

I represent the Napa Valley Vintners, a non-profit trade association, andspend much of my time focusing on sustainability issues. To quote TipO’Neil former Speaker of the United States House of Representatives “all politics are local” and this sentiment fits sustainability practicesperfectly. If we do not contribute at a local level to green initiatives wecannot bring change at a global level.

In my work at the Napa Valley Vintners I oversee the Napa Green pro-grams. These programs focus on improving the Napa River watershed byreducing fine sediment discharge and maintaining natural habitat. Inthe winery we work on changing the employee mentality in turning offthe lights, turning off the water and putting the right containers in theright garbage cans.

Napa Valley wineries have around an 85-90 per cent recycling rate in-cluding Vineyard waste for composting. The California state-wide ave-rage is around 60 per cent.

Our two waste management companies are now moving into food com-posting and we are seeing organic matter in our landfill drop significantly.

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Scott Hutchings Manager - Government and Public AffairsWM Waste Management – Colorado & Utah, United Stateshttp://www.wm.com

Conversion Technologies and a Changing Industry: Innovation, Sustainability and the Future of Waste

Waste Management is North America’s largest waste provider and recycler. We are leading the industry in sustainability. We believe we do not manage “waste,” we manage “resources.” We focus on develo-ping sustainable solutions to materials management. These solutionsmust be environmentally and economically sustainable. We are strivingto minimize our customers’ and our own impacts on the environmentand to maximize the value of the materials we manage.

WM is working to improve the understanding of new technologies andfacilitate clean energy programs. We hope to gain support for programsthat will reduce our reliance on foreign oil, reduce GHG emissions andcreate local economic development opportunities. This industry is evol-ving quickly. The technologies are likely to change as they develop.

WM is investing in clean energy and technologies. These technologieswill help to create more value from the material we manage. They willgenerate renewable energy and renewable energy that can reduce ourreliance on foreign oil while reducing greenhouse gas emissions.

We are working to reduce the conflicts between solid waste policies,state renewable energy policies, and federal renewable fuel goals. Weare working to educate regulators on the technologies and opportuni-ties for GHG emission reductions.

There is no “single solution.” We expect to develop a suite of technologysolutions over time. We hope to work with our local community part-ners to divert more material to higher value uses – by recycling more,creating energy and renewable fuel.

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Joe McDermott Councilmember, King County, Washington, United Stateshttp://www.kingcounty.gov

Pioneering Resource Efficiency: From Recycling to Biosolids

Waste prevention, reuse, and recycling of materials have been and con-tinue to be a large part of resource initiatives in the Northwest. The pro-grams are directed towards waste prevention and recycling with an in-creasing focus on product stewardship, sustainability and green building.

King County’s recycling rate is approximately 50 per cent through re-cycling opportunities for fluorescent lamps and electronic products, pro-moting less junk mail and phone books, and creating the EcoconsumerProgram, school education and technical assistance programs, and de-veloping new markets for recycled materials. In 2010, nearly 1.2 milliontons of materials were recycled and composted in King County. We have also seen success with product stewardship, a strategy that encouragesenvironmental product design and shifts responsibility to producers forfinancing and managing products at their end of life. Products impactedby the strategy range from electronics, fluorescent tubes and bulbs topharmaceuticals, paint, phonebooks, batteries and carpets. Future ef-forts will focus on increased recycling of paper, organics, metal, plasticfilm and bags as well as wood.

King County has a Green Building Program that promotes green buildingtechniques through grants, technical assistance, hands-on training andinformation. We have a green building and sustainable development or-dinance that applies to all county-owned and county-financed buildings.There is also a lot of outreach to the building sector.

King County also converts waste resources to energy with a landfill gasprocessing plant. The Cedar Hills Regional Landfill is one of the largestlandfill gas processing facilities in the nation. The facility takes gas fromdecomposing garbage buried at the landfill, cleans it and transfers it toa nearby natural gas pipeline. The role of landfill gas to energy is majoras it turns waste into an energy asset for the next 30 to 40 years. Themajor advantage is that previously wasted landfill gas is being used togenerate power thereby reducing greenhouse gas emissions and genera-ting revenue for the county’s Solid Waste Division.

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King County has been a leader in biosolids in the United States, produ-cing biosolids from solids extracted during the wastewater treatmentprocess for the past 40 years. Biosolids are a nutrient-rich marketablesoil amendment that safely returns carbon and nutrients to the land.Biosolids produced by King County are called Loop and are used in pri-vate and public forests and to produce dry land wheat, compost, andhops. Biosolids are a safe, sustainable alternative to synthetic fertilizerwith a proven ability to improve soil structure, reducing runoff and ero-sion. The County receives revenue from agriculture products based onthe fertilizer value of biosolids delivered. The county’s WastewaterTreatment Division also creates resources from wastewater by fuelingsome of its operations through energy recovery and producing reclaimedwater.

Heidi Sanborn Executive Director, California Product Stewardship Council, Sacramento, California, United Stateshttp://www.calpsc.org

Extended Producer Responsibility – Another Polluter Pays Principle?

The California Product Stewardship Council (CPSC) has the mission toshift California’s product waste management system from one focusedon government funded and ratepayer financed waste diversion to onethat relies on producer responsibility in order to reduce public costs anddrive improvements in product design that promote environmental sus-tainability.

The AB 939 (1989) – Integrated Waste Management Act created firstly,waste hierarchy in the order of source reduction, recycling and compos-ting, transformation and landfill disposal. Secondly, it puts recyclinggoals on local government, amounting to 50 per cent in the year 2000.Landfill disposal bans were on aerosol cans, E-waste, fluorescent lightbulbs and so on. In 2006, the Universal Waste Ban prohibited to reducevolume, toxicity and illegal disposal, to create collection and recyclingoptions to place an enforcement burden on local government, whichraised the cost burden for rate- and taxpayers. The illegal disposal rosedramatically.

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The Strategic Directive 5 in 2007 the Department of Resources Recycleand Recovery (CalRecyce) called for fostering cradle-to-cradle producer responsibility. In following extended recycling fee systems this meansthe focus moves to the brand owner, who makes design and marketingdecisions, which comes down to the principle of extended Producer Re-sponsibility (EPR).

However, this system never achieved source reduction. Consumers, tax-and ratepayers have had enough cost increases. Advanced Disposal Fees(ADFs) undermine private sector growth and producers have no financialsignal to stop generating waste, which has been supported widely in thelast years and was approved for, amongst others, Ag Pesticide Contai-ners, Green Chemistry, Paint, Carpet and Recalled Products Take-Back.International Research and Collaboration has been launched.

Land Use Management

Sherry GreenbergPolitical Blogger and Democratic Political Consultant, California Majority Project, United Stateshttp://www.camajorityreport.com

California Land Use – The Peace Dividend and Base Closures

In the United States decisions related to land use most often are mat-ters of local concern, involving mundane interests such as a family wan-ting to add a second story onto their house or a small developer wishingto tear down a gas station to build a small retail strip mall. Decisionsrelated to these matters are typically made by a municipal agency ormaybe even by a vote of a city council. There may be tangential federalor state issues, such as compliance with the Americans with DisabilitiesAct, but mostly such typical land use issues are governed by localities.However, on occasion, land use matters can involve a complex balan-cing of federal state, local and private interests. These multi-layeredscenarios can be treacherous to navigate and cause massive impact oncommunities. One such situation that greatly affected communitiesacross the States, with a particular impact on California, was BRAC –Base Realignment and Closure.

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Following World War II, Congress passed the Federal Property and Admi-nistrative Act of 1949. This law authorized the transfer or disposal offederal property by the General Services Administration (GSA). As theCold War wound down and military procedures and strategies were mo-dernized to meet current needs, Congress authorized the GSA to dele-gate its authority to the Department of Defence (DOD) to transfer ordispose of obsolete or redundant military installations. Military basesprovide significant economic activity in local communities. Members ofCongress, while recognizing a need for the military to modernize andcut unnecessary costs did not want to bear responsibility for closingsuch important sources of job in their districts. BRAC established a com-plex procedure that ultimately required essentially only an up or downvote, without amendment, from Congress. Thus, Members of Congressdid not have the opportunity to exempt bases in their district. And, theydid not have to assume responsibility, theoretically, for closing an im-portant source of local economic activity.

Thus far, there have been five rounds of base closures. While the baseclosures have impacted communities throughout the States, Californiahas born a disproportionate share – particularly during the first fourrounds. California has approximately 12 per cent of the United Statespopulation. But, during the first four rounds of BRAC, California absor-bed 54 per cent of the personnel cuts and the closure of almost thirtysignificant installations. Estimates are that the first four rounds of BRACcost California 9.6 billion US-Dollar in annual revenues. California alonelost more jobs via BRAC than the other 49 states combined.

Beyond the direct job losses caused by BRAC, empty bases are left forreuse. The DOD first offers closed bases to federal agencies. If there isno such interest, then the DOD can offer all or part of the base to stateor local government, redevelopment authorities or private entities. Thereuse process is arduous. While it can create opportunities, it is alsofraught with obstacles. Often the buildings and land on former militaryinstallations are contaminated with hazardous waste – such as asbe-stos, toxic chemicals and radioactive materials. These hazardous mustbe abated before the property can be reused. And, such abatement canbe extremely expensive. Transferees of bases must enter into complexnegotiations with the federal government for adequate removal of thesehazardous materials.

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Various interests in each impacted community have specific ideas abouthow a closed base should be reused. Developers often want to buildhousing – especially on bases that are located on highly desirable realestate, such as the Presidio of San Francisco, which has picturesqueviews of the Bay and Golden Gate Bridge. Nearby residents of closed installations often want recreation facilities. Commercial interests fre-quently want to build retail zones. On bases that might house endan-gered species, conservationists urge preservation of habitats. Historicalpreservationists might argue that portions of bases should be main-tained to avoid destruction of buildings they feel are significant.

There are also infrastructure considerations – such as transit, roads orbridges to accommodate increased traffic to housing, business or at-tractions on former bases. If housing is constructed on former installa-tions, schools may need to be built for the children who will live inthose houses. BRAC provides no money for such needs and states andlocal communities, especially in the current economy, may find it diffi-cult to fund the necessary infrastructure. As in California, various statelaws and initiatives may dictate whether bonds can be issued or taxesrose to accommodate the needed infrastructure. Often, military installa-tions are not built to state or local code and may not follow federal dis-abilities access laws. Compliance requires additional expendituresbefore the property can be reused.

Probably more than any other recent situation involving real property inthe States, BRAC illustrates the competing interests at play in land use.Many of BRAC-related interests and issues apply in any land use situation in the States. As Alameda City Manager John Russo will illus-trate, that municipality's experience with the closure of its Naval AirStation encapsulates the many pitfalls and opportunities of developingavailable land in a local community.

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28 http://www.cityofalamedaca.gov/About-Alameda/ 29 http://yosemite.epa.gov/r9/sfund/r9sfdocw.nsf/3dec8ba3252368428825742600743733/23fed941bf316814882575ad00628866!OpenDocument 30 Ibid.31 http://www.militarymuseum.org/NASAlameda.html32 See footnote 29.

John A. RussoCity Manager, City of Alameda, California, United Stateshttp://www.cityofalamedaca.gov

Redeveloping the Alameda Naval Station

The Alameda Naval Air Station is a closed Navy installation located onAlameda Island, adjacent to the City of Alameda28 in Alameda Country,California. The subject of disagreement with various ministries evolvedon how to use this land, which formerly belonged to the Naval AirForce, most appropriately.

“Prior to 1936 the area was occupied by borax processing plant, an oilrefinery and an airport for the City of Alameda. In 1936, the Navyacquired title to Alameda and the air station’s primary mission was toprovide facilities and support for fleet aviation activities” 29. In 1993,Alameda was designated for closure and the installation ceased allnaval operations in 199730.

Out of the Naval Air Station Alameda31 a city of Alameda has been redeveloped over the past couple of years when it still consisted of a regional park, Veteran’s facility, Endangered Species Colony Agreement,the United States Fish and Wildlife Service, East Bay Regional Park Dis-trict and the City of Alameda. But the planning of the redevelopment ofthe former Naval Air Station was under constrain due to land-use regu-lations, wildlife restrictions as well as limitations on the historical dis-trict etcetera. The Navy was the led agency responsible for clean up ofthe site, together with the Environmental Protection Agency (EPA) aslead regulatory agency32.

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The Green Tea Party Movement

Professor Terry L. AndersonExecutive Director, The Property & Environment, Research Center, Montana; Hoover Institution, Stanford University, California, United Stateshttp://www.perc.orghttp://www.hoover.org

Serving Budget Cuts and Environmental Quality

As the 2012 presidential campaign heats up, enter the Green Tea Party(GTP) and candidate Kermit the Frog. The GTP has an official drink,green tea, which is filled with “anti’s” – anti-deficits, anti-regulations,and anti-bureaucracies – for fighting the cancer of an ever-growing go-vernment. But the GTP also has some “pros” – pro-growth, pro-environ-mental quality, and pro-property rights.

The GTP does not stand behind environmental rhetoric. Kermit does notdrive a hybrid because it is “deeper shade of green,” or eat at “greenconcession stands,” or use green termite killers. It does not believe thatmore government spending, especially at the national level, is the key toprosperity or to environmental quality.

The GTP stands for improving environmental quality while cutting go-vernment budgets and bureaucracy. Its platform begins with the pre-mise that economic growth is a prerequisite for environmental quality.Kermit is a “rational optimist,” the title of Matt Ridley’s best sellingbook, who is optimistic human ingenuity and entrepreneurship are thesolution to, not the cause of environmental problems. With the right in-centives, humans will adapt to global warming and, in so doing, improveecosystems.

To get the right incentives for improving environmental quality, the GTPplatform focuses on using the carrot – property rights and markets –rather than the stick – government regulation. Property rights and therule of law are the best way to make the environment an asset worthconserving because it makes economic sense to do so. Kermit under-stands that sustainability only comes from profitability.

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Here are a few policies that the GTP supports.

• Let markets determine how to best meet our energy demands. It will find alternatives to fossil fuels because those alternatives are cost effective, not because they create “green jobs.” The government has a poor record of picking winners. Despite billions of tax dollars spent on alternative energy such as wind and solar, they make a trivial contribution to both U.S. and world energy and continue to require subsidies. The market will find profitable and therefore sustainable alternatives that are cheaper, cleaner and more convenient.

• Land management is best left to private property owners. Whether it is food, timber, or environmental amenities, private owners are better stewards. Private land trusts, for example, cooperate with landowners to obtain conservation easements for producing everything from open space to endangered species habitat to agricultural communities. The GTP opposes federal subsidies for agriculture, water projects, flood control, and hydroelectricity production because they distort sound private land management decision, often to the detriment of the environment. Ethanol is a classic example. The GTP opposes federal land management bureaucracies that have a poor record for either fiscal or environmental responsibility. The GTP believes that markets without subsidies for water, food, housing, and amenities will be more fiscally and environmentally friendly.

• Where property rights are hard to create, the GTP believes the government can mimic the market through cap-and-trade programs. Command-and-control regulation failed to halt the demise of fishe- ries. Tradable catch shares to a sustainable harvest, on the other hand, have a record of reducing costs and increasing fish stocks. Similarly, capping air and water emissions and creating property rights to tradable emission permits can encourage innovative ways to reduce emissions at a lower cost. In his book, Cleaning the Air, Indur Goklany concludes that “emissions trading should be expanded to allow trades between old and new sources, and the pollutant-by- pollutant approach should be replaced by one that focuses on reducing overall risks to public health.”

The time is right for political entrepreneurs to endorse the GTP and Kermit as the best way to slow government growth, increase economicprosperity, and improve environmental quality. GO GREEN!

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Hans H. SteinRegionalbüro Europäische Institutionen und NordamerikaFriedrich-Naumann-Stiftung für die Freiheit71 Av. de Cortenbergh1000 BrüsselBelgienwww.fnf-europe.org

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