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Statement by Kemal Derviş, Administrator of the United Nations Development Programme On the Occasion of the Launch of the Human Development Report 2007/08, “Fighting Climate Change: Human Solidarity in a Divided World”

His Excellency, President Lula da Silva,  Minister of Foreign Affairs Mr. Celso Amorim, Minister for Social Developent Mr Patrus Ananias, , Secretary of State Leire Pajín, Minister of Science and Technology Mr. Sergio Rezende, Minister of Environment Ms Marina Silva, Director of Human Development Report Office, Mr. Kevin Watkins,
Distinguished Guests, ladies and gentlemen.

It is a real honour to be here in Brasilia for the global launch of the Human Development Report 2007/08 entitled, “Fighting Climate Change: Human Solidarity in a Divided World.” I would like to begin by sincerely thanking President Lula and the Government of Brazil for so graciously hosting this event. It is a just one further example of the commitment Brazil has to helping to address what is one of the most urgent challenges of our time, namely, tackling climate change and its implications for human development.

I. The science on climate change
 As we are all aware, climate change is now a scientifically established fact.  And as recognized by the Nobel Peace Prize committee in October, the work of the United Nation’s Intergovernmental Panel on Climate Change (IPCC) has over the last two decades, as set out most recently in their Synthesis Report, been critical in establishing an ever-broader consensus about the scale of the changes occurring in the global climate, the connection between human activities and climate change, and the effects of climate change.

While the exact impact of greenhouse gas emission is not easy to forecast, we now know enough today to recognise that there are large risks, potentially catastrophic ones. These include the melting of ice-sheets on Greenland and in the West Antarctic (which would put many countries under water), massive loss of biodiversity, and changes in the course of the Gulf Stream that would seriously alter weather patterns and constitute a risk for the human family as a whole.

As the Human Development Report 2007/08 makes clear, what we do today about climate change has consequences that will last a century or more. The heat-trapping gases we send into the atmosphere in 2008 will stay there until 2108, and beyond. The part of that change that is due to greenhouse gas emissions is not reversible in the foreseeable future. We as a global community, sharing one planet, are therefore making choices today that will affect our own lives, but even more so, the lives of our children and grandchildren.

Genuine concern about the effect of climate change on future generations dictates that we must act now.  We know the danger exists. We know the damage caused by greenhouse gas emissions is irreversible for a long time. And we know that it is growing with every day of inaction. Taking action now is a form of insurance against possibly massive losses. While it is true that we do not know the full probability of such losses or their likely exact timing, this should not be an argument for not taking insurance.

II. Risk and vulnerability for the poorest people

If these long-term threats were not reason enough to act and act quickly, the reality is that climate change is already starting to affect some of the poorest and most vulnerable communities around the world.  An increase of a worldwide average of 3 degrees centigrade (compared to pre-industrial temperatures) over the coming decades would result in a range of localized increases that could reach twice as high in some places. The effect that increased droughts, extreme weather events, tropical storms and sea level rises will have on large parts of Africa, on many small island states and coastal zones will be inflicted in our lifetimes. Increased exposure to droughts, floods and storms is already destroying opportunity and reinforcing inequalities. Thus, while climate change is a challenge for all, it is primarily and most immediately a challenge for developing countries in the lower latitudes which will face the impact of global warming not within centuries, but within decades.

While many developing countries have made significant progress in human development with millions of people being lifted out of poverty every year, violent conflict, lack of resources, insufficient coordination and weak policies continue to slow down development progress, particularly in Africa. It is now becoming increasingly clear that the climate change challenge is also going to hinder development.  We must, therefore, see the fight against poverty and the fight against the effects of climate change as interrelated efforts which reinforce each other, and where success must be achieved on both fronts, together.

III. Strategies for adaptation and mitigation

Success in addressing the climate change challenge will therefore need to involve adaptation to the effects of global warming because it is still going to affect the poorest countries in a significant way even if serious efforts to reduce emissions start immediately. Countries will need to develop their own adaptation plans, but the international community will need to assist them. 

While we pursue adaptation, we must also start to reduce emissions and take other steps at mitigation so that the irreversible changes already underway are not further amplified over the next few decades. If mitigation does not start now, the cost of adaptation in twenty or thirty year’s time will become prohibitive for the poorest countries.  Stabilizing greenhouse emissions to limit climate change is, therefore, a worthwhile insurance strategy for the world as a whole, including the richest countries. It is also an essential part of our overall fight against poverty and for achieving the Millennium Development Goals.

I therefore call today on leaders around the world to make this dual purpose of climate policies – to limit future climate change and help the most vulnerable adapt to what is already unavoidable -  a top priority.

There are a number of concrete policies that can be put in place to achieve these ends. 

IV. National action and international cooperation

First, it’s clear that we do need big changes and ambitious new policies. Second, while there will be large net benefits over time as a result of taking action on climate change, at the beginning, like with every investment there will be significant short-term costs.  This will require leadership of a kind that goes beyond electoral cycles, where societies will need to agree to pay the early costs to reap the long term gains, including changes in lifestyle choices.  One such lifestyle change relates to personal transportation which accounts for greater oil consumption than any other activity and is the fastest growing source of CO2 emissions. As the Report makes clear, developed and developing countries alike need to change the mix of fuels in the transport sector to align policies with carbon budgets.  I am pleased to note that Brazil offers one of the most successful examples of this, with one-third of the country’s transport sector now running on sugar-based ethanol, the cleanest and cheapest biofuel developed in recent decades.

I should also add that while the transition to climate protecting energy and lifestyles will have these short-term costs, there may also be economic benefits beyond what is achieved by stabilizing temperatures. I like to refer to the benefits that are likely to be realized through Keynesian and Schumpeterian mechanisms where new incentives for massive investment stimulates overall demand, leading to innovation and productivity jumps in a wide array of sectors. While we cannot fully predict how large these effects will be, taking them into account could lead to high benefit-cost rations for good climate policies.

Third, there is a growing recognition that the design of good policies will need to be mindful of the dangers of excessive reliance on bureaucratic controls. While government leadership will be essential in correcting the huge externality that is climate change, markets and prices will have to be put to work so that private sector decisions can more naturally lead to optimal investment and production decisions.  The use of the pricing mechanism is much more efficient than trying to use bureaucratic controls. For example, what should be the essence of mitigation policy, carbon and carbon equivalent gases will have to be priced so that using them reflects their true social cost.

 The most difficult policy challenges will relate to the distributional challenge. Those who have largely caused the problem – wealthy countries – are not going to be the ones who suffer the most in the short term. The poorest who did not and still are not contributing significantly to greenhouse gas emissions are the most vulnerable. Poor countries that are not historically responsible for carbon emissions are however being made to deal with the impacts of climate change largely on their own. In developing countries, one in 19 people were affected by climate-related disasters between 2000 and 2004. In contrast, only one in 1,500 people were affected in wealthy countries. The main difference is that developed countries have the means and resources to climate-proof their infrastructure. In between the rich and poorest societies, many middle income countries are becoming significant emitters in aggregate terms, but they do not have the same carbon debt to the world that rich countries have accumulated and they are still low emitters in per capita terms.   Rich countries need to shoulder their responsibilities and contribute to the incremental costs of moving the middle income countries on to a clean energy growth path.

Finally, those who benefit from a global public good should contribute to financing it. As home to the Amazon rainforest, Brazil knows well the rich treasure it owns which benefits the whole of humanity. Worldwide, forests provide a wide range of global public goods, of which climate is one. By contributing financially to the protection and upkeep of these goods, developed countries could support strong incentives for conservation. Multilateral mechanisms for such transfers should be developed as part of a broad-based strategy for providing global public goods. That is why I have advocated for blending a concessional element into the public financial resources available to middle-income countries, such as Brazil, from financial institutions such as the World Bank or the regional development banks.

As the Report makes clear, there is a window of opportunity for avoiding the most damaging climate change impacts, but that window will not last for long. Actions taken – or not taken – in the years ahead will have a profound bearing on the future course of human development.

If that window is missed, temperature rises of above two degrees Centigrade could see the Bahamas submerged under water, losses of up to 60 percent of rain-fed maize production in Mexico on which two million poor farmers depend, the disappearance of glaciers that provide 80 percent of fresh water to Peruvian cities, and increased cases of dengue fever in previously dengue-free areas of Latin America.

The world lacks nether the financial resources, nor the ability to develop the technology to act. What is missing is a sense of urgency, of human solidarity and collective interest. 

The United Nations climate change conference in Bali, Indonesia beginning next week is a unique opportunity to put the concerns of the world’s poorest and most vulnerable people at the centre of the fight against climate change. It may not be possible to reach agreement on all issues immediately. But it is very important to reach sufficient agreement to take some of the decisive policy measures that are needed.

While we do still live in a world where people are separated by vast gaps in wealth and opportunity, let us seize the chance that exists to safeguard the one thing we all share in common: planet Earth. For in the end our destinies are inextricably tied to each other. 

Thank you.