Facing the challenge: Low Carbon Development and Poverty Alleviation

Findings from a DIIS conference on the options for addressing both poverty and climate change

The world’s low income countries are facing an enormous task in the years to come. Not only are they continuing their uphill battle for economic growth and poverty reduction; they also have to wrestle the global climate changes that are threatening exactly these countries the most.

The enormity of this task often leads to the conclusion that low income countries should leave Low Carbon development to the wealthier countries and instead focus on following the conventional economic development path.

However, there is a now a growing attention to the fact that a low carbon development process may in fact contribute to poverty alleviation and economic development in these countries.

By supporting more efficient energy use, sustaining natural resources and enhancing local income opportunities, options may exist for low carbon development to actually contribute to local livelihoods and national economies. However, these options need to be identified, and their possible positive or negative impacts on development and poverty alleviation needs to be carefully considered.

On Tuesday of this week, some 70 participants met at a seminar hosted by DIIS to address this issue. Following presentations by experts from Ghana, Bolivia, the UK and Denmark, the seminar participants engaged in group discussions to discuss and identify options and recommendations for supporting pro-poor low carbon development. The debate centered on three particular areas: Agriculture, forestry and energy.

Low carbon development and agriculture
In agriculture, the options debated included organic and low external input agriculture, which on the plus side appears to have good scope for contributing both to rural poverty reduction and providing a number of important additional environmental benefits at local levels. The absence or low levels of fertilizers in organic and low external input farming, respectively, also has carbon emissions reduction potential.

The policy challenge may therefore lie more in recognizing the economic-, social- and climate-related value of such local farming systems, and giving them more priority in development support and national policies than is currently being done. This includes greater financial support to enhancement of such practices, and to ensuring institutional frameworks such as tenure rights and specific low carbon practices such as Conservation Agriculture approaches.

Several seminar participants pointed to the importance of “bringing the state back in” in terms of supporting low carbon agricultural development – not so much as a service provider but as a mechanism for providing the institutional supportive framework and legitimacy of such approaches.

Reducing emissions from deforestation and degradation
In forestry, current options center on the establishment of a global mechanism whereby developing countries can be financially rewarded for reducing global emissions through forest conservation. This scheme, known as Reduced Emissions from Deforestation and Degradation (REDD), could have a significant impact on lowering global emissions, and may generate substantial funds for developing countries.

Whether REDD can contribute to poverty alleviation will however depend on a number of factors, including the outcome of current international debates on a number of design options for how the mechanism should work. E.g. whether it should be purely market driven or fund-based, and which types of forest management and –policies should be rewarded under the scheme. Such design options will have a substantial effect on determining whether REDD will have positive or negative effects on poverty, equity and local livelihoods and rights at local levels.

A key decision to be made is whether REDD should mainly aim towards a “No Harm” policy towards the poor, or whether a more proactive pro-poor policy is employed that emphasizes local forest user rights and ensuring that the benefits from REDD would actually reach the poorest. Experience suggests that while the former may reduce the transaction costs of REDD mechanisms, it also significantly increases the risks for both the social and environmental sustainability of the scheme.

Options in the energy sector
In the energy sector, a range of technical options exist for reducing the current dependency on fossil fuels and thereby ensuring an energy sector that is both climate friendly and more efficient and thereby less costly both for national economies and poor households. Such options include efficiency measures at both power generation, delivery and end consumer levels as well as increased use of renewable resources, such as hydro, wind, biogas, solar and thermal energy.

Here, key constraints may include a reluctance on the part of governments to commit fully to such alternative approaches, while at the local level the poor may not always be able to afford the upfront investments required for even relatively cheap technologies.

Other participants at the seminar pointed out that more large-scale and conventional solutions should not be overlooked. This includes large-scale hydropower generation which may contribute significantly to reducing the cost of electricity, thereby enhancing the potential for expanding electricification and in this way providing relatively cheap development opportunities for the rural poor.

Such large-scale schemes will however need to consider the constraints in electricity delivery infrastructure, and the difficult balance between on the one hand providing cheap energy for some parts of a population, while imposing potentially socially problematic measures on others parts of the population (such as resettlement for hydropower dams).

The role of development assistance
Cutting across these sectors was the issue of how Danida and other donors may support pro-poor low carbon development options.

Seminar participants pointed to the need for supporting the national framework conditions for a low carbon development process. If a pro-poor low carbon development process is to be achieved, substantial policy reorientations may be necessary in some sectors, and institutional frameworks need to be strengthened further to take on the task, including at local levels.

The need to support demonstration projects that can help develop experiences and showcase the positive effects of low carbon options was also pointed out, as was the possibility of helping to meet some of the upfront investment costs faced by national governments in many of the low carbon options discussed at the seminar.

Other participants pointed to the need for reflection on whether a pro-poor low carbon development process is in fact possible under the current development- and aid architecture, or whether a more fundamental rethink is required about what good development is, and how it can be supported by donors.

The findings from the seminar will feed into a study currently being conducted by DIIS on options for pro-poor Low Carbon Development. The study has been commissioned by Danida and will be made publically available upon completion. Details here.

Available for download (pdf files):

Low Carbon Development in Low Income Countries – Linking to Poverty Reduction
Jacob Fjalland, Research Associate, DIIS (1,01 MB)

Considerations on Low Carbon Development – Perspectives from Bolivia
Javier Gonzales Iwansiw, Environment and Development Researcher, Stockholm Environment Institute in Oxford, UK, and Nur University, Bolivia (1 MB)

Making REDD work for the poor
Jessica Brown, Research officer, Overseas Development Institute (ODI), UK (792 KB)

Organic Farming in Low Income Countries – an Example of Pro-Poor Low Carbon development?
Henrik Egelyng, Project Researcher, DIIS (4 MB)

Low Carbon Energy Development and Poverty Reduction in Sub-Saharan Africa – Opportunities and Barriers
Ishmael Edjekumhene, Senior Program Manager, Kumasi Institute of Technology and Environment (KITE), Ghana (663 KB)

The Role of Existing SMEs in Developing Low Carbon Energy in Africa: The Case of the MFP Programme i West Africa
Ivan Nygaard, Scientist, Risø DTU National Laboratory for Sustainable Energy, Roskilde, Denmark (1 MB)

Is There a Market for Danish Companies in Low Carbon Solutions for Low Income Countries?
Anders Hauch, Regional manager, Confederation of Danish Industry (DI) (2 MB)

Notes from discussion sessions (485 KB)

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