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Environmental Trends Threaten Global Progress for the Poor

United Nations Development Programme

Development progress in the world’s poorest countries could be halted or even reversed by mid-century unless bold steps are taken now to slow climate change, prevent further environmental damage and reduce deep inequalities within and among nations, according to projections in the 2011 Human Development Report, launched by the United Nations Development Programme (UNDP) Nov. 2.

The 2011 report—Sustainability and Equity: A Better Future for All—argues that environmental sustainability can be most fairly and effectively achieved by addressing health, education, income and gender disparities together with the need for global action on energy production and ecosystem protection. The report was launched in Copenhagen Nov. 2 by UNDP Administrator Helen Clark with Danish Prime Minister Helle Thorning-Schmidt, whose new government has pledged to reduce Denmark’s CO2 emissions by a dramatic 40 percent over the next 10 years.

As the world community prepares for the landmark UN Conference on Sustainable Development in June 2012 in Rio de Janeiro, the report argues that sustainability must be approached as a matter of basic social justice, for current and future generations alike.

“Sustainability is not exclusively or even primarily an environmental issue, as this report so persuasively argues,” Helen Clark says in the foreword. “It is fundamentally about how we choose to live our lives, with an awareness that everything we do has consequences for the seven billions of us here today, as well as for the billions more who will follow, for centuries to come.”

UNDP has commissioned the editorially-independent Human Development Reports each year since 1990, when its Human Development Index (HDI), a composite measure of health, education and income, first challenged purely economic measures of national achievement and called for consistent global tracking of progress in overall living standards.

Between 1970 and 2010 the countries in the lowest 25 percent of the HDI rankings improved their overall HDI achievement by a remarkable 82 percent, twice the global average. If the pace of improvement over the past 40 years were to be continued for the next 40, the great majority of countries would achieve HDI levels by 2050 equal to or better than those now enjoyed only by the top 25 percent in current HDI rankings, the report notes—an extraordinary achievement for human development globally in less than a century. Yet because of escalating environmental hazards, these positive development trends may instead be abruptly halted by mid-century, the report contends, noting that people in the poorest countries are disproportionately at risk from climate-driven disasters such as drought and flooding and exposure to air and water pollution.

Sustainability and Social Justice

Despite the human development progress of recent years, income distribution has worsened, grave gender imbalances still persist and accelerating environmental destruction puts a double burden of deprivation on the poorest households and communities, the report says. Half of all malnutrition worldwide is attributable to environmental factors, such as water pollution and drought-driven scarcity, perpetuating a vicious cycle of impoverishment and ecological damage, the report notes.

High living standards need not be carbon-fueled and follow the examples of the richest countries, says the report, presenting evidence that while CO2 emissions have been closely linked with national income growth in recent decades, fossil-fuel consumption does not correspond with other key measures of human development, such as life expectancy and education. In fact, many advanced industrial nations are reducing their carbon footprints while maintaining growth.

“Growth driven by fossil fuel consumption is not a prerequisite for a better life in broader human development terms,” Helen Clark said. “Investments that improve equity—in access, for example, to renewable energy, water and sanitation, and reproductive healthcare—could advance both sustainability and human development.”

The report calls for electricity service to be provided to the 1.5 billion people who are now off the power grid—and says that this can be done both affordably and sustainably, without a significant rise in carbon emissions. This new UN-backed Universal Energy Access Initiative could be achieved with investments of about one-eighth of the amount currently spent on fossils fuel subsidies, estimated at US$312 billion worldwide in 2009, according to the report.

The report adds its voice to those urging consideration of an international currency trading tax or broader financial transaction levies to fund the fight against climate change and extreme poverty. A tax of just 0.005 percent on foreign exchange trading could raise $40 billion yearly or more, the report estimates, significantly boosting aid flows to poor countries—amounting to $130 billion in 2010—at a time when development funding is lagging behind previously pledged levels due to the global financial crisis.

“The tax would allow those who benefit most from globalization to help those who benefit least,” the report argues, estimating that about $105 billion is needed annually just to finance adaptation to climate change, especially in South Asia and sub-Saharan Africa.

The Report examines social factors not always associated with environmental sustainability:

· Expanding reproductive rights, health care and contraceptive access would open a new front in the fight against gender inequality and poverty, the report contends. Reproductive rights can further reduce environmental pressures by slowing global demographic growth, with the world population now projected to rise from 7 billion to 9.3 billion within 40 years.

· The report argues that official transparency and independent watchdogs—including news media, civil society and courts—are vital to civic engagement in environmental policymaking. Some 120 national constitutions guarantee environmental protections, but in many countries there is little enforcement of these provisions, the report says.

· Bold global action is urgently required for sustainable development, but local initiatives to support poor communities can be both highly cost-effective and environmentally beneficial, the report emphasizes. India’s Rural Employment Guarantee Act cost about 0.5 percent of GDP in 2009 and benefited 45 million households—one-tenth of the labour force. Brazil’s Bolsa Familia and Mexico’s Oportunidades programmes cost about 0.4 percent of GDP and provide safety nets for about one-fifth of their populations.

The authors forecast that unchecked environmental deterioration—from drought in sub-Saharan Africa to rising sea levels that could swamp low-lying countries like Bangladesh—could cause food prices to soar by up to 50 percent and reverse efforts to expand water, sanitation and energy access to billions of people, notably in South Asia and sub-Saharan Africa.

By 2050, in an environmental challenge scenario factoring in the effects of global warming on food production and pollution, the average HDI would be 12 percent lower in South Asia and sub-Saharan Africa than would otherwise be the case, the report estimates. Under an even more adverse environmental disaster situation—with vast deforestation, dramatic biodiversity declines and increasingly extreme weather—the global HDI would fall 15 percent below the baseline projection for 2050, with the deepest losses in the poorest regions.

Environmental deterioration could undermine decades of efforts to expand water, sanitation and electricity access to the world’s poorest communities. “These absolute deprivations, important in themselves, are major violations of human rights,” the authors say.

For more information, click here.

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The annual Human Development Report is an editorially independent publication of the United Nations Development Programme. For free downloads of the 2011 Human Development Report in ten languages, plus additional reference materials on its indices and specific regional implications, click here.

UNDP partners with people at all levels of society to help build nations that can withstand crisis, and drive and sustain the kind of growth that improves the quality of life for everyone. On the ground in 177 countries and territories, we offer global perspective and local insight to help empower lives and build resilient nations. Visit UNDP's website here.

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Ola Elvestrun, Norway's environment minister, announced Thursday that it is freezing its contributions to the Amazon Fund, and will no longer be transferring €300 million ($33.2 million) to Brazil. In a press release, the Norwegian embassy in Brazil stated:

Given the present circumstances, Norway does not have either the legal or the technical basis for making its annual contribution to the Amazon Fund.

Brazilian President Jair Bolsonaro reacted with sarcasm to Norway's decision, which had been widely expected. After an official event, he commented: "Isn't Norway the country that kills whales at the North Pole? Doesn't it also produce oil? It has no basis for telling us what to do. It should give the money to Angela Merkel [the German Chancellor] to reforest Germany."

According to its website, the Amazon Fund is a "REDD+ mechanism created to raise donations for non-reimbursable investments in efforts to prevent, monitor and combat deforestation, as well as to promote the preservation and sustainable use in the Brazilian Amazon." The bulk of funding comes from Norway and Germany.

The annual transfer of funds from developed world donors to the Amazon Fund depends on a report from the Fund's technical committee. This committee meets after the National Institute of Space Research, which gathers official Amazon deforestation data, publishes its annual report with the definitive figures for deforestation in the previous year.

But this year the Amazon Fund's technical committee, along with its steering committee, COFA, were abolished by the Bolsonaro government on 11 April as part of a sweeping move to dissolve some 600 bodies, most of which had NGO involvement. The Bolsonaro government views NGO work in Brazil as a conspiracy to undermine Brazil's sovereignty.

The Brazilian government then demanded far-reaching changes in the way the fund is managed, as documented in a previous article. As a result, the Amazon Fund's technical committee has been unable to meet; Norway says it therefore cannot continue making donations without a favorable report from the committee.

Archer Daniels Midland soy silos in Mato Grosso along the BR-163 highway, where Amazon rainforest has largely been replaced by soy destined for the EU, UK, China and other international markets.

Thaís Borges.

An Uncertain Future

The Amazon Fund was announced during the 2007 United Nations Climate Change Conference in Bali, during a period when environmentalists were alarmed at the rocketing rate of deforestation in the Brazilian Amazon. It was created as a way of encouraging Brazil to continue bringing down the rate of forest conversion to pastures and croplands.

Government agencies, such as IBAMA, Brazil's environmental agency, and NGOs shared Amazon Fund donations. IBAMA used the money primarily to enforce deforestation laws, while the NGOs oversaw projects to support sustainable communities and livelihoods in the Amazon.

There has been some controversy as to whether the Fund has actually achieved its goals: in the three years before the deal, the rate of deforestation fell dramatically but, after money from the Fund started pouring into the Amazon, the rate remained fairly stationary until 2014, when it began to rise once again. But, in general, the international donors have been pleased with the Fund's performance, and until the Bolsonaro government came to office, the program was expected to continue indefinitely.

Norway has been the main donor (94 percent) to the Amazon Fund, followed by Germany (5 percent), and Brazil's state-owned oil company, Petrobrás (1 percent). Over the past 11 years, the Norwegians have made, by far, the biggest contribution: R$3.2 billion ($855 million) out of the total of R$3.4 billion ($903 million).

Up till now the Fund has approved 103 projects, with the dispersal of R$1.8 billion ($478 million). These projects will not be affected by Norway's funding freeze because the donors have already provided the funding and the Brazilian Development Bank is contractually obliged to disburse the money until the end of the projects. But there are another 54 projects, currently being analyzed, whose future is far less secure.

One of the projects left stranded by the dissolution of the Fund's committees is Projeto Frutificar, which should be a three-year project, with a budget of R$29 million ($7.3 million), for the production of açai and cacao by 1,000 small-scale farmers in the states of Amapá and Pará. The project was drawn up by the Brazilian NGO IPAM (Institute of Environmental research in Amazonia).

Paulo Moutinho, an IPAM researcher, told Globo newspaper: "Our program was ready to go when the [Brazilian] government asked for changes in the Fund. It's now stuck in the BNDES. Without funding from Norway, we don't know what will happen to it."

Norway is not the only European nation to be reconsidering the way it funds environmental projects in Brazil. Germany has many environmental projects in the Latin American country, apart from its small contribution to the Amazon Fund, and is deeply concerned about the way the rate of deforestation has been soaring this year.

The German environment ministry told Mongabay that its minister, Svenja Schulze, had decided to put financial support for forest and biodiversity projects in Brazil on hold, with €35 million ($39 million) for various projects now frozen.

The ministry explained why: "The Brazilian government's policy in the Amazon raises doubts whether a consistent reduction in deforestation rates is still being pursued. Only when clarity is restored, can project collaboration be continued."

Bauxite mines in Paragominas, Brazil. The Bolsonaro administration is urging new laws that would allow large-scale mining within Brazil's indigenous reserves.

Hydro / Halvor Molland / Flickr

Alternative Amazon Funding

Although there will certainly be disruption in the short-term as a result of the paralysis in the Amazon Fund, the governors of Brazil's Amazon states, which rely on international funding for their environmental projects, are already scrambling to create alternative channels.

In a press release issued yesterday Helder Barbalho, the governor of Pará, the state with the highest number of projects financed by the Fund, said that he will do all he can to maintain and increase his state partnership with Norway.

Barbalho had announced earlier that his state would be receiving €12.5 million ($11.1 million) to run deforestation monitoring centers in five regions of Pará. Barbalho said: "The state governments' monitoring systems are recording a high level of deforestation in Pará, as in the other Amazon states. The money will be made available to those who want to help [the Pará government reduce deforestation] without this being seen as international intervention."

Amazonas state has funding partnerships with Germany and is negotiating deals with France. "I am talking with countries, mainly European, that are interested in investing in projects in the Amazon," said Amazonas governor Wilson Miranda Lima. "It is important to look at Amazônia, not only from the point of view of conservation, but also — and this is even more important — from the point of view of its citizens. It's impossible to preserve Amazônia if its inhabitants are poor."

Signing of the EU-Mercusor Latin American trading agreement earlier this year. The pact still needs to be ratified.

Council of Hemispheric Affairs

Looming International Difficulties

The Bolsonaro government's perceived reluctance to take effective measures to curb deforestation may in the longer-term lead to a far more serious problem than the paralysis of the Amazon Fund.

In June, the European Union and Mercosur, the South American trade bloc, reached an agreement to create the largest trading bloc in the world. If all goes ahead as planned, the pact would account for a quarter of the world's economy, involving 780 million people, and remove import tariffs on 90 percent of the goods traded between the two blocs. The Brazilian government has predicted that the deal will lead to an increase of almost $100 billion in Brazilian exports, particularly agricultural products, by 2035.

But the huge surge this year in Amazon deforestation is leading some European countries to think twice about ratifying the deal. In an interview with Mongabay, the German environment ministry made it very clear that Germany is very worried about events in the Amazon: "We are deeply concerned given the pace of destruction in Brazil … The Amazon Forest is vital for the atmospheric circulation and considered as one of the tipping points of the climate system."

The ministry stated that, for the trade deal to go ahead, Brazil must carry out its commitment under the Paris Climate agreement to reduce its greenhouse gas emissions by 43 percent below the 2005 level by 2030. The German environment ministry said: If the trade deal is to go ahead, "It is necessary that Brazil is effectively implementing its climate change objectives adopted under the [Paris] Agreement. It is precisely this commitment that is expressly confirmed in the text of the EU-Mercosur Free Trade Agreement."

Blairo Maggi, Brazil agriculture minister under the Temer administration, and a major shareholder in Amaggi, the largest Brazilian-owned commodities trading company, has said very little in public since Bolsonaro came to power; he's been "in a voluntary retreat," as he puts it. But Maggi is so concerned about the damage Bolsonaro's off the cuff remarks and policies are doing to international relationships he decided to speak out earlier this week.

Former Brazil Agriculture Minister Blairo Maggi, who has broken a self-imposed silence to criticize the Bolsonaro government, saying that its rhetoric and policies could threaten Brazil's international commodities trade.

Senado Federal / Visualhunt / CC BY

Maggi, a ruralista who strongly supports agribusiness, told the newspaper, Valor Econômico, that, even if the European Union doesn't get to the point of tearing up a deal that has taken 20 years to negotiate, there could be long delays. "These environmental confusions could create a situation in which the EU says that Brazil isn't sticking to the rules." Maggi speculated. "France doesn't want the deal and perhaps it is taking advantage of the situation to tear it up. Or the deal could take much longer to ratify — three, five years."

Such a delay could have severe repercussions for Brazil's struggling economy which relies heavily on its commodities trade with the EU. Analysists say that Bolsonaro's fears over such an outcome could be one reason for his recently announced October meeting with Chinese President Xi Jinping, another key trading partner.

Maggi is worried about another, even more alarming, potential consequence of Bolsonaro's failure to stem illegal deforestation — Brazil could be hit by a boycott by its foreign customers. "I don't buy this idea that the world needs Brazil … We are only a player and, worse still, replaceable." Maggi warns, "As an exporter, I'm telling you: things are getting very difficult. Brazil has been saying for years that it is possible to produce and preserve, but with this [Bolsonaro administration] rhetoric, we are going back to square one … We could find markets closed to us."

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