Tuesday, 18 December 2012

How can business help the MDGs?

By Noshua Watson

The UN High Level Panel met a few weeks ago to discuss the Post-2015 Millennium Development Goals framework. The new MDGs have been at the forefront of discussion in the UK, as Prime Minister David Cameron is co-chairing the panel with the presidents of Indonesia and Liberia. Out of the UK events, blogs and online discussion, different means of encouraging business participation in the MDGs have emerged: including business in the MDG consultation process, asking business to contribute to an enabling environment for economic growth and poverty reduction, integrating the MDGs into corporate strategic goals or even having an MDG oriented around private sector goals like FDI, employment or supply-chain inclusion.

An issue that has been assumed, but not directly addressed has been: while targeting the MDGs, how do you build local capacities? I think that those who want to engage business in the MDGs can learn from the philanthropic sector in this area. For the Bellagio Initiative on philanthropy and development, Bheki Moyo wrote that the aim of institutionalised (or vertical) philanthropy should be to support horizontal (or community/local/regional) philanthropy. The Bellagio Initiative worked this way, as the Rockefeller Foundation worked with IDS and the Resource Alliance to reach out to Southern NGOs, academics and thought leaders.

At a recent workshop on how foundations could strengthen civil society in Africa held by Oxford-based NGO INTRAC, the participants concluded that there is a trade-off between working with local organisations that have already demonstrated their capacities versus taking time and money to strengthen new partners. They found that, “There may be multiple layers between monetary input and development activities and outcomes. A typical ‘chain’ might involve private funder, intermediary international NGO, local partner NGO(s), community-based organisations and individual beneficiaries.”

The same goes for businesses, especially multinationals, that would try to achieve the MDGs. Including smallholder farmers in a global value chain might also require finding and financing local processors. The Business Innovation Facility has piloted this kind of intervention to help expand an agro-processor and local supply chains in Nigeria.

Thursday, 13 December 2012

What was all that climate change stuff people used to go on about?...

By Stephen Spratt

How the world has changed. Do you remember COP 15 in Copenhagen in 2009? For months leading up to the event coverage was everywhere. Celebrities queued up to express confidence that ‘this was the moment’ that politicians would ‘rise to the challenge’. And the politicians said much the same. John Kerry, erstwhile US Presidential candidate, summed up the attitude well:
“We can stop the climate-driven wars of the future. We can keep would-be climate refugees in their homes.  We can keep islands on the map and stop climate-fuelled droughts and storms before they ever start....we have an opportunity to realign the way nations have dealt with each other. By reaching agreement on finance, emission targets, and a transparent system for global action, we will be recognizing globally that the stewardship of the planet and our appetite for resources will be managed in a new way in a new era.”
In stark contrast, this year’s COP* in Doha, which came to an end at the weekend, was so low-key hardly anyone was even aware it was happening. If Senator Kerry’s goals were well on the way to being achieved, this would be understandable. Unfortunately, of course, the opposite is true. Not only have none of these aims been realised, but the scientific evidence, rapidly melting ice-caps, historically unprecedented weather patterns, that kind of thing, gets stronger and stronger. As the need for action grows the prospects of actually seeing any action diminishes at an ever faster rate.

How can we explain this lack of action? 
  1. There is an inevitable fatigue to interminable negotiations that go nowhere. Having marched up the hill of expectation at Copenhagen, many people are no doubt very wary of having their hopes dashed again. 
  2. The gulf between the positions of the different parties is so wide that optimism is difficult to sustain anyway. 
To take just one example, at Copenhagen developed countries promised to transfer $100 billion per year to developing countries by 2020 to fund climate change mitigation and adaptation. The original reason is a simple application of the polluter pays principle: countries that caused the problem should compensate those that suffer from its consequences. While this rationale remains ethically compelling, and developed countries have not (yet?) reneged on the longer-term goal, no progress has yet been made in actually generating this finance, or even deciding where it will come from.

Doha - COP 18 - Dec 8, 2012 009
What we had instead were various attempts to water down the commitment. Given their fiscal deficits, many developed countries are keen to avoid having to tap public coffers. The idea is to get private investment instead, but presumably the private sector will only invest where there is a good financial return, and there is no reason to think that this will be where finance is most needed. The risk is that private finance will go where it was going anyway, leaving non-commercially viable mitigation projects, and virtually all adaptation projects, struggling for resources. These need public funds, and, worryingly, developed countries seem increasingly reluctant to honour their commitments in this regard. Having actually put some money on the table at Doha, the UK remains a notable exception to this trend.

To be fair, one good outcome of Doha was the agreement to establish a mechanism to provide ‘loss and damage’ funding for countries affected by climate change. However, while this was originally described as a form of ‘compensation’ mechanism, negotiators from the EU and US insisted it be ‘rebranded’ as ‘new aid’, from fear they could be held responsible for climate change-related damage in the future, and so leave themselves open to compensation claims. But of course they are responsible, at least in part, as the original commitment to transfer climate finance funds recognised. Again, this does not bode well for the prospects of ever seeing anything like $100 billion of ‘new and additional’ resources being transferred annually from developed to developing countries.

Those seeking reasons to be cheerful are probably wise to avoid these annual jamborees, which have become increasingly depressing. I have recently started a project to understand better the drivers of renewable energy investment in China and India. Despite the intractable state of international negotiations this continues to grow. Understanding why might just provide a chink of light amongst all the doom and gloom.

*IDS has a body of research on Climate Change, much of which touches on the issues raised in this post and at the UN Climate Change Conference – COP18.

Image credit: World Resources Institute/Flickr