The view from Davos - Part three: Perspectives on the environmental debate

Monday, February 04, 2008 10:46 AM by Simon Maxwell

Last week, I attended the World Economic Forum in Davos. This is the third of four blogs with my reflections and predictions on how the debates will be taken forward in 2008. (for the other blogs, visit 'ODI on... Davos 2008')

Which way for biofuels?
Biofuels is at a much earlier stage of development, and is interesting because ODI (viz Leo Peskett and others, including most recently Chris Stevens and others in the International Economic Development Group) have published on the subject. There are some strong enthusiasts, notably from Latin America, and in Brazil half of every tank is bioethanol, but I would say the pendulum is rather swinging against first generation biofuels derived from sugar, grains and oilseeds: critics say they push food prices up, cause environmental degradation if forest has to be cleared, increase pressure on water supplies, exclude poor farmers, save very little carbon, given the energy costs of production, and cost a lot, especially if produced with subsidy and behind tariff barriers in Europe and the US. Of course, the arguments are contested and location-specific. Still, the general consensus is that we need a dash to the next generations of biofuels, not just cellulose-based options, but more excitingly algae and bacteria-based options, which do not have the same disadvantages. BP are investing heavily on research in these areas. DFID Chief Scientist Gordon Conway argued strongly for algae. A Professor from Harvard, Michael Church, made the case for e-coli. A number of people mentioned biogas from domestic waste. Everyone agrees, of course, that EU subsidies and tariff barriers are pernicious (see the new ODI Briefing Paper): everyone, that is, except for those with the power to change things. Everyone also agrees that oil consumption has to be controlled.

My view of all this is that we are in a similar situation to the one we found ourselves in the mid-1960s, with the threat of mass famine in India. The Green Revolution in India happened because of a sustained and coordinated programme of work by Foundations (Rockefeller), aid agencies and governments, to provide the science, technology, infrastructure, education, marketing services and policy environment. If ever there was a case for a public-private partnership and for the practical application of global corporate citizenship, this is it.

Climate change adaptation
Climate change adaptation is at an even earlier stage, but complicated as ODI work on Climate Change, Agriculture and Poverty Reduction shows. Adaptation ranges from investments like the Thames Barrier to drought-proofing of sorghum varieties for the Sahel: too varied to be manageable without some disaggegation. We spent some time on insurance issues, where CAT bonds is becoming quite well developed, but will be very expensive if the probability of disasters rises (who would insure your house if they knew it was going to be flooded every two years?). A big problem is that cover is one year at a time and needs to be multi-year. SwissRe are very good on this subject and have developed new technologies like index-insurance (which monitors and pays out on high-level indicators like rainfall in a district, rather than trying to measure damage on individual fields).

Otherwise, we spent a lot of time on very short term adaptation problems facing the rural poor, which in my view might or might not be caused by climate change.

What I think we need are country or regional scenarios, with and without climate change, over 10-50 years, and distinguishing trends from shocks. The “without” scenarios would recognize significant structural change over all these time periods (demographic shifts, urbanisation, growth of service sectors, increasing wealth etc . . .). The “with” scenarios would necessarily involve probabilities (cf Stern) but would estimate both the frequency of shocks and the permanent features. It is surprising that these do not exist. People keep saying we don’t have sufficient data to make accurate predictions, but the whole point about scenario planning, and about Stern, come to that, is that the analysis is deliberately exploratory and probabilistic.

Water
I went to a working breakfast and also a morning’s workshop on water, chaired by Maggie Catley-Carson (ODI is, of course, very active on water policy). There has been a Call for Action on Water, led by the food industry, and they will be following up with scenario planning and action plans. Key topics included benchmarking on metrics of water use, but also better policies on e.g. water pricing. Many companies reported projects that were intended to be water-neutral or net contributors. For example, Coca Cola, burned by public protest in Southern India, of course, have a policy that they will not go into a water-stressed area unless they can make a net positive contribution to water availability, e.g. by investing in water harvesting in the surrounding area. Interesting that drinking water (never mind sanitation) is not really the focus. Despite Mary Robinson calling repeatedly (and rightly) for a rights-based approach, we were reminded more than once that drinking water is only 8% of water use and that 80% is agriculture.

There is a great emphasis in this (and some other sectors) on awareness-raising and leadership. Everyone wants an Al Gore. This is fine, as far as it goes, and awareness-raising is good. However, I think leadership is also about offering people hope and the prospect of solutions. Thus, Al Gore raises awareness, but also talks about e.g. long-life light-bulbs or house insulation.

The thing about water is that, once you have accepted water stress, the next stage of the conversation is all about conflicts and politics. In various sessions, we talked about the Coca-Cola plant in Kerala (alleged conflict between industrial water extraction and access by local people), dams and displacement in India and Canada, the politics of subsidised water extraction for irrigation (India again), the difficulties associated with pricing water in poor communities, resistance to water company privatisation, inter-regional conflicts associated with moving water from one place to another (e.g. Spain) and international water use issues (e.g. the Nile). There is an interesting parallel with food security strategies, which were designed to adjudicate exactly the kinds of conflicts which arise in water – and which need to be part of a political process. We surely need national water strategies.