Reference: Wolfensohn, J.D. 2002. Global Priority. Our Planet 13(3). pp.4-5
Global
priority
James D. Wolfensohn explains that achieving environmental sustainability is essential if poverty is to
be reduced
The Millennium Development Goals (MDGs) grew out of the agreements and resolutions
of conferences organized by the United Nations in the past decade. They have now been
commonly accepted as a framework for measuring development progress, and the World
Bank Group is committed to working with our country partners to achieve these goals.
The MDGs can only be attained if countries choose an environmentally and socially
sustainable development path. This requires managing the physical, human, natural and
social capital that underpin development in ways that meet the needs of the present
generation without foreclosing options for the future. This task is particularly challenging in
the case of natural capital where the goods and services provided by ecological systems
to sustain human development continue to be overexploited, degraded and – in cases
such as biodiversity – irreversibly lost, on a scale that causes worldwide concern.
There is broad agreement that reversing environmental degradation is critical to poverty
reduction, since poor countries – and particularly poor people – are most vulnerable to
environmental degradation and lack the financial, technical and institutional means to
address these problems. The priorities for action include:
• Improve access by poor people to safe water and sanitation and reduce indoor
and outdoor air pollution to lessen the burden of disease.
• Arrest the degradation of soil and water resources to help improve agricultural
productivity.
• Conserve terrestrial and aquatic ecosystems, to preserve critical ecological goods
and services.
• Improve social and economic conditions to help reduce the effects of
environmental disasters.
Reference: Wolfensohn, J.D. 2002. Global Priority. Our Planet 13(3). pp.4-5
Sound policies
Addressing these priorities – and building environmental sustainability at the country level
– starts with sound national policies and programmes for economic growth that improve
people’s lives and the local environment. However, unless such national policies and
programmes take into account adverse regional spill-over effects, they will potentially
seriously threaten the health of transboundary ecosystems that provide vital
environmental services to hundreds of millions of poor people. Moreover, unless we
collectively act to preserve the global environmental commons – the climate, the ozone
layer, the diversity of life and the oceans – we will undermine the sustainability of national
and regional development. The evidence is unequivocal: regional and global
environmental commons are, with few exceptions, deteriorating.
Environmental services constitute regional and global commons. They can be protected
only through cooperation and collective action by developed and developing countries.
Helping our country partners address these challenges is the focus of the Bank’s new
environment strategy, Making Sustainable Commitments. On many global environmental
issues, Bank action is linked to the objectives of international agreements. The Bank
Group works with country partners to overcome the factors that restrict their ability to act
on global environmental priorities, particularly individual countries’ limited economic
incentives for taking action on the global environment, and the frequently weak national
policy and institutional frameworks that limit the incentives and scope for effective action.
Unless we collectively act to preserve the global environmental commons we
will undermine the sustainability of national and regional development
These limited economic incentives follow inherently from the regional or global public
goods character of environmental services. As a consequence, decisions taken at the
country level on the use of natural resources for national economic development do not
adequately reflect their global impacts – or as the economists would say, the regional and
global externalities are not internalized at the national level. Absent markets for trading
certain global environmental goods and services, global non-market values are today
captured primarily through international resource transfers. The Global Environment
Facility (GEF) and the Multilateral Fund for the Implementation of the Montreal Protocol
(MLF) were established to help underwrite and leverage such transfers.
Resource transfers from these mechanisms have served to raise the returns to host
countries on environmentally friendly investments with global benefits, including energy
services, rural development, management of terrestrial and aquatic ecosystems, and
finding alternative technologies to replace chlorofluorocarbons and other ozonethreatening
substances. Such investments can have a double benefit, contributing to
long-term environmental sustainability – through, for example, reduced emissions of
carbon dioxide – while also producing immediate local environmental benefits such as
improved air quality.
Partnerships
Together with the United Nations Development Programme and UNEP, the World Bank
Group has served as an implementing agency for the GEF and the MLF. We remain firmly
Reference: Wolfensohn, J.D. 2002. Global Priority. Our Planet 13(3). pp.4-5
committed to deliver on our mandates under these funding mechanisms, and strongly
support expanded funding for the GEF to meet its broadening responsibilities. We see our
role and impact going further: through these partnerships, we can help mobilize public
funds for global environmental management, accelerate the transfer of environmentally
friendly technologies to our developing country partners, and play a role – particularly
through the Bank Group’s International Finance Corporation – in promoting the global
environment as a business opportunity.
The Bank Group’s partnership with the GEF and the MLF has prompted a growing
realization within our institution that global environmental needs have to be addressed as
an extension of the local, national and regional environmental issues that underpin
sustainable development. Through these alliances, we have embraced new financial
mechanisms using limited grant resources, secured effective stakeholder involvement,
and fostered partnerships of strategic importance for global environmental management.
Market mechanisms
A key challenge in our joint effort to promote public goods for the global environment is to
help devise broader market-oriented mechanisms for dealing with long-term externalities,
such as carbon emissions, where there is great scope for win-win solutions benefiting
industrial and developing countries alike.
The development and management of the Prototype Carbon Fund (PCF) is a first step by
the Bank Group in this direction. Participants in the $180 million PCF include 17 major
corporations as well as six governments. The PCF seeks to demonstrate the feasibility of
creating environmentally credible greenhouse gas emission reductions under the
regulatory framework of the Kyoto Protocol’s Clean Development Mechanism (CDM) and
the development of a global market in which these would be traded. It has already
negotiated emission reductions purchase agreements in more than a dozen projects and
countries.
We are currently designing and marketing two new specialized funds: the Community
Development Carbon Fund (CDCF) and the BioCarbon Fund (BioCF). The CDCF is
designed to channel private capital under the CDM to small projects to the smallest and
poorest countries. The BioCF is to develop prototypes for the production of
environmentally and socially credible carbon assets through creation of carbon sinks in
sustainable forestry, agriculture and management, and expanded biodiversity
conservation efforts, consistent with the objectives of the Conventions on Biodiversity and
Desertification. The Bank’s efforts to create and sell certified improvements in biodiversity
bundled with its carbon assets in its PCF business, and under the BioCF, signal the
opportunity to create an independent market for biodiversity.
The Bank is committed, working in partnership with others, to support the priorities
identified in the Plan of Action of the World Summit on Sustainable Development
James D. Wolfensohn is President of The World Bank.
PHOTOGRAPH: Natasha Japp/UNEP/Topham