Challenging complexity

Morten Elkjaer heads the Department for Green Growth at Denmark’s Foreign Ministry. German development professionals praise their Scandinavian neighbour for having such a department, but Elkjaer himself admits that he does not exactly know what “green growth” means. The term makes sense in policymaking, but it has never been precisely defined by scientists or economists.  

The international community needs a clearer understanding. The UN wants to define SDGs and to follow up on the poverty-reducing agenda of the Millennium Development Goals (MDGs) from 2015 on. The MDGs were originally supposed to be achieved in that year, but several targets for reducing poverty will not be met.

Fighting poverty in itself is a complex challenge. The MDGs basically rely on a disputed definition of poverty, according to which a person counts as poor if he or she must cope with less than a daily purchasing power of $ 1.25. Hildegard Lingnau of the OECD (Organisation for Economic Cooperation and Development) says the definition is inadequate. In her view, other issues matter too, such as access to health care or education for instance. She also insists that national definitions of poverty should be taken into account since they are in line with what the people understand. Finally, she wants future goals to tackle inequality. Unless the UN rises to these challenges, according to her, it will settle for eliminating poverty only in the most basic sense.

Assessing issues such as multidimensional poverty or inequality is a huge challenge. Scholars have designed various indices to do so, and they all require solid data. Most developing countries plainly do not have the statistical capacities needed. Donor governments should therefore do more to support them in this area, Lingnau said at this year’s annual PEGNet conference in Copenhagen in October. PEGNet stands for Poverty Reduction, Equity and Growth Network. It includes research institutions and development agencies from all over the world.

If assessing poverty is difficult, assessing environmental impacts of human action is even more difficult. Conventional wisdom may often prove wrong. James Thurlow, a South African scholar at the Washington-based International Food Policy Research Institute, opposes the popular view that the cultivation of bio-fuel crops is always at the expense of people’s food security. He admits that this is a real risk in countries where agriculture so far has only been growing food for local markets. It is different, however, where fuel-crops compete with other export crops. He asks: “Why is it okay for Malawi to grow tobacco but not bio-fuels?”

Thurlow has studied the potential for bio-fuel production in Tanzania. His economic models show that small-scale farming for this purpose would do a lot to ­reduce poverty. Relying on large-scale farming would also be helpful, but not to the same extent.  

Nonetheless, Thurlow’s advice is to opt for large-scale sugarcane plantations. The reason is environmental constraints. Large-scale plantations are more efficient, he says, so they require less land to produce the same amount of sugarcane, and there is not enough suitable land for many smallholdings. Clearing forests, however, would be environmentally destructive.

Thurlow’s example shows how reality may differ from common assumptions. The good news is that this applies to policymaking too. Ever since the Earth Summit in Rio de Janeiro in 1992, the conventional wisdom has been that developing countries will not voluntarily embark on climate protection because it is up to the rich nations to spend money on controlling a problem they caused and can afford to tackle.

Nonetheless, Vietnam has recently adopted a green-growth policy, acknowledging its responsibility to mitigate climate change, as Anne Zimmer of the Potsdam Institute for Climate Impact Research reports. Zimmer lists several reasons for the policy change:

• Vietnam’s long coast is particularly vulnerable to climate change.
• The government is interested in renewable power generation because fuel imports and energy subsidies are straining its budget.
• Air pollution has become a huge problem.

The most important incentive, however, was probably international climate finance, Zimmer points out. Donor governments are increasingly allocating official development assistance (ODA) to climate-protection projects, and Vietnam hopes to attract such funding by being one of the first countries to come up with good proposals. Given that Vietnam has dramatically reduced poverty in the past two decades, the government is finding it increasingly difficult to get conventional ODA.

Whether climate finance should be part of ODA at all is a controversial issue however. In principle, it was agreed in Rio in 1992 that support for climate-change mitigation should be additional to ODA. The Danish government argues that it is spending 0.8 % of GDP on ODA, which is more than the 0.7 % pledged. It argues that all expenditure above the 0.7 % threshold is “additional”. Most donor governments, however, have never lived up to the 0.7 % pledge. The topic is sure to prove contentious in future climate negotiations. At the PEGNet conference, Ronald Mangani, an economist from Malawi, insisted that disadvantaged nations that did not cause global warming deserve „unconditional support for adapting" to the impacts.

To gear development towards sustainability, many approaches will have to be modified. Many lessons of past decades remain valid, however. For instance, education and reproductive-health rights for women are essential in environmental terms too, says Elkjaer, the Danish diplomat, because population growth in itself has a bearing on Earth’s ecological balance.

In a similar vein, expanding financial services in a way to reach all people matters in sustainability terms. Jahangir Alam Chowdhury of the University of Dhaka has done research on cyclone victims in Bangladesh. His data show that poor families with access to financial services are more likely to recover their losses than others who may end up in destitution for good. Hans Dembowski