By: Andrew Stee

Keynote speech delivered by Dr. Andrew Steer, Special Envoy of the World Bank on Climate Change, at the opening ceremony of the annual conference of the Arab Forum of Environment and Development (AFED), on 27 October 2011 in Beirut

It is a great joy for me to be here. It is hard to imagine a more important conference on a more important subject at a more important time than this. And I commend you Adnan Badran for your Chairmanship. Commend you Najib Saab for your leadership of this great organization AFED. I have seen many environmental organizations in my time and I think the combination that you bring is absolutely best practice. You bring a sharp pencil of analysis, together with the right mix of people: private sector, government. academic, civil society, financiers; because we need all hands on deck if we are going to solve this problem. Let me say what an honor it is also to share this platform with Jose Maria Figueres who has demonstrated that leadership matters in this field, and an entire nation can change its development path and indeed can develop an international reputation which leads to a positive virtuous cycle with the right kind of leadership. Let me also say how nice it is to see Mohammed Al-Ashry my old friend and vice chair of AFED. Mohammed used to be my boss 20 years ago and so has taught me a great deal of what I know. So if you disagree with what I say blame him.

The title of this conference is “Green Economy in a Changing Arab World”, which is also the title of the annual report of the Arab Forum for Environment and Development (AFED). What a great title that is, and I encourage everybody here to read this document. I’ve read almost all of it and I could hardly put it down on the plane. It’s not something that you can just be casual about. This requires you to think hard, it’s worth several hours of hard work. Let’s just disentangle the title of the conference.

First “a changing Arab world”. I’m not going to talk about the changing political context in the Arab world because you know much more about that than I do. Suffice it to say that with openness comes opportunities. We have discovered that the voice of citizens, and often the voice of female citizens, has been a game changer in many countries as they have improved their environmental management. Let me instead say a word about the changing context within which the Arab world operates.

Climate Change

Last year in Cancun the world agreed to try to limit the increase in average temperatures to 2 degrees. And that was very good. Ninety countries have now informally given their statements of intent as to what they plan to do with their greenhouse gas emissions by 2020. And if you go to the UNFCCC website, you will find 90 countries stating what they plan to do. And that’s never happened before. It’s great progress.

The problem is, if you add all of those up, and you go to the very most optimistic end of the range, you’ll find that we’re nowhere close to getting towards a 2 degree Celsius world. We are heading for an increase in global temperatures, of 3-5 degrees and that is very serious especially for the Arab world. 2010 tied with 2005 for the hottest year on record in the Arab world. Nineteen countries in the world had record temperatures last year. Five of them were in the Arab world: Kuwait, Iraq, both over 53 degrees; Saudi Arabia, Qatar, Sudan. It’s not only temperature of course, sea level rise is another challenge. Did you know that a half a meter rise of sea level could flood 30% of Alexandria, in Egypt causing displacement of 1.5 million people and the loss of 200,000 work places, and that’s half a meter! Experts expect today that sea level rise will be over 1 meter. We have to redo our calculations. And of course extreme weather events are becoming more common, and shifts in the hydrological cycle. Last year’s AFED report on water documents this quite brilliantly. More than 45 million people in the Arab world lack access to clean water and sanitation and that’s going to be more difficult to achieve. Food security is obviously a major threat in many parts of the world, but Arab countries have a special challenge because they’re so dependent on imports. Agricultural yields in Arab countries in the absence of major efforts for adaptation will decline. Estimates vary, but some estimates suggest that as much as a 50% drop in some wheat yields could occur by 2050 in Arab countries.

In addition, food prices globally will likely rise, because of the astonishing arithmetic. Population will rise globally by almost 50% to 9-10 billion by 2050. Food production, because of rising incomes, will need to rise by 70% by 2050, at a time when average global yields in the absence of real action will be falling, because of climate change, by perhaps something like 10-15%. In Africa food consumption will need to triple. In the Arab world, as you know, population may double to as much as 700 million. This is a challenge of startling proportions.

During this conference, the World Bank will be having a discussion of a report that we have prepared and is close to finalizing but we want to have discussions on it first, on the issue of the need for adaptation. Now within the Arab world there are some signs of great hope even in countries experiencing challenges. For example, Yemen, has submitted this week a plan for adaptation to a programme that we manage called The Pilot Programme for Climate Resilience, which is a 1 billion dollar programme for adaptation. Yemen is one of the first countries to come with a very serious plan of integrating the issue of adaptation throughout its entire planning process. So there are some very encouraging signs.

Now, with this great challenge, can we expect a breakthrough in global negotiations, so that the problem can be solved? Unfortunately, the current context is not conducive to that. Economic conditions in Western countries are such that it’s unlikely that the sums of money that will be required will come forward quickly, and at the same time the global politics of climate change suggest that it’s unlikely to make a breakthrough. We are all going next month to Durban and working very hard to try and make progress, but we need to be realistic. There are two large political issues hanging over that event, both of which will be difficult to solve. First, what is the shape of the future regime for climate change? What’s the future of the Kyoto protocol? What sort of legal form? How do we anchor the commitments that are out there legally? It’s striking that almost nobody is talking about the need for deeper commitments to cut emissions in Durban. It’s a matter of how do we agree to make them slightly more legally binding than they are already. The second big issue is climate finance. We hope very much a green fund will be launched at Durban. But last week in Cape Town, when we had the final meeting of the design committee, we unfortunately couldn’t get a unanimous international agreement from the 40 members of the committee to make a unanimous recommendation to Durban. So, the chances are that it will be difficult to achieve what we need to achieve in Durban. Now there will be some positive deliverables that could be very helpful to Arab countries: we hope to reach agreement on new technology centers around the world, we hope to make progress on adaptation, we hope that agriculture will be firmly and for the first time embedded in the way the UNFCCC does its business because, sadly, agriculture has been left out.

Green Economy

Let’s come to the subject of the green economy, or green growth. What is it? What was wrong with the old notion of sustainable development? People seem to be a little confused nowadays. What is it that we really believe in? I believe the green economy and green growth do mark a step forward from what we understood at the time of the original Rio. Remember in 1992 the world actually was not growing. Africa had just had a decade of negative real growth. Eastern Europe, in the form of Soviet Union, was declining in its economy. And a lot of people actually believed the economy and the environment were enemies. We’ve come a long way since that time in our understanding. The world is more than twice as large economically as it was at the time of the Rio meeting. Real per capita incomes in developing countries are over 70% higher.

We’ve also learned that actually a bad environment hurts the economy. We’ve done lots of assessments in Arab countries, ranging from Tunisia where environmental damage accounts for about 2.1% of GDP, way up to much much higher numbers. And as AFED report said, the average is possibly of as high as 5% in Arab countries. But we’ve also learned that actually smart environmental policies can lead to higher investment, higher innovation and more jobs. And that is a very important conclusion, because jobs are the driver of why so many countries today are interested in green growth and the green economy. More than 150 developing countries have said they’re interested in moving forward on ideas of the green economy, but they don’t really understand it, they are seeking help. Go to Jakarta and talk to the minister of planning, she will say I’m interested in jobs and if you can generate jobs, count me in on a green economy. Talk to the minister of finance of South Africa as I did last week, he said I have three priorities and that’s why I’m interested in the green economy: jobs, jobs and jobs. Go to the United States, 9.2% unemployment. And come especially of course to the Arab world where nearly 15% are looking for jobs and as high as 27% among the youth. So there is huge interest.

We are now working in 130 countries on climate change issues, we never would have dreamt of that 10 years ago. But there’s a lot we don’t know. We’re, if you like, learning to build the racing car as we’re driving around the track. We’ve just established something called a “Green Growth Knowledge Platform”, and I’d love it if we could do this jointly with AFED. We already got a number of organizations working with us simply to make sure that we learn from each other. We’re also bringing out a major report for Rio on green growth, trying to disentangle what it really means. We’re looking at the issue of whether really there are more jobs out there? We’re looking at the numbers in renewable energy: is it more job intensive than traditional energy? Yes, it is. Energy efficiency is quite intensive in jobs, as much as recycling. There are a lot of jobs there. And so on and so forth.

What I like about AFED’s report is that it doesn’t just stay in the field of theory, it actually comes down to earth and asks the Monday morning question: What about agriculture? What happens in water supply? What happens in the energy industry? In manufacturing, in transport, in city planning, in buildings, in solid waste, in tourism and so on? Now by necessity, the Arab countries are going to need to innovate. And the real exciting thing is that is happening. This document here, the AFED report, shows in a number of places where that’s happening. Let me just give you two that we’re working on, we find that it’s very exciting the rest of the world is watching. One on city management, for example, go to Amman today. Amman, Jordan is the first and only city in the world that has a city-wide plan for receiving carbon finance, measuring greenhouse emissions at the city level. So it has a plan that includes waste landfills, recycling, transportation, bus rapid transit, street lighting, CFLs, an urban strategy which includes building codes, and the important thing is that it adds that all together, and says look, watch us as a unit, and support us as we as a city go forward. And this was a big battle we and the city of Amman and others fought hard to get the rules of carbon markets changed. So this is an example of where the Arab world has become a real leader.

Arab Leadership in Renewable Energy

The area in which the Arab world will become, I believe, a dominant leader will be in renewable energy, and in particular the technology that uses thermal energy. What we’re seeing now is that throughout North Africa and the Middle East estimates have been done of the potential, and money is beginning to be put in. Under the clean technology fund which the World Bank together with the African Development Bank are managing in that region, we are just putting in 750 million dollars to help 5 Arab countries invest in over a gegawatt of renewable energy. And that in turn will be part of a 5 gegawatt plan, which in turn will make North Africa and the Arab world a real leader. This month we will be approving the first project, which will be in Morocco, and Morocco currently imports 97% of its energy sources. That project in and on itself would not be justifiable. It is only justifiable because it will be part of a programme that will pull down costs. Costs at the moment are not economical. But with the right policies bringing together ministries of finance, ministries of technology and trade, even foreign ministries because the Arab world will become a big exporter in net terms to Europe of renewable energy, bringing those all together one will find that this will be one of the most important strategic investments that will ever be made, and the Arab world will become known throughout the world potentially as a great supplier of renewable energy, just as it has been a supplier of traditional energy.

Historical Turning Point

Let me just make two concluding remarks. It is extremely important to seize opportunities when they arise, because they may not come again, at least for a long time. Copenhagen taught us that. We came so close but we failed, and we may have lost a decade as a result. We must be looking for opportunities in those countries where there is leadership, in those sectors where there’s leadership, and we must invest in it and seize it, and bring together all of the persuasion and expertise that we can, and move on it because things happen very quickly. Urban historians tell us that the United States chose its suburban planning system and changed as a nation in just 14 years. Between 1956 and 1970. Imagine if they’d followed a different path during that brief window of 14 years. France changed its entire energy strategy in just 7 years, between 1980 and 1987, when 42 nuclear plants were built out of the 58 that exist today in France, and the entire mix of energy was altered in just 7 years. China’s housing will double between 2000 and 2015. What’s the point? The point is there are such historical turning points and they must be seized, because the kinds of houses that China chooses to build will have a huge impact on the future, not only of China, but the future of the world, and we must seize opportunities as we see them.

And, finally, let me make a point that I made at the beginning. We need to bring all hands on deck. We have seen in the environmental movements that sometimes when success happens that the environmentalists, the environmental ministries, almost don’t want the others to join in, they’re nervous about ministries of finance and planning and agriculture taking over, because after all isn’t this the territory that we have been fighting for. One sees that at negotiations all the time. Negotiators could achieve so much more if they could bring other ministries and powerful ministries. And what we find is that every 6 months we host a meeting of finance ministers and we have to bring them the story of climate change, why? Because it is very important we get everybody involved. What’s the point here? An organization like AFED, and friends of AFED, people like the World Bank, have got to be smart politically. We’ve got to bring all of the elements together so that the whole adds up to much more than the sum of the parts.

Let me commit to you the full support of the World Bank group in your vital journey that you’re on. I bring you the greetings of Bob Zoellick the president of the World Bank, also our new Vice President for Middle East, North Africa and Arab countries Inger Andersen, who used to lead the entire sustainable development programme at the World Bank and believes passionately in this issue. And let me commit to you our support as we go forward, and also to wish you the best wishes as we together struggle with these fascinating and crucial issues.