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Publikationen des Deutschen Institut für Entwicklungspolitik (DIE)
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Orchestration: an instrument for implementing the Sustainable Development Goals

Mon, 24/08/2015 - 14:10
From 25 to 27 September 2015, governments will meet at the United Nations (UN) in New York to adopt the Sustainable Development Goals (SDGs). As the list of 17 goals is now on the table, attention is shifting to the next phase of the new framework for global development: implementation. The UN Conference on Financing for Development in Addis Ababa in July 2015 has already laid some groundwork, but challenges remain. One major challenge will be to meet the growing demand for cooperation arising from the transformative and universal nature of the SDGs. The economic, social and environmental sustainability goals will not be limited to developing countries but apply to all countries in the world. In addition to national and local implementation, international cooperation must play a far-reaching role. This is especially true for goals such as a stable climate, sustainable consumption and production patterns, global health and security that can only be achieved through coordinated cross-border or global action.
At the same time, the conditions for global collective action have changed substantially. The international system is now more multipolar due to the rise of emerging powers. Important multilateral processes are stalled or advance only slowly. In contrast, transnational networks have become a central feature of global governance and allow actors from civil society, the private sector, ministries, agencies, cities and municipalities to assume a global role. Successful examples such as the C40 Cities, the Extractive Industries Transparency Initiative and the Global Vaccine Alliance (Gavi) demonstrate that such networks can make important contributions to global sustainable development.    These networks do not always emerge on their own and must overcome obstacles to cooperation. In various areas of sustainable development, such as environmental, health and development policy, approaches to foster global networks already exist under the catchword "orchestration". Yet these efforts are still very piecemeal. Governments and international organisations should develop orchestration more systematically into an integral part of the instruments used to achieve the SDGs.
An orchestration instrument for the SDGs would initiate, support and shape global networks. In addition, the instrument could specifically promote networks that integrate actors from middle-income countries into new cooperation initiatives for global public goods. The instrument would have two different objectives: firstly, mobilising contributions to global sustainable development (financing, sharing and co-creation of knowledge, standard setting, etc.) and, secondly, improving conditions for international cooperation as a whole (e.g. by reducing fragmentation or improving linkages between domestic and global policy processes).
Government departments and international organisations from different policy areas could have a role in managing orchestration for the SDGs. In principle, development cooperation actors are in a position to play a leading role in getting such an instrument up and running. They have a number of relevant assets on which they can draw as orchestrators (financial resources, operational capacity, etc.). The orchestration of global networks might, however, stretch the existing limits of bi- and multilateral development cooperation (e.g. eligibility for official development assistance, the need to use certain implementation mechanisms).


Financing Global Development: The BRICS New Development Bank

Fri, 10/07/2015 - 14:34
The UN Conference on Financing for Development in Addis Ababa in July 2015 will pave the way for the implementation of the post-2015 development agenda. The Briefing Paper series “Financing Global Development“ analyses key financial and non-financial means of implementation for the new Sustainable Development Goals (SDGs) and discusses building blocks of a new framework for development finance.
The BRICS New Development Bank (NDB) was created in mid-2014 by the governments of Brazil, Russia, India, China and South Africa. It will have a fairly large capital contribution – initially of US$ 50 billion – from BRICS countries and can grow up to $100 billion with contributions from other countries. It will fund in-vestment in infrastructure and sustainable development on a significant scale. The NDB will provide valuable resources to help fill the massive gap in investment in infrastructure and sustainable development resources in emerging and developing economies, which has been estimated to reach at least US$ 1 trillion annually. It will also give emerging and developing countries a greater voice in the development finance architecture.
Other emerging economies are also creating institutions. Thus, BRICS leaders have also created new institutions, such as the Contingency Reserve Arrangements (CRA), in BRICS countries to provide official liquidity in times when balance of payments adjustments are needed. Furthermore, with China’s initiative, the Asian Infrastructure Investment Bank (AIIB) is being created. It will have 57 potential member countries, including all major European economies (such as Germany, the United Kingdom and France), with the largest share of the capital being contributed by China. China also announced the creation of the New Silk Road Bank to fund investment in infrastructure connections within Asia as well as those linking to Europe and Africa.
The creation of these new institutions contributes in a valuable way to the aims of financing sustainable development, as will be discussed in the Financing for Development conference in Addis Ababa on 12–16 July 2015.

Financing global development: Beware of ‘end poverty’ euphoria and trigger-happy reform of concessional finance

Thu, 02/07/2015 - 14:00
The UN Conference on Financing for Development in Addis Ababa in July 2015 will pave the way for the implementation of the post-2015 development agenda. The Briefing Paper series “Financing Global Development” analyses key financial and non-financial means of implementation for the new Sustainable Development Goals (SDGs) and discusses building blocks of a new framework for development finance.
The client base of the concessional finance windows at the major multilateral development banks is shrinking as some of the largest borrowers by volume become richer, more credit-worthy and lose eligibility for ‘soft’ financing terms. Simultaneously, competition from new donors is growing, as is demand from low-income and lower middle-income countries for market-priced sovereign borrowing, spurred on by prevailing low-interest rates. Pressure to adapt to this changing operational context notwithstanding, the uncertainty facing the development finance industry suggests a gradualist, precautionary and insurance-oriented approach to the future of multilateral concessional windows.
A realistic assessment of medium-term growth prospects suggests that the pool of countries eligible for multilateral ‘soft’ finance windows will shrink slowly over the coming decade. In such a scenario, the number of people living in extreme poverty by 2025 would still amount to more than half a billion, with a sizable share living in middle-income countries that will be ineligible for concessional finance by current eligibility rules.
This Briefing Paper argues that trigger-happy reform suggestions for shrinking or scaling back multilateral finance are unrealistic and counterproductive: they ignore the option value of preserving international financial institutions and their concessional windows in a world with considerable uncertainty about future poverty outcomes and global governance failures that prevent first-best policy solutions.
Strategic options exist for the shareholders of the World Bank, the African Development Bank, the Asian Development Bank and the International Monetary Fund to attenuate the dilemma they face from their shrinking client base.
These options are:
  • redefining concessional fund eligibility criteria, so that it reflect more closely national capacity to raise domestic resources;
  • smoothing transition periods by making ‘blend status’ an explicit step in the graduation process, with funds directed towards measures of social inclusion and redistribution;
  • strengthening sub-sovereign allocation, to take account of within-country regional inequalities;
  • opening the multilateral soft windows for regional and global public goods, with climate change adaptation and disaster risk management as tracer sectors.


Financing global development: The role of local currency bond markets in Sub-Saharan Africa

Fri, 26/06/2015 - 11:06
The UN Conference on Financing for Development in Addis Ababa in July 2015 will pave the way for the implementation of the post-2015 development agenda. The Briefing Paper series “Financing Global Development” analyses key financial and non-financial means of implementation for the new Sustainable Development Goals (SDGs) and discusses building blocks of a new framework for development finance.
The enormous deficiencies in Sub-Saharan Africa’s (SSA) local and regional infrastructure in areas such as water, sanitation, transport and energy facilities, mean that long-term financial resources must be mobilised to ensure sustainable development. Local currency bond markets (LCBMs) are still generally underdeveloped in SSA in comparison with other regions of the developing world. Yet for all SSA countries, including the poorest economies, LCBMs could become an important means of long-term financing and reduce the financial vulnerability associated with foreign currency borrowing. LCBMs provide alternative sources of financing and reduce a country’s dependency on foreign debt. They allow for risk diversification and can mitigate the effects of external shocks. Local currency government bond markets are also important for benchmarking corporate bond markets – another way to finance companies for the long-term.
Policy recommendations for improving LCBM development in SSA
We recommend supporting LCBM development through national and regional initiatives that strengthen the institutional and regulatory environments, broaden the investor base and create more liquid secondary markets.     Authorities in SSA need to ensure favourable macroeconomic environments and develop suitable financial infrastructures.
To avoid financial turbulence, capital account liberalisation should be pursued very carefully, with LCBM development going hand-in-hand with solid financial and institutional development. SSA authorities should put into place appropriate strategies for managing debt and capital accounts in order to address capital in- and out-flows, and ensure trained personnel to implement them. Authorities should further ensure the safety of investments by guaranteeing profit repatriation. In this respect, law enforcement is crucial.
Bilateral and multilateral donors can support LCBM development by offering technical assistance to realise debt management strategies. The Debt Management Facility of the World Bank and the IMF and the Debt Management and Financial Analysis System of the United Nations Conference on Trade and Development (UNCTAD) are good examples of donor support for developing countries that provide country-specific technical assistance at different levels. In SSA the African Development Bank has put in place the African Market Initiative (AFMI) which promotes LCBM development in SSA. Another fine example of donor support is the World Bank Group’s Global Emerging Markets Local Currency Bond Program (Gemloc), which promotes LCBM development in emerging market economies.
Since LCBMs can supply long- or medium-term capital for both governments and companies they have a large potential for financing the infrastructure needed in SSA and for supporting the achievement of the SDGs.


Financing global development: The potential of trade finance

Thu, 25/06/2015 - 15:47
The UN Conference on Financing for Development in Addis Ababa in July 2015 will pave the way for the implementation of the post-2015 development agenda. The Briefing Paper series “Financing Global Development” analyses key financial and non-financial means of implementation for the new Sustainable Development Goals (SDGs) and discusses building blocks of a new framework for development finance.
Although international trade is an integral component of the conference in Addis Ababa, trade finance itself has not been taken into consideration. This omission represents a serious shortcoming because trade finance is essential to international trade, especially for developing countries with less developed national financial markets and limited access to international financial markets. Every trade transaction must be financed. The non-availability of trade finance may therefore become an obstacle to international trade that impedes sustainable development.
As international trade is one of the most important driving forces for economic development in developing countries and emerging markets, the availability of trade financing is extremely important for sustainable development. In particular, the integration of small and medium-sized enterprises (SMEs) into international trade is essential for emerging markets and developing countries and promotes economic development in an especially effective and sustainable manner. Trading in intermediate products has now become more important than end product trading, since goods are primarily produced within global value chains; two thirds of international trade is based on trade with intermediary products.
Participation in global value chains is therefore an important objective for developing countries. Empirical literature shows that countries which are strongly integrated into global value chains experience, on average, higher economic growth; however, frictions in finance represent one of the greatest obstacles to participation in global value chains. According to estimates from the Asian Development Bank (ADB) for 2013, the annual global gap in trade finance amounts to USD 1.6 billion. Increasing the availability of trade finance by 5% could raise production and the number of jobs by 2%. According to surveys of market participants, the financial crisis led to a huge decline in the supply of trade finance. And yet even after the crisis was resolved, the availability of trade finance remains a significant problem in emerging markets and developing countries. Surveys show that this is especially the case in Africa and Asia. The lack of development within the financial sector can pose a significant hurdle to international trade and prevent emerging markets and developing countries from integrating into the global trade system more effectively and taking advantage of trade benefits.
For this reason trade financing should be an important building block of the future framework for development finance. For developing countries, it is particularly important to put the focus on strengthening both local and regional banking sectors as well as their international interlinkages and on improving the connection between trade finance and value chains in order to promote the integration of SMEs into the global economy, for example by strengthening the respective support programmes for Supply Chain Finance.


Financing global development: Can foreign direct investments be increased through international investment agreements?

Thu, 25/06/2015 - 15:41
The UN Conference on Financing for Development in Addis Ababa in July 2015 will pave the way for the implementation of the post-2015 development agenda. The Briefing Paper series “Financing Global Development” analyses key financial and non-financial means of implementation for the new Sustainable Development Goals (SDGs) and discusses building blocks of a new framework for development finance.
Foreign direct investment (FDI) is hailed as an important source of external financing for many developing countries. Improving developing countries’ access to global FDI flows is thus a central aim of the international community, as documented by the past two United Nations Conferences on Financing for Development, in Monterrey in 2002 and Doha in 2008. The need to set up a “stable and predictable investment climate” as a precondition to attract FDI was emphasised in the outcome documents of the Monterrey and Doha conferences. International investment agreements (IIAs) are mentioned as effective policy instruments to promote FDI flows. In fact, many developing countries signed IIAs to attract FDI and, in turn, promote economic development.
This standard justification is increasingly being questioned by critics of IIAs. An increasing number of policy-makers, scholars and non-governmental organisations argue that IIAs, by and large, have not resulted in increased FDI flows and, worse still, they fear that IIAs excessively restrict host countries’ ability to adopt public policies aimed at promoting sustainable development. Incidentally, this scepticism has also set the tone of the draft for the accord to be adopted at the Addis Ababa conference. It emphasises that FDI can have a positive impact on development, but only if foreign investors adhere to social and environmental standards, and if IIAs do not constrain domestic policy space to implement development-oriented policies.
The overview of the empirical evidence on the effects of IIAs on FDI flows suggests that this scepticism is well-justified. Although various studies find a positive impact of IIAs on FDI, in light of methodological challenges to actually measure this impact and alternative evidence, these results should be interpreted with great caution. Furthermore, researchers have only recently tried to account for different treaty designs. They find that treaty content matters and not all IIAs have the same effect on FDI flows. For example, treaties with market-access provisions have a positive effect on FDI, in particular if they are included in preferential trade and investment agreements (PTIAs). The hotly debated investor-state dispute-settlement (ISDS) clauses, on the other hand, have no effect on FDI.
Policy-makers in developing countries hoping to attract FDI should therefore pay closer attention to the actual design of IIAs. The empirical evidence suggests that they have some room to improve the compatibility of IIAs and national policy objectives by reformulating the standards of investment protection. In Addis Ababa, the international community should come up with proposals for how developing countries can be supported in order to reform their IIAs.


Financing global development: The role of central banks

Thu, 25/06/2015 - 15:30
The UN Conference on Financing for Development in Addis Ababa in July 2015 will pave the way for the implementation of the post-2015 development agenda. The Briefing Paper series “Financing Global Development“ analyses key financial and non-financial means of implementation for the new Sustainable Development Goals (SDGs) and discusses building blocks of a new framework for development finance.
In many developing and emerging economies, central banks have begun over the past decade to place renewed emphasis on the promotion of economic development and structural transformation, looking beyond narrow mandates for macroeconomic stability. Developmental central bank policies have included policies directed at financial sector development, the promotion of financial inclusion and aligning the financial system with sustainable development.
This marks a shift from the orthodoxy that has dominated central banking since the 1980s and that has been promoted in developing countries by institutions such as the International Monetary Fund (IMF) and multilateral development banks. The orthodox approach to central banking – according to which central banks should primarily focus on price stability – has been severely undermined by the global financial crisis. It has become clear that central banks also ought to take responsibility for safeguarding financial stability. Moreover, in the aftermath of the crisis, many central banks have adopted unconventional policies to address problems of debt, stagnation and deflation. This has opened up a new discussion on the scope of – and limits to – the mandate of central banks. In practice, many central banks in developing countries nowadays proactively seek to promote sustainable economic development. Specifically, an increasing number of central banks and financial regulators have become active in promoting financial inclusion and in greening financial systems, rendering them important – albeit in international policy discussions often underrated – actors in development financing.
Widening the mandate of central banks can help to promote sustainable economic development by improving the framework conditions for financing the post-2015 development agenda. However, a wider mandate undoubtedly complicates matters, as developmental objectives may at times conflict with stability objectives. As central bank mandates widen, it will therefore be important to reform central bank policy frameworks with a view towards addressing the risks arising from a wider central bank mandate. The reform of central bank policy frameworks may help to ensure that central banks promote economic development and stability in a balanced manner, and thus be an important building block of a new framework for development finance.


Financing global development: What role for official development assistance?

Tue, 23/06/2015 - 12:28
The UN Conference on Financing for Development in Addis Ababa in July 2015 will pave the way for the implementation of the post-2015 development agenda. The Briefing Paper series “Financing Global Development“ analyses key financial and non-financial means of implementation for the new Sustainable Development Goals (SDGs) and discusses building blocks of a new framework for development finance.
Preparations for the upcoming conference show that the concept, provision and monitoring of official development assistance (ODA) remain contentious issues.
Divergent positions are being offered regarding the future role of ODA.
  1. There are groups proposing that ODA refocus on poverty reduction, mainly in poor and fragile states.
  2. Others advocate that ODA play a more catalysing role in terms of mobilising other forms of (particularly private) finance.
  3. There are calls for repositioning ODA as an instrument to deal with the provision of global public goods.
Although it is clear that not all expenditures on global public goods (e.g. clean air) should be reported as ODA, it will not be easy to separate what is relevant to development from what is not. A key tension remains: as the SDG agenda moves away from an agenda directly concerned with progress in individual developing countries, the ODA reporting system still focusses on resource transfers from  developed to developing countries. The SDG agenda will likely not reflect a consistent vision on global development finance but instead innovate where possible and conserve where necessary. The resulting hybrid vision will likely promote universality and North-South transfer simultaneously, representing one gradual step in converging towards a global sustainable development agenda with universal reach. As a main proponent of this agenda, the OECD has expended substantial political and technical resources on the ODA concept and its statistical system, to the relative neglect of designing a broader Total Official Support for Sustainable Development (TOSSD) measure and furthering discussions on the financing of global public goods beyond ODA. It needs to redirect this focus now that discussions on TOSSD have intensified.
In principle, all Addis Ababa stakeholders recognise a broader understanding of “development finance”, which includes all relevant financial contributions from all stake-holders. Nevertheless, ODA will likely remain a hot item on the conference agenda. Although it remains important to closely monitor ODA inputs, what the new global development agenda really needs is for the current system to evolve into one that places reporting on financial inputs at the service of multi-stakeholder efforts to share joint accountability for ensuring results. An important step forward would be to complement the existing provider-centric ODA reporting system by developing countries’ own reporting of development-relevant external finance through the UN High-Level Political Forum.


The G-7 and the post-2015 process: role and deliverables

Wed, 03/06/2015 - 14:35
At the upcoming G7 Summit held in Elmau, G7 members should seize the opportunity and push for a successful outcome of the major multilateral events of 2015 dealing with development finance (Addis Ababa), the post-2015 agenda for sustainable development (New York) and climate change (Paris). We identify opportunities for action at three different levels. •   The G7 should introduce changes at home with a significant global impact: (i) G7 leaders should commit themselves to formulate national, time-bound plans for implementation of the universal post-2015 agenda that are linked to existing national processes such as sustainable development policies and strategies; (ii) they should be frontrunners in tackling unsustainable consumption and production patterns and (iii) specify national contributions on how to limit global warming to 2°C. •   The G7 should support sustainable development in low- and middle-income countries (LICs and MICs): (i) The G7 should scale up support for national public health systems in LICs and help create a health contingency fund; (ii) reconfirm and specify commitments to contribute to global public finance, including         official development assistance (ODA) and climate finance and (iii) promote the transfer and development of technology for LICs and MICs. •   At the global level the G7 should promote global rules for global commons: (i) the G7 should implement reforms of the international financial architecture; (ii) advance the reform of the international tax system by promoting multilateral agreements to foster international cooperation among tax authorities and (iii) encourage an enabling international trade system for developing countries including a development friendly Transatlantic Trade and Investment Partnership (TTIP) and Trans-Pacific Partnership (TPP). The post-2015 agenda for sustainable development reaffirms the universality of human rights and other core G7 values. While the current draft proposal of the Sustainable Development Goals (SDGs) is not perfect, it could trigger urgent collective action which is needed now to maintain and secure prosperity and wellbeing of current and future generations within planetary boundaries. Furthermore, the sustainable development agenda provides an example of how to deal with collective problems: in a rules-based partnership, based on ideas of fairness, equity and common but differentiated responsibilities. The G7 must play their part and help the negotiations succeed.

Let’s walk our talk: from the July 2015 Financing for Development Conference in Addis Ababa, Ethiopia, down the Road to Dignity by 2030

Mon, 01/06/2015 - 09:52
In a few months' time, the international community will meet in Addis Ababa, Ethiopia, for the third International Conference on Financing for Development (FfD). The Conference is expected to decide on the means of implementation (MOI) for the Post-2015 Agenda, which will be considered for adoption in September 2015, as well as those for the climate agreement to be reached at the 21st session of the Conference of the Parties (COP21) in Paris in December 2015. However, negotiations on the MOI have so far generated mainly declarations of intent – i.e. statements on what should ideally be done – as opposed to concrete commitments. Moreover, these declarations of intent are basically just requests for 'more'; for instance, more domestic resources, more private investments, more official development assistance (ODA). The MOI declarations that have been put forth to date are no match for the sense of urgency and ambition that marks the Post-2015 Agenda or that which is likely to mark the COP21 outcome document. Thus, the FfD Conference confronts a twofold challenge: closing the 'specificity gap' by moving from declarations of intent to concrete, actionable MOI commitments; and closing the 'ambition gap' by identifying the MOI issues that are of strategic relevance to the successful implementation of the Post-2015 Agenda. To successfully address these two gaps, a key complicating factor will need to be taken into account: the Post-2015 Agenda is setting out to achieve sustainable development goals (SDGs) of universal applicability at a time when the world is undergoing several foundational transformation processes. Accordingly, this paper aims to identify feasible ways and means of narrowing the identified gaps. It does so with a special focus on the national and international public finance side of the challenge. The principal suggestion is a three-step process that could be completed at the forthcoming FfD Conference and repeated at future review meetings. In the first step, the criteria for identifying the MOI issues of high strategic relevance would be determined. These, of course, may vary as the implementation of the respective outcome documents progresses. In Step II, the focus would be on identifying qualifying MOI issues. And in Step III, the decision would be taken to establish operationalization task forces (OTFs) for each of the identified topics. In this way it would be possible to ensure that the goals of ending poverty, transforming all lives and protecting the planet, shift from paper to reality – as we, the international community, 'walk our talk' along the road to dignity and, let us hope, beyond.

Post-2015: recharging governance of United Nations development

Wed, 13/05/2015 - 17:04
The post-2015 development agenda will constitute a different mission for UN Development than the current one driven by the Millennium Development Goals (MDGs). Unlike the MDGs agenda, the new sustainable development goals (SDGs) aim to integrate the economic, social and environmental pillars of sustainable development while emphasising global challenges to a greater extent. The growing interconnection between local and global development challenges will be a key feature of the SDGs.
Current governance arrangements of UN Development, however, impose a constraint on the organisation’s ability to meet the integration requirements of the SDGs.
To deliver on the post-2015 development agenda in an integrated and coordinated manner, UN Development will require governance capacity that can foster policy coherence and interoperability in programming and operations. This means that governing boards will have to be able to coordinate their work more effectively than in the past, with a view to balancing agency and system-wide interests, as well as the local and global perspective in their decision-making. Such changes required in the capability of governing bodies also offer Member States the opportunity to rethink what constitutes legitimacy in governance.
Three options are particularly proposed to address the governance demands of the post-2015 development agenda:
  1. ECOSOC as a system-wide governing body: On the basis of a system-wide strategy, the UN Development Group (UNDG) becomes formally accountable to ECOSOC and the General Assembly for the implemen-tation of system-wide objectives. This would strengthen horizontal governance of development operations;
  2. Fulltime Joint Executive Board: Merging the four executive boards of the funds and programmes with major development operations; and
  3. Fulltime Development Board: A single board for the governance of operational activities of the 19 funds and programmes reporting to the central bodies of the General Assembly and the Economic and Social Council (ECOSOC).
In making the governance of UN Development “fit-for-purpose”, Member States would fundamentally recharge multilateral cooperation, whose appeal is withering, despite the reality of growing interconnectedness, complexity and uncertainty in today’s globalising world.

What is the potential for a climate, forest and community friendly REDD+ in Paris?

Thu, 23/04/2015 - 08:29
Reducing Emissions from Deforestation and Forest Degradation (REDD+) is a mitigation instrument that creates a financial value for the carbon stored in standing forests. The purpose of REDD+ is to provide incentives for developing countries to mitigate forest-related emissions and to foster conservation, sustainable management of forests and the enhancement of forest carbon stocks.
This instrument is still not fully operational under the United Nations Framework Convention on Climate Change (UNFCCC) but, despite the large criticism it raises, its political traction is what is keeping it on the table.
In this Briefing Paper, we discuss the prospects for REDD+. We structure these on the basis of options included in the Ad Hoc Working Group on the Durban Platform for Enhanced Action (ADP) Negotiating Text of February 2015: (1) forests in a market-based mechanism, (2) result-based approaches for REDD+, and (3) non-result-based approaches. In addition, we discuss for each of these the likeliness of substantial international finance that they may raise, their mitigation potential, their contribution to forest conservation, and their social co-benefits.
We conclude that large sums for REDD+ can only be expected when REDD+ credits can be used to offset fossil-fuel based emissions, provided the carbon credit price is high enough.
Although funds could be large, and may contribute to forest protection, there is an important counterargument: only the emissions reductions that are realised through non-offsetting approaches are net emission reductions.
Integrated non-results-based approaches may offer more opportunities for local social and ecological co-benefits but it is difficult to raise funds for them. With the high stakes of protecting the global climate and important ecosystems, biodiversity and local cultures, a non-results-based mechanism seems too non-committal. But, without funds, non-offsetting approaches may not be realised at all, which may prove to be a missed opportunity for forest protection. Leakage (deforestation elsewhere) and non permanence (deforestation at a later point in time) may be an issue for all options, but form a climate risk particularly when forest credits are used to offset emissions.
We suggest a middle road that focuses on regulatory measures and results-based approaches, which ensure social co-benefits, and are financed through public funds specifically generated for the purpose of developed nations assisting developing nations in adaptation and mitigation projects. Under this type of solution the results-based approach should be separated from mechanisms to reduce emissions from fossil fuel use.


Can the tourism industry contribute to international adaptation finance?

Fri, 10/04/2015 - 11:38
At the UN climate negotiations, developed countries pledged to mobilise US$ 100 billion of climate finance per year from 2020 onwards to support developing countries in dealing with climate change. Since this money is supposed to come from private sources too – some of which is to be spent on climate change adaptation – this briefing paper explores the potential of the international tourism industry to contribute to adaptation finance, with a focus on Small Island Development States (SIDS). The SIDS is a group of low-lying coastal countries that are particularly susceptible to natural disasters and climate change impacts. Tourism is the main economic sector for most of them. Given the sector’s vulnerability to climate change (e.g. rising sea levels or extreme weather events), high levels of investment in adaptation will be needed to maintain the high number of visitors.
A diverse landscape of modalities for funding adaptation through the tourism sector is available, with corresponding limitations and challenges in their implementation. The tourism sector represents a diverse array of businesses. The adaptive capacities of these businesses, their operational scales and customer demands are key determining factors behind the potential to contribute to, or finance, adaptation.
Different options are available on various scales. For example, on a local scale, hotels and resorts can contribute to adaptation by investing in sea walls, or in water- and energy-efficiency measures. Governments can endorse this through, for instance, building codes and policies for sustainable water and energy use.
On a sub-national or national scale, adaptation funds (i.e. financed by public and private sources) or adaptation taxes could be suitable instruments for involving a range of private actors operating in tourism and generating financial resources. Insurance schemes could help to share in and deal with risks.
Tourism enterprises can contribute to and invest in adaptation in SIDS. Regardless of whether such investments would count as part of the US$ 100 billion, we recommend governments in SIDS to endorse this. However, in developing such mechanisms to mobilise pri¬vate financial contributions, it must be considered that tourists and multinational tourism corporations have the highest adaptive capacities. They can simply change destinations if climate impacts are too extreme or if the costs of adaptation make a destination relatively more expensive. The price sensitivities of the industry thus need to be factored in, and taxes or levies should theoretically be applied as uniformly as possible across tourist destinations in different countries in order to prevent travellers from substituting more expensive destinations (where adaptation taxes are adopted) for cheaper ones.

What should development policy actors do about the Transatlantic Trade and Investment Partnership (TTIP)?

Wed, 04/02/2015 - 11:27
The Transatlantic Trade and Investment Partnership (TTIP) is currently the subject of heated debate – but with a narrow focus. The debate is primarily concerned with the impact of TTIP on Germany and Europe. Too little attention is being paid to the implications of this mega-regional for the rest of the world. In light of growing global in-equality, the question of how we can shape globalisation fairly and whether TTIP can play a role in this is more pressing than ever.
TTIP is an attempt by the European Union (EU) and the United States to define new rules of play for the world economy with potential global application. From a development policy perspective, this exclusive approach gives cause for concern, as it precludes emerging economies and developing countries from negotiations.
The TTIP negotiation agenda goes far beyond the dis-mantling of trade barriers, also encompassing, for example, the rules for cross-border investment and a broad spectrum of regulations that are often only loosely related to traditional trade policy. This expansive negotiation agenda is the real innovation of the transatlantic negotiations, with uncertain consequences for all those countries that do not have a seat at the negotiating table. Whether they like it or not, these countries will be affected by the rules agreed upon at this table through their participation in international trade.
As such, TTIP could mark an important turning point in the world trade system. TTIP, along with the Trans-Pacific Partnership (TPP) negotiated by the United States and 11 other nations, threatens to further undermine multilateral negotiations within the World Trade Organization (WTO). Of even greater concern is the fact that emerging economies such as Brazil, India and especially China, none of whom are involved in the TTIP and TPP negotiations, could react to these mega-regionals by joining together to form opposing trade blocs. Instead of taking a largely exclusive approach, it would be better if the transatlantic partners placed the emphasis on cooperation with emerging eco-nomies and developing countries, especially given the tremendous economic potential of these nations and the global challenges currently being faced in other policy areas, challenges which can only be overcome by working together with these states.
When it comes to promoting global development and shaping globalisation fairly, the TTIP negotiations offer potential and present challenges at the same time. Nonetheless, there are some specific recommendations as to how TTIP can be made as development-friendly as possible: 1) steps should be taken to avoid discriminating against third countries in the area of regulatory cooperation; 2) rules of origin should be as generous, uniform and open as possible; 3) preference programmes of the EU and the United States should be harmonised;  4) third countries should be afforded credible options for joining the partnership in future.
Development policy stakeholders have the following options for action: 1) the TTIP negotiations should under-score the importance of measures for integrating developing countries into global value chains; 2) efforts need to be made at European level to promote greater consistency between TTIP and development policy goals, particularly those of the post-2015 agenda; 3) steps should be taken to reach out to emerging economies and developing countries with greater transparency and to offer them the opportunity to engage in dialogue; 4) the WTO process needs to be reinvigorated and reformed at multilateral level.

Measuring green growth: why standardisation is (sometimes) not desirable

Thu, 18/12/2014 - 09:44
The need to find a suitable alternative to our present carbon-based production pattern is currently the subject of international discussion, not least because economic growth usually goes hand in hand with increased resource consumption. As part of such an alternative, all economic decisions would have to take into account environmental concerns and the value of natural assets. The discussion is mainly focused on different concepts of green growth, now a buzzword. The hope is that we can find a solution to our world's most pressing issues, one that enables us to achieve economic growth while conserving ecosystems, preventing environmental degradation and contributing to the aims of climate stability and poverty reduction.
In addition to the important debate on the different ways of achieving this, it is also essential to discuss how we can effectively map the achievement of green growth. A number of international organisations have proposed sets of indicators for measuring green growth, and initiatives such as the Green Growth Knowledge Platform (GGKP) have been set up to pool existing knowledge, identify gaps in knowledge and provide a platform for discussion.
In this context, finding a standardised way of measuring green growth is far less trivial than it may appear at first glance, as there are at least two sources of heterogeneity that need to be taken into account: the different concepts of green growth that exist and the specific conditions of each country that require different priorities to be set. Differing income levels mean that countries will have varying degrees of scope for action and will set different policy priorities. Furthermore, there are often fundamental structural differences between economies, with implications for environmental impact and the use of natural resources. There must also be a certain degree of political stability for green growth strategies to be planned and implemented properly. Finally, it is necessary when measuring green growth to (be able to) distinguish between cyclical and structural changes in the economy.
This results in several sets of indicators for measuring green growth. However, the goal should not necessarily be to develop one sole set of universally valid indicators.
If we are to clearly delimit the concept of green growth to prevent its arbitrary use, then we need firstly to come up with a comprehensive way of defining it and secondly find overarching key indicators for measuring it that reflect central categories. At the same time, the different baseline conditions in developing countries, emerging economies and industrialised nations mean that green growth strategies must be adapted to individual situations. Accordingly, sets of indicators for measuring green growth need not only to allow a certain degree of flexibility, but also to be capable of reflecting this diversity.

Advancing female education by improving democratic institutions and women’s political representation

Wed, 17/12/2014 - 15:38
Reducing gender gaps in education, employment and political decision making, among other dimensions, has long been an important development objective. This is confirmed by the international consensus reached over Millennium Development Goal 3 (MDG 3): “Promote Gender Equality and Empower Women”. Ensuring equal access to education, in particular, is a central component of this effort, as reflected in the goal’s target, which is to eliminate gender disparities in education by 2015.
Are countries that have adopted democratic political institutions more successful at reducing the gender gap in education? And can higher levels of political representation of women contribute to achieving this objective?
Democracy advances the cause of women’s education in the absolute, although there is no conclusive evidence on whether it improves women’s situation relative to men’s. When it comes to political representation, the evidence is clear: larger numbers of women in politics and elected office improve overall educational outcomes and reduce the gender gap in education.
What lessons can be learnt regarding the linkages between democratic institutions, women’s political representation and the gender gap in education?

- The fact that democracies have a better track record than autocratic regimes when it comes to education and development provides additional justification for development cooperation policies that support gradual political opening in autocracies as well as the stabilisation and consolidation of democracy in countries that have chosen to go down this path. Moreover, it suggests that the adoption of specific democratic institutions, such as allowing women to run for office, can make a difference, even in countries that are not formally democratic.

- Multiple policy objectives could be reached with one policy tool: women’s political representation. Progress in this dimension improves not only girls’ education but also health and political participation, among other outcomes.

- Policy-makers and international donors should exercise caution in adopting and supporting the implementation of quick fixes to increase women’s political representation, such as gender quotas. In countries with high levels of gender inequality, such as India, quotas alone are likely to have limited effects. Instead, these should be integrated into a larger set of interventions aimed at diminishing gender gaps in employment, assets and decision making.

Overall, these arguments speak directly to the current debate on the post-2015 agenda. The ratio of girls to boys in education and the proportion of seats held by women in national parliament are two indicators for MDG 3. As these topics are also likely to be central in the post-2015 agenda, it is important to consider the studies showing that making progress in the second indicator advances the first one. This, in fact, can help when analysing the feasibility of these objectives and in the planning of the resources required to achieve them. Moreover, these findings point to the importance of including governance in the global develop¬ment agenda.

Proposal for a global framework for climate action to engage non-state and subnational stakeholders in the future climate regime

Thu, 27/11/2014 - 09:11
This briefing paper proposes a Global Framework for Climate Action (GFCA), a comprehensive and collaborative programme to build advantageous linkages between the multilateral climate regime and non-state and subnational climate initiatives.
Global climate governance features a great diversity of institutions, state and non-state stakeholders, and their plethora of actions aimed at mitigation and adaptation. The United Nations Framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol remain the most important elements of the multilateral climate regime. However, these state-centred regimes and their ongoing negotiations have been criticised for being cumbersome and insufficiently effective. The multilateral regime leaves governance deficits regarding implementation (of adaptation and emission-reduction policies), regulation (new international agreements, norms and standards) and legitimacy (effective output, as well as engagement by underrepresented stakeholders). These deficits could partially be addressed through a growing number of non-state and sub-national initiatives. For instance, cities have adopted emission-reduction targets and cooperate on adaptation, and industries are setting their own targets to reduce emissions. These kinds of initiatives have the potential to make concrete and solution-oriented contributions towards realising a climate-resilient and low-carbon future and also improve the effectiveness of the UNFCCC process. The groundswell of initiatives has, however, not reached its full potential as – until now – it has been uncoordinated and not well documented.
The proposed GFCA aims to catalyse non-state and subnational initiatives, grant recognition to initiatives that make substantial contributions, and inspire governments to raise mitigation and adaptation ambitions by scaling-up innovative solutions and successful methods. To achieve this, a layered design is proposed that allows for the recording of a wide array of initiatives while ensuring measurability of progress in terms of output (visible activities and products), outcome (behavioural change) and impact (changes in environmental indicators). Periodic overall assessments of participating initiatives will strategically inform where initiatives could complement the multilateral process and where links could be built.
We envisage a GFCA as a collaborative programme, oper¬ated and administered by a network of experts, think tanks as well as public and private organisations. Such a network yields the strengths of existing efforts and pools resources from multiple organisations while retaining legitimacy through a partnership with an international body, such as the UNFCCC secretariat or the United Nations Environment Programme (UNEP).
The proposed GFCA could become an important element in the future global climate governance architecture. It would strengthen coordination capacity within the UNFCCC to steer non-state and subnational actions towards greater ambition and the implementation of international targets and agreements on the ground. It would also give recognition to initiatives that substantially contribute to low-carbon and climate-resilient develop¬ment, and it would motivate reputation-conscious non-state stakeholders to develop such initiatives.

Making global health governance work: recommendations for how to respond to Ebola

Tue, 28/10/2014 - 09:41
The Ebola pandemic is a crisis of global proportion and of global concern. It is locally concentrated and requires responses on a local scale with a global scope. Its projected trajectory is the subject of volatile predictions, confused communication, imperilled responses and, increasingly, panic. It is at once a health crisis, with severe economic repercussions, and a threat to peace and security, espe­cially in the region and even beyond.
The response to the Ebola pandemic should be twofold.

  • The immediate crisis must be brought under control. We propose a set of short-term actions that are based on a much stronger commitment and co­ordination by the international community. Above all, these are geared towards establishing an acknow­ledged and legitimate global health leadership structure: based in the United Nations system and supported by key global players such as the United States and the European Union.
  • In order to overcome the current Ebola outbreak with a view towards drawing conclusions to prevent another such crisis, international actors need to reflect on the structural aspects undergirding this crisis. Three elements of such a response need to be recognised. First, the Ebola pandemic is a global crisis; in addition to the individual impacts of infection, a global pandemic can easily lead to a panic in which health, social, economic and political costs are impossible to quantify. Second, it is a health crisis not only for those infected with and affected by the Ebola virus, but also for the most affected region - in health, economic and security terms (as people seek health care apart from Ebola treatment). Third, Ebola poses a health, economic and security crisis for the West Africa region and beyond: its spread threatens the fragile gains made in the post-conflict societies of Guinea, Liberia and Sierra Leone. The broader West Africa region and the Sahel are characterised by fragile social cohesion, as people struggle to sustain livelihoods curtailed by quarantines, fear and falling trade while authorities work to maintain and manage socio-political tensions.

The current Ebola crisis illustrates the shortcomings of the way international cooperation is organised. In rising to the challenge of a committed, coordinated response, the following points must be acknowledged.

  • Ebola's eruption into densely populated urban areas reinforces the vital necessity of functioning local, national and global health systems. Zoonoses are likely to multiply; learning to predict and prepare for them is vital.
  • It makes it clear that weak and fragile local systems, especially in a post-conflict setting, pose not only a local hazard but a global threat.
  • Current crisis response mechanisms of the international community are neither effective nor adequate. To a large extent, the situation is caused by chronic underfunding of the core functions of leading international institutions.
  • There are urgent opportunities that the international community should take advantage of to improve the workings of the (global) health sector, e.g. compre­hensively supporting health systems' development

Post 2015: setting up a coherent accountability framework

Fri, 24/10/2014 - 14:33
United Nations (UN) deliberations are underway towards a post-2015 agenda that unites poverty eradication and sustainable development. While negotiators are tasked to determine goals and indicators, another fundamental question is: How will progress towards the sustainable development goals (SDGs) be monitored and reviewed?
A post-2015 accountability framework is needed to document and guide how stakeholders take responsibility, learn from their efforts and adjust their behaviour towards achieving the SDGs in a transparent manner. Discussions on such a framework are still at an early stage.
Only some general elements of an accountability framework have been agreed among UN Member States. Most importantly, the framework will be voluntary, non-binding and state-led, which raises the question of how governments and other actors can be incentivised to participate. The main incentives are likely to be reputational: states can strengthen their SDG profiles and showcase “best-practices”. They could also benefit through exchanging lessons learnt. Financial support, capacity development support and technology transfer can be additional incentives, particularly for least developed countries.
Incentives, however, have to be complemented by a strong commitment and ownership at the national level. The framework should be rooted in an inclusive, bottom-up approach, in which each government determines its own level of ambition. Further, governments should be able to link their national efforts to SDG discussions at the regional and international levels in a multi-layered framework.    

Currently, a fragmented landscape of international bodies is dealing with individual elements of the proposed SDGs. For each of the 17 goals, myriad entities and platforms exist, both within and outside the UN system. All claim global coordination functions, but many continue to work in parallel. Without addressing this incoherence, the accountability framework risks becoming a loose collection of disconnected efforts. Such a patchwork approach will not suffice in supporting the realisation of an aspiring agenda.
Therefore, the post-2015 discussions offer the unique opportunity of setting up a coherent accountability framework that engages stakeholders across all platforms. Such a framework would help to avoid duplication and promote synergies. Its major benefit is to bring key stakeholders together in a few focused discussions that are more effective and legitimate than the current fragmented setup of international cooperation.
A coherent framework would feature improved monitoring and reporting as compared to the Millennium Development Goals (MDGs) and would enable a strengthened review process. It should consist of three key components: key actors (governments, the UN system, other stakeholders), interlinkages (within UN structures and outside of them) and ambition (in design and commitments).
The international community should engage in discussions on the accountability framework without delay. Only then can the post-2015 agenda be placed on solid footing from the start.

Post 2015: enter the UN General Assembly: harnessing Sustainable Development Goals for an ambitious global development agenda

Wed, 03/09/2014 - 15:38

With the wrapping up of the United Nations' Open Working Group (OWG) on Sustainable Development Goals (SDGs) at the end of July 2014, the international process towards the adoption of universal sustainable development goals has entered its decisive phase. Established in the wake of the 2012 "Rio+20" summit on sustainable development, the OWG has arguably fulfilled its task by tabling a substantive proposal that represents "an integrated indivisible set of global priorities for sustainable development" with "aspi¬rational global targets." Crucially, the OWG's proposal re¬flects the global level of ambition as well as attention to national circumstances.
It is now up to UN Secretary-General Ban Ki-Moon and, ultimately, the UN General Assembly (UNGA) to follow up on the OWG proposal and to foster consensus at the global level. Concomitantly, the SDGs also need to be anchored within an institutional system that facilitates progressive implementation and ensures accountability. The OWG has come a long way in paving the ground, but deliberations will continue before the UN General Assembly eventually adopts a consolidated set of SDGs in 2015. This defines the political space to promote improvements as the international community strives for a set of goals that is pragmatic enough to ensure broad ownership across the North-South divide and ambitious enough to actually make a difference vis-à-vis business as usual. Four issues deserve particular attention from policymakers and negotiators:
  1. Negotiators should not let themselves be diverted by the quest for a smaller number of goals. The total number of SDGs is of little concern for each SDG to deliver on its promises. The substance and the feasibility of individual targets matters, not the memorability of the set of goals as such.
  2. A consolidated set of SDGs should further emphasise the potential of integrated approaches wherever this is reasonable, for example with regard to targets relating to water, food security and energy provision. The goals tabled by the OWG could do better to overcome the silo approach that has characterised the Millennium Development Goals (MDGs).
  3. The goals need to be ambitious both in terms of substantive targets and in terms of sharing the burdens of implementation in the envisaged 'global partnership'. Now is the time to specify who is expected to be doing what, by when, and with which means.
  4. The goals are supposed to be universal and hence need to be relevant and fair for developed countries and developing countries, as well as within all countries. The notion of 'leaving no one behind' should be reflected more consistently across the eventual set of goals.
This briefing paper elaborates on these priorities as it critically appraises the outcome of the OWG with a view to forthcoming sessions of the UN General Assembly. It also identifies challenges for implementation, notably regard¬ing the responsibilities of Germany and the European Union. It concludes that all countries will be well advised to devise national road maps that facilitate the incorporation of the SDGs into domestic policy. These should be fashioned in a manner that is in itself aspiring and flexible enough to allow for progressive adjustment as the global partnership for sustainable development evolves beyond 2015.


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