World Bank: Climate-smart development benefits lives, jobs, GDP

By Susanne Retka Schill | July 07, 2014

Advanced biofuels and biomass play supporting roles in several scenarios examined in a recent report from the World Bank Group looking at climate-smart development. The report introduces a new comprehensive model developed to take a more holistic look at the externalities surrounding policies and projects that address climate change, incorporating projected impacts on health, economics and emissions.

In the case study on the transport sector, the report looked at the benefits from, transitioning to “low-carbon fuels such as bio-ethanol for medium- and heavy-duty vehicles,” improving engine fuel efficiency, shifting to hybrid and electric vehicles, and shifting from cars to public transport and from hauling freight by trucks to rail and ships.

“A transformation of the transport sector toward more-efficient vehicles and freight and greater use of advanced biofuels and public transit, would have significant economic and health benefits in the six focus regions. These changes would save about $170 per ton of avoided CO2 emissions. At the global level, GDP would be about 0.5–0.8 percent higher than baseline levels in 2030, but the impact across countries would be mixed.”  Developed economies would perform best, while the emerging economies of India and China would reap the greatest benefits in lives saved from reduced air pollution”

The new report, “Climate-Smart Development: Adding Up the Benefits of Actions that Help Build Prosperity, End Poverty and Combat Climate Change,”   focuses on the U.S., the European Union, Brazil, China, India and Mexico to examine the benefits from several scenarios.

The study reports the new macroeconomic models’ projections of socioeconomic benefits and impacts on environmental externalities. Seven scenarios are evaluated, four looking at project interventions scaled to national levels and three dealing with policies in transportation, energy efficiency in industry and buildings. The modeling framework seeks to analyze these projects and policies to identify the full range of benefits, including improved health, crop yields, energy savings, job growth, labor productivity and economic growth.

“By 2030, the benefits of these three sets of sector policies would include 94,000 premature deaths avoided annually and GDP growth of $1.8 trillion-$2.6 trillion per year,” according to the report. “The policies would avoid 8.5 gigatons of CO2-equivalent and almost 16 billion kilowatt-hours of energy saved, roughly equivalent to taking 2 billion cars off the road. Together, these implementing these policies could represent about 30 percent of the total reduction needed in 2030 to limit global warming to 2 degrees Celsius.”

The four simulated case studies looked at expanded bus rapid transit in India, integrated solid waste management in Brazil utilizing renewable energy solutions among others, cleaner cookstoves in rural China, and biogas digestion and solar photovoltaics in Mexican agriculture. “The aggregate benefits over the life of the projects are estimated to include more than 1 million lives saved, about 1 million–1.5 million tons of crop losses avoided, and some 200,000 jobs created. These projects could reduce CO2e emissions by 355 million–520 million metric tons, roughly equivalent to shutting down 100–150 coal-fired power plants. This equates to about $100 billion–$134 billion in additional value for just three of these projects in India, Brazil, and Mexico when accounting for health benefits, avoided crop losses, GDP benefits, and the social benefits of carbon mitigation (beyond direct project benefits such as the value of carbon finance assets, reduced operating costs and other project-related economic benefits). In China, the estimated value of avoided premature death alone would come to more than $1 trillion.”

The first chapter of the report looks at the benefits from reducing short-lived climate pollutants such as black carbon from diesel vehicles and cooking fires, methane from mining operations and landfills, ozone formed when sunlight interacts with emissions from power plants and vehicles and some hydrofluorocarbons. Reducing these emissions could avoid premature death and reduce crops losses, the report says. Unlike CO2, these short-lived pollutants don’t linger in the atmosphere for centuries, but are removed in weeks or years, yet are responsible for up to 40 percent of current warming “Stopping these air pollution emissions from entering the atmosphere would by itself help reduce warming and provide time to develop and deploy effective CO2 interventions,” the report says. Renewable fuels are among the strategies employed to reduce those short-lived climate pollutants in several of the scenarios studied, including transportation implications, the use of landfill gas and methane and biomass as a power source for industry.

Capturing externalities can strengthen the rationale for projects or policies aimed at controlling air pollutants, said Rachel Kyte, World Bank Group vice president and special envoy for climate change, in the report announcement. “Climate inaction inflicts costs that escalate every day. This study makes the case for actions that save lives, create jobs, grow economies and, at the same time, slow the rate of climate change. We place ourselves and our children at peril if we ignore these opportunities.”