Why the World Bank is taking on climate change – Interview with Rachel Kyte, vice president of sustainable development
By Coral Davenport
12 August 2013 (National Journal) – The World Bank, headquartered a block from the White House, was founded after World War II to combat global poverty. But over the past year, fighting climate change has become the bank’s new guiding principal, as economic evidence indicates that global warming will be a driving cause of poverty worldwide in the 21st century. The bank has become a big player in climate policy, investing billions annually into climate-related programs—and blocking money from projects such as coal-fired power plants. In a November report, the bank detailed the devastating economic consequences of a global annual temperature increase of 4 degrees Celsius (7.2 degrees Fahrenheit) by 2100. In a June study, the bank projected that due to climate change, by the 2030s African countries could lose up 80 percent of cropland and major portions of Bangkok and Vietnam could be flooded. National Journal spoke with Rachel Kyte, the bank’s vice president of sustainable development, about the economic impact of climate change. NJ: Why is the World Bank now putting so much emphasis on climate change? Kyte: We’ve come to the realization that we cannot achieve our mission, which is to end poverty, unless we slow the rate of climate change. Climate science now shows that we’re on course for a 4-degree [Celsius] temperature rise by 2100, that we’re going to be 2 degrees warmer by the 2030s. And that’s going to have devastating effects on food production, how livable cities are. … It’s going to be extraordinarily difficult for the poor, who are the least resilient, to be part of the growth and opportunity story over the next few decades if climate change is unabated. NJ: So climate change is now a driving force of the World Bank’s mission? Kyte: Absolutely. There are countries in Africa experiencing drought every two years as opposed to every five, or every 10 years. If the economic impact of a crippling drought is 1, 2, or 3 percentage points of GDP lost in a year and this is happening every two years, these countries are going backwards rather than forwards. Climate change is absolutely central to our understanding of how we can help these countries grow and prosper. NJ: How does a financial-development institution do that? Kyte: It’s a good question. We work with governments and the private sector … to understand their aspirations around growth and competitiveness. We need to help them factor in the risks that they will face as a result of the climate impacts that can be predicted—increase of extreme weather events, sea-level rise, crop-production dislocation. We need to walk them through the risks of climate change and the need to invest in their own resilience and in low-carbon developments. … We need to walk them through the opportunities that come from avoiding the lock-in of a carbon-intensive growth model. And we need to walk them through whether there are up-front capital costs … and where those costs can be met with mobilization of different financial or investment resources. NJ: For the developed world, particularly the U.S., how do you make the case that there’s an economic cost to climate change? Kyte: The extreme weather events that we are experiencing globally … bring enormous costs. The succession of storm events, droughts, the cycle of fires … have enormous economic dislocation. Beyond just the extreme weather events, in which insurance costs can be calculated, there are costs in not planning to accommodate the increased intensity and frequency of some of these events. One superstorm is one thing, but if you now expect the superstorm to hit on a more intensive or more regular basis, not planning for that is an economic folly. [more]
