There is a very nice blog from June 2023 on the interactions between climate change and poverty on the World Bank Open Data site (based on also very nice recent research papers by the authors (working paper and published version). However, their opening paragraph contains a statement that is, kind of, on the face of it, correct, but, at the same time, can create confusion.
“Eradicating extreme poverty and stopping global warming can only be tackled together: reducing poverty without considering carbon emissions is a self-defeating strategy, as climate change impacts will threaten hardly won development gains. But despite rapid progress to decarbonize the world economy, reducing poverty by increasing people’s consumption today requires increasing carbon emissions, since economic systems in most developing countries still rely on fossil fuel energy. And the eradication of extreme poverty is so urgent that it cannot be delayed, especially to fix a problem that has largely been created by the richest among us.”
The potential confusion here is that this paragraph can be read as implying that for a given country addressing their own poverty that the problems of poverty and carbon emissions must be tackled together. In a direct causal sense, this is just obviously false. That is, take a country with currently high levels of extreme poverty, say, Ethiopia at 27 percent or Malawi at 70 percent. If one is concerned about their levels of extreme poverty to 2050 then it should be clear that, to first order, nothing about Malawi’s own carbon emissions between now and 2050 will have anything to do with the consequences of climate change for Malawi and its poverty. This is because Malawi’s own incremental emissions between now and 2050 under any growth scenario for Malawi are so small relative to the global total stock of carbon in the atmosphere in 2050 that the consequences for Malawi (or any other country) are vanishingly small. This is for three reasons, which are three deep features that make the challenge of climate change so very challenging.
One, carbon stays in the atmosphere a very, very long time and hence much of the relevant stock in 2050 has already been determined by emissions that have already happened. (This feature is in sharp contrast to some, but not all, other environmental challenges where the natural processes can remove pollution such that if the flow goes down the stock can go down.)
Two, Malawi by being both very poor and very small in population has very small total emissions and hence incremental emissions under various feasible growth paths are also very small. So, according to the figures reported in Our World in Data the emissions in 2021 in Malawi were 23.85 million tonnes whereas in the USA they were 5.93 billion tonnes. This means even if Malawi’s emissions were to grow by 50 percent by 2050 this would be the equivalent of a .2 percent (one fifth of one percent) reduction in US emissions. And China’s 2021 emissions are 13.71 billion tonnes.
Three, climate change in a global phenomena and depends on the total global stock and hence all countries are affected by the totals, irrespective of their own emissions. So nothing Malawi does about carbon emissions will have any first order effect on Malawi’s damages from climate change compared to about anything China or the US or Europe or India do.
I think there are three important reasons to make this clear.
First, this aspect of the “sustainability” of economic growth is very different from considerations where the feedback loops are at the country level and hence the default concern was that a given country was using up its own stock of natural resources (e.g. groundwater, forests, fertile soil, fisheries, oil, minerals, etc.) or creating its own environmental damages (e.g. air pollution, water pollution) that these would put a check on future economic production or wellbeing. But these feedbacks loops were national (or perhaps regional) and hence the question was whether the processes of economic growth and wellbeing gains could be sustained or were ignoring the “true” total stock of productive assets of the country, including their natural resources. In this respect climate change is very different as Malawi’s growth/wellbeing prospects may well suffer and become “unsustainable” due to climate change, but this will be because of the past and future actions of others, not (to first order) because of anything Malawi does about its own emissions. (And “Malawi” is just a place holder for “small to medium sized developing country with high extreme poverty). So, from the point of view of a given country there may be much more pressing environmental sustainability issues actually under its more direct policy control than carbon emissions. And, from a country view the actions to mitigate the negative consequences of climate change on their wellbeing might also be much, much, more important than controlling their emissions.
Second, there are enormous legitimate political pressures to dissemble about this. That is, controlling climate change requires many countries to cooperate in lowering their emissions relative to their BAU baseline. But these reductions are a “global public good” and every country understands that their efforts alone are ineffective. So many countries may reasonably say: “I will only cooperate to reduce emissions if all other countries cooperate.” This creates a pressure to get all countries to commit to action on their own emissions. This in turn creates pressures to tell countries: “The consequences for your country of climate change are going to be very bad so you should, as a country, commit to actions to reduce your carbon emissions, at the very least for any given amount of economic growth (e.g. carbon intensity) even if not in absolute terms.” But, while that statement is rhetorical powerful, everyone, not least developing country political leaders and policy makers, can see that it is logically flawed and false, or, at the very least, leaves out the key feedback mechanism working through global politics: “…if you fail to commit to climate actions this may cause other countries, whose emissions in total will really make a difference to climate change, to not take action and these emissions of other countries could make climate change consequences worse in your country.” Improving Malawi’s carbon emissions will only benefit climate conditions in Malawi through an indirect channel of political transmission.
Third, this is especially important for the World Bank, which is seeking to make the “global public good” of climate change more important in its agenda. But this is going to necessitate a tricky change for the World Bank. Previously, if the World Bank (via IDA) was doing projects in Malawi it was usually the case that the costs and benefits of the project were justified exclusively by the costs and benefits to Malawi as, in the end, the World Bank is a Bank and it makes a loan (even if, on IDA terms this has a huge grant element relative to market costs) to Malawi. But if the World Bank is making a loan to Malawi that affects carbon emissions one has to be clear whether this is justified as actions by Malawi based on the costs and benefits just for Malawians or whether part of the justification is that Malawi is making a contribution to the “global public good.” And if the answer is that the actions are contributing to the “global public good” with resources borrowed from a global development agency like the World Bank, what is the appropriate allocation of those incremental costs between the future citizens of Malawi (who have to repay the loan) and the rest of the global population which enjoys the benefits of Malawi’s actions. The tensions here are obvious and the stakes are high and lack of clarity here can undermine in the long-run the World Bank’s legitimacy.
Interestingly, after this introduction claiming “reducing poverty without considering carbon emissions is a self-defeating strategy” the blog, based on real research and actual numbers, makes exactly the opposite point. The incremental carbon emissions to reduce extreme poverty are inconsequentially small. By their calculations the incremental carbon emissions to “eliminate” (drive to 3 percent or less in every country) extreme poverty at historical relationships of GDP growth to poverty and GDP growth to emissions was only 4.9 percent of 2019 levels–which is roughly the amount global emissions have been increasing every three years since 2020. So, however negative the consequences of climate change are in 2050 it almost certainly will not be because countries grew at a pace needed to reduce extreme poverty. Rather what will determine climate change (including on countries with extreme poverty) is whether the countries responsible for nearly all historical and current emissions–and who do not have any appreciable extent of “extreme poverty”–did or did not reduce their emissions. T
This is related to a presentation about “sustained” versus “sustainable” development for a group in Pakistan in 2022, in which I make this point about climate change without the benefit of the more accurate and concrete numbers this recent research provides.