Equity as the Gateway to Environment Ambition

By Martin Khor, Executive Director, South Centre, 18 March 2015

In  the quest for an international climate agreement on actions to address the climate change crisis, three aspects have to be the basis simultaneously: the environmental imperative, the developmental imperative, and the equity imperative. This EDE formula requires that the different pieces of the climate negotiations be seen and addressed as a whole, in a holistic way.  In particular, setting the global goal for emission reduction has to take account of the environmental imperative, and also deal with the emission reduction of Annex I and non Annex I parties.  Equity is the element and principle that cements the link between environment and development.  Indeed, equity is the gateway to environmental ambition.     

For example, fixing of a temperature target and of a global emissions reduction goal must be done within a paradigm or framework for the equitable sharing of the atmospheric space and the development space.   The sharing of the mitigation efforts, and the support (finance and technology transfer) that must accompany this sharing, is a most critical piece of the jigsaw puzzle.

The UN Climate Convention recognises the equity principle; that developed countries take the lead in emission reduction, and that developing countries have development imperatives, and their ability to undertake climate actions depend on the extent of support they receive from the developed countries.  Annex I countries will also meet the agreed full incremental costs of implementing developing countries’ mitigation measures, as well as providing financing on adaptation and technology. 

There are competing claims on a national budget or a family budget.  The trade-offs and dilemmas are more acute for the poor.  A poor family would put greater priority on feeding the children and on health care, and also on adaptation action such as preventing floods and rain from occupying the house, ahead of spending on mitigation.  Thus, financial assistance is required if changing to more environmentally sound cook stoves, or having zero-emissions small industry or agriculture, are to be achieved by the family.  So too regarding a typical budget making exercise by developing countries. They have to grapple with adaptation problems, loss and damage (and reconstruction after extreme weather events), as well as imperatives of social and economic development (provision of food, health care, education, water, electricity, infrastructure, etc), as well as the new obligations on mitigation.  This is what the developing countries mean when they accepted the obligation of  ‘enhanced nationally appropriate mitigation actions by developing countries in the context of sustainable development, supported and enabled by technology, financing and capacity building’, in the Bali Action Plan.   A similar context is being put forward with regard to the ‘intended nationally determined contributions’ to be submitted in relation to the Paris COP in 2005.

The provision of support in terms of financing, technology and capacity building and the building in concretely of the appreciation of the need for sustainable development are parts of operationalising of the equity principle, which in turn would be a necessary piece of effective global mitigation action.  Recognising the gateway role of equity to higher environmental ambition is not a rhetorical but a logical and realistic way of getting to a successful mitigation framework.   

According to the latest IPCC reports, total CO2 emissions since 1870 have to remain below about 2900 Gton of CO2 if global warming is to be kept at less than 2 degree C (relative to 1861-80= with a probability of over 66%.  However 1900 Gton has been emitted by 2011, leaving the space of only 1,000 Gton between now and the future. Since the emission level was 49 Gton of Co2 equivalent in 2011, the carbon space would be exhausted within 2 or 3 decades at current rates of emission.

This sobering set of figures makes it imperative that we find a solution based on international cooperation.  Otherwise various types of conflictual conditions may arise.

The concepts of historical emissions and historical responsibility are important in this context.  Of the cumulative global emissions Annex I countries accounted for 72% of the total compared to their share of population of about 25%.  Developing countries accounted 28% of the total cumulative emissions, with their 75% share of population.   If a “fair share” is defined as share of emissions corresponding to share of population, then it is possible to measure the extent of over-use or under-use of a country’s share of resource, in this case “atmospheric space.”  The over-utilisation of the atmospheric space by Annex I in 1850-2008 was 568 Gton, the same as the under-utilisation by developing countries (up to 2009, in my estimation, in a paper on The Equitable Sharing of Atmospheric and Development Space: Some Critical Aspects, South Centre, Research Paper 33, 2010).  This is a measure of “climate debt” or “climate credit.”   In terms of annual flow, Annex I countries as a group are  still exceeding their fair share, as their share of total emissions exceeds their share of world population.   

In sharing the remaining carbon space, say for 2015 to 2050 or beyond, two concepts are needed:  (1) The allocation of carbon space as according to rights and responsibilities; (2) The actual carbon budget (and related physical emissions reduction schedule) that countries eventually put forward as what they can physically undertake.

There could be a difference between the allocation of responsibilities and rights, and the actual emissions reduction or related budgets.  Therefore: Countries that cannot meet their allocated budget or emission cut can compensate for this unmet part of their obligation and countries that do not make full use of these rights, can obtain the funds for their actions, including actions on behalf of the former set of countries.

The WBGU (German Advisory Council on Global Change), in its 2009 paper “Solving the climate dilemma: the budget approach”, was a pioneer in making combined use of the carbon budget approach, the historical responsibility principle, and emissions allocations for countries, and the use of “offsets” through carbon trading by countries that are unable to stay within their meet their allocated emission budget.  For example, it found that three countries (USA, Germany, Russia) had already emitted in 1990-2009 their entire allocated budget for 1990-2050 and therefore begin with negative emission allocations for the period 2010-50.  In the WBGU model, the countries with high emissions can buy emissions rights from the countries with low emissions and have higher actual budgets than their allocated budgets, and thus stretch out their emissions for more years.  The low-emission countries emit less than their rights and receive funds from the high-emissions group through the emissions trading mechanism.   Such a model incorporates many concepts and features that are important for the discussion on equity and environment and points to a concrete solutions framework which can also include concrete figures of emissions allocations and actual emissions budgets, etc.

The equity approach has implications for the various topics in the UNFCCC discussion.  In a discussion on global mitigation goal, the setting of a global goal for emission reduction should be accompanied by a clarification of the roles of developed and developing countries. 

For example, a proposal of a global goal of 50% emissions cut and an Annex I goal of 80% cut, which has previously been put forward by a number of developed countries including Germany, raises several issues. Such targets, combined, in fact, attempts to set a global carbon budget as well as to allocate the shares (of responsibilities and rights) to which two parties  — developed and developing countries – are to have. If two figures are given in an equation of three parameters, the third figure, which is the “remainder” responsibility (and right) of the developing countries can be fairly simply worked out.

 The issues include the following.  Firstly, the 50% global cut is environmentally not ambitious enough, as it would correspond to a carbon budget above what is required.  Secondly, the implied distribution of the carbon budget gives Annex I countries a budget share of 30-35 per cent, compared to their 16% share of world population in this period.  Thirdly, acceptance of this proposal means accepting not only an unfair distribution of the 2010-50 carbon budget, but also writing off the cumulative debt of developed countries.

Fourthly, accepting these figures (50%, 80%) implicitly accepts a specific emissions cut target for developing countries, and locking in this whole distribution of carbon budget and set of emissions cuts.   It implies that in 2050, annex I total and per capita emissions would be cut by 80% while developing countries’ per capita emissions would be cut to 1.5 ton or about half below 1990 levels; and compared to 2005 levels it would be around 40% below in absolute terms and 60% below in per capita terms.  The cuts for developing countries would be even much deeper, compared to the ‘business as usual ‘ level of 2050.    

For a fairer framework of carbon budgeting, the distinction should be made between the allocated national budget according to rights and responsibilities, and the actual budget to be implemented, with the difference to be made through “offsetting”.   Of course there should also be conditions set for offsetting.    In this exercise, the concept of “negative emissions” needs to be used.  Again, the WBGU’s 2009 paper is a pioneer in this respect.  For example, it found countries that had already exhausted their allocated budget for 1990-2050 and therefore begin in 2010 with negative emission allocations for the 2010-2050 period.  For example, in the WBGU estimation, the USA has an emission allocation of minus 56 Gton in its 2010-50 budget.  

It would be a physical impossibility for even technologically leading countries to meet such high negative emissions targets, at least at the present stage of know-how and technology.  The offset mechanism thus comes into play, in the WBGU model, with high-emission countries financing low-emission countries through an offset mechanism.  This could be carbon trading or another mechanism such as payment into and drawing from a fund.

In my own estimation, if a target is set for developing countries as a group to only avoid a per capita emission cut by 2050 (compared to 1990 levels), they would retain a level of 3 ton per capita, and correspondingly Annex I countries would have to cut their emission by 147%.    If a goal is set for developing countries to double their per capita emission to allow for more development space, Annex I would have to cut its aggregate emissions by 277%.   If Annex I cannot realistically meet the targets set, especially at levels higher than 100%, then the mechanism of payment to assist in fulfilling the allocated targets can be used.

This exercise shows how difficult, physically and politically, it will be, to reach solutions.  Even if the budget approach cannot be used in the end for lack of consensus, it is useful to illustrate the issues at stake.

In any case, an associated question is whether there can be sufficient technological solutions in fixing the climate crisis.  One aspect is whether the developed countries with their know how and innovation capabilities can find solutions that meet the criteria of climate friendliness, environmental soundness, social acceptability and economic efficiency.  We do not want solutions whose implementation causes situations worse than the problem itself. 

The other aspect is the development pathways of developing countries.  To meet both the imperatives of economic development and of environmental soundness, decoupling between emissions and economic growth is needed, through a technological, economic and social revolution we have not seen before.  For this decoupling to have a chance, massive infusions of finance and technology, coupled with institutional and human capacity building is required.   This is why equity is also embedded in the finance and technology issues.

The enormity of the problem was not lost on the economist Nicholas Stern who has said  : “If the allocations of rights to emit in any given year took greater account both of history and of equity in stocks rather than flows, then rich countries would have rights to emit which were lower than 2 tonnes per capita (possibly even negative) The negotiations of such right involve substantial financial allocations: at $40 per tonne CO2e a total world allocation of rights of, say, 30Gt (roughly the required flows in 2030) would be worth $1.2 trillion per annum”.

On estimates on mitigation funds needed, the World Bank estimated that:  “In developing countries mitigation could cost $140 to $175 billion a year with associated financing needs of $265 to $565 billion.  A study in India (by the CSE) of  six sectors to determine India’s low carbon growth options  concludes:  “There is no real way we can reduce emissions without impacting growth once we cross the current emissions-efficiency technology threshold…It is for this reason that India (and all other late entrants to the development game) must not give up on their demand for an equitous global agreement.”   For the power generation sector, a low-carbon strategy could reduce emissions in India cumulatively by 3.4 Gton by 2030-31.  The additional cost of generating power from renewable technologies is estimated at US$203 bil or about $10 bil a year or $60 per tonne of CO2 emissions avoided.

On adaptation financing needs, the World Bank estimates up to $100 billion a year, higher than the UNFCCC’s financial flows report (at $27 to $66 bil a year). The most comprehensive estimate is a IIED-Imperial College study led by Martin Parry which found the adaptation cost for developing countries may come up to $450 billion annually.

Financing for technology cooperation and transfer: The UNFCCC’s expert group on technology (EGTT) estimates the total finance needs are $300-1,000 billion a year; with developing countries’ additional funding needs of $182 – 505 billion a year, for deployment and diffusion of technology. This does not include research and development or demonstration costs in developing countries.


(a) Global Goal:    In the negotiations on global goal, developing countries have argued that a decision on a global goal (whether temperature limit or global emissions reduction) should be in the context of equity and to be preceded by a paradigm for the equitable sharing of the atmospheric space or resource. This should also be the case for the wording on a global peaking year.  

This is a correct position because the global goals for temperature and emissions reduction have implications for the responsibilities of developing countries or for their options in their emissions and thus their economic pathways.  This principle of equity in the sharing of atmospheric space has to be operationalised with the use of carbon budget and debt concepts.  The data on fair shares and actual emissions and thus on debt/surplus also have major implications for the sharing of the carbon space in the 2010-2050 period, and thus of the allocation of emission obligations and rights as would be expressed in the shared vision’s important element of “global goal for emissions reduction.”

(b) Mitigation: The concepts and figures on cumulative emissions and carbon debt/surplus make it clear that Annex I parties must continue to “take the lead” in emissions reduction. If developed countries undertake only weak targets for the next commitment period and their emissions are only reduced a little (or even increases), then there is even less carbon space left for developing countries. The present pledges made either in the Copenhagen Accord/ Cancun pledges or Kyoto Protocol are far from adequate. Various analyses show that the Annex I (including the US) pledges add up collectively to only a 16% reduction (by 2020 compared to 1990) at best  and if loopholes (through LULUCF and AAUs) are taken into account there can even be a 6.5% increase in Annex I emissions. 

(c) Finance: One way in which the historical carbon debt that developed countries hold may be discharged is through payments into the Green Climate Fund.  Besides this, the developed countries have obligations under the UNFCCC to meet mitigation, adaptation and capacity building expenses.  The quantum of funds for discharging the carbon debt and for meeting the additional costs are large, but this is to be expected since the financial requirements of adaptation, mitigation, capacity building and technology are massive. The amounts so far announced ($10 bil a year in 2010-12 and $100 bil by 2020) are  inadequate.  Moreover there is no road map between 2013 and 2020 and beyond.

(d) Technology Transfer:  To play their extremely ambitious and difficult role, developing countries need technology at the most affordable rates. The following measures are proposed: (1) They must have the maximum access at least cost to the best technologies; (2) Barriers to technology transfer must be addressed, including the issue of IPRs; (3) Developing countries must be assisted in the development of endogenous technology and to undertake their own R and D and develop innovation, with international support;  (4) R and D activities should be financed by UNFCCC funds, and the products from these should be in the public domain;  (5) Sufficient funds should be provided for technology development and transfer to developing countries.; (6) A Technology Policy Board or Council should be set up under the UNFCCC to address the technology issues.

It would be useful to have a work programme or research agenda with the objective to examine the various aspects of equity as a principle and how it is to be operationalized in various issues (mitigation, adaptation, finance, technology, global mitigation goal).The recognition and operationalizing of the equity principle will be a major gateway for the raising of environmental ambition, including in facilitating that the means of implementation can be provided in adequate amounts and appropriate forms to developing countries so that they can contribute more to the global mitigation effort as well as to meeting their adaptation needs. 


A Note for the Special UN General Assembly Session on Climate Change

by Martin Khor, Director, Third World Network

A. Background and latest scientific information and scenarios

Climate change is a genuine and serious crisis.  The latest IPCC reports have done valuable service by placing the scientific and other aspects on the global agenda in a more scientifically clearer manner. It shows that “business as usual” will lead to temperatures rising by 3°C to 6°C, with catastrophic results in the form of rising sea levels, melting glaciers, water shortages, floods and decreased agricultural yields.

 It would take only 3% of world income in 2030 to carry out the major changes needed. That works out to a reduction in the growth of gross domestic product (GDP) of only 0.12% per year until 2030.

However major changes are needed changes needed to energy systems, technology, transport, buildings, industry, agriculture, how we treat forests and seas, and to lifestyles, aimed at quickly bringing down the emissions of greenhouse gases.

The IPCC’s third report (May 2007) shows that Greenhouse gas emissions have grown by 70% between 1970 and 2004. The largest growth has come from the energy supply sector (an increase of 145%), transport (120%), industry (65%) and land use, land use change, and forestry (40%). With current policies, global greenhouse gas emissions will continue to grow with carbon dioxide (CO2) emissions from energy use rising by 45% to 110% between 2000 and 2030.

That would be disastrous in the effects it would have on raising temperatures. The present global temperature is already 0.7°C above the pre-industrial level. There is near scienfitic consensus that if the global temperature increases by more than 2°C above the pre-industrial level, there would be irreversible climate changes. With changes above 3°C, there would be catastrophic changes.

An interesting table in the IPCC report shows what could happen with different scenarios.
In order to keep temperatures from rising more than 2-2.4°C, the greenhouse gas concentration in the atmosphere has to be contained to 445-490 parts per million (ppm). And for that to happen, CO2 emissions must be cut by 2050 to 50-80% below the year 2000 level. And to keep on track to this timetable, the emissions must peak by 2015.

This is the IPCC’s the best scenario, but even then many scientists and environmentalists would claim it is not enough.

In the next scenario, the temperature rise is restricted to 2.4-2.8°C, the greenhouse gas concentration must be contained to 490-535 ppm, and emissions must be cut by 30-60% by 2050.

 In the next scenario, temperature rises by 2.8-3.2°C, with gas concentration at 535-590 ppm, and emission changes range from 5% rise to 30% cut.

A worse scenario is where the CO2 emissions rise by 10%-60%, causing greenhouse gas concentration to be 590-710 ppm, with temperatures rising by 3.2 to 4°C, resulting in runaway climate chaos.

 In the most disastrous scenario, emissions rise by 25% to 140%, the greenhouse gas concentration rises to 710 to 1130 ppm, and temperatures rise by 4 to 6.1°C. Human life is almost certainly impossible in many parts of the world.

 In order to keep to the first and best scenario, the IPCC estimates that 3% of the world’s GDP is required to be spent by 2030, not a very large sum compared to how it would prevent damage worth much more.

 Changes required to being down greenhouse gas emissions would include the use of current technology:

 ·ENERGY supply – improved efficiency, switching from coal to gas, nuclear power and renewable energy (hydropower, solar, wind, geothermal, bioenergy);

 ·TRANSPORT – More fuel-efficient vehicles, hybrid vehicles, cleaner diesel vehicles, biofuel, shift from road transport to rail and public transport systems, non-motorised transport, and land-use and transport planning;

 ·BUILDINGS – Efficient lighting and day-lighting, more efficient electrical appliances and heating and cooling devices, improved cook stoves, improved insulation, solar heating and cooling design, and alternative refrigeration fluids;

 ·INDUSTRY – More efficient end-use electrical equipment, heat and power recovery, material recycling and substitution, control of non-CO2 gas emissions, among others;

 ·AGRICULTURE – Improved crop and grazing land management to increase soil carbon storage, restoration of cultivated peaty soils and degraded lands, improved rice cultivation techniques and livestock and manure management, improved nitrogen fertiliser application techniques, and dedicated energy crops to replace fossil fuel use;

 ·FORESTRY – Afforestation, reforestation, forest management, reduced deforestation, wood product management, and use of forestry products for bio-energy; and

 ·WASTE – Landfill methane recovery, waste incineration with energy recovery, composting of organic waste, controlled waste water treatment, and recycling and waste minimisation.

Some of these proposals are controversial. Environmentalists for example decry the proposed shift to nuclear power, which brings its own massive problems.   The role of biofuels, positive and negative, is still to be assessed.

The IPCC report also advocates changes in lifestyle and behaviour patterns so that resource conservation is emphasised. This will contribute to developing a low-carbon economy.

B.  The need for major change in developed countries.

The most important contribution to change has to come from developed countries.  This is because they have been historically most responsible for Greenhouse Gas emissions; they are still the most important emitters, especially per capita;  and they have more financial and technological resources.

The Kyoto Protocol recognized this by requiring Annex I countries to cut their emissions.  The Kyoto Protocol requires industrialized countries to reduce greenhouse emissions by an average of 5% below 1990 levels in its first commitment period between 2008 and 2012. However generally the developed countries have not so far made enough progress in meeting up to their targets.

The Greenhouse Gas Data 2006 report by the UNFCCC (UN Framework Convention on Climate Change) secretariat (which was issued in October 2006) reported a “worrying” upward trend in the 2000-2004 period.

Although the overall emissions by these countries dropped 3.3% in the 1990-2004 period, this was mostly due to a 36.8 per cent decrease by economies in transition of eastern and central Europe (EITs).  Most worrying was that the other industrialized Parties of the UNFCC  registered an increase of 11%. 

“The worrying fact is that EITs, which were mostly responsible for the overall emissions reductions of industrialized countries so far, as a group have experienced an emission increase of 4.1% in the period 2000-2004,” UNFCCC Executive Secretary Yvo de Boer said when launching the report in Bonn.  “This means that industrialized countries will need to intensify their efforts to implement strong policies which reduce greenhouse gas emissions,” he added.  

Emission reductions are urgently required in the transport sector but they seem to be especially difficult to achieve, growing by 23.9% from 1990 to 2004, the report noted.

Thus, the UNFCCC data is really gloomy as it show an overall lack of action on the part of industrialized countries, and even then excluding the US, which itself has one of the poorest records.  According to one estimate, the United States’ emission level in 2005 was 12% above the 1990 level and could rise to 30% above that level in 2012.

There is need for action in developed countries to deeply cut their emissions.  The mechanisms such as carbon trading and clean development mechanism should not be used as “escape routes” from this.  That escape route is for those under-performing developed countries to fund climate-friendly projects in developing countries and thus earn “credits” allowing them to continue emitting Greenhouse Gases above their permitted level.

The recent initiative in the EU to set targets for its emission cuts 2020 is a good start, though many would agree it is not enough.   The G8 Summit 2007 also set targets for emission reduction, although it did not bind all G8 members.  Those are numbers to be worked further on.

C.  The equity perspective and North South relation

Historically and presently the developed countries have been most responsible for Greenhouse gas emissions, and have greater resources and technical capacity, and thus should contribute most in terms of (1) changes in their own countries;  (2) assisting developing countries to move onto a sustainable path.

According to United Nations statistics, in 2003 there was a total of 27.5 billion tons of CO2 emissions worldwide.  Major emitting countries included the US (5.8b tons, 21% of total), China (4.2b tons, 15%), EU (3.8b ton, 13.7%), Russia (1.5b tons, 5.4%), India (1.3b tons, 4.6%), Japan (1.2b tons, 4.5%).

However, what is more important are the data for per capita emissions.   In 2003, according to UN statistics, the CO2 emissions per capita were US 19.8 tons, Australia 18, Canada 17.9, Germany 9.8, Japan 9.7, UK 9.4, China 3.2, Brazil 1.6, Indonesia 1.4, India 1.2, Pakistan 0.75, Nigeria 0.42, Zambia 0.19, Tanzania 0.1 and Chad 0.01.

It is more equitable and fair to consider the per capita emission concept and data.  This is because some countries have large total emissions mainly because of their huge population sizes, and not because of the emission intensity.

The principle of “contraction and convergence” would be equitable and thus more capable of winning support by more people.  In this principle, the world as a whole has to contract or reduce its total emissions.   In doing so, an equitable principle is used.  Take the total maximum emission level that is sustainable, i.e. that the world is able environmentally to sustain.  Divide this total by the world’s population.  That level of emission per capita could be considered the “emission right” or “emission entitlement” per person.

In countries where this level is exceeded, there should be targets and plans to bring down the emissions aimed at reaching the average per capita entitlement level.  In countries where this level is not yet reached, there is the possibility to expand up to that level;  however this should be done in the most efficient manner so that the level of economic activity can be higher at each per capita emission level.

In fact, there is a strong case that the developing countries should be allowed to exceed the per capita entitlement level, while the developed countries should reach an equilibrium below the entitlement level.  This is because of the superior technological level that the latter have reached, and also because of the much extra “space” that they enjoyed since the industrial revolution to grow and to emit.   Due to this historical and present reality, the developing countries can argue that they require the extra “space” to catch up especially technologically.  As they develop their technology and become more climate-efficient, the developing countries could go down to the average entitlement level.       

The principle of “fair shares for environmental space” should be coupled with the principles of “common and differentiated responsibility” and “contraction and convergence.”

D.  Guidelines for future action    

The UNFCC has been the multilateral forum for global action on climate change.  It should remain so, as it has universal membership.  The Kyoto Protocol is the main instrument of the UNFCC at present, and a post Kyoto regime should be established within the UNFCC framework.  This is the best chance to continue international cooperation on the climate issue.  

UNFCC and Kyoto are based on a central principle, that of common and differentiated responsibility (CDR).  This should remain the central principle of a post Kyoto regime.

The articulation of this principle in Kyoto called for developed countries (Annex I countries) to undertake emission reduction according to time-bound targets, while all countries would undertake relevant programmes to be less carbon dependent, and report on them.   Developed countries would also assist developing countries through financial resources and technology transfer.

In a post Kyoto regime, the CDR principle should remain central.  Developed countries should take the lead in contributing most through reduction commitments.   Their record has to improve tremendously from the performance so far in this Kyoto period. 

The equity principle and the related principles of “fair shares for environmental space”, “emission entitlements”, “contraction and convergence”, should guide the process.

Developing countries for their part should recognize that there is a serious climate crisis, and upgrade the priority they put in mitigating and adapting to this crisis.  This calls for high-level coordination between various Ministries and agencies, and a strong implementation plan and capacity.

The developing countries will not be able to undertake this major task themselves.  They have to be assisted through financial resources for both adaptation and mitigation.

Since new climate-friendly and energy-efficient technologies are crucial, there must be worked out multilaterally a scheme for equitable sharing of the technologies and the benefits from them.

In this the issue of intellectual property of these technologies is key.   The full operation of the IP system can and is likely to hinder the transfer of climate-friendly technology to developing countries.  One option is that patents on climate-friendly technologies be exempted.  Another is that they be provided in developed countries but that developing countries can exempt them.    In any case, the climate crisis should not be seen as a business opportunity to make monopoly profits especially from the developing countries.  It should be an occasion to demonstrate the human capacity to cooperate especially in the face of life-threatening phenomena.       (Presented at the Informal Thematic Debate of the General Assembly on Climate Change as a Global Challenge, New York, USA, 31 July 2007-1 August 2007.)

Food Crisis, Climate Change and the Importance of Sustainable Agriculture

By Martin Khor, Director, Third World Network

Presentation at FAO Food Security Summit, Rome 4 June 2008


This statement deals with the crisis of food prices and shortages, and also the issue of agriculture and climate change.  The importance of food security and of expanding sustainable agriculture practices in its economic, social and environmental aspects is stressed.


The current global crisis of high food prices, and of shortages in some countries, has given prominence once again to food security concerns.  In recent years there was complacency about food security and national self-sufficiency, as it was thought that cheaper imports would be always or usually available, and local food production was not so necessary as previously thought.  Many developing countries reduced food production, many of them under advice of the international financial institutions.

The rising world prices of many food items in the past couple of years have meant more expensive imports, and inflation of food prices in local markets. There have also been cases of shortages, as some countries placing orders for example for rice have found that the supply is not forthcoming or guaranteed, sometimes because of export restrictions by the exporters of the food items.  Many developing countries have been caught in this situation, resulting in street protests as families found it difficult to cope.

Because of this new situation, the paradigm of “food security” has suddenly shifted back to the traditional concept of greater self-sufficiency, instead of prioritizing the option of relying on cheaper imports. It is now recognized that in the immediate period, there is need for emergency food supplies to affected countries, but that a long-term solution must include increased local food production in developing countries.  This raises the question of what constitute the barriers to local production and how to remove these barriers.  

Factors for this crisis include climatic factors (such as drought for example affecting wheat production in Australia), the rising cost of inputs especially oil and oil-based products, and the switch of land use from production of food to biofuels.  However a longer term reason is the decline in agriculture in many developing countries, in most cases due to the structural adjustment policies of the IMF and World Bank.   The countries were asked or advised to (1) dismantle marketing boards and guaranteed prices for farmers’ products;  (2) phase out or eliminate subsidies and support such as fertilizer, machines, agricultural infrastructure; (3) reduce tariffs of food products to low levels.

Many countries that were net exporters or self-sufficient in many food crops experienced a decline in local production and a rise in imports which had become cheaper because of the tariff reduction.  Some of the imports are from developed countries which heavily subsidize their food products.  The local farmers’ produce were subjected to unfair competition, and in many cases could not survive.  The effects on farm incomes, on human welfare, on national food production and food security were severe.

The case of Ghana illustrates this.  The policies of food self-sufficiency and government encouragement of the agriculture sector (through marketing, credit and subsidies for inputs) had assisted in an expansion of food production (for example in rice, tomato, poultry).  The policies were reversed starting from the mid-1980s.and especially in the 1990s.  The fertilizer subsidy was eliminated, and its price rose very significantly.  The marketing role of the state was phased out.  The minimum guaranteed prices for rice and wheat) was abolished, as were many state agricultural trading enterprises and  the seed agency responsible for producing and distributing seeds to farmers, and subsidized credit was also ended.

Applied tariffs for most agricultural imports were reduced significantly to the present 20%, even though the bound rate was around 99%.  This, together with the dismantling of state support, led to local farmers being unable to compete with imports that are artificially cheapened by high subsidies, especially in rice, tomato and poultry. 

  • Rice output in the 1970s could meet all the local needs, but by 2002 imports made up 64% of domestic supply.  Rice output in the Northern region fell from an annual average of 56,000 tonnes (in 1978-80) to only 27,000 tonnes for the whole country in 1983.   In 2003, the US exported 111,000 tonnes of rice to Ghana.   In the same year, the US government gave US$1.3 billion subsidies for rice.  A government study found that 57% of US rice farms would not have covered their cost if they did not receive subsidies. In 2000-2003 the average cots of production and milling of US white rice was US$415 per tonne, but it was exported for just $274 per tonne, a price 34% below its costs.
  • Tomato was a thriving sector, especially in the Upper East region.  As part of a privatization programme, tomato-canning factories were sold off and closed, while tariffs were reduced.  This enabled the heavily subsidized EU tomato industry to penetrate Ghana, and this displaced livelihoods of tomato farmers and industry employees. Tomato paste imported in Ghana rose from 3,200 tonnes in 1994 to 24,077 tonnes in 2002.   Local tomato production has stagnated since 1995.   Tomato-based products from Europe have made inroads into African markets.  In 2004, EU aid for processed tomato products was $298 million euros, and there are many more millions of euros in indirect aid (export refunds, operational funds for producer organisations, etc).
  • Ghana’s poultry sector started its growth in the late 1950s, reached its prime in the late 1980s and declined steeply in the 1990s.  The decline was due to withdrawal of government support and the reduction of tariffs.  Poultry imports rose by 144% between 1993 and 2003, and a significant share of this were heavily subsidized poultry from Europe.  In 2002, 15 European countries exported 9,010 million tonnes of poultry meat for Euro 928 million, at an average of Euro 809 per tonne.  It is estimated that the total subsidy on exported poultry (including export refunds, subsidies for cereals fed to the poultry, etc) was Euro 254 per tonne.  Between 1996 and 2002, EU frozen chicken exports to West Africa rose eight fold, due mainly to import liberalization.  In Ghana, the half million chicken farmers have suffered from this situation.  In 1992, domestic farmers supplied 95% of Ghana’s market, but this share fell to 11% in 2001, as imported poultry sells cheaper.

In 2003, Ghana’s parliament raised the poultry tariff from 20% to 40%. This was still much below the bound rate of 99%.  However, the IMF objected to this move and thus the new approved tariff was not implemented.  The IMF representative in Ghana told Christian Aid that the IMF pointed out to the government that the raising of tariffs was not a good idea, and the government reflected on it and agreed. Many farmers’ groups and NGOs in Ghana have protested on this to the government.

Some developments in the trade negotiating arena are also a source of concern.  The Doha negotiations at the WTO are mandated to substantially reduce domestic support in developed countries. However, to date, the offers of the US and EU indicate their overall trade distorting support (OTDS) would be reduced at the bound level, but not at the applied level.  Also, the figures in the Chair’s latest agriculture text (19 May 2008) would not reduce the actual present domestic support for the US.  The maximum or bound OTDS level for the US would be $13 to 16.4 billion, while the actual support in 2007 is reported to be around $7-8billion.        

Another source of concern is the new US Farm Bill.  According to several analyses, including those made by the US administration, the Bill will continue the present system of subsidies, and in some ways or for several commodities, it will expand the support.  For example the Bill guarantees that 85% of the domestic market for sugar will be met by local production.  The bill also allows a farm family with an income of up to US$1.5 million to obtain subsidies, compared to the limit of $200,000 per farmer proposed by the Bush administration.  The Bill thus “locks in” the US system and levels of subsidies for the next 5 years, and it also constrains what the US negotiators can offer in the WTO’s Doha negotiations.

A major loophole in the WTO’s agriculture agreement is that countries are obliged to reduce their bound levels of domestic support that are deemed “trade distorting” but there are no constraints on the amount of subsidies deemed non distorting or minimally distorting, which are placed in the so-called Green Box.  Recent studies have shown however that many of the Green Box subsidies are also trade distorting.  The Doha negotiations are unlikely to place new effective disciplines on the Green Box. Therefore, the major subsidizing countries can change the type of domestic subsidies they give, while reducing the “trade distorting subsidies” and continue to provide similar levels of farm subsidies.

Meanwhile the developing countries are being asked to reduce their agricultural tariffs further. The Chair’s proposal at the Doha talks is for a maximum 36% tariff cut for developing countries, and 24% for small vulnerable economies.  This is sizable, and compares with the 24% cut in the Uruguay Round.  Most developing countries are advocating that the instruments of special products (SP) and special safeguard mechanism (SSM) be set up as part of the WTO talks to promote food security and farmers’ livelihoods and rural development.  SPs would exempt important food products from tariff cuts or at least allow for more lenient cuts.  SSM would enable a developing country to impose an additional duty op top of the bound rates in situations of reduced import price or increased import volume, in order to protect the local farmers.  However there is considerable opposition from some exporting countries to having these instruments that can work in an effective way.    

In the bilateral or regional FTAs involving developed and developing countries, the developing countries are asked to reduce or eliminate their tariffs by even more.  For example, in the Economic Partnership Agreements between ACP countries and the EU, the ACP countries are asked to eliminate their tariffs on 80% of their tariff lines over different time periods.  Agricultural products are among those affected.     

Conclusions and Proposals

1. The economic and trade policies followed by many developing countries, often at the advice of international financial institutions, or as part of multilateral and bilateral trade agreements, have contributed to the stunting of the agriculture sector in developing countries.  The developing countries must be allowed to provide adequate support to their agriculture sector and to have a realistic tariff policy to advance their agriculture, especially since developed countries’ subsidies are continuing at a high level.  The developed countries should quickly reduce their actual levels of subsidy. 

2. The agriculture policy paradigm in developing countries must be allowed to change.  Countries should have the policy space to expand public expenditure on agriculture. Governments in developing countries must be allowed to provide and expand support to the agriculture sector.  

3.  Developing countries should place high priority on expanding local food production. Accompanying measures and policies should thus be put in place.  The countries should be allowed to calibrate their agricultural tariffs in such a way as to ensure that the local products can be competitive and the farmers’ livelihoods and incomes are sustained, and national food security is assured.

4.  The proposals of developing countries (led by the G33) on special products and special safeguard mechanism, aimed at food security, farmers’ livelihoods and rural development, at the WTO should be supported.  Effective instruments that can meet the aims should be established.

5.  The policies of the World Bank, IMF and regional development banks should be reviewed and revised as soon as possible, so that they do not continue to be barriers to food security and agricultural development in developing countries.

6.  The actual levels (and not just the bound levels) of agricultural domestic subsidies in developed countries should be effectively and substantially reduced.  There should also be new and effective disciplines on the Green Box subsidies to ensure that this category does not remain an “escape clause” that allows distorting subsidies that are detrimental to developing countries.

7.  There should be a review of many of the FTAs between developed and developing countries, including the EPAs between the EU and ACP countries.  In light of the food crisis and the changing paradigm on food security, developing countries that have signed or are in the process of negotiating FTAs should ensure that the FTAs provide enough policy space to allow sufficiently high tariffs on agricultural imports that enable the fulfillment of the principles of food security, farmers’ livelihoods and rural development.


Climate change affects developing countries’ agriculture, while agricultural practices also contribute to climate change.  These problems need to be addressed urgently.

Effects of climate change

According to various studies, cited in a paper by IFPRI’s Director General, Joachim von Braun (2008), many poorer developing countries are in tropical and sub-tropical regions that are vulnerable to global warming and in semi-desert areas threatened by water scarcity.  By 2080, agriculture output in developing countries may decline by 20% due to climate change and yields could decrease by 15% on average.  The number of under-nourished people in Sub Sahara Africa may rise from 138 million in 1990 to 359 million in 2050.   Responses to climate related threats in agriculture underestimate the problem and there is little work on how the negative effects can be mitigated, according to IFPRI.

According to the recent report of the IAASTD (Independent assessment of agricultural knowledge, science and technology for development), climate change can irreversibly damage the natural resource base on which agriculture depends.  Some negative impacts are already visible in many parts of the world.  Water scarcity and the timing of water availability will increasingly constrain production.  Climate change will require a new look at water storage to cope with the impacts of more and extreme precipitation, higher seasonal variations and increased rates of evapotranspiration in all types of ecosystems.

Extreme climate events (floods and drought) are increasing and are likely to adversely affect food and forestry production and food security.  (IAASTD 2008).

On the other hand, agriculture is a major contributor to climate change.  Agriculture is the main emitter of nitrous oxides and methane.   The total global contribution of agriculture (direct and indirect emissions) is between 8.5 to 16.5 billion tones of carbon dioxide equivalent, representing 17 to 32 percent of all global human-induced Greenhouse Gas emissions, including land use changes (Greenpeace 2008). 

Direct contribution to Emissions

According to the IPCC, the agricultural sector annually emits 5.1 to 6.1 billion tonnes of carbon dioxide equivalent in 2005.  Of these, (1) methane (which has 20 times more global warming potential than carbon dioxide) accounts for 3.3 billion tonnes equivalent; (2) nitrous oxide (which has 300 times greater global warming potential than carbon dioxide) accounts for 2.8 billion tonnes annually; and (3) carbon dioxide emissions are 40 million tonnes. . (ITC 2007).  This represents 10-12% of total greenhouse gas emissions. 

Of the direct emissions, the main forms are:  (1) nitrous oxide emissions from high nitrogen levels in the soils from synthetic fertilizers  (2.128 billion tonnes), which are mainly associated with nitrogen fertilizers and manure applied to soils.  Fertilisers are often applied in excess and not fully used by the crop plants, and some of the surplus is lost as nitrous oxide to the atmosphere; (2) enteric fermentation of cattle (1.792 billion tones);    (3) biomass burning (672 million tones);  (4) rice production (616 million tones),  (5) manure handling (413 million tonnes).   (Greenpeace 2008).

According to current projections, total greenhouse gas emissions from agriculture will reach 8.3 billion tonnes of carbon dioxide equivalent in 2030, compared to the current level of about 6 billion tonnes (ITC 2007).

Indirect Contribution to Emissions

Agriculture also contributes indirectly to emissions, through the following:  (1) The production of fertilizers is energy intensive and adds 300-600 million tonnes of carbon dioxide equivalent per year, or 0.6 to 1.2% of total greenhouse gas emissions.  The greatest source of emissions from fertilizer production is the energy required, which emits carbon dioxide.  With the intensification of agriculture, the use of fertilizers has increased sharply.    

(2) Other farm operations (such as tillage, seeding, applications of agrochemicals and harvesting) also emit 60 to 260 million tones of carbon dioxide equivalent, irrigation emits 50 to 680 million tones while the production of pesticides emits 3 to 140 million tones annually.

(3) Change in land use (from other uses to agriculture) is estimated to be also a major source of emission, about 2.9 to 5.9 billion tonnes annually (or 6-17% of all Greenhouse Gas emissions).  (Greenpeace 2008).

Mitigation potential

Greenpeace (2008) has suggested many mitigation actions.  The large mitigation potential can change agriculture from the second largest emitter to a much smaller emitter or even a net sink.  The overall mitigation potential is 6 billion tonnes a year, which is close to all of agriculture’s direct emissions.  The greatest potential mitigation contribution is from soil carbon sequestration (5.38 billion tonnes annually), followed by reduction of methane emissions  (500 million tones) and nitrous oxide emissions (120 million tonnes).

Because there is low carbon concentration in croplands, there is great potential to increase carbon content through beneficial management practices.  On agricultural lands, restoration of the carbon content in cultivated organic soils has a high per-area potential and is the area of greatest mitigation potential in agriculture (Greenpeace 2008).

Proposals for mitigation by Greenpeace include:  (1) Cropland management (avoiding leaving land bare;  using an appropriate amount of nitrogen fertilizer;  no burning of crop residues in the field;  reducing tillage) (mitigation potential of 1.45 billion tonnes);   (2) grazing land management (mitigation potential 1.35 billion tonnes);  (3) restoration of organic soils that are drained for crop production and restoration of degraded lands to increase carbon sinks (mitigation potential of 2 billion tonnes);  (4) improved water and rice management;  (5) set-asides, land use change and agro forestry;  (6) increasing efficiency in manufacturing of fertilizer;  (7) consumer behaviour change, in eating less meat. 

In the Greenpeace analysis, conventional and intensive agriculture characterized by mechanization and use of agro-chemicals (mineral fertilizers, herbicides, pesticides) and reliance on high external inputs (chemicals, irrigation, fossil fuels) have led to high environmental and social costs that may undermine future capacity to maintain required levels of food production.

In April 2008, the IAASTD launched its report in Johannesburg, which was approved by 57 governments. The IAASTD was an inter-governmental process, co-sponsored by FAO, UNDP, UNEP, GEF, World Bank, with over 400 authors involved in drafting the report.  It conducted a three-year evidence-based assessment on agricultural science and technology and on the future of agriculture.  It made a critique of conventional industrial farming and called for a fundamental change in farming practices so as to better address increasing food prices, hunger, inequities and environmental crises.  The report reflects a growing consensus among scientists and many governments that the old paradigm of industrial energy-intensive and toxic agriculture is an outdated concept, while small-scale farmers and agro-ecological methods provide the way forward.

Its conclusion was that the past emphasis on production and yields brought some benefits, this was at the expense of the environment and social equity.  While promoting agro-ecological methods, it did not support genetically-modified crops, preferring to highlight the doubts and uncertainties surrounding them, rather than the claimed benefits.  The report concluded that for poor farmers, genetically modified crops are unlikely to play a substantial role in addressing their needs, and longer-case assessments of the environmental and health risks and regulatory frameworks are needed.  (Lim 2008).

A report by the International Trade Centre and FIBL (Research Institute of Organic Agriculture, Switzerland) provides a detailed assessment of the benefits of organic farming regarding climate change.  A summary of the benefits are as follows:

  • Organic agriculture has considerable potential for reducing emissions.
  • In general it requires less fossil fuel per hectare and kg of produce due to the avoidance of synthetic fertilizers.  Organic agriculture aims to improve soil fertility and nitrogen supply by using leguminous crops, crop residues and cover crops.
  • The enhanced soil fertility leads to a stabilization of soil organic matter and in many cases to a sequestration of carbon dioxide into the soils.
  • This in turn increases the soil’s water retention capacity, thus contributing to better adaptation of organic agriculture under unpredictable climatic conditions with higher temperatures and uncertain precipitation levels. Organic production methods emphasizing soil carbon retention are most likely to withstand climatic challenges particularly in those countries most vulnerable to increased climate change.  Soil erosion, an important source of carbon dioxide losses, is effectively reduced by organic agriculture.
  • Organic agriculture can contribute substantially to agro forestry production systems.
  • Organic systems are highly adaptive to climate change due to the application of traditional skills and farmers’ knowledge, soil fertility-building techniques and a high degree of diversity.
  • The study concludes that:  “Within agriculture, organic agriculture holds an especially favourable position, since it realizes mitigation and sequestration of carbon dioxide in an efficient way…Organic production has great mitigation and adaptation potential, particularly with regard topsoil organic matter fixation, soil fertility and water-holding capacity, increasing yields in areas with medium to low-input agriculture and in agro-forestry, and by enhancing farmers’ adaptive capacity.  Paying farmers for carbon sequestration may be considered a win-win-win situation as (a) carbon dioxide is removed from the atmosphere (mitigation);  (b) higher organic matter levels in soil enhance their resilience (adaptation), and (c) improved soil organic matter levels lead to better crop yield (production).   

The study recognizes that organic agriculture also has weaknesses, mainly related to productivity and yield losses in some crops and production areas, and this highlights the need for research.  Total European research funding for organic agriculture currently represents less than 1% of the total food and agriculture research budget.

Moreover in some areas, organic farming performs better, for example in conditions where there are water constraints.  Yields from organic agriculture where water is limited during the growing period, and under subsistence farming, are equal or significantly higher than those from conventional agriculture.  The ITC report cites a comparison of 133 studies from developing countries concluded that organic plant and livestock yields were 80% higher than their conventional counterparts, and for crops only the yield increase was 74% (Badgley et al., 2007).

Another review of sustainable agriculture practices, covering 208 projects in 52 countries, show that 9 million farmers have adopted sustainable agriculture practices on 29 million hectares in Africa, Asia and Latin America (Pretty and Hine 2001, cited in Lim 2003).  Farmers have achieved substantial increases in food production per hectare:  50-150% for rain-fed crops; 5-10% for irrigated crops.  Disaggregated data show:

  • Average food production per household rose by 1.7 tonnes per year (up by 73%) for 4.42 million small farmers growing cereals and roots on 3.6 million hectares.
  • Increase in food production was 17 tonnes per year (up 150%) for 146,000 farmers on 542,000 hectares cultivating roots (potato, sweet potato, cassava).
  • Total production rose by 150 tonnes per household (up by 46%) for the larger farms in Latin America (average size 90 hectares).

Conclusions and proposals

Agriculture both seriously affects climate change and is in turn seriously affected by it.  Both these problems should be addressed urgently.

(1) There should be more research and action on adaptation measures in agriculture, especially in developing countries in order to assist farmers in developing countries to reduce the adverse effects of climate change on agriculture.

(2) Action plans for mitigation measures for agriculture should be urgently researched and implemented.

(3) Financing assistance for adaptation and mitigation measures in the agriculture sector in developing countries should be prioritized.

(4) Arrangements should be made for the sharing of experiences and the transfer of good practices in agriculture that can constitute mitigation and adaptation.

(5) Given the many advantages of organic farming and sustainable agriculture, in terms of climate change as well as social equity and farmers’ livelihoods, there should be a much more significant share of research, personnel, investment, financing and overall support from governments and international agencies that should be channeled towards sustainable agriculture.   Promotion of sustainable agriculture can lead to a superior model of agriculture from the environmental and climate change perspective, as high-chemical and water-intensive agriculture is phased out, while more natural farming methods are phased in, with research and training programmes also promoting better production performances in sustainable agriculture.  


Greenpeace International (2008).  Cool farming: climate impacts of agriculture and mitigation potential. 

IAASTD (2008).  Executive summary of the synthesis report of the international assessment of agricultural knowledge, science and technology for development (IAASTD).

ITC and FiBL (2007), Organic farming and climate change.

Joachim von Braun (2008).  “Impact of climate change on food security in times of high food and energy prices.”

Khor, Martin (2008).  The impact of trade liberalization on agriculture in developing countries: the experience of Ghana.  TWN, Penang.

Khor, Martin (2003).  Sustainable agriculture: critical ecological, social and economic issues.  TWN briefing paper 5, June 2003).

Lim Li Ching (2003),  Sustinable agriculture is productive (TWN briefing paper 8, July 2003).

Lim Li Ching (2008), Overhaul of agriculture systems needed, says new report.

Pretty, Jules and Richard Hine (2001).  Reducing food poverty with sustainable agriculture: a summary of new evidence.  Centre for Environment and Society, Essex University.