GEF 2020 Strategy does not really seem to be long-term? STAP meeting March 21, 2013

Transcription

1 WORKING DRAFT Last Modified 3/21/2013 8:45 AM Eastern Standard Time Printed 3/12/ :59 AM Eastern Standard Time GEF 2020 Strategy STAP meeting March 21, does not really seem to be long-term?

2 1 Why a Long-Term Strategy? Articulate GEF s unique value proposition in an increasingly crowded space for international environment financing Anchor GEF s 4-year replenishment cycles in a longerterm framework Help ensure maximum GEF impact, effectiveness, and value for money

3 2 Four phases, in parallel with the GEF-6 replenishment process, seeking inputs from all parts of the GEF partnership Phase 1 (Feb to Mar) Initial review of material and preliminary stakeholder consultations, targeting: Council members Implementing agencies CSO network GEF Secretariat staff Phase 2 (Apr to May) Detailed analysis and stakeholder consultations with a wide range of stakeholders familiar with the GEF and experts in the rapidly changing landscape of international finance Phase 3 (May to July) Finalization of research and consultations and first draft of the strategy document Phase 4 (Aug to Oct) Finalization of the strategy document Process led by GEF Secretariat supported by a joint team from McKinsey & Company, the World Resources Institute and Ateneo School of Government of the Philippines

4 3 Focus of work in phase 1: Two lines of inquiry: Trends and drivers of deterioration in global environmental commons GEF strengths, weaknesses and capabilities Key questions to be answered: Where should GEF focus its efforts to achieve maximum impact? How (and with who) should GEF engage? What capabilities would GEF need to do so?

5 4 Remaining presentation Illustration of thought process for trends and drivers Three sections: 1. Global trends and drivers 2. Agriculture illustrative drill-down 3. Palm oil illustrative drill-down Important caveat: very (!) preliminary.but great opportunity to get feedback; selected questions are already put in presentation

6 Contents 1. Global trends and drivers 2. Agriculture illustrative drill-down 3. Palm oil illustrative drill-down

7 6 Planetary Boundaries Under Stress

8 GLOBAL TRENDS AND DRIVERS The worsening of the environment across many dimensions is accelerating Climate 1 Fisheries 2 CO 2 concentration, ppm Water surplus % 100% 0% -100% % EU 15 Eastern Europe EU 15 California Chang Jiang Colorado Turkey basin Bangladesh Brazil Indonesia Pakistan Egypt 100% world population HuangHe Ganges basin river basin Ganges river basin Nigeria Zhu Jiang Land 3 Net primary productivity (NPP) loss, % -100% 100% world population 1 Source: National Oceanic and Atmospheric Administration 2 Source: Searchinger, et al, World Resources Institute, Sustainable Food Futures: Scope of the Challenge and a Menu of Solutions, forthcoming, Source: IFPRI, Economics of Land Degradation (2011) 7

9 8 GLOBAL TRENDS AND DRIVERS meanwhile, the emergence of 3 billion middle class consumers by 2030, mostly in Asia will drive food, energy, and resource needs Global middle class 1 Billions of people SSA MENA Latin America N. America Europe Asia-Pacific 3 billion The global car fleet is expected to double to 1.7 billion Steel demand is expected to rise 80% driven primarily by urbanization China s per capita meat consumption is expected to rise by nearly 50% Together, India and China are expected to add floor space equivalent to 3 Chicagos every year Caloric food and water demand are projected to increase over 60% and 50%, respectively 1 Based on daily consumption per capita ranging from $10 to $100 (in purchasing power parity terms) Source: OECD; McKinsey, Resource Revolution (2009)

10 GLOBAL TRENDS AND DRIVERS Population and economic growth affect the environment through key intermediate sectoral drivers 9 Growing global middle class Population and income growth will drive demand for food, energy, and resources 1. Selected intermediate sectoral drivers A B C D E F Agriculture Transportation Buildings / cities Power Materials Other sectors (e.g., petroleum, gas, textiles) Does this causality chain create an impression of a development against the environment situation? Selected direct drivers GHG emissions (CO 2, CH 4, N 2 O, HFCs, PFCs) Deforestation Loss of coral reefs Land-use change Land degradation Over-exploitation of fisheries Water withdrawals Chem. / nutrient pollution Environmental commons Climate Biodiversity Land Fisheries Water Does fisheries belong here? Rather, oceans?

11 Contents Global trends and drivers Agriculture illustrative drill-down - Palm oil illustrative drill-down

12 AGRICULTURE DEEP-DIVE A Demand for food and feed will be driven by the developing world, which will account for over 70 percent of growth to 2030 (1 of 2) Cereal demand 1 Million tons / year 1,868 1, ,157 1, ,310 1, Asia Africa Latin America and Caribbean North America Europe Oceania ROW CAGR, % Share of growth % Developing world share of growth is > 70% Corn, wheat, and rice, for food and feed use only Source: Projections based on IMPACT IFPRI model SOURCE: Team analysis, IFPRI IMPACT Model 11

13 12 AGRICULTURE DEEP-DIVE A Meat demand is projected to grow Globally, demand for meat is predicted to grow 18% per capita from 2000 to 2050, and 50% overall Kilograms per person per year World per capita demand for meat % Sheep Poultry Pork Beef Meat consumption per capita: long way to go in developing countries (2009) Kg / capita / year Developing Asia SSA and other developing Latam Developed countries

14 GLOBAL TRENDS AND DRIVERS Agriculture has a significant impacts across the environmental commons Share of environmental impact by intermediate sectoral driver, % of total direct environmental driver 100% 1 Climate 2 Biodiversity 3 Land 4 Fisheries 5 Water GHG emissions 3 Direct Direct + Indir A B Agriculture Transportation Land-use change and degradation 4 69 Inland Marine Withdrawals C D 100 Buildings / cities Power 100 E F Materials 1 Other 2 65 Pollution 6 ~70 ~15 ~8 ~8 1.. Steel, coal, and chemicals comprise the materials water withdrawals from China. Iron, steel, chemicals, and concrete comprise materials emissions 2. Textile are nearly half of the other water withdrawals for China. Petroleum and gas represents 1. 6% What of other emissions. is the Biofuels constitute the other source of land-use change 3. Estimates for GHG emissions are for 2030 based on McKinsey report, Pathway to a Low Carbon Economy (2009) 4. Based on estimated required increase of 175 mn hectares to satisfy food and energy needs in right Sources: measure IIASA, FAO, for IFPRI, IPCC, World Bank, WRI, and McKinsey. Deforestation is included as in land use change with 80% of deforestation occurring for agriculture and 15-20% for timber 5. Estimates for water withdrawals are for 2030 based on McKinsey report, Charting our Water Future biodiversity? (2009) 6. Galloway et al (2008), Transformation of the nitrogen cycle: recent trends, questions, and potential solutions, Science (2008) 13

15 14 A Regarding CHG emissions, rice, palm oil, and cattle together contribute around 60% of all agricultural-related emmisions Drivers of global CO 2 e emissions from direct and indirect (deforestation) agricultural production Deforestation 2,350 slash and burn 1 Deforestation 1,440 intensive farming Deforestation 1,570 cattle ranching Peat loss from 2,000 palm oil production Agricultural 2,310 soil practices Livestock manure / enteric fermentation 3 2,380 Rice cultivation 880 Other agricultural practices Total ,640 1 Over 80% of deforestation is related to agriculture. About 15-20% is related to timber 2 About 90% of the global peat loss is concentrated in Indonesia and is mostly a result of draining peat soils for agriculture, especially the cultivation of oil palm 3 The primary ruminant livestock animals are cattle, goats, and sheep. Cattle account for the majority of ruminant enteric fermentation and waste

16 15 AGRICULTURE DEEP-DIVE A Regarding water withdrawals, agriculture is the primary sectoral driver of water withdrawals in India and China (espc. rice and wheat) Over 50% of water demand in China is for agriculture Billions of cubic meters Domestic & Muni Other industry Power Agriculture Billions of cubic meters Total = Total = Rice accounts for nearly 50% of ag. water withdrawals in China Other crops Forestry Pastures & Fishing Cotton Wheat Vegetable Rice and nearly 80% in India Billions of cubic meters Domestic & Muni Other industry Power Agriculture Total = Total = 1, , while rice and wheat together account for >50% in India Billions of cubic meters 420 1,995 Irrigation requirements 82 MCM/Mton Other crops Cotton Maize Oil crops Sugarcane Wheat Rice

17 Contents 1. Global trends and drivers 2. Agriculture illustrative drill down 3. Palm oil illustrative drill down

18 PALM OIL DEEP-DIVE A.i Nearly 90% of palm oil is produced in Indonesia and Malaysia where production growth is mainly due to land expansion, rather than yield gains Production of palm oil, 2009 Mn tons Indonesia Malaysia and Indonesia oil palm fruit production 1 Mn tons Malaysia Thailand % pa 0.8 Colombia Nigeria Others 2009 X Malaysia and Indonesia oil palm fruit acreage Mn hectares % pa Average Malaysia and Indonesia oil palm fruit yield MT per hectare % pa Only Malaysia and Indonesia FAO data used Source: FAO 17

19 PALM OIL DEEP-DIVE A.i top 10 global palm oil producers Note: many more players in the full value chain 000s hectares Felda Sime Darby Sinarmas/SMART 1 240? Wilmar KLK IOI Kulim Berhad Lonsum 3 New Britain Palm Oil 2 3 United Plantations ~ SMART TBK reports overall plantation size of 138k own plantations and 109k nucleus plantations excluding plasma schemes. Actual plantation size of SinarMas Group is estimated to be much larger 2 Mature hectares only 3 Excludes out growers/plasma schemes Source: Company Annual Reports 2010 and

20 PALM OIL DEEP-DIVE A.i There are many opportunities for interventions in palm oil PRELIMINARY Ways to capture opportunity Land tenure and productivity Peatland and forest rehabilitation Integrated spatial planning Benefits GHG abatement Land Water Scope of the opportunity Limited impact High impact Initiate community-based campaign to map, provide title for lands Create market for ecosystem services of peat / forests Increase agricultural productivity through community-level livelihood training and capability building Provide funding for extension services Return water-table to pre-drainage levels through a combination of large earth-works and multiple smaller canal dams Aforestation and reforestation programs Develop spatial planning map incorporating carbon stock Align on single, shared map for use by govt and agencies Establish transparent, publically accessible information system housing key spatial planning data, i.e. forest and peat areas, carbon stock, license locations Land use optimization Update current forest and non-forest zoning to provide access to degraded land for development Establish degraded land bank to incentivize private sector through taxes, subsidies, and insurance schemes SOURCE: Team analysis 19

21 A.i Questions for discussion What are the scientific underpinnings of such an approach to Strategic selectivity? How could STAP support identification of possible areas for intervention? What capabilities would GEF need to implement such an approach? Thank you! 20