Our current system of evaluating investments is broken. It is based on outdated understandings of the impacts of public and private investments, who bears risk, and how investment returns should be allocated. This system has perpetuated itself in earnest over the past few decades, and a path to aligning the health of our planet and economic growth remains unclear. What is clear at this juncture is that we cannot afford business-as-usual valuation methods: nature and the economies it supports cannot bear it. 

There is a clear disconnect between current, business-as-usual valuation techniques and our collective futures. While there are different valuation techniques for investments and/or assets, they all fundamentally rely on estimating future cash flows and the future replacement values of assets. These estimates are based on past information. 

What is clear at this juncture is that we cannot afford business-as-usual valuation methods: nature and the economies it supports cannot bear it. 

These estimates will often consider the risk that the final result may not match up to these expectations.  Yet, there remains no accepted methodology to evaluate climate risk when discussing these investments. Reporting on the climate-related risks facing businesses also remains in the early stages. Moreover, investments that would be positive forces against the march of climate change are often ignored by these valuation techniques.  

To respond to this need, our team developed the Sustainable Asset Valuation (SAVi) methodology to show the value that infrastructure projects can deliver to society when environmental, social, and economic risks and externalities are considered. In 2018, our team expanded the SAVi methodology to cover nature-based infrastructure (NBI). We made this change to better understand how specific investments can protect and enhance ecosystems while supplying critical public goods and services. The evidence so far from completed valuations point to NBI outperforming traditional infrastructure investments when environmental and social benefits are considered. 

While we have continually proven the multiple benefits associated with investing in NBI projects, we remain confronted with views that NBI investing is niche and has limited potential to scale. There remains a common perception that NBI investing is the purview of public financiers and philanthropies, not institutional investors and other large, private investors. 

One major constraint on scaling investment into NBI is that it is not considered a distinct “asset class” in its own right. This misunderstanding can be alleviated by better communication and understanding of the opportunities provided by NBI investments and by policies that are conducive to these investments.

Communicating the benefits of investing in nature

One of the key challenges we are tackling at IISD is how we communicate the benefits of NBI investments. To date, these communication efforts remain in early stages, and part of the challenge in telling this story comes from how the terms “asset” and “asset class” are applied to NBI relative to other assets. 

Our work has found that investments in NBI protect and enhance ecosystems and deliver economic returns. Assets are considered holdings that provide current, future, or potential economic benefits; therefore, NBI, by definition, is an asset. 

Assets are considered holdings that provide current, future, or potential economic benefits; therefore, NBI, by definition, is an asset.

To make NBI an asset class is to simply consider that these assets are similar, given that asset classes are defined as groupings of investments that exhibit similar characteristics and are subject to the same regulations. However, discussions of NBI as an asset class are usually shaded by an acknowledgement that economic benefits are disparate, inconsistent, and do not accrue solely to the investor. 

While in certain instances this situation may be true, in other instances, enough but not all economic benefits accrue to the investor to make the investment financially viable. The current practice of treating NBI assets as requiring one owner to reap all the benefits to justify the investment is not something we ask of other asset classes. For example, equity investors share in the profits of a company after salaries, debtors, and other expenses are paid, but equity investments are still viewed as an asset class. 

Moreover, there are substantial equity and debt investments made by venture capital firms in companies, projects, and/or new products that do not have discernable revenue streams at the outset or where the revenue streams may not be consistent. However, we do not label these opportunities as unworthy of investment. Our work will continue to meet this challenge of communicating that NBI, in many cases, performs similarly to other assets while also enhancing our ecosystems, supporting our economies, and providing for the well-being of affected populations. With a larger evidence base, greater recognition of these points, and the treatment of NBI as an asset class, we expect that NBI will increasingly become a go-to choice for investors. 

Improving the investment climate

A conducive investment environment can also make it easier to scale up NBI investments. While national and subnational governments have created incentives for private citizens and businesses to lower the cost of “going green” or to make their dwellings and businesses more energy efficient, these governments remain behind in creating incentives for large investment flows to go to NBI projects. 

Governments remain behind in creating incentives for large investment flows to go to NBI projects.

For example, if governments made capital gains and distributions from NBI holdings more tax advantageous than gains or distributions from other asset classes, investors would have an incentive to move more money toward these beneficial projects. While we acknowledge that issues over how to define NBI and nature-based solutions could undermine government efforts to make the necessary policy changes, we also acknowledge the painstaking work being done by the International Union for Conservation of Nature (IUCN) in this area.

Clearer parameters around what can be considered an NBI investment could catalyze government action and scale investment, so long as stakeholders understand the benefits of NBI.

Our continued work through the NBI Global Resource Centre and our SAVi assessments aims to provide the evidence base to communicate the benefits of NBI, shaping the understanding of NBI as both an asset and an asset class and inducing policy-makers to create a conducive environment for scaling up investment in this type of infrastructure. 

We recognize that we need a stronger evidence base for NBI than what we have now, and we look forward to working with all stakeholders to build that evidence base together. What we cannot do is continue to ignore the value of nature and the infrastructure it provides when making investment decisions. If we do so, we miss a crucial opportunity to improve the lives and livelihoods of many. Understanding NBI as an asset class is one step in that direction, as it puts NBI on a level playing field with other investment options in the hopes of driving much-needed investment flows toward NBI as a solution to our future infrastructure questions.

With the first part of the Conference of the Parties to the Convention on Biological Diversity in China now in the rearview mirror and the 2021 United Nations Climate Change Conference (COP 26) in Glasgow just days away, we must consider how we’ll be able to meet the increasing need for financial resources to address the acute climate and biodiversity crises we face. 

A crucial aspect of this work is that we must acknowledge that public and private actors have different roles and interests in tackling climate financing challenges.

There is little doubt that new financial pledges will be made in Glasgow, which will send important political signals in their own right. However, these pledges must be placed in the context of prior commitments and actions so that we can learn from the past and improve our approach for the future. 

A crucial aspect of this work is that we must acknowledge that public and private actors have different roles and interests in tackling climate financing challenges. We also need to learn why both groups have yet to meet the expectations outlined in prior pledges so that we can target our efforts accordingly.

Learning From the Past: How we missed the targets

There are two recent reports that document how and why public and private actors have not been able to meet the climate finance commitment set out in Copenhagen over a decade ago. The first, published by the Overseas Development Institute (ODI), highlights the leaders and laggards among countries in their efforts to fulfill their existing commitments to mobilize USD 100 billion annually for climate by 2020. The second is the Organisation for Economic Co-operation and Development’s (OECD) latest iteration of its work on climate finance provided and mobilized by developed countries. 
Both reports speak to an urgent need to increase allocations to public climate finance, especially among those countries most responsible for our current climate predicament. They also highlight a need to understand that the private sector’s interest in climate investments does not reach all sectors. 

Of the 23 donor countries analyzed in the ODI working paper, only Norway, Sweden, and Germany were estimated to be providing their fair share of finance, while Canada, Australia, and the United States were among the cadre of countries that were deemed to be providing the least amounts of climate financing based on their estimated climate impacts. 

While pledging governments may have over-committed in Copenhagen in 2009, it is also apparent that their assumptions regarding private finance were also overly optimistic. Private sector finance, viewed as critical to delivering on the Copenhagen pledge, failed to participate as expected. The OECD’s recent analysis shows that private finance has been largely uninterested in working alongside public finance toward climate goals. According to the OECD, in 2016, for every USD 1 of bilateral and multilateral climate finance, 21 cents was mobilized from private investors. In 2019, that number was roughly the same.

A Better Understanding of Private Sector Climate Finance

Before we assume how the private sector will respond to pledges made in Glasgow, we need to consider the history so far. Specifically, private finance is currently more interested in investing in certain sectors of the climate change issue, namely climate mitigation through green energy, and has shown less interest in others, such as adaptation and nature-based solutions. Organizations such as ours are working on building the track record and business case for underinvested sectors such as sustainable and resilient infrastructure, including nature-based infrastructure. Yet we also recognize that the public sector will remain the key financier going forward.

The meetings over the next few months will set the trajectory for the next decades on climate and biodiversity and must include a serious discussion regarding finance.

Donor governments, for their part, must recognize this evidence and make sure that public climate finance continues to fill the gaps. They also need to know where to target their efforts. Public climate finance should not be used to incentivize private investors in sectors where they are already closely involved. Donor governments should instead use public finance to attract investors to underinvested sectors where possible while acknowledging that in some sectors, public finance is currently—and will likely remain—the only source of investment. While Glasgow will bring targets for more finance, better targeting of that finance is crucial for learning from past missteps.

The meetings over the next few months will set the trajectory for the next decades on climate and biodiversity and must include a serious discussion regarding finance. However, that discussion needs to recognize where we were leaving Copenhagen and Paris, where we are now, and who the actors are that continually bring needed finance to the table. Facing these financing realities is crucial to setting meaningful pledges and attainable goals for the future. We cannot afford to miss again. 

In a matter of days, the global community will gather in Glasgow for the first UN climate conference since the beginning of the COVID-19 pandemic.  

Because no formal negotiations have taken place in the last two years, COP 26 is an important signal of whether the Paris Agreement can serve as an effective catalyst for countries to act together to keep a 1.5° Celsius pathway within reach. 

The list of issues before climate diplomats at COP 26 is long, and the stakes are high: the August report from the Intergovernmental Panel on Climate Change made clear that without immediate and drastic cuts to greenhouse gases, temperatures are likely to rise by more than 1.5° Celsius above pre-industrial levels in the next 20 years, causing widespread devastation.

Here are key deliverables IISD will be watching for at COP 26:

More Ambitious National Pledges 

When they arrive in Glasgow next month, all countries are now being urged to revise their national pledges in line with a 1.5° Celsius target, the lower of the two Paris temperature goals. Some countries have come forward with new targets, but major emitting countries, including Australia, China, and India, have yet to submit new pledges, and it is unknown if they intend to do so in Glasgow. 

The United Nations Framework Convention on Climate Change Secretariat analyzed the new pledges submitted as of the end of July 2021. The good news is that they represent a 12% decrease in emissions. The bad news is that the pledges may lead to a temperature rise of 2.7°C by the end of the century.

There’s no time to lose. IISD has been following the current slate of COVID-19 recovery packages that governments have announced over the past year, and many are still allocating large sums of money to support oil, gas, and coal. New reports from organizations like the International Energy Agency and the Energy Transitions Commission lay out in detail how a cleaner path can be achieved.

Wealthy Countries Delivering on Climate Finance, Increasing Focus on Adaptation

Over 10 years ago, developed countries pledged to provide or mobilize USD 100 billion per year by 2020. That target has been missed. Current estimates by the Organisation for Economic Co-operation and Development show that USD 79.6 billion was provided or mobilized in 2019, roughly similar to 2018 levels. 

Developing countries have linked the provision of finance to the success of COP 26. They want to know that the money will be provided as soon as possible, paving the way for a new financial commitment that would expand the funds available beyond 2025. The recent announcement of a climate finance delivery plan published by the UK COP presidency and developed by top German and Canadian officials is already drawing close scrutiny ahead of the negotiations for its level of ambition, approach, and proposed timeframe. 

Developing countries have also long argued that adaptation should be given the same amount of consideration and funding as mitigation. According to the UN Environment Programme, annual adaptation costs alone in developing countries are expected to reach USD 140 billion to 300 billion per year by the end of the decade, going up to USD 280 billion to 500 billion by mid-century. Yet only about 25% of climate finance is going toward adaptation now.

IISD’s work with the National Adaptation Plan (NAP) Global Network gives us a window into the demand for adaptation planning in developing countries. Almost three-quarters of nations have some adaptation plans in place, but financing to implement those plans is urgently needed. 

The global community also needs to advance guidance on measuring progress toward achieving the Global Goal on Adaptation (GGA), which is an important part of the Paris Agreement. By tracking collective progress toward the GGA, nations can keep tabs on what adaptation action and support are needed. 

A Focus on Nature-Based Solutions

This year’s COP presidency will also have an entire day dedicated to nature on November 6, and how negotiators treat the subject of nature in Glasgow will have implications for the UN Convention on Biological Diversity’s (CBD's) efforts to develop a post-2020 biodiversity framework, which they plan to endorse next year. Already, the research shows that incorporating both issues in countries’ national adaptation planning can lead to better outcomes, which is a lesson that both the climate COP and the CBD talks should take forward.

Ahead of COP 26, IISD has launched a new Nature-Based Infrastructure Global Resource Centre together with our partners, the Global Environment Facility, the MAVA Foundation, and the United Nations Industrial Development Organization. The new Centre will show how much money can be saved and crucial benefits gained by investing in nature to meet some of our global infrastructure needs, and we will conduct over 40 assessments of nature-based infrastructure projects through the Centre over the coming years. 

Solidarity in a Time of Uncertainty

A sense of solidarity in the face of international crises is also being tested by the pandemic, given the large disparities in vaccine distribution and access between countries. 

As we have learned from other negotiating processes that have had to operate online or in hybrid mode during the COVID-19 pandemic, this new virtual reality of international diplomacy leads to mixed results, and we are still learning how to navigate these challenges.

Even with the efforts of the U.K. government to facilitate vaccine access and quarantine costs for incoming participants, many delegations and observers are facing the prospect of not being able to participate in this year’s climate talks or being involved in only a minimal way. 

The pandemic also means there will be fewer participants representing the private sector, sub-national governments, civil society, and youth at this COP event. This is a loss, as these groups add a significant dynamism and urgency to the talks and help build the collective solidarity needed at this moment. 

Other international negotiations that hope to convene in person, such as the World Trade Organization with its upcoming ministerial conference this December, will be looking to see how the pandemic affects the COP 26 process and outcomes. 

That’s why IISD’s most important role at COP 26 is making sure that everyone—regardless of their ability to attend—can be up to date on where the negotiations are going and what they mean. Our Earth Negotiations Bulletin team will be undertaking daily reporting and analysis throughout the conference, and they will also hold a halfway point webinar to take stock of the talks after the first week, answer questions, and show what remains at stake for the second and final week. 

This inclusion is crucial because the real test of Glasgow’s success will be the work that comes after, once negotiators return home. Domestic political realities often make it hard for international commitments to translate into action. However, as COVID-19 has taught us, our world can change nearly overnight, with devastating consequences. We must mobilize our whole community to act now to avert further damage tomorrow.

The members of the G20 generate 80% of global greenhouse gas emissions. This means any meaningful climate action will require these countries to change course—and quickly. The fourth G20 Finance Ministers meeting on October 13 and the G20 Heads of State Summit on October 30–31 are major opportunities for members to make a public commitment in this direction that leaders need to take back home and put into practice. 

Key to this effort is ensuring that public funds no longer support a fossil fuel-based recovery. Over the past year, the Energy Policy Tracker has shed light on public financial commitments to energy-intensive sectors, revealing gaps between governments’ actual spending and a green recovery. As of this week, the Energy Policy Tracker website now shows how these commitments have evolved since last year. Let’s take a closer look at the trends revealed in G20 members since the start of the COVID-19 pandemic.

First, there is still a long road ahead for G20 members to truly “green” their recoveries at home.

Almost half (USD 311 billion) of the COVID-19 response in G20 members served fossil fuel-producing and consuming activities. Meanwhile, clean energy received only USD 278 billion (USD 134 billion went to “other” energy policies—those neither strictly in the clean or fossil categories). Furthermore, less than one in every ten US dollars committed to energy in the COVID-19 response benefited the cleanest energy measures, such as renewables or energy efficiency. More than eight in every ten dollars committed to fossil fuels came with no green strings attached, benefiting fossil fuel production and consumption without establishing any climate targets or reductions in pollution. 

Nevertheless, some progress is noticeable from 2020 to 2021.

In March–May 2020, when G20 members began approving COVID-19 response measures en masse, the share of clean commitments was just 22% on average. Fast forward to June–August 2021 and this share increased to 39%. The share of clean energy support could continue making gains as new, greener plans are approved. 

In the transport sector, most early commitments supported the airline or car industry, usually with no green strings attached. But looking at overall recovery support for transport in the G20 today, half of the total now targets clean energy transportation such as electric and low-emission vehicles. This dramatic green shift was largely driven by just three major policies: USD 25 billion for public transportation committed by the United States in March 2020, USD 27 billion for biogas plants committed by India in November 2020, and USD 35 billion committed to high-speed railways, electrification of transport, and electric charging infrastructure in Italy in April 2021. Similarly, in the power sector, the total amount committed to clean power has now overtaken the amount committed to fossil fuel-based power. 

Despite these positive developments, more efforts are needed to achieve a fossil-free recovery.

While the share of clean energy commitments increased from March 2020 to August 2021, since December 2020, this progress has largely stagnated, with only a 2% rise since 2021 began.  

Certain policies and sectors remain neglected, while others are almost entirely fossil fuel-based. For example, fossil fuel subsidy reform and fossil fuel taxation remain untapped measures despite their potential to raise significant revenue without increasing the public deficit of G20 economies. Recent IISD research shows that both of these tools can raise over USD 550 billion per year globally. In the G20 alone, fossil fuel subsidy reform could have raised USD 259 billion in 2019.  Similarly, policies aimed at improving energy efficiency in buildings are low-hanging fruit in terms of job creation and emissions reductions, but buildings received only 6% of total recovery commitments. 

In the resource sector, G20 members’ domestic measures also demonstrate important shortcomings, with commitments almost entirely based on new coal investments in India and China. These include investments to support new coal power plants, coal mining and coal to chemical projects, coal transportation infrastructure, and the rollback of environmental norms. This runs directly counter to the International Energy Agency’s Net Zero by 2050 Report, which calls for ending new coal projects and investments in new fossil fuel supply by the end of 2021. Clearly, much work remains for G20 members to align the public money commitments they are making at home with a net-zero future. 

A green recovery cannot be the purview of only a few governments. Stagnation is no longer an option. This week, G20 leaders have a window of opportunity to shift course to a fossil-free recovery before the G20 Leaders Summit and the United Nations Convention on Climate Change’s (UNFCCC) Twenty-Sixth Conference of the Parties (COP 26). To take advantage of this political moment, they must commit to ending all new recovery spending on fossil fuel production and to redirecting public finance away from fossil fuels and toward clean energy, and when G20 leaders return home, they need to translate these commitments into practice. 

This originally appeared as an op-ed in The Economic Times on September 28, 2021. The introductory paragraphs are reprinted below with permission.

In recent months, India’s biggest private sector players have made ambitious clean energy commitments. Reliance India Ltd announced clean technology investments worth Rs 75,000 crore; ArcelorMittal pledged Rs 19,000 crore for solar power; and Adani Green raised Rs 9,570 crore in debt financing. Backed by India’s billionaires, these announcements herald a new chapter of clean energy expansion in our country. But why aren’t our energy public sector undertakings (PSUs) also at the forefront of India's energy transition?

PSUs continue to play a vital role in India’s energy sector and the wider economy. Energy sector PSUs account for seven of India’s 10 Maharatnas — firms that have an annual turnover of more than Rs 25,000 crore. Over 50 per cent of the country’s power generation is publicly owned. Just two PSUs produce around 90 per cent of the country’s coal output. Publicly-owned oil marketing companies are responsible for 57 per cent of refining and almost all retail distribution. Since independence, these companies have been vehicles of nation-building, creating millions of jobs and generating revenue for the government. But as the world shifts away from fossil fuels, India’s energy majors, unfortunately, continue to invest in them.

Read the full article in The Economic Times.

Covid-19 recovery spending offers a golden opportunity to accelerate the transition from fossil fuels to clean energy while ensuring no one gets left behind.

This is the major finding from a recently published report which offers a system aimed at helping world governments design processes and define roadmaps to accelerate the energy transition.

The report, written by the Global Subsidies Initiative (GSI) at the International Institute for Sustainable Development (IISD), also encourages policymakers to take immediate action and suggests that decisions made now will prove vital in the years ahead.

“Since the beginning of the pandemic, governments pledged hundreds of billions of dollars to fossil fuel-intensive sectors putting climate commitments on the backburner,” said Paulina Resich, senior communications officer for IISD’s energy team.

“Our work shows how to get back on track to limit global warming to 1.5C and align economic recovery with a just transition to clean and sustainable economies,” she added.

The report takes the form of a five-step blueprint, with each principle building on the previous. This is what it suggests.

1) Divest from fossil fuel production

As of September 2021, G20 and 11 other governments have committed to over $350 billion to support fossil fuels, in addition to the over $800 billion already spent annually. Financing support is seen through direct budgetary transfers, tax expenditures, public finance, state-owned enterprise investments and more and completely swamps spending commitments for clean and renewable energies.

Instead, recovery packages should be centred around a low-carbon future, meaning more support to clean energy and incentivising a just transition away from fossil-fuel intensive sectors.

Directing spending towards the latter also gives the wrong signals to the market and, perhaps more importantly, preserves the idea that the main driver of our economies is the fossil fuel industry.

2) Reform subsidies

Fossil fuel subsidy reform and taxation can raise – and unlock – at least $553 billion globally per year, which can significantly help to bolster post-pandemic recovery efforts and a transition to net zero.

“Raising fossil fuel prices is a great way for governments to generate funds for the pandemic response as long as some of the revenues are used to boost incomes for the poor,” said Tara Laan, report author and senior associate at IISD, arguing that the approach “has the double benefit of encouraging consumers and investors to switch to cleaner energy and transport alternatives.”

“The solution to a fossil fuel recovery doesn’t need to be complicated: just gradually increase taxes on fossil fuels and use the revenues for more productive purposes, including helping the vulnerable,” she added.

3) Support clean energy

Money raised from FFSR and taxation can be funnelled or “swapped” into clean energy, energy efficiency, energy access, and the decarbonisation of transport – pressing areas to target and achieve Sustainable Development Goals and net-zero commitments.

These changes often demand high upfront costs, such as improving HVAC in buildings or developing electric road and rail infrastructure, and a swap from fossil fuels will help overcome this barrier, as well as ensure alignment between fiscal and energy policies and environmental and social priorities.

4) Incentivise clean electricity

To move towards electricity, the International Energy Agency suggest that around 70% of all investments are expected to be provided by private sources, and thus incentivisation and leverage needs to come from the top.

“Clean electricity is going to be the backbone of the energy transition but it will need major investment and it’s up to governments to make sure this investment flows into clean energy,” said Anna Geddes, report author and IISD associate.

“Governments can help re-direct investments to clean electricity by providing well-targeted subsidies and policies and making public finance institutions and state-owned enterprises key agents of change for achieving net-zero,” she added.

5) Ensure a just transition

While the energy transition is inevitable, governments must carefully plan for it to mitigate any economic, social and environmental risks, and take a negotiated approach based on social dialogue between themselves, workers, employers, and stakeholders.

“For any recovery to be just you have to make sure that social partners all have an equal role in policy design and that this is coupled with meaningful stakeholder engagement where communities who are affected are part of the process, have their voices heard, and their issues and concerns are addressed fairly,” said Philip Gass, report author and IISD lead for transitions in its energy programme.

Ultimately, these principles are individual pieces of a larger puzzle, where all five must be adopted in a multidisciplinary system.

“Fossil-free recovery needs strategic thinking and planning as well as consistent and coordinated action,” concluded Lourdes Sanchez, report lead and IISD senior policy advisor.

“There is an urgency to act and direct limited financial resources to the areas that will support the energy transition while creating jobs and fostering sustainable economic and social development.”

Find out more in the report “Achieving a fossil-free recovery”.

Listen to the podcast “How to achieve a fossil-free recovery”.

This article was originally published by Climate Home News and has been reprinted with permission.

Anishinaabemowin—also known as Ojibwe—is the language spoken by the Anishinaabe people.

Over the past 3 years, here at IISD Experimental Lakes Area, we have been working with a group of Elders, language experts, and youth to translate two animated videos explaining our research on mercury contamination and climate change into Ojibwe.

We now not only have the Ojibwe versions of these videos, but we also put together two supplementary lesson plans—each consisting of a full transcript, sentence breakdown, list of new words, and root word collections.

We hope that all-level language learners can benefit from these visual, audio, and grammatical resources and, at the same time, learn about some interesting scientific concepts. Language teachers can also include them in their teaching activities, as suggested in the lesson plans.

Speaking personally, I am a massive language enthusiast and have greatly enjoyed this process.

Given that, and the fact that the number 4 is sacred in Anishinaabe culture (and many other Indigenous cultures), I wanted to share four interesting aspects about Anishinaabemowin that I have learned.

The Creational

The Ojibwe language energizes and replenishes itself and does not borrow foreign vocabulary. For instance, many popular languages around the world derive the word for the element “carbon” from its Latin root carbo, meaning “coal,” including carbone in French, carbono in Spanish, Karbon in Turkish, كربون (Karbun) in Arabic … you get the gist! This “borrowing” phenomenon is very common in many scientific terminologies.

However, the Ojibwe language does not follow the same rule. Instead, the Ojibwe translation of some of the terminologies we encountered was based on the function, the action, and the observer’s understanding associated with these terms.

For example, carbon dioxide in Ojibwe is mitigoo-inanaamowin, meaning “(the air that) the trees breathe.” You will find many more such neologisms created in the lesson plans.

The Cultural and Spiritual

Jason Jones, an Ojibwe language teacher and a member of our translation team, explained that there are three forms of translation: literal, implied, and cultural.

All three methods were implemented in our translation exercise.

For example, in the climate lesson plan, you will notice that some parts of the translation do not follow the order of the English texts. In other words, literal (word-by-word or sentence-by-sentence) translation was replaced by implied translation, where translators interpreted the overall meaning in a way that they observed or understood.

The term for the “United States” is “gichi-mookomaanakiing” in Ojibwe, meaning “the land of the big knives.” This is, according to Jason, an example of a cultural interpretation: long ago, Anishinaabe people would bring their sacred items into battles and carry them on their sides. They saw early Europeans carrying their swords—big knives—by their sides all the time and thought these big knives were their sacred items.

Jason also explained that there are Elders who speak spiritual Ojibwe—a form of the language that he insightfully described as “being loaded with culture” and “untouched by the residential schools.”

For instance, “gookomisinaan” (literally “our grandmother”) represents “the moon” in spiritual Ojibwe. In one of the Anishinaabe stories, the hero Nenaboozhoo’s grandmother turns herself into the moon. That concept, therefore, is forever connected to water and women. This type of spiritual Ojibwe language has been lost over the years, and “language helpers” are trying to get it back.

The Action-Based

Many languages, including English, are noun-based, meaning that the majority of the words in the language domain are nouns, as opposed to verbs. But the Ojibwe language is quite the opposite in that the majority of its vocabulary consists of verbs (actions) as opposed to nouns (objects).

For instance, the noun mercury in Ojibwe is biiwaabikowaabo gaa-waawaakeshkaag, meaning “the liquid metal that is (very) shiny” or “the liquid metal that shines brightly.” That term was created and eventually transformed into a noun form, however, with an action (“shines”) built into it.

The action-based aspect of the language, in a way, reflects the teaching of the Anishinaabe Elders in terms of taking responsibility and action to protect the land and the water.

The lesson plans include the breakdown of each sentence into its root words. Go ahead and see if you can find the actions associated with the words.

Animate or Inanimate?

Many Ojibwe words are categorized as animate or inanimate, meaning the object is either living or non-living, spirited or non-spirited.

In Western science, we often describe a compound as being organic or inorganic, a concept that could potentially help us understand this dualism. However, here’s a story that I love sharing when I speak about this fourth aspect of the Ojibwe language.

Elder Nancy Jones asked us, during one of our translation sessions, “Where is mercury from?” We answered: “Mercury is a naturally-occurring element found in rocks.” She followed with another question: “Then why is it considered non-living (inorganic)? Because in Anishinaabemowin, a rock is animate, living, and has a spirit.”

Elder Nancy’s simple question profoundly changed my way of looking at nature and all the elements we find there.

While Western science helps us objectively observe the environment, which is defined by a separation between the observer and the observed, Indigenous traditional wisdom unites the observer and the observed. Nature as a whole is a giant living being, and we are a part of it!

We often talk about sharing each other’s worldviews or bridging the Western and Indigenous ways of looking at the world. But how can we achieve this goal? I believe that language plays a key role.

The language we speak shapes our worldview. Many Indigenous languages are at risk of disappearing. Understanding the importance of a language and helping to find creative ways to preserve and revitalize it can reverse this trend.

I would like to thank the Elders and language helpers for their teachings and for giving me the permission to share those stories in this blog article.

With the latest report from the Intergovernmental Panel on Climate Change warning of “unprecedented” changes to our climate, decision-makers are facing renewed calls to take firm and immediate action. As they weigh options for undoing the damage, a crucial step will be to empower women in climate adaptation efforts while marshalling the potential of our natural environment in the process.

Nature-based infrastructure (NBI) can and should be part of these efforts. The term NBI has grown in prominence in recent years, as governments and infrastructure investors look to use ecosystems for valuable infrastructure services, such as water filtration and flood protection. NBI also provides other benefits that can improve human health, support livelihoods, and enable climate adaptation and mitigation. 
 
As this conversation evolves, an important issue that must be at the forefront is how to ensure women and girls play a leadership role in this NBI work, from project design to implementation, as well as in monitoring and evaluation. 

Women have long faced a greater burden from a changing climate compared to men, which exacerbates many other inequalities. For example, in the Global South, women rely heavily on natural resources for their livelihoods. This is common in rural areas, where women are often responsible for gathering and supplying food for their households, along with collecting water and firewood for heating and cooking. With climate change making these tasks more labour intensive and time consuming, women are left with little time to access education and training, earn income, or develop new skills. 

Moreover, women often face barriers to accessing and control over natural resources. Traditional roles and norms, land tenure systems, and a lack of capital tend to disadvantage women, restricting their access to the land, fisheries, and forests they depend on. Women are also underrepresented in environmental decision making and natural resources management, such as forest user groups, water user associations, and environmental policy-making. Due to these disadvantages, women are less likely to benefit from NBI projects.

There is another way, however: including women as powerful and dynamic advocates of climate adaptation, especially as NBI becomes a greater part of the solution. 

How a mangrove forest is supporting the livelihoods of 100,000 people

The Saloum Delta is a prime example of how women’s livelihoods are under threat from declining ecosystems—and how NBI can play a transformative role.

Restoring and keeping ecosystems like the Saloum Delta intact is not only good value for money but also key for protecting people’s livelihoods.

Located in Senegal, the delta is a tropical mangrove ecosystem that supports the livelihoods of more than 100,000 people. It filters water, provides fuelwood, prevents floods and erosion, and supports fish stocks. Based on our assessment using the Sustainable Asset Valuation (SAVi) methodology, its ecosystem services will be worth CFA 3.589 billion (EUR 5.47 billion) over 40 years. 

However, climate change and unsustainable uses put pressure on ecosystems like the Saloum Delta, threatening the livelihoods of communities who depend on it. Data from the Convention on Biological Diversity (CBD) shows, for example, that in poor rural households, ecosystem goods and services can account for at least half of local livelihoods. In some cases, that figure can go up to 90%. Restoring and keeping ecosystems like the Saloum Delta intact is not only good value for money but also key for protecting people’s livelihoods. However, to make sure women and girls can access these resources, it is essential to also address restrictive social and cultural norms.

How can NBI be a game-changer for women?

The Saloum Delta is just one example of how NBI can yield tangible benefits for communities. NBI projects can contribute to public health efforts by providing clean and safe drinking water, improved sanitation, and better nutrition. For example, our research in India has shown that constructed wetlands are a cost-efficient solution for wastewater treatment. 

NBI projects can also improve access to water for household use, making it easier and faster for women to collect water—thus minimizing their exposure to health and security risks on the way. 

These projects can also support and protect livelihoods. For example, our SAVi assessment in Belgium shows how planting trees and hedges on farmlands, also known as agroforestry, can lead to increased crop yields, provide biomass as an energy source, and help regulate the water cycle.

While these are impressive gains, they can be made even more successful and sustainable when gender considerations are a core component of NBI projects and strategies. 

Capacity-building strategies that are paired with NBI projects can strengthen women’s roles as decision-makers and experts, especially when it comes to climate adaptation.

A recent IISD report illustrates why a gender-responsive approach toward ecosystem-based adaptation has proven benefits and shows how practitioners and policy-makers can implement it. For example, the authors present mounting evidence that integrating gender considerations in initiatives related to water and land management makes them more effective and sustainable.

Capacity-building strategies that are paired with NBI projects can strengthen women’s roles as decision-makers and experts, especially when it comes to climate adaptation. For instance, training about afforestation and water management related to our recent SAVi project in Indonesia is designed to empower women in these fields. NBI projects also serve as a platform where women can network to share and exchange best practices and knowledge.

How can we integrate gender issues in valuing NBI?

Given these lessons, our upcoming NBI Global Resource Centre aims to work closely with women stakeholders, integrate their knowledge, and train them in NBI and climate adaptation. 

The NBI Global Resource Centre is led by IISD and supported by the Global Environment Facility (GEF), the MAVA Foundation, and the United Nations Industrial Development Organization (UNIDO). Its online site will launch later this year and will progressively aim to establish the business case for NBI by providing data, training, and sector-specific valuations. 

Where possible, our valuations of NBI projects will pay close attention to gender-specific challenges and benefits. For example, the proportion of women engaged in agricultural activities may be higher, which means that they are more vulnerable to the risks of a variable climate, but at the same time, they can reap greater benefits from NBI, like agroforestry.  

Incorporating gender considerations into infrastructure decisions is challenging because we often lack gender-disaggregated data. We will therefore start by including gender issues in our NBI valuations by considering questions such as: 

• How are roles and responsibilities allocated in the local context? 
• Do women and girls face specific risks, for instance, from natural disasters or air pollution? 
• Do women and men have equal access to information and training for climate adaptation? 
• Who would be employed in building and maintaining the NBI project, and who will benefit from it?

Where disaggregated data is available, we will include it in upcoming NBI valuations to provide more accurate estimates of how these projects can provide equitable benefits—and other gains not captured by traditional valuations—for women, especially in comparison with engineered, “grey-built” infrastructure.

The burdens of climate change and the benefits of adaptation are spread unevenly in society. Gender-responsive valuations will help us to understand these differences and design inclusive, beneficial NBI projects that support climate adaptation. Only by ensuring that gender issues are a vital component of this work can we create NBI that empowers those who need it the most and advances gender equality.

A PDF version of this article is available here. 
 

Climate change policies have taken on many forms, including much-needed net-zero commitments, green new deals, and circular economy plans. Together, the economies of countries that already have, or intend to have, net-zero targets account for 68% of global GDP and 56% of the global population.

Net-zero and circular economy policies are new and must quickly move from being aspirational to actionable. But as these policies are implemented, they will impact international trade and, according to a new IISD report, influence the development of lower-income economies. 

When we take a snapshot of developing country exports, we see that resource exports are the most important when looking at their share of that country’s revenue. In sub-Saharan Africa, fossil fuel exports accounted for USD 146 billion of the region’s revenue in 2018, whereas the export of metals and minerals accounted for USD 110 billion. To put this in perspective, agricultural exports accounted for USD 48 billion in revenue. Most of these fossil fuel exports go to countries with net-zero targets.

The low-carbon energy transition will directly impact demand for key resources. Most net-zero and circular economy plans are predicated on the drastic reduction of oil demand, which means that developing countries might lose out. Oil exports from sub-Saharan Africa, for instance, accounted for 84% of that USD 146 billion in highly valuable revenue 3 years ago. 

With tightening markets for crude and refined oil in the short to medium term, it is questionable whether producers in lower-income economies could retain a competitive edge on the international oil market. They are not the lowest-cost producers, nor do they have the subsidy capacity to artificially lower their production cost. 

South Sudan, Angola, Nigeria, Chad, and the Republic of the Congo, in particular, rely on fossil fuels for more than 50% of their exports, a share that can soar to 96% in the case of South Sudan. These countries will urgently need to diversify their revenues and exports or risk being detrimentally affected by net-zero commitments and circular economy packages. This requires that they build industrial capacity quickly, given how challenging economic diversification has been in the past.

Critical minerals and the energy transition

While markets for fossil fuels will tighten, there is space for growth when it comes to metals and minerals, notably those essential to the energy transition. These include non-ferrous metals such as copper, aluminum, nickel, and zinc. Some of these materials serve dual purposes: nickel, for example, is used to make lithium-ion batteries but also to produce stainless steel, which is critical in the construction of wind turbines. Copper is a conductor for wind power but equally essential for general wiring and in the manufacturing of electric vehicles.

While markets for fossil fuels will tighten, there is space for growth when it comes to metals and minerals, notably those essential to the energy transition.

The potential growth for these markets is immense. Even if the circularity of key metals is improving, strong increases in demand coupled with challenges of supply (the time needed to develop new projects, export restrictions, rising production costs, social tensions, and climate-related stresses) will require greater investment in mineral-rich countries to accelerate the global energy transition.

Investments in mining projects in developing countries are capital intensive and rely on assumptions about the longevity of resource use. While African countries can be particularly important for producers, given their reserves—especially in platinum, manganese, bauxite, and chromium—there are also a number of concerning indicators that cast doubt on low-income countries being able to fully exploit demand growth. 

Already, there is a strong discrepancy between reserves and production, with several developing countries holding a larger percentage of minerals in reserve compared to what they produce. Furthermore, additional political and economic measures would be needed to ensure that export gains reflect positive developmental outcomes. 

Why economic diversification matters

The magnitude of the impacts that changes in fossil fuel and metal markets have on developing countries will depend on several factors and variables. These include the extent to which imports can effectively be substituted by cleaner alternatives, such as recycled materials, and the ability of developing countries to diversify their economies and rely on a wider set of exported goods. 

Still, because the scale of potential impacts is so significant, governments must plan ahead, while international partners must be ready to provide support. Besides technical assistance and capacity building (for example, under the Aid for Trade initiative), the promotion of intra-African trade in the context of regional integration, including the African Continental Free Trade Area, could support economic diversification.

While sub-Saharan African countries and least-developed countries tend to export a very narrow set of goods to their OECD trading partners and large emerging economies like China, intra-African trade is clearly more diversified and balanced. Regional trade has also grown significantly and consistently since 2002 to become the largest destination of sub-Saharan African countries’ exports. In addition to offering new opportunities for diversification, regional trade is also less likely to attract restrictions related to net-zero commitments or circular economy packages.

In sum, low-income economies that currently rely on fossil fuel exports will, if they do not diversify and adapt, see their export revenue reduced as net-zero and circular economy policies are implemented. On the other hand, the clean energy transition also offers opportunities for supplying the market with critical metals and minerals, which are often found in low-income countries. While the net effect will depend on the good and country in question, encouraging South¬–South regional trade flows can help all countries diversify their export revenue and reduce reliance on resource exports.

The electric vehicle (EV) industry has grown significantly in the last few years. Despite a decline in 2020 due to the COVID-19 pandemic, EV sales overall were more resilient than those of internal combustion engine vehicles. Growth forecasts also remain encouraging, with the share of EV sales expected to increase from 2% in 2018 to 35% in 2030. 

This growth depends on strong supply chains, which rely on a secure and sustainable supply of raw materials, specifically minerals and metals. The most critical EV component is the battery, which encompasses between one third and one quarter of the vehicle’s total cost of production. In 2018, raw materials accounted for about 10% of EV production costs. 

Two important materials in lithium-ion batteries today are lithium and cobalt, which are both found in large amounts in developing countries such as Chile and the Democratic Republic of the Congo (DRC). The growing interest and projected increases in manufacturing EVs, along with the subsequent rising demand for specific minerals needed for this, present key opportunities for developing countries to step up as suppliers. 

The growing interest and projected increases in manufacturing EVs, along with the subsequent rising demand for specific minerals needed for this, present key opportunities for developing countries to step up as suppliers. 

Their ability to take advantage of this opportunity, however, depends on each country’s economic and political readiness to promote investment in sustainable production and to put in place trade and industrial policies that will shape the growth of their mining and manufacturing sectors while creating employment and value addition. Evolving battery technology also brings risks to raw material producers, as different battery chemistries require different raw materials. Investments in production and processing assets could become stranded if technological change leads to reduced demand for certain raw materials. 

Lessons from Chile and the DRC

Chile, for example, has significant comparative advantages for lithium extraction and refining. The country holds the largest percentage of the international reserves, and its extraction processes—which use natural evaporation driven by the sun’s energy—use less energy than extraction processes elsewhere.

However, the Chilean lithium industry has been slow to scale up due to a combination of regulatory uncertainty and technical challenges. To take advantage of rising lithium demand, the Chilean government must overcome these barriers while taking into account the need for environmental protection, sustainable water management, and local communities’ priorities.

Another example pertains to cobalt production in the DRC. The DRC was responsible for 71% of global cobalt production in 2019 and just over 50% of worldwide reserves. Large-scale or industrial mining is responsible for over two thirds of cobalt production in the DRC, with the other third supplied by artisanal mines. While some of this artisanal mining is formal and registered, most is not and is often associated with unethical labour practices. 

Supply chain concerns are driving innovation away from cobalt, with batteries continuously reducing, or even eliminating, the use of cobalt. The most noteworthy example of the result of such pressure imposed on downstream manufacturers is the ongoing class-action lawsuit brought against Apple, Google, Microsoft, Dell, and Tesla by a human rights group on behalf of victims injured or killed in artisanal mining in December 2019. The lawsuit identified both producers and intermediaries, including some of the largest cobalt producers.

Supply chain concerns are driving innovation away from cobalt, with batteries continuously reducing, or even eliminating, the use of cobalt.

In recent years, two other scandals underlined some of the challenges undermining the development of a trustworthy, ethical, and efficient cobalt industry. The first was related to corrupt mining deals, which were estimated to have deprived the Congolese state of over USD 1.3 billion in revenues. A second involved a Swiss criminal investigation into one of the largest international cobalt mining companies (Glencore) over its alleged corrupt practices in the DRC.

The political and governance challenges associated with mining have led some regulators around the world to tighten their oversight of the activities of their multinational companies, intermediaries, and even state-owned mining companies.

Battery producers are already working to develop batteries that rely less on primary materials, especially cobalt, as a result. Lithium-ion batteries already appear set to play a dominant role in the decade ahead, while technological revolutions are underway with regard to eliminating cobalt. As a result, it is imperative for lithium and cobalt producers and governments in mineral-rich countries to value this risk and plan their long-run mining policies accordingly.

Striking a delicate balance

Developing country governments have a range of trade, investment, and industrial policy tools available to maximize the development outcomes they can achieve from the EV boom. These include providing an enabling environment through an open and predictable trade regime and effective border clearance mechanisms. They also involve actions to improve connectivity, including transport, logistics services, and information and communications technology (ICT). 

Developing country governments have a range of trade, investment, and industrial policy tools available to maximize the development outcomes they can achieve from the EV boom.

Governments that seek enhanced domestic value addition have also been using export restrictions and local content requirements, though it is worth noting that these measures could face legal challenges at the World Trade Organization, along with prompting concerns about their impact on the openness and predictability of the multilateral trading system. 

In practice, there is a delicate balance to be struck between allowing sufficient flexibility in business operations to attract foreign investment and creating domestic employment, opportunities for value addition, or industrial development. Where demand for key raw materials looks stable in the medium term, policies that promote value-adding activities would appear to be a good long-term option, as long as the “created” industries are economically viable. Where demand for a key material is volatile, and in particular where it is likely to fall, trade measures to encourage domestic refining of those minerals run the risk of stranding assets, and revenue might be better applied to supporting the diversification of economic activity in the extractives sector.