Ensuring certification reaps rewards: the case of a Rwandan coffee cooperative.

Participating in certification programs and meeting sustainability standards can have valuable benefits for smallholder farmers and fulfil environmental and social objectives. But what happens when, despite the time and money invested in certification, the product fails to sell?

Last month, as part of IISD’s State of Sustainability Initiatives program, I visited a coffee farmers’ cooperative in the eastern region of Rwanda to see how their efforts to obtain certifications had affected their community.

The group, known as Cooperative Abakangukiyekawa, has 540 members and has been certified Fair Trade since 2006. It is now working to obtain Rainforest Alliance certification.

Meeting certification criteria requires farmers to invest money and time in reshaping their production, processing and business practices. The expectation is that the market will reward farmers for these efforts, by buying their certified product at a higher price, for example, and improving their market access.

Domestic advances, international challenges

While I was in Rwanda, the farmers proudly showed me the advances they had made in their efforts to meet the certification criteria. They set up terraced plots to prevent soil erosion; nurseries to grow trees provided shade for coffee bushes and created live fencing, thus reforesting their community; and filtration tanks prevented water source contamination from coffee bean processing.

They also showed me how they segregate their coffees throughout the process, ensuring the coffee’s traceability from farm to buyer. The cooperative even revised its payment process, to pay farmers immediately when they deliver their coffee “cherry” to the processing (washing) station.

The cooperative has to borrow money to pre-finance the harvest, which covers operational costs and ensures immediate payment for farmers when they deliver the cherry beans. This particular cooperative is fortunate enough to borrow from a semi-governmental bank that charges 8.5 per cent annual interest, compared to fully commercial banks that charge two or three times that amount.

But the cooperative members then showed me their warehouse, which housed a full third of the year’s production that has not yet sold. The Rwandan harvest runs from March to May, meaning this coffee has been sitting, unsold, for the past eight months. If the cooperative cannot sell the coffee by February 2019, they will pay a fine of 2 per cent.

This situation is largely created by volatile commodity markets, which farmers cannot control. The price of coffee on international commodity markets (New York “C” market for coffee) dropped substantially in 2018, making many buyers unwilling to pay the Fair Trade minimum price. That price is designed to cover the investments and costs that farmers must bear to obtain the certification.

The Fair Trade minimum price and price premium are fundamental for the cooperative and its members to manage their farms sustainably. The money these farmers earn also allows them to invest in social and community development projects, which cooperative members often run themselves.

Farmers such as these ones in Rwanda are ultimately operating within a larger international trading system that often does not value the environmental, social and economic efforts of farmers. However, these same farmers are also running a business and must feed themselves and their families from what they sell, especially if they are smallholders.

Despite the many benefits from certification, the fines, loans and uncertainty around prices have placed a hefty financial burden on the cooperative and its members, and they are desperate for a solution.

Identifying challenges and solutions

At IISD, we work with key stakeholders in Rwanda, such as government representatives, the private sector and producers, to help improve the situation of smallholders using certification. The goal is to identify and address the major challenges facing smallholders who enter sustainable coffee programs.

Together with institutions such as the Rwanda National Agricultural Export Development Board (NAEB) and Sustainable Growers, IISD is developing a multistakeholder platform to share impact data on sustainability programs so that we can better assess what does and doesn’t work. This information is essential for stakeholders to identify and implement solutions to these challenges.

Cooperative Abakangukiyekawa is a prime example of some of the challenges farmers often face, particularly that of oversupply—a costly problem that, if not addressed, could disincentivize farmers from participating in certification programs and meeting sustainability standards. Some possible solutions include matching the supply with the demand of certified products, along with supporting government policy to enable sustainable supply chains and trade. Further steps include lowering the transaction costs involved in obtaining certifications, along with providing access to training and affordable finance for smallholders.

These farmers are helping the global environment and their local communities by undertaking environmentally and socially responsible actions and investments. Unfortunately, despite their efforts, they are unable to sell much of their certified product, making it harder to support their families and communities.

The entire supply chain, and fundamentally consumers, has a responsibility to support these important actions by demanding high-quality, sustainably produced and certified products, such as the coffee from Cooperative Abakangukiyekawa.

The SSI is an international transparency and capacity-building project aiming to improve strategic planning and sustainable development outcomes related to VSSs by providing in-depth, credible and needs-based information. The project is funded by the Swedish International Development Cooperation Agency (SIDA).

There seems little doubt the Fourth Industrial Revolution—and particularly the uptake of digital and highly automated systems—will transform our economies in coming decades.

Effects of that transformation are the subject of multiple debates, such as those currently happening at Davos, and there are multiple signals that the spread of artificial intelligence, the Internet of Things, advanced robotics, 3D printing and autonomous transport are set to change society as we know it.

One major stream of conversation about the forthcoming transformation has focused on the changing role of human labour in an age of automation. Indeed, existing technologies already allow automation of half of all activities people are currently paid to do. They also significantly transform current business models and producer-customer relationships and create new employment opportunities for those able to use them. With a good chunk of the global labour force expected to be looking for new jobs by 2030, a robust response is obviously needed to manage adverse social side effects.

But what impact will all this have on energy use, natural resource use and the environment?

Upsides and Downsides

If carefully managed, changes in production and consumption patterns could create environmental improvements compared with the processes used today. But without proper environmental objectives and management systems, automation alone could have significant adverse impacts—especially on energy use (and emissions generated from the current energy mix), resource use and ecosystems. The figure below visualizes the best- and worst-case scenarios of these disruptive innovations.

Many emerging technologies offer the potential to reduce emissions. They could also theoretically improve resource-use efficiency, provided increased efficiency does not trigger over-consumption. This is a big "if," since customer relationships are increasingly based on detailed digital surveillance of behavioural patterns and involve highly effective marketing techniques that can ramp up demand for products or services.

On the other hand, changes in both consumption and production patterns increase the total demand for electricity and can easily raise greenhouse gas emissions, depending on the carbon footprints of the power sources used. They could also enhance unsustainable exploitation of natural resources—especially if our dependency on rare metals for production of electronic equipment further deepens. Proliferation of all sorts of electronic equipment and future composite materials also bring new challenges for recycling and waste management.

Lastly, potential large-scale dislocation of the labour force—particularly in low-/middle-income export-oriented economies with high population growth rates—could lead to a return migration to rural areas and increased use of available natural resources for livelihood purposes. This may worsen already significant pressures on ecosystems.

Double-Edged Swords

Considering these facts, there are no upfront guarantees new technological capabilities will automatically foster environmental sustainability. The forthcoming disruptive technologies are double-edged swords that may generate diverse outcomes based on the intentions and skills of their users.

Thus, it’s a good time to explore the linkages between these new technologies, the changing economic premises that will accompany their deployment, emerging patterns of production and consumption, and their potential environmental and social impacts. Such an enquiry may be guided by (even if not limited to) global aspirations to reach the Sustainable Development Goals.

From that perspective, the ongoing technological transformation could be strengthened by the use of economic instruments, especially those that: (a) incorporate environmental and natural resource use externalities of emerging business models, products and services; (b) promote resource- and emission-saving innovations; and (c) potentially also generate revenue for social support programs that may need to accompany a transition to new occupations and sources of livelihood. Other mitigation and enhancement options could be identified as our understanding evolves.

As the founder of the World Economic Forum, Klaus Schwab, rightly noted, before we devise strategies to cope with the Fourth Industrial Revolution, we first need to better understand it.

To that end, interested experts are invited to analyze the range of environmental impacts of forthcoming technological changes and their interaction with economic and social considerations. A preliminary scoping paper is available at Research Gate, and we invite interested parties to identify emerging issues of concern, give comments and suggest potential future steps for a  deliberative enquiry (including a possible open discussion forum).

A greener, more equitable world won’t be an automatic outcome of the digital revolution. It’s our duty to shape its development even as its pace takes our breath away.

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Jiri Dusik is a Technical Specialist with UNDP Viet Nam.

Barry Sadler is an Environment and Sustainability Analyst.

Opinions expressed are those of the authors and do not necessarily reflect views of the United Nations Development Programme.

If there is one place countries can get the best bang for their carbon buck it’s looking to their own fiscal incentives: reforming government subsidies to fossil fuels and taxing them properly.

The resulting savings can then be redistributed into incentivizing sustainable energy and to communities and sections of society affected by rising fuel prices and loss of jobs. Research has found governments could save an average of USD 93 per tonne of carbon abated through fossil fuel subsidy reform and could generate a whole lot more revenue if carbon fuels and energy were taxed appropriately to account for ill health and climate damage.

Greenhouse gas emissions reductions would be significant too—around a quarter of the current country effort committed toward Paris through one fiscal instrument.

Many countries are leading the way and along with the private sector: several organizations shared stories and actions for success at the recent United Nations climate change talks in Katowice, Poland. These groups included the Friends of Fossil Fuel Subsidy Reform, the Nordic Council of Ministers and the Global Subsidies Initiative (GSI) of the International Institute for Sustainable Development (IISD). Countries that were able to highlight successful stories and opportunities for change included Argentina, Costa Rica, Denmark, Ethiopia, Finland, India, Indonesia, Italy, New Zealand, Norway, Sweden, Switzerland and Zambia.

On December 11, the Friends of Fossil Fuel Subsidy Reform launched a Network for action on fossil fuel subsidy reform. Countries had previously come together virtually throughout 2018 to share stories of success on themes including peer review, communicating subsidy reforms, subsidy swaps for sustainable energy, investment in a just transition and mitigation measures via cash transfers.

A brochure accompanied the launch and outlined the lessons shared across the Network in 2018 and how more countries can get involved with the Network in the future.

Marc Chardonnens of Switzerland said, “We must learn from each other’s successes to enable smooth changes and reforms toward adequate pricing of fossil fuels.”

Kimmo Tiilikainen, Finland said, “These subsidies take us in the opposite direction of the Paris Agreement.”

Francesco La Camera of Italy (incoming Director General of IRENA) explained, “When we talk about reform … there are the environmental and social aspects that are to be considered at the same time if we want to succeed.”

Kangwa Muyunda from Consumer Unity & Trust Society (CUTS) International, Zambia explained that in a country where energy access is low “the cost of subsidizing the system is a barrier to energy access.”

Sveinung Rotevatn, Norway explained that “unfortunately, we are not on track to reach either 1.5 degrees nor 2 degrees at the moment and while this is happening, we are spending USD 400 billion on fossil fuel subsidies.” He noted, “The group has been instrumental in bringing forward strong arguments for why subsidy reform is necessary.”

Stephanie Lee of New Zealand chaired the conference and explained that having lived in Indonesia she understood that “the Indonesian story is a brave one.”

Rachmat Witoelar of Indonesia then explained the practical steps that Indonesia took to save USD 15 billion from reforms in 2015.

On December 7, a side event organized by the GSI of the IISD with the Fundación Ambiente y Recursos Naturales (FARN) talked about the benefits of reforming fossil fuel subsidies. The event discussed successful reform examples from different countries around the globe and presented a new report about success stories of fossil fuel subsidy reform and taxation across the G20.

Lourdes Sanchez (IISD) reported how Indonesia significantly increased public investment in programs to boost growth and reduce poverty, including infrastructure and social support for the vulnerable, after reforming diesel and gasoline subsidies in 2015—which saved the government USD 15 billion a year. CEEW’s Arunabha Ghosh discussed the effects of the current shifting of fossil fuel subsidies toward renewables in India. This shift has facilitated access to electricity and clean cooking fuels for tens of millions of Indians—notably the poor and vulnerable.

Enrique Maurtua of Argentina’s FARN concluded the event with a presentation on the evolution of fossil fuel subsidies in Argentina following the major subsidy reforms that the country has undertaken in the past couple of years. The reform of incentives to oil producers in that country saved at least USD 780 million in 2017 in public finance. These and other stories presented in the new report show that reform is possible and has significant related benefits. There are challenges, such as higher fuel costs, but when oil prices increase it is important countries stay on course with reforms and put in place compensation measures for the vulnerable.

On December 10 a side event organized by IISD/GSI with support of the Nordic Council of Ministers took place at the Nordic Pavilion. Participants included: Hannele Pokka, Permanent Secretary, Ministry of the Environment, Finland; Richard Bridle and Laura Merrill, IISD/GSI; Kangwa Muyunda, CUTS Lusaka; Astrid Knutsen Hårstad, Political adviser, Ministry of Climate and the Environment Norway; Oras Tynkkynen, SITRA; Eka Hendra Permana, Fiscal Policy Agency, Indonesia; and Gonzalo Sáenz de Miera, Director of Climate Change, Iberdrola.

The event provided an opportunity to learn about the impact of government subsidies from a private sector energy company perspective, as well as about active reforms from a country-level perspective (Indonesia and Zambia) and to learn more about opportunities for countries to implement swaps and thus move away from government subsidies for fossil fuels and toward sustainable energy and transport. The event launched the latest report from the Nordic Council of Ministers on this issue, with a focus on the business model and concept of swaps, including a detailed roadmap with Zambia and potential for action in Morocco.

Elsewhere within the CoP, the financial sector called for the phase out of fossil fuel subsidies by set deadlines, signed by 415 investor signatories with well over USD 32 trillion in assets. The issue of FFSR was also echoed in other publications, including the UNE 2018 Emissions Gap Report and 2018 Brown to Green report.

Despite difficulties within the negotiations from some Parties, coalitions of the willing are forming to translate the Paris Agreement into action on the ground and between countries via peer to peer support and encouragement. What this means for true multilateral and international action and institutions, across the board, is unclear. Agreement was reached in Katowice, but in terms of early action, such first mover country groupings of the willing (like the Friends of Fossil Fuel Subsidy Reform and others) will be key to success.

Key Links

Further information about the Friends Network and Brochure. Video of the launch.

Further information about the Nordic Council of Ministers report and work “Swapping fossil fuel subsidies for sustainable energy.”

Further information about report “Stories from G20 countries: Shifting public money out of fossil fuels.”

This article first appeared on the GSI Subsidy Watch Blog on January 15, 2018.

Most of the people suffering from hunger around the world live in rural areas and engage in agricultural activity.

It is not a coincidence that they also often lack basic services, such as energy and irrigation provision, due to a lack of infrastructure. This lack of infrastructure is an important reason for their vulnerability to hunger. 

(Français ci-dessus) 

Financing infrastructure, including roads, storage and localized energy grids, will help provide food security for the 821 million people estimated to live in hunger worldwide.

Our report, Financing Rural Infrastructure: Priorities and pathways to ending hunger, highlights how new financial instruments can support a decentralized and robust infrastructure base for farmers, food processors and rural communities.

We break down some of the financing approaches below.     

Storage infrastructure

About one third of food produced for human consumption is lost or wasted globally, amounting to about 1.3 billion tonnes per year. Storage facilities, including grain and rice silos, warehouses and cold storages, play a critical role in ensuring food security and ending hunger.

Governments should create dedicated funds with a mandate to provide financing for storage infrastructure projects. Loans with preferential terms, either through a dedicated infrastructure scheme or partner bank, can also be provided to farmers or cooperatives for investment in agricultural storage.

Improved storage infrastructure capacity, quality and practices are crucial to reducing post-harvest loss.

Decentralized renewable energy infrastructure

As much as a quarter of the world’s population lack access to electricity. Almost 85 per cent of these people live in rural, dispersed communities across sub-Saharan Africa and South Africa.

Increases in energy prices result in higher food prices, reducing access for poorer households.

Tax incentives at different stages of the decentralized renewable energy (DRE) transition, such as setting up wind turbines, can encourage deployment both on the supply and demand side. Concessional loans are also a viable option. These loans, with preferential interest rates provided either by government or international development agencies, enable DRE projects to have access to finance at a lower cost.

Energy is a game-changer in agriculture. It is essential for a wide range of tasks, from operating machinery to powering and lighting facilities to charging communication devices.

Feeder roads

Without access routes to obtain inputs and reach markets, other food security investments, including technical assistance and access to finance, underperform.

One approach to financing roads is under the availability payment scheme, in which governments would pay a predetermined amount for a private party to operate and maintain the roads. Co-financing road projects is another viable option. When municipalities, national governments or multilateral development banks (MDBs) co-invest in a project, it gives a strong signal to investors about the project’s legitimacy.

Investing in feeder roads can contribute to growth, poverty alleviation and food security.

Irrigation infrastructure

Agricultural productivity resulting from irrigation can be more than twice as high on a per-hectare basis than rainfed production.

This is why investing in water distribution is critical. Public-private partnerships are one financing option. This entails engaging with the private sector in either the construction or maintenance of irrigation and drainage infrastructure, helping spur agricultural productivity.

Access to reliable water sources positively contributes to women’s empowerment through increased asset ownership and control over resources, better sanitation, local job creation and food security. 

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Pourquoi le financement des infrastructures rurales est crucial pour atteindre la sécurité alimentaire ?

La plupart des personnes souffrant de la faim dans le monde vivent dans des zones rurales et travaillent dans le secteur agricole.

Ce n’est pas une coïncidence s’ils n’ont pas  accès aux services de base, tel que l’approvisionnement en énergie et l'irrigation en raison d’un manque d’infrastructure. Celui-ci constitue un facteur important de leur vulnérabilité à la faim.

Le financement des infrastructures, qu'il s'agisse de routes, de stockage ou de réseaux d’énergie localisés contribuera à assurer la sécurité alimentaire des 821 millions de personnes dans le monde qui souffrent de la faim.

Notre rapport, Financement des Infrastructures Rurales : Priorités et voies d’accès pour éradiquer la faim, met en évidence comment de nouveaux instruments financiers peuvent soutenir une infrastructure décentralisée destinée aux agriculteurs, aux transformateurs d'aliments et aux communautés rurales.

Nous décrivons ci-dessous certaines des modes de financement.     

Les infrastructures de stockage

Environ un tiers des aliments produits pour la consommation humaine sont perdus ou gaspillés dans le monde, soit environ 1,3 milliard de tonnes par an. Les installations de stockage, y compris les silos à grains et à riz, les entrepôts et les chambres froides, jouent un rôle essentiel pour assurer la sécurité alimentaire et éradiquer la faim.

Les gouvernements devraient créer des fonds spécifiques dédiés au financement des projets d'infrastructure de stockage. Des prêts à des conditions préférentielles, soit par le biais d'un programme d'infrastructure spécifique, soit par l'intermédiaire d'une banque partenaire, peuvent également être accordés aux agriculteurs ou aux coopératives pour des investissements dans le stockage agricole.

L'amélioration de la capacité l'infrastructure de stockage ainsi que la qualité et les pratiques demeure primordial pour réduire les pertes après récolte et protéger les approvisionnements alimentaires. Elles constituent également un outil important pour donner aux agriculteurs un meilleur contrôle pour pouvoir déterminer à quel moment et à quel prix vendre leurs produits.

Les infrastructures pour l'énergie renouvelable décentralisée

Près d’un quart de la population mondiale n'a pas accès à l'électricité. Près de 85 % de ces personnes vivent dans des communautés rurales dispersées en Afrique subsaharienne et en Afrique du Sud.

L'augmentation des prix de l'énergie entraîne une hausse des prix des denrées alimentaires, réduisant l'accès aux services pour les ménages les plus pauvres.

Des incitations fiscales à différents stades de l'opération des énergies renouvelables décentralisées (ERD), comme l'installation d'éoliennes, peuvent encourager son déploiement tant du côté de l'offre que de la demande. Les prêts consentis à des conditions favorables sont également des alternatives viables. Ces prêts, assortis de taux d'intérêt préférentiels accordés par le gouvernement ou par des organismes internationaux de développement, permettent aux projets d'ERD d'avoir accès au financement à un coût moindre.

L'énergie est un second souffle pour l'agriculture. Il est essentiel pour un large éventail de fonctions, allant de l'utilisation de machines à l'alimentation et à l'éclairage d'installations, en passant par le chargement d'appareils de communication. Les nouvelles technologies combinées à un financement novateur mettent cet aspect vital mais négligé de l'infrastructure rurale à la portée de tous.

Routes de desserte

Les autres investissements dans la sécurité alimentaire y compris l'assistance technique et l'accès au financement, en l'absence de voies d'accès pour obtenir des intrants et accéder aux marchés, resteront en dessous des objectifs désirés.

L'une des méthodes de financement des routes consiste à utiliser des systèmes de paiement de disponibilité par lesquels les gouvernements versent à une partie privé un montant prédéterminé pour l'exploitation et l'entretien des routes. Le cofinancement de projets routiers est une autre option viable. Lorsque les municipalités, les gouvernements nationaux ou les banques multilatérales de développement (BMD) co-investissent dans un projet, cela donne un signal fort aux investisseurs sur la légitimité du projet.

Investir dans les routes de desserte peut contribuer à la croissance, à la réduction de la pauvreté et à la sécurité alimentaire.

Les Infrastructures d’Irrigation

La productivité agricole résultant de l'irrigation peut être plus de deux fois plus productive par hectare que la production pluviale.

C'est pourquoi il est essentiel d'investir dans la distribution de l'eau. Les partenariats public-privé constituent l’une des options de financement. Cela implique de travailler avec le secteur privé dans la construction ou l'entretien des infrastructures d'irrigation et de drainage, contribuant ainsi à stimuler la productivité agricole.

L'accès à des sources d'eau fiables contribue positivement à l'autonomisation des femmes grâce à une plus grande propriété de l’actif, un meilleur contrôle des ressources, un meilleur assainissement, à la création d'emplois locaux et à la sécurité alimentaire. 

Gender inequality has always been an impediment to development. 2018 proved to be a year when explorations of gender parity burst forth into the mainstream more than ever before.

Against this global backdrop, IISD continues to spotlight gender concerns in sustainable development. For example, two of our recent reports reveal how gender, water and climate change are interwoven in policies emanating from Ugandan and Kenyan government institutions.

This matters greatly given that women—as adopters of new agricultural and energy technologies, educators of the young and main users of water for household needs—offer valuable insights and solutions into better managing the risks of climate change.

Working on these reports, I was impressed by the variety of public policy responses that can be incorporated in the water sector to empower women—a process known as gender mainstreaming—but also saddened at the reality of how traditional discriminatory mentalities still have deep roots. With this came the realization that progress to achieve gender equality in these countries is going to be very slow.

First let’s consider how well women are represented in positions that can effect change.

At first glance, statistics on women in leadership positions were disappointing—Kenya has elected only three female governors in 2017 out of a total of 47—a meagre 6.4 per cent.

But is the rest of the world really doing much better?

Having been born in Russia, I am always inherently interested in how my country is doing compared to the world on various issues. I discovered that Russia has only two women as heads of federal subjects (governors, presidents of republics and other heads of administration) out 85—an even less encouraging percentage of women’s representation (2.3%) compared to Kenya.

It’s clear, therefore, that statistics in both countries are strikingly similar; however, a peek behind the curtain reveals that these statistics have different stories to tell.

In Kenya and Uganda, the empowerment of women is firmly on the agenda. Significant improvements are being made in legislation with respect to representation of women in decision making, gender budgeting, and government staff training on gender issues. Furthermore, institutions such as the National Gender and Equality Commission in Kenya and the Equal Opportunities Commission in Uganda, have been set up to monitor and influence the state of gender equality.

Moreover, in in Kenya, a two-thirds gender rule in the Constitution’s Article 27(8) mandates that “not more than two-thirds of the members of elective or appointive bodies shall be of the same gender,” which not only guarantees 30 per cent women’s representation but also ensures there is no bias in areas where women may be overrepresented.

Undoubtedly, more work is needed at the policy implementation level in both countries, but the progress is evident. No women were elected governors in Kenya’s 2013 election; however, the situation improved when three were elected in 2017.

Women, as adopters of new agricultural and energy technologies, educators of the young and main users of water for household needs, offer valuable insights and solutions into better managing the risks of climate change.

In Russia, on the contrary, the existence of problems related to gender is not recognized at the official level. Various acts violating women’s rights serve as evidence, such as the recent legislative change decriminalizing domestic violence to which women mainly fall victim. Moreover, there is a lack of government commitment, knowledge and capacity for gender sensitive budgeting or planning.

Furthermore, any stipulations such as Kenya’s two-thirds gender rule are absent in the policies of Russian governments.

Turning the lens back on the advancement of a sustainable world, having women in positions of power matters greatly, not only in the name of gender equality and representation, but because women’s experiences and roles in society and households bring invaluable insight into how to protect important resources and deal with climate change.

The current state of affairs may reveal one layer, while a closer look at policy landscapes and broader cultural shifts may better reveal where we are headed. As we have seen, though Kenya and Uganda may have similar percentage of female policy-makers as Russia, the trajectories towards gender parity are quite different.

Therefore, in light of the processes happening in East Africa as policies becomes better enforced, we can expect countries like Uganda and Kenya to advance further towards gender equality, and thus find themselves better equipped to construct sustainable futures.

And what I have certainly learned by conducting this research is that in the world of sustainable development commonly understood East/West binaries about gender equality don’t always prove to be true, and that an appreciation of context and broader landscapes can prove just as valuable as homing in on existing facts.

India has become an outspoken proponent of renewable energy, including at the just-concluded COP 24 in Poland and as champion of the International Solar Alliance (ISA).

But do the facts back up the rhetoric? Is the central government walking the talk?

Money, as they say, isn't everything, but an analysis of expenditure patterns reveals a lot about government priorities. And government subsidies affect energy prices, which drive investment and consumption decisions.

A recent study of India's energy subsidies sheds light on exactly which energy types the government is backing. And it's no small amount—INR 151,484 crore (USD 23 billion) in the 2017–19 fiscal years (FYs). The report is an update of a comprehensive inventory released last year.

Consistent with the government's position has been its shift away from subsidizing fossil fuel and toward renewable energy. FY 21016/17 saw a record increase in support for renewable energy of INR 5,766 crore (USD 0.8 billion). At the same time, government support for coal, oil and gas fell by INR 13,418 crore and by INR 120,687 crore from 2014 to 2015, reflecting reform in consumer price subsidies for fuels such as petrol and diesel.

But this is not the full story. Subsidies for fossil fuels were still over three times those for renewables in FY 2017/18 at INR 52,982 crore. Coal alone received more than renewables at INR 15,992 crore and even increased by INR 1,148 crore.

Subsidies for coal can undermine the development of renewables by artificially reducing prices for coal-fired power, the renewables' main competitor. This contributes to air pollution and carbon emissions. Even where there are environmental standards for coal, they aren't always well enforced. One such example is non-compliance with coal washing laws, delivering a benefit of INR 980 crore in FY 2017/18 to coal companies—and incentivizing dirtier air for everyone.

Some energy subsidies are important to achieving certain policy objectives, such as access to energy. Around 70 per cent of India's energy subsidies aim to keep prices low for consumers or to connect households with modern energy, such as the Ujjwala program for cooking gas or the Saubhagya program for electricity.

The single largest support measure in FY 2017/18, accounting for almost half of all energy subsidies, was transfers to electricity companies to keep power prices low (INR 74,925).

Programs to improve access to clean, modern energy are vital for health and improving development outcomes across many areas, as recognized in the UN Sustainable Development Goals. But this does not mean that such programs should be exempt from review? On the contrary, evaluation is essential to ensuring they are effective and delivering value for money.

At the moment, most of India's spending on energy consumption, particularly electricity, is poorly targeted, with many benefits being captured by higher-income households. Efforts have been made to improve targeting, but given their high remaining costs, renewed efforts to direct support to the poor are critical.

Looking at expenditure patterns, alternative ways of providing access to modern energy can also be considered. Kerosene, for example, is still used as the primary source of lighting for 30 per cent of households in some states and by many more as a backup during power outages. Subsidizing kerosene might seem like a lifeline to these households. But kerosene causes indoor air pollution and poses a fire risk, as well as providing low-quality light. Renewable alternatives such as solar lanterns or home systems are available for comparable costs to kerosene over time, but subsidies are needed to help poor households meet the initial upfront costs.

Further support may also be warranted for electric vehicles (EVs), which can help reduce pollution and de-link India's economy from volatile international oil prices. At the moment, when oil prices rise, the subsidy bill increases at the same time that revenues decline due to a variable fuel tax on petrol and diesel. Subsidies for EVs are only in their early stages in India, totalling INR 148 crore in FY 2017/18 and rising to INR 250 crore in FY 2018/19.

Looking forward, the central government's support for renewable electricity is likely to head in the opposite direction to EVs in coming years. Reforms associated with the Goods and Services Tax (GST) will see tax breaks for coal and renewables both decline by about INR 2,000 crore in FY 2018/19, but total tax breaks for coal will still be five times those for renewables. In addition, the largest subsidy for renewables, "viability gap funding," is likely to decline in line with increasingly competitive pricing for renewables.

Despite the increasing competitiveness of utility-scale solar and wind projects, certain clean technologies may continue to require budgetary support. They include offshore wind, energy storage and off-grid solutions. In addition, support for integration costs (such as energy storage) is likely to be needed to accelerate greater uptake of renewables. One potential source of funding is to shift savings from fossil fuel subsidy reform or better subsidy targeting.

Hard data, such as that in this review, provides a welcome anchor point in a debate that is frequently shrouded in spin by governments, interest groups and commentators. Greater transparency and reporting are needed to get the full picture.

Financial information is sorely lacking for many government energy policies, particularly at the state level. Only with full accounting and disclosure can there be the necessary evaluation of energy policies to ensure they are meeting their objectives and delivering value.

This article first appeared on Business Standard on December 20, 2018.

It will take significant private sector investment for Canada (and the world) to reach the goals laid out in the Paris Agreement.

The kind of changes needed to avoid the consequences of over 2°C global warming — embracing low-carbon technology and techniques around energy production, transportation, and agriculture — require an infusion of capital beyond what governments and taxpayers can cover.

Likewise, there’s a clear need to draw investment away from the wrong kind of activities. Companies with high-carbon emitting lines of business and business models, however, rarely reflect climate change on their balance sheets according to the latest report from the Task Force on Climate-Related Financial Disclosures. Despite available voluntary standards, companies seldom disclose their physical risks from climate change or the business risks from emerging climate change-related regulations.

The result? Investors get a distorted, incomplete view of the market and the status quo continues.

Current strategies are good, but not enough

Fortunately, work to get us off this perilous path is underway, both at home and abroad. The Canadian government’s carbon price backstop will ensure a price on pollution exists in every province. The Expert Panel on Sustainable Finance (EPSF), appointed by the Minister of Environment and Climate Change and the Minister of Finance, will soon provide recommendations on harnessing the country’s financial assets for a successful low-carbon transition. There are likely to be strong calls to action, too. In the panel’s words, “If we want to capture the large market opportunities and establish the rules affecting our financial industry and our key economic sectors for ourselves, we need to move faster and more decisively.”

Canada has several international examples to take notes from. The European Union has actively developed the policy framework for sustainable finance as well as an action plan to enforce it. Their progress on the file is remarkable, especially considering animosity from several member countries.

The main takeaway from our G20 peers? Climate risk disclosure must become mandatory. The federal government should amend the Canadian Business Corporations Act to require that companies include certain climate change-related disclosures and environmental reporting in their annual reports. It should also require all federal institutions, including regulators, to do the same.

Everyone must be involved to effect change

Other entities have roles to play. The Toronto Stock Exchange should join the UN Sustainable Stock Exchanges Initiative — an excellent initiative to encourage environmental, social, and corporate governance — while the Bank of Canada should clarify how much the disclosure of climate-related risks is relevant to their 2019 Financial System Review. The Chief Actuary of the Office of the Superintendent of Financial Institutions should report on climate risks to the fully funded status of the Canada Pension Plan Investment Board. And the Office of the Superintendent of Financial Institutions should engage with the Central Banks and Supervisors Network for Greening of the Financial System.

Given the 10-year window for meaningful action laid out by the Intergovernmental Panel on Climate Change's latest report, Canada should focus its efforts on environmental actions that deliver the best bang for its buck. With the investment system underwriting so much of our lives, there’s no question what the primary focus should be.

This article first appeared in the Media Planet insert in the National Post on December 17, 2018.

As 2018 draws to a close and many of us enjoy our holidays, you may finally find yourself with spare time to enjoy a book or podcast on sustainable development.

We asked the IISD team to share some of their favourite reads and listens on the issues we cover in our work. We hope you enjoy our holiday reading list—and all the best to you in 2019.

Factfulness: Ten Reasons We're Wrong About the World – and Why Things Are Better Than You Think
by Hans Rosling, Ola Rosling, Anna Rosling Rönnlund

I really enjoyed this book because it challenges our views of development and progress—and because the world is changing and we need to keep up. The book covers a broad range of progress indicators linked to development and the SDGs and asks how much we really know about what is happening in the world based on "facts" as opposed to our "perceptions" about the “third world.” My whole family learned a great deal from this book, including how globally the number of guitars per household is going up (great!)  and the relative lack of progress on climate change. — Laura Merrill, Senior Policy Advisor and Manager of Global Subsidies Initiative

Podcast: Data for Social Good
by Anik See for CBC Ideas

This CBC Ideas podcast on Data For Social Good is full of inspiring stories of how individuals are using public data to change how we see and understand the world, and find creative solutions to everyday problems. Stories range from mapping Mexico City’s informal bus routes to more accurately reporting fishing numbers in the Bahamas. A great listen while wrapping presents! — Jennifer Temmer, Project Manager with SDG Knowledge team

Winners Take All: The Elite Charade of Changing the World
by Anand Giridharadas

“I sit on a man’s back choking him and making him carry me, and yet assure myself and others that I am sorry for him and wish to lighten his load by all means possible … except by getting off his back.” Giridharadas opens his book with this provocative quote by Leo Tolstoy. Throughout the book we follow well-meaning do-gooders—mostly wealthy and successful—and learn about their initiatives for changing the world. But aren’t we just fooling ourselves? Won’t these initiatives do just the opposite and keep us from aspiring change at a more fundamental level?  — Nathalie Bernasconi, Group Director of Economic Law & Policy Program

How Change Happens
by Duncan Green

This book does a great job of introducing the concepts of "Systems Change" and "Complexity" into the context of sustainable development and shows how these ideas can be used practically to deliver greater impact. — Kali Taylor, Project Officer, SDG Knowledge Program

Energy transitions are about people.

The protests happening in France send that signal loud and clear. If green policies are seen to be unjust or to be worsening inequality they will not be accepted, regardless of a government's good intentions.

The government of President Emmanuel Macron violated two important principles of what is known as a "just energy transition": they failed to engage in social dialogue and they failed to formulate concrete benefits of the reform for those who are less privileged.

The good news is that when these principles are observed, reforms can and do succeed.

Take, for example, Ghana and Indonesia, countries which recently removed fuel subsidies. Governments there consulted with labor unions, consumer associations and other stakeholder groups while running communication campaigns explaining the reform's rationale and benefits.

In Canada, where the government is implementing another difficult reform – shutting down coal – the government launched a Task Force on Just Transition for Canadian Coal Power Workers and Communities. Made up of labour, industry, NGOs, academic and local government representatives, the task force is mandated to engage with relevant stakeholders, collect information on impacts, identify opportunities and feed recommendations back to the federal government.

The Straw that Broke the Camel's Back

In France, the "gilets jaunes" or Yellow Vests protests have been described as the biggest social unrest in decades. The riots are particularly jarring given that they arose in a country positioning itself as a world leader in terms of raising ambition and assuring the implementation of global climate change agreements.

The protesters were initially sparked by a fuel tax increase proposed to begin on Jan. 1, 2019. The discord, however, has been brewing over many other previously implemented or planned reforms by the Macron government such as partial abolition of the wealth tax, liberalization of the national rail and amendments to the labor code. Many of these are seen to contribute to rising inequality.

The fuel tax was designed to discourage people from using diesel cars and to raise revenue for funding renewables. Yet the protesters did not see concrete benefits for real people. Some of them even saw the tax as compromising the green agenda because a lion's share of fuel tax revenues would go to reduce France's fiscal deficit while the wealth tax was reduced.

As the protests grew increasingly violent, Macron canceled the tax increase. Prime Minister Edouard Philippe also announced a freeze on gas and electricity tariff rises and promised what should have happened in the first place: consultations across the country to see how reforms can be implemented without hitting vulnerable groups and how the green agenda can be matched with social needs.

Real Benefits for Real People

To enjoy broad-based support, green policies such as carbon and fuel taxes need to create visible benefits for vulnerable groups and reduce inequality. In Canada, the federal government plans to redistribute the proceeds of their carbon taxes to households as a form of carbon dividend. In Indonesia, when fuel subsidies were removed in 2015, $15.6 billion worth of savings were invested in social safety nets, infrastructure and transfers to villages. In France, the visible benefits of reduced diesel use will be better air quality and fewer respiratory diseases, but there hasn't been clear government communication on this point.

Job creation is another critical area for investing fuel tax revenues, and some of these ideas are already taking root in France. One was included in the protesters' counter-proposal for green policies as they urged the government to "favor ecology while saving households money" by carrying out a national plan to insulate buildings. On top of increasing energy efficiency, such programs also create local jobs.

The just transition is a headline issue at the U.N. climate conference currently taking place in Poland. There, the agenda focuses predominantly on workers, particularly in the coal industry. What is clear is that a just transition is needed not just for coal workers, but also for consumers. If social dialogue and concrete benefits for vulnerable groups are made central to climate policies, reforms will succeed.

Ivetta Gerasimchuk is lead for sustainable energy supplies, based in Geneva. Joachim Roth is energy policy consultant, based in Paris. Both work at the International Institute for Sustainable Development.

This article first appeared in U.S. News on December 7, 2018.

The recently announced EU Bioeconomy Strategy continues that continent’s legacy of advancing biological solutions to environmental questions and strategically highlights the economic benefits of the approach with a strong focus on jobs, growth and investment in the EU.

In fact, the EU’s bioeconomy already accounts for 4.2% of its GDP; it contributes over €2 trillion in annual turnover and €621 billion in added value, and keeps over 18 million people employed.

The plan is not only concrete—including a €100m Circular Bioeconomy Thematic Investment Platform to bring bio-based innovations closer to the market, and  a pledge to build 300 new sustainable biorefineries across Europe by 2030—it also complements an EU directive to ensure that 20% of the EU’s total energy needs are met with renewables by 2020.

In short, the Europeans are significantly ahead of the game.

If Canada were to up its game in the bioeconomy sector, the impact would be significant. In fact, replacing just 5% of Canada’s gas supply with renewable gases would reduce GHG emissions by 10 to 14 megatonnes annually.

We are already moving in the right direction.

The proposed Clean Fuel Standard seeks to increaser use of lower-carbon fuel—including renewable natural gas—and applies to the transportation, building and industry sectors. And the newly-formed Circular Economy Leadership Coalition, a collaboration of major business leaders, academics and non-governmental organizations, are committed to accelerating Canada’s transition to a circular economy.

However, to fully advance a bioeconomy in the country we need a National Bioeconomy Strategy, inspired by the recently updated EU Bioeconomy Strategy, and even the White House’s 2012 National Bioeconomy Blueprint. In fact, this was already recommended by the Canadian Chamber of Commerce in 2015.

The strategy needs to exemplify existing Canadian successes in bioeconomy, but also pave a path for Canada to further pilot technologies and innovations at home and globally—innovations that convert Canada’s abundant bio-waste materials and industrial by-products into fuel, bio-based fertilizers, and high value chemicals while also recycling scarce metals, plastics, and valuable nutrients.

The government of Canada should provide the necessary support, incentives, and guidance, through funding and programs to attract businesses, and develop biorefineries and innovation clusters across the country.

Put simply, a bioeconomy relies on the use of biological products, biomass, and waste materials to be used and converted into food, feed, fuel and more. If you imagine a circular economy, whereby “the value of products, materials and resources is maintained in the economy for as long as possible, and the generation of waste minimized”, a bioeconomy represents the renewable component.

While the recent report from the Intergovernmental Panel on Climate Change certainly sent shockwaves across the world as it warned of the devastating consequences of our current environmental trajectory, it also spotlighted the urgent need to find alternatives to the status quo.

In a world that urgently needs to find alternatives to dirty fossil fuels that emit high rates of greenhouse gases (GHGs) that contribute to climate change, and that needs to move away from the current linear economic model of “extract, use and discard resources”, the bioeconomy proves a highly viable solution.

Canada’s large land base, low population density, and abundance of natural resources have traditionally proven limiting factors in the transition to a bioeconomy future.

With today’s environmental imperatives, however, Canada, which emits high levels of GHGs and has access to an overabundance of waste, residues, and biomass, is perfectly positioned to become a world leader in advancing a bioeconomy.

This article first appeared on EU Reporter on December 12, 2018.