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ClimateandDevelopment:AnAgendaforAction
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ClimateandDevelopment:AnAgendaforAction
?2022TheWorldBankGroup
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Telephone:202-473-1000;Internet:
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pubrights@
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Coverdesign:BradAmburn
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ClimateandDevelopment:AnAgendaforAction
1.Contents
Foreword
4
Summary 6
1.CountryClimateandDevelopmentReports:integratingclimatechangeanddevelopment 7
2.Climatechangeposesamajorthreattolong-termdevelopmentobjectives 10
2.1.Climatechangehaswidespread,deep,andcascadingeffectsacrossmostsectors 10
2.2.Boostingresilienceandadaptationisanurgentandintegralpartofdevelopmentandpovertyreduction,
especiallyinlow-incomecountries 13
2.3.Evenwithadaptation,successfuldevelopmentandpovertyreductionrequireacceleratedmitigationaction,
especiallyfromhigh-incomecountriesandlargeemitters 19
3.Climateobjectivescanbeachievedwithoutcompromisingdevelopment 21
3.1.Structuralchangeandsupportivepolicyenvironmentsareneededforsuccessfulandjustclimateaction 21
3.2.SectoraltransitionswithprivatesectormobilizationcreateopportunitiestoreduceGHGemissionswhile
contributingtodevelopment 22
3.3.MostcountriescanfollowdevelopmentpathwaysthatalignwithajusttransitionandtheParisAgreement
withoutmajortrade-offs 33
4.Successrequiresurgentpolicyreformsandincreasedfinancialsupportfromtheinternational
community 39
4.1.Innovativeclimatefinancesolutionstomeetadditionalinvestmentneeds 39
4.2.Considerthepoliticaleconomyinpolicydesign 45
4.3.Buildinginstitutionalcapacityandimprovinggovernanceanddecisionmaking 46
4.4.Acceleratedinnovationandscalingupkeytechnologiesforadaptationandmitigation 47
4.5.Ajusttransition:preventingandmanagingimpactsonpeopleandcommunities 49
5.Prioritizationandsequencing:arequisiteforsuccess 51
5.1.Prioritizingwhatisgoodfordevelopmentorurgenttoachieveclimategoals 51
5.2.MainrecommendationsintheCCDRs 52
6.Conclusion 55
Acronyms
CBAM
CarbonBorderAdjustmentMechanism
CCAP
ClimateChangeActionPlan
CCDR
CountryClimateandDevelopmentReport
CPAT
ClimatePolicyAssessmentTool
CSA
climate-smartagriculture
DRM
disasterriskmanagement
EU
EuropeanUnion
EV
electricvehicle
GDP
grossdomesticproduct
GHG
greenhousegas
GRID
Green,Resilient,andInclusiveDevelopment
HIC
high-incomecountry
LIC
low-incomecountry
LMIC
lower-middle-incomecountry
M&E
monitoringandevaluation
MANAGE
(WorldBank’s)Mitigation,Adaptation,andNewTechnologiesAppliedGeneralEquilibrium
MFMod
(WorldBank’s)Macro-FiscalModel
MIC
middle-incomecountry
NDC
NationallyDeterminedContribution
O&M
operationsandmaintenance
SME
smallandmedium-sizedenterprise
SOE
state-ownedenterprise
UMIC
upper-middle-incomecountries
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ClimateandDevelopment:AnAgendaforAction
AchievingClimateand
DevelopmentGoalsTogether
ForewordbyDavidMalpass
Developingcountriesfaceauniquechallengeofhavingtoachieve
theireconomicdevelopmentgoalsinthecontextofachanging
climate.
Policymakersfacetoughquestions.Howtotranslateshort-andlong-
termclimateimpactsintodecisionstoday?Whatpolicyreformsand
investmentsshouldbeprioritized?Whatarethetrade-offsbetween
immediatebenefitsandcostlierdelays?
Theanswerstothesequestionswillimpacteverysectoroftheir
economiesandsocieties.Moreover,thereisnosinglesolution:the
energytransitioninChinalooksverydifferentfrominChad,andthe
developmentprioritiesofPakistanvarysignificantlyfromthoseofTürkiye.
Allcountriescanbenefitfromasystematicapproachthatcombinesthebestavailabledata,models,andtoolstoprovideimmediateandactionablerecommendationsthatintegrateclimateanddevelopmentgoals.
Thatiswhatourtransformativenewdiagnostic—theCountryClimateandDevelopmentReports—setsouttodo.
ThereportsbuildontheWorldBankGroup’slongandongoingcountryengagementastheworld’sleadingdevelopmentinstitutionandtheleadingproviderofclimatefinancetothedevelopingworld.Eachreportisrootedinitsuniquecountrycontext:fromthecountry’sclimatecommitmentsanddevelopmentprioritiestoitsincomelevelanditssectoraltransitions.Thereportstakeapeople-centricapproach,frompeoplelivinginflood-proneareastoworkersinthecoalindustry,toprotectthepoorestandmostvulnerableandcontributetoajusttransition.Theycapturetheessentialroleoftheprivatesectorinincreasingresilienceandreducingemissions.Theyalsoexaminethe
“Allcountriescanbenefitfromasystematicapproach
thatcombinesthebestavailabledata,models,andtools
toprovideimmediateandactionablerecommendations
thatintegrateclimateanddevelopmentgoals.Thatis
whatourtransformativenewdiagnostic—theCountry
ClimateandDevelopmentReports—setsouttodo.”
5
ClimateandDevelopment:AnAgendaforAction
technologiesandinnovationsneededforlowercarbonintensityproductionofelectricity,steel,cement,andmanufacturing,andhowtheworldwillbuildgreenandefficientsupplychainsforsustainabledevelopment.
Theresultisthateachreportcontainsawealthofinformationonthepathwaysandinvestmentsthatcanhelpeachcountrytoshapealow-carbon,resilientdevelopmentfuture.Thesereportsdonotprovidealltheanswers,buttheyoffernewanalysisandlayoutthechallengesandopportunitiesofclimateanddevelopmentinanintegratedwaythatenablespolicymakerstobetterfindtheanswerstheyneed.
Thefirstbatchofreportsspans24countries:Argentina,Bangladesh,BurkinaFaso,Cameroon,Chad,China,ArabRepublicofEgypt,Ghana,Iraq,Jordan,Kazakhstan,Malawi,Mali,Mauritania,Morocco,Nepal,Niger,Pakistan,Peru,Philippines,Rwanda,SouthAfrica,Türkiye,andVietnam.EachreportisconductedjointlybytheWorldBankanditsprivatesectorarms,theInternationalFinanceCorporationandtheMultilateralInvestmentGuaranteeAgency,andinclosecoordinationwiththeInternationalMonetaryFund.Iwanttothankallthosewhohavetakenpartinthisgroundbreakingexercisefortheirinsights,rigor,collaborativespirit,andhardwork.
Thisanalysis,ClimateandDevelopment:AnAgendaforAction,drawsfromtherichnessoftheindividualcountryreportsandsharessomeearlyinsightswehavegleanedfromthefirstbatch.Theseearlyinsightsarestriking.InCCDRcountries,investinganaverageof1.4%ofGDPinadaptationandmitigationcouldincreasetheirresilienceandreducetheiremissionsbyasmuchas70%by2050.ThetransitioncouldseepositiveimpactsonGDPandemployment,butthesemustbebalancedagainstlossesinfossilfuel-intensivesectorswhichwillimpactsomepopulationsandcommunities.
Thegainsaretheretobereapedbuttheyarenotautomatic:theydependoncarefullydesignedpoliciesaswellasincreasedfinancialsupportfromrichereconomies.Especiallyinlower-incomecountries,whereinvestmentneedsforclimateactionoftenexceed5%ofGDP,increasedvolumesofconcessionalfinance—includingthroughgrants—arecriticaltoasuccessfulandjusttransition.
ThefirstbatchofCCDRsshowsusthattacklingclimateanddevelopmentisachievable.Together,wecanforgeapathtowardalow-carbonresilientfuture.
6
ClimateandDevelopment:AnAgendaforAction
Summary
Climatechangeposesamajorthreattolong-termdevelopmentobjectives,especiallypovertyreduction,andacceleratedemissionreductionsareneeded,particularlyinhigh-incomeandotherhigh-emittingcountries.Reducingemissionscanbedonewithoutcomprisingdevelopment:takentogether,CCDRlow-carbondevelopmentstrategiesreduceemissionsby70%,withoutsignificantimpactongrowth,providedthatpoliciesarewelldesignedandfinancingisavailable.Financingneedsaverage1.4percentofGDP,amanageableamountwithappropriateprivatesectorinvolvement.Butinlower-incomecountries,financingneedscanexceed5%,whichwillrequiremoresupportfromhigh-incomecountries,includingincreasedconcessionalresources.
Tosupportthealignmentofdevelopmentandclimateobjectivesatthecountrylevel,theWorldBankGrouphaslaunchedanewcorediagnostictool:theCountryClimateandDevelopmentReport(CCDR).TheCCDRsintegrateclimatechangeanddevelopmentconsiderationsandaimtohelpgovernments,privatesectorinvestors,citizens,anddevelopmentpartnersprioritizethemostimpactfulactionsthatcanboostresilienceandadaptationandreducegreenhousegas(GHG)emissions,whiledeliveringonbroaderdevelopmentobjectives.Thefirstsetof20CCDRscovers24countriesandprovidethreemaininsights.
First,climatechangeposesamajorthreattolong-termdevelopmentobjectives,especiallypovertyreduction.Withappropriateadaptationpolicies,countriescanreduceimpactsintheshortterm.Buteventhen,successfuldevelopmentrequirerapidreductionsinglobalGHGemissions,whichrequiresfirstandforemostacceleratedmitigationactioninhigh-incomecountriesandotherlargeemitters.
Second,climateobjectivescanbeachievedwithoutcompromisingdevelopment,butonlyifkeyconditionsaremet.Thesekeyconditionsincludewell-designedclimateactions,strongparticipationoftheprivatesector,adequateinternationalsupport,andappropriatecomplementarymeasurestomanageunavoidabletrade-offs,protectpoorpeople’sconsumption,andfacilitateajusttransition.MostCCDRlow-carbondevelopmentpathwaysaremoreambitiousthanexistingNDCs,reducingtotalGHGemissionsinCCDRcountriesby70%comparedwithacurrent-policyscenario.Takentogether,however,theywouldstillleadtosignificantemissionsin2050,showingtheneedtoadjustthesepathwaystoincreaseambitionovertime,butalsoforenhancedsupportfromandactioninHICs,includingwithnegativeemissions.
Third,successrequireschallengingpolicyreforms,reallocationofscarcepublicresources,increasedmobilizationofprivatecapital,andincreasedfinancialsupportfromtheinternationalcommunity.Resilientandlow-carbonpathwayscandeliverneteconomicgains,ifadditionalannualinvestmentneedsaveraging1.4percentofcountries’GDPover2022–30canbemet.Thetransitionalsorequiresmanagingpoliticaleconomyobstacles;strengtheninginstitutions;acceleratingdiffusionofnewtechnologies;andmanagingdistributionaloutcomes.Tobesuccessful,allcountrieswillrequirecarefullydesignedpoliciesandscaled-upfinancialsupportfromrichereconomies.Low-incomecountriesfacehigherinvestmentneeds,oftenexceeding5percent,andwillneedaccesstosustainedlevelsofconcessionalresources,includinggrants.
TheCCDRsrecognizethatineachcountry,agovernment-ledprioritizationandsequencingexerciseisanessentialsteptotranslatethediagnosticintoacountry-ownedstrategyandimplementableinvestmentplan.ACCDRcanbeanopportunityforgovernmentsandprivatesectorinvestors,citizens,internationalfinancinginstitutions,andWorldBankGrouppartnerstoengageondevelopmentandclimateaction,withbettercountry-levelcoordination.
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ClimateandDevelopment:AnAgendaforAction
1.CountryClimateandDevelopmentReports:integratingclimatechangeanddevelopment
Climatechange—causedbygreenhousegas(GHG)emissionsfromhumanactivities—posesseriousthreatstocountries’abilitytosecurepastdevelopmentsgainsandsustainimprovementsinlivingstandards.Climatechange,poverty,andinequalityaredefiningchallengesofourtime—anditiscrucialthatwetacklethemtogether,acknowledgingtheinterconnectionsbetweenpeople,planet,andtheeconomy.Tothisend,itisurgentthatcountriesbuildtheresilienceandadaptationoftheirpeopleandeconomiestotheeffectsofclimatechangeintheirdevelopmentstrategies,whilealsoreducingGHGemissionstomitigatedamagingchangestotheglobalpublicgoodthatisclimate.IntegratingclimateanddevelopmentisattheheartoftheWorldBankGroup’sClimateChangeActionPlan(CCAP)2021–25andtheWorldBank’sGreen,Resilient,andInclusiveDevelopment(GRID)approach.1
TheWorldBankGrouphasrecentlylaunchedanew,corediagnostictool:theCountryClimateandDevelopmentReport(CCDR).Integratingclimatechangeanddevelopmentconsiderations,thisdiagnosticisjointlyconductedbytheWorldBank,theInternationalFinanceCorporation,(IFC)andtheMultilateralInvestmentGuaranteeAgency(MIGA),inclosecoordinationwiththeInternationalMonetaryFund.ItaimstohelpcountriesprioritizethemostimpactfulactionstoboostresilienceandadaptationandreduceGHGemissions,whiledeliveringonbroaderdevelopmentobjectives.CCDRsaredesignedtoanalyzetheconnectionbetweenclimateanddevelopmentpoliciesandidentifyconcretepriorityactionsthatsupportcountries’developmentgoalsastheyimproveclimateresilienceandloweremissions.Capturingthecentralityofpeopleinclimatechangepolicies,CCDRsassesshowclimaterisksaffectpeople,andhowgovernmentsandtheprivatesectorcanbuildresilience,consideringtheimplicationsofphysicalandtransitionrisksonpovertyandjobs.Thefirstsetof20CCDRs(publishedorinpress)covers24countries(figure1).2BuildingonthelessonslearnedfromtheinauguralyearoftheCCDR,weaimtorolloutCCDRstoallourclientcountriesoverthenextthreetofiveyears.
CCDRsuseascenarioapproach—consideringcountry-specificresilientandlow-carbondevelopmentpathways—toexplorethreebroadpolicyspaces.First,theylookatsectoralandmacroeconomicpoliciesandinvestmentsthatcreatesynergiesbetweenclimateactionandshort-tomedium-termdevelopmentobjectives.Forexample,improvingpublictransitcanexpandaccesstojobsandcriticalsocialservices,particularlyforwomenandthepoor,reducetrafficcongestion,andaddresslocalairpollution,allwhilereducingGHGemissions.Second,CCDRsexaminepotentialtrade-offsbetweenclimateandotherdevelopmentobjectivesandidentifypoliciesandinvestmentsthatcanpreventormanagethesetrade-offs.Forexample,decommissioningcoalinfrastructurereducesGHGemissionsbutcouldhaveadversesocialimpactsifnotaccompaniedbytargetedsupportforlocalcommunitiesandworkers.Third,CCDRsexploreopportunities,reforms,investments,andpolicyinstrumentstofurtherleverageprivatesectorresourcesandsolutionsforbothclimatechangeadaptationandmitigationandtobettermanagedistributionalimpactsandthepoliticaleconomy,usingapeople-centricapproachtotheclimateanddevelopmentagenda.
1
/handle/10986/35799;/handle/10986/36322
.
2
/en/publication/country-climate-development-reports
.
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ClimateandDevelopment:AnAgendaforAction
Initiated
DominicanRepublic
Azerbaijan
Bhutan
Cambodia
CentralAfricanRepublic
Colombia
DemocraticRepublicofCongo
C?ted'Ivoire
Paraguay
Romania
Tunisia
Uzbekistan
WestBankandGaza
Zimbabwe
EcuadorGuinea-BissauIndia
KenyaLebanonLiberiaMadagascar
Aspublicdocuments,CCDRscanprovideimpetusatthecountrylevelforgovernments,theprivatesector,citizens,anddevelopmentpartnerstoengageintheclimateanddevelopmentagenda.Byconveningprivatesectorinvestors,governments,andmultilateraldevelopmentbanks,CCDRssupportcoordinatedcountry-levelclimateaction,andcanhelpdirectconcessionalandprivatefinancingfromprivatesectordevelopmentfinanciersandnontraditionaldonorstohigh-impactclimateaction.
FIGURE1:CCDRcountriescoveredinthissynthesispaperandthosewhereCCDRshavebeenrecentlyinitiated
Publishedorinpress
Mali
Mauritania
Morocco
Nepal
Niger
Pakistan
PeruThePhilippinesRwanda
SouthAfricaTürkiyeVietnam
Argentina
Bangladesh
BurkinaFaso
Cameroon
Chad
China
Egypt
Ghana
Iraq
Jordan
Kazakhstan
Malawi
Forthcoming
AngolaBrazilHonduras
Indonesia
Mozambique
Onhold
Ukraine
Sudan
EasternCaribbean
(AntiguaandBarbuda,
Dominica,Grenada,St.Kitts
andNevis,St.Lucia,andSt.
VincentandtheGrenadines)
Population(billions,2021)
GDP($,trillions,2020)
GHGemissions(MtCO2e,2018)
2.7
(34.5%)
393(0.8%)
2.7(34.0%)
15,980(33.8%)
19.4
(22.4%)
2.6
(3.0%)
3.9
3,387(7.2%)
22,063(46.7%)
60.5(69.9%)
(4.5%)
1.8
(23.2%)
0.6(7.2%)
5,460(11.5%)
Note:MtCO2e=milliontonsofcarbondioxideequivalent.
CCDRscombinethebestavailabledata,models,andtoolstoplacewhatisoftenadiscussionofimpactsinthedistantfutureintomoreimmediateandactionablerecommendationsfordecisionmakerstoday.Whiletheanalysisanddiagnostictypicallyextendto2050,CCDRpolicyrecommendationsfocusonthemedium-term,especiallytheyearsuntil2030.TheybenefitfromtheexpertiseofWorldBankGroupclientsandstaffondevelopmentchallenges—includingpovertyandprivatesectorissues—andstrongsynergieswithotherdiagnostics,suchasCountryEconomicMemorandums,PovertyAssessments,andCountryPrivateSectorDiagnostics.Theywillbeusefulfor:
9
ClimateandDevelopment:AnAgendaforAction
?TheWorldBankGroup:CCDRswillinformtheWorldBankGroup’sSystematicCountryDiagnosticandCountryPartnershipFramework,ensuringthatthegroup’sprioritiesandfinancingportfolioconsiderdevelopmentandclimateobjectives.
?Governments:Byprovidingastrategic,macrofiscal,andfinancialdiscussiononclimate-relatedissues,andcomplementingWorldBankGroupsectoralengagementandanalyses,CCDRswillhelpcountriesframetheirowndevelopmentandclimateobjectives,facilitateawhole-of-governmentapproachtothisagenda,andidentifyhowtomobilizetheprivatesectorincludingprivatesectorcapital.
?Theprivatesectorandgeneralpublic:Aswellasthemaineconomicrisks,CCDRsidentifyeconomicopportunitiesforprivatesectorinvestmentandmarkets.Theycanalsotriggeraconversationwiththepublicandcivilsocietyaroundkeypriorities,trade-offs,andajusttransition.
?Aglobalaudience:CCDRsexplorerealisticpathwaystoachievetheglobalcommunity’sdevelopmentandclimateobjectives,includingtheSustainableDevelopmentGoalsandthe
2030agenda,andidentifypolicyandexternalfinancingneedsaswellascommontechnologyandtradeissues.
ThissynthesissummarizesthemainemergingfindingsfromthefirstsetofCCDRs.Itidentifiescommonalitiesaswellasdifferencesandspecificitiesacrosscountrycontexts,incomegroups,andgeographies.Italsoaimstocombinetheseinsightstoinformonhowinternationaldevelopmentpartners—especiallyhigh-incomecountries(HICs)—shouldsupporttheglobaltransitiontowardamoreresilientlow-carbondevelopmentpath,includingthroughtheirownclimateactionandsupporttoclimateactioninlow-andmiddle-incomecountries(LICsandMICs)thushelpingreconcileclimateanddevelopment.
10
ClimateandDevelopment:AnAgendaforAction
2.Climatechangeposesamajorthreattolong-termdevelopmentobjectives
?Climatechange—causedbyGHGemissionsfromhumanactivities—posesamajorthreattolong-rundevelopmentobjectives,especiallypovertyreduction.
?Withappropriateadaptationpolicies,countriescanreduceimpactsintheshortterm.
?Evenwithappropriateadaptation,successfuldevelopmentandpovertyreductionrequirerapidreductionsinglobalGHGemissions,whichrequiresfirstandforemostacceleratedmitigationactioninHICsandotherlargeemitters.
Climatechangeaffectsallenvironmentalconditionsinwhichpeopleliveandeconomiesoperate,withcomplexdirectandindirectimpactsonactivitiesandwell-being.Forexample,someimpactsarefeltthroughchangesinaverageclimateconditions,suchaswaterscarcityorthespatialdistributionofplants,crops,andwildlife,whileothersarefeltthroughchangesinthefrequencyandintensityofextremeweatherevents,suchasheatwaves,drought,floods,orstorms.Impactscanbedirect,suchaswhenhighertemperaturesaffecthealth,well-being,orlaborproductivity,orindirect,suchaswhenchangesinclimateaffectthedistributionofpeststhataffectagriculturalyieldsormagnifyconflict.ThefirstsetofCCDRsexaminemanyimpactchannels—includingeffectsonlaborproductivity,agriculturalyields,ornaturalhazards—toidentifyopportunitiesforprotectingeconomiesandpopulations.
Thefutureimpactsofclimatechangecriticallydependonthechoiceswemaketoday.Impactscanbereducedintheshorttermwithappropriatedevelopmentandadaptationpoliciesandinterventions,andinthemedium-to-longtermbyreducingglobalemissions.GHGemissions,demographics,technologies,workingconditions,andsocialandphysicalinfrastructureswillhavealargeimpactonboththemagnitudeofclimatechangeandthevulnerabilityofaffectedeconomiesandpopulations.
2.1.Climatechangehaswidespread,deep,andcascadingeffectsacrossmostsectors
Sectoral,macroeconomic,andpovertyimpactassessmentsdemonstratevulnerabilitytoclimatechange,especiallyinlow-incomeandhigh-povertycountries.Theimpactsofclimatechangearewide-rangingandcomplex,andtheyoftencascadeacrosssectorsandsystems.Anddespitebeingpartialandnotextendingbeyond2050(whentheworstimpactsareexpected),theCCDRimpactassessmentsdemonstratethatclimatechangehassignificantimplicationsforfoodsecurity,humanhealth,economicopportunities,anddevelopmentoutcomes(table1).TheCCDRsalsoshowthatimpactstendtobelocalized,withcountriesandregionsexposedtodifferentthreats.Forexample,inSub-SaharanAfrica,whereverypoorpeoplespendalargeshareoftheirbudgetonfood,peoplearehighlyvulnerabletoagriculturalimpactslocallyandinotherbigfood-producingcountries.Thedirectimpactofhighertemperaturesonlaborproductivity—especiallyforoutdoorworkers—isoneofthemainsourcesofeconomicdamageacrossallcountries.
11
ClimateandDevelopment:AnAgendaforAction
TABLES.1:ExamplesofclimatechangeimpactsfromthefirstsetofCCDRs
Agricultureandfood
?By2030,Vietnamcouldexperienceagriculturallossesofupto6.2%comparedto2010levelsasopposedtoascenario
withoutclimatechangewhereagriculturaloutputisestimatedtoincreaseby25%
?InArgentina,annuallossesinrainfedagriculturefromwaterdeficitsorexcessesareestimatedat$2.1billion(0.6%of
GDP)
?By2050,inadryorhotscenario,theSahelcountriescouldexperiencea5–10%and11–20%fallincroprevenuesand
livestockyield,respectively,whileinawetscenario,theimpactonlivestockyieldscouldbepositiveinallcountries
?By2050,withoutclimatechangeadaptation,morethan2.6millionunitsoflivestock(71%ofthecurrenttotal)in
Camerooncouldbeunderdrought-inducedstressconditionsannually
?By2050,overallfoodproductioninEgyptcoulddeclineby5.7%
Water
?Withou
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