Seminar on South-south Cooperation between China and IFAD (9.23-9.29)

Climate-smart Rural Development and Poverty Reduction Approach

Dr. Wendao CaoRural Development Specialist

World Bank, Beijing

Outline

• Climate change: processes, characteristics and threats

• Climate Change and Poverty – An Integrated View

• Climate-smart, Watershed Approach: Loess Plateau Concepts and Experiences

• Conclusion

Climate change: processes,

characteristics and threats

Source: UNEP/GRID–Arendal

Incremental risks – present and pipeline

• Increase in exposure to drought and long-term drying

• Reduced agricultural productivity, especially in rainfed areas:

- Global modelling points to losses of 10% for developing countries, ranging 7% Asia to 17% SSA, with gains for developed countries (Cline 2007)

- Ricardian modelling for dryland SSA points to losses of 25% by 2060

- Probabilistic Monte Carlo crop modelling reveals high (95%) probability of large losses for southern African maize, West African root crops and sorghum in Sahel (Lobell et al 2008)

Incremental risks continued

• Coastal/Delta flooding and sea surges (Bangladesh, Vietnam and Egypt)

• Port city exposure (50 150m by 2070: Mumbai, Guangzhou, Shanghai…OECD 2008)

• Storm damage (eg Central America)• Increased water stress on ecosystems• Glacial melting

– Short-term flooding risks (Nepal, Central Asia)– Long-term threat to irrigation systems (Indus, northern India

and China)– Urban water supply (Peru)

Climate risks and vulnerability

• Inability to cope with climate risk is already a major cause of poverty

• Incremental risks superimposed on global picture of 2bn living on less than $2 a day and 1/3 children malnourished

• ‘Low human development traps’:• Ex ante losses in productivity• Asset erosion• Capability erosion (health, nutrition, education)

• Human impacts • Ethiopia: children aged -5 are 41% more likely to be stunted if born in

drought year and affected• Global modelling for growth impacts have tended to

obscure distributional concerns: the poor face earliest and deepest damage

ClimateChange

• Increased severity and frequency of weather events

• Gradual changes in temperature, sea level and climate zones, and fresh water

Economic, Equity and Poverty Outcomes

• Growth and its distributional pattern will be affected

• Increased variability. Poverty traps (country, region and household)

• Increased risk and vulnerability to climate change

TransmissionChannels

• Effects on livelihoods• Changes in capital stock

and productivity• Increases in mortality and

morbidity rates• Changes in settlement

patterns• Political tensions and

conflict• Changes in relative prices• Macro and fiscal effects

Climate Change and Poverty – An Integrated View (PR Board)

Increased short-term variability Gradual changes in mean

Protection -Protective infrastructure (dams, flood walls, levees)

-Same as short-term, although multiplies risk and overtime become prohibitive (negative externalities)

Adaptation -Drought resistant agriculture-Adaptive infrastructure (houses on stilts, schools and health centers in boats)-Vaccination campaigns, improved services-Building code regulations

- Land taxes and resettlement initiatives for vulnerable areas ------Subsidies and incentives to promote less climate sensitive activities.-Improved water and energy and management and pricing policies

Response -Emergency response plans (national and community levels) (water, housing, resettlement, etc.)-Improved and rebuilding of services and infrastructure in vulnerable areas-Disaster Insurance (public/private)

-Targeted safety net programs-Disaster and meteorological monitoring systems (national and community based).

Policy Options and Trade-offs (PR Board)

Case from China, Loess Plateau

Loess Plateau in China• Size: 640,000 km2

• Rural Population: 70m• Location: upper &

middle reaches of the Yellow River

• Stretches over 7 provinces

Map of China

The Loess Plateau

one of the most seriously one of the most seriously eroded places on earth.eroded places on earth.

home to more than 50 million home to more than 50 million mostly very poor farmers.mostly very poor farmers.

centuries of overuse of the natural resources and unsustainable farming practices.

1.6 b tons of sediment annually clog up the Yellow River, pose a serious flood risk in the lower reaches.

Eco-environmental Impact

• Reduction in water storage capacity• Loss of soils, soil productivity; loss of farmland• Loss of vegetation, biomass & biodiversity• Climate changes• Poor air quality, increased dust storms• Increased pollution• Sedimentation downstream

Economic Impact

Lower yields & returns; Higher production costs Farm income decline Reduction in GDP

Loss of grain production

Social Impact

• Poverty• Reduced food security• Increased health problems• Vulnerability• Accelerated migration

Climate-smart, Watershed Management Approach (1994-2008)

Dual Objectives:

1. Improving income and livelihood2. improving ecological conditions

Equally important. Impact each other

Inner Mongolia

Shanxi

Shaanix

Gansu

Project Area

The project covers 48 counties, 4 provinces, with area of 30,000 km2 in total.

Project Scale

The total investment of the project (two phases) was US$ 500million, among which US$ 300 million from the Bank loan.

Institutional Measures

• Participatory watershed planning process• Huge incentive through transfer of State

land to farmers through long-term lease • Emphasize both bottle-up and top-down

approaches

Central PLG

Central

TP

Provincial PLGs

Provincial PMOs Provincial TP

Prefecture PLGs

Prefecture PMOs

county PLGs

County PMOs

township PLGs

Township station

Legend consultive functionAdministrative function

CPMO

Project Structure

Financial Instruments

• High counterpart funding (50%); strong government ownership

• Community in-kind contribution• Clear distinction between public and private

goods• Make clear that the WB loan needs to be

repaid by farmers

Implementation Arrangements Structure and no-structure interventions Sufficient staffing, clearly defined roles &

responsibilities, stressing institutional and community capacity building

Strong emphasis on technology transfer Enforcement of policy Strict supervision of physical and financial

progress, problem solving and feedback mechanism and rigorous M&E

Foster inter-agency collaboration partnership & networking

Policies and Enforcement

• Banned free range grazing of sheep and goats

• Enforced land tenure policy: farmers receive contracts with 30-50 years use rights

• Banned planting on steep slopes

Impact • Physical: 920,000 ha rehabilitated; terrace 190,000 ha;

diversified agriculture; beneficiaries = 2.5 million people; improved rural infrastructure

• Financial: Grain production from 428 kg to 630 kg per capital; per capita income increased from US$ 45 to US$ 203 (US$ 44 more than non-project areas)

• Social: 2.5 million people out of poverty; women’s social status and children school enrollment raised

• Environmental: vegetation cover from 17% to 33%; bio-diversity increased and micro-climate improved; annual soil erosion reduced by over 107 million tons; downstream improvements

BEFORE: Mainly slope-land cropping; sever soil erosion; very poor natural vegetation; gullies grazed heavily by goats

AFTER: moderate slopes are terraced; good yields due to

water conser-vation; steep slopes planted with shrubs/

trees using contour trenches; entire watershed is

disallowed for grazing, allowing vegetation to return

1999: Project site - site preparation for tree planting; earth shaped water harvesting pits to catch run-off; protection ridges along gullies to prevent further cutting

2004: Similar site in the same watershed - water harvesting pits disappear in grass & vegetation

1999: Project site - pits for tree planting on top of hills, protected by stones preventing soil from further erosion

… a similar site 5 years later

Contour planting of black locust trees at early stage of project implementation

… the same location in 2004

Comprehensive watershed treatment in 1999

the same location in 2004

Large-scale Chinese pine plantation in northern Shanxi in 1999

… the same location in 2004 (notable strong grass vegetation returns after grazing ban)

Lessons

1. Planning process2. Participation approach3. Coordination mechanism4. Investment mechanism5. M&E system

1. Planning Process

• Considering interaction of land, water & other natural resources

• Decentralized and participatory• Iterative learning

2. Participatory Approach

• Re-define government role as regulator and service provider

• Communities and farmers are central in rehabilitation programs

• Secured land tenure & other natural resources users rights

3. Coordination Mechanism

Institutional framework:– Among Government agencies– With farmers / private sector /

NGOs– National watershed management

network

4. Investment Mechanism

• Integration and coordination of fiscal resources

• Work in partnership with private sector

• Combine resources with policies

5. M&E ProcessM&E system to inform all stakeholders about: a) socio-economic and environmental impacts of

watershed-based interventionsb) interactions between people and environmentc) long-term changes within the watershed

improve the quality and efficiency of data collection, handling, analysis, and sharing

ensure accountability be cost effective

Innovative approaches: participatory M&E

Conclusion/checklist: climate-smart approaches (WDR 2010)• Mgnt aligned with ecological processes and defined at appropriate spatial

scale• Cooperation among administrative levels, sectors, and line departments;• Broad stakeholders and research centers, in problem solving and decision

making• Enabling legislation and legal framework to support local action• Adaptable legislation and policies to response to new information• Long time horizon for planning and capacity building• Assessment of flexible and reversible measures• Experimentation and learning through policy experiments to inform

management• Full consideration of alternative scenarios and of structural and

nonstructural measures• Mechanisms to understand and challenge assumptions• Explicit communication of assumptions and consideration of uncertainty• Use of information and monitoring to inform policy• Generation of scientific and technical knowledge to develop new practices• Appropriate financing system

Thank You!

For more information, please contact:

Dr. Wendao Cao

World Bank Office Beijing, P R China

Tel: (86-10-58617693); Fax: (86-10-58617800)

Email: wcao1@worldbank.org