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Misery in Slow Motion: The Deep and Long Lasting Effects of Drought

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Repeated droughts around the world have shockingly large and often hidden consequences, destroying enough farm produce to feed 81 million people every day for a year, damaging forests, and threating to trap generations of children in poverty, according to a new report from the World Bank Group.

Uncharted Waters: The New Economics of Water Scarcity and Variability presents new evidence on how increasingly erratic rainfall impacts farms, firms and families.  It also shows that although floods and storm surges pose major threats, droughts are “misery in slow motion,” with impacts deeper and longer lasting than previously believed.

These impacts demonstrate why it is increasingly important that we treat water like the valuable, exhaustible, and degradable resource that it is,” said Guangzhe Chen, Senior Director of the World Bank’s Water Global Practice.We need to better understand the impacts of water scarcity, which will become more severe due to growing populations and a changing climate.”

The report found that impacts caused by drought can cascade into unexpected areas.

For families, the effects of drought can span generations.  The report finds that in rural Africa, women born during extreme droughts bear the marks throughout their lives, growing up mentally and physically stunted, undernourished and unwell because of crop losses.  New data shows that women born during droughts also have less education, fewer earnings, bear more children and are more likely to suffer from domestic violence. Their suffering is often passed on to the next generation, with their children more likely to be stunted and less healthy, perpetuating a vicious cycle of poverty.

On farms, repeated years of below-average rainfall not only destroys crop yield — it forces farmers to expand into nearby forests.  Since forests act as a climate stabilizer and help regulate water supplies, deforestation decreases water supply and exacerbates climate change.

For firms, the report calculates the economic costs of droughts as four times greater than that of floods.  A single water outage in an urban firm can reduce its revenue by more than 8%. And if that firm is in the informal sector, as many are in the developing world, sales decline by 35%, ruining livelihoods and stagnating urban economic growth.

Many of the regions most affected by drought overlap with areas that are already facing large food deficits and are classified as fragile, heightening the urgency of finding solutions.

If we don’t take deepening water deficits and the bigger and more frequent storms that climate change will bring seriously, we will find water scarcity spreading to new regions of the world, potentially exacerbating issues of violence, suffering, and migration,” said the report’s author and World Bank’s Water Global Practice Lead Economist Richard Damania“Current methods for managing water are not up to the challenge.  This sea-change will require a portfolio of policies that acknowledge the economic incentives involved in managing water from its source, to the tap, and back to its source.”

The impacts of erratic rainfall ripple through farms, firms and families, sometimes for generations. The report offers proposals for how to tackle these challenges, calling for new policies, innovation and collaborations.  

The report recommends constructing new water storage and management infrastructure, paired with polices that control the demand for water.  Utilities responsible for water distribution in cities also need to be properly regulated to incentivize better performance and investment in network expansion, while also ensuring a fair market return.  The report also noted that when flood and droughts turn into economic shocks, safety nets must be put in place to ensure poor families can weather the storm. 

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Environment

Five things you should know about disposable masks and plastic pollution

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The fight against plastic pollution is being hit by the COVID-19 pandemic, as the use of disposable masks, gloves and other protective equipment soars, but UN agencies and partners insist that, if effective measures are put into place, the amount of plastics discarded every year can be significantly cut, or even eliminated.

1) Pollution driven by huge increase in mask sales

The promotion of mask wearing as a way to slow the spread of COVID-19 has led to an extraordinary increase in the production of disposable masks: the UN trade body, UNCTAD, estimates that global sales will total some $166 billion this year, up from around $800 million in 2019.

Recent media reports, showing videos and photos of divers picking up masks and gloves, littering the waters around the French Riviera, were a wake-up call for many, refocusing minds on the plastic pollution issue, and a reminder that politicians, leaders and individuals need to address the problem of plastic pollution. 

2) A toxic problem

If historical data is a reliable indicator, it can be expected that around 75 per cent of the used masks, as well as other pandemic-related waste, will end up in landfills, or floating in the seas. Aside from the environmental damage, the financial cost, in areas such as tourism and fisheries, is estimated by the UN Environment Programme (UNEP) at around $40 billion.

The UN Environment Programme (UNEP) has warned that, if the large increase in medical waste, much of it made from environmentally harmful single-use plastics, is not managed soundly, uncontrolled dumping could result. 

The potential consequences, says UNEP, which has produced a series of factsheets on the subject, include public health risks from infected used masks, and the open burning or uncontrolled incineration of masks, leading to the release of toxins in the environment, and to secondary transmission of diseases to humans.

Because of fears of these potential secondary impacts on health and the environment, UNEP is urging governments to treat the management of waste, including medical and hazardous waste, as an essential public service. The agency argues that the safe handling, and final disposal of this waste is a vital element in an effective emergency response.

“Plastic pollution was already one of the greatest threats to our planet before the coronavirus outbreak,” says Pamela Coke-Hamilton, UNCTAD’s director of international trade. “The sudden boom in the daily use of certain products to keep people safe and stop the disease is making things much worse.”

3) Existing solutions could cut plastics by 80 per cent

However, this state of affairs can be changed for the better, as shown by a recent, wide-ranging, report on plastic waste published by The Pew Charitable Trusts, and sustainability thinktank Systemiq.

The study, “Breaking the Plastic Wave: A Comprehensive Assessment of Pathways Towards Stopping Ocean Plastic Pollution”, which was endorsed by Inger Andersen, head of the UN environment agency UNEP, forecasts that, if no action is taken, the amount of plastics dumped into the ocean will triple by 2040, from 11 to 29 million tonnes per year.

But around 80 per cent of plastic pollution could be eliminated over this same period, simply by replacing inadequate regulation, changing business models and introducing incentives leading to the reduced production of plastics. Other recommended measures include designing products and packaging that can be more easily recycled, and expanding waste collection, particularly in lower income countries.

4) Global cooperation is essential

In its July analysis of plastics, sustainability and development, UNCTAD came to the conclusion that global trade policies also have an important role to play in reducing pollution. 

Many countries have introduced regulations that mention plastics over the last decade, an indicator of growing concern surrounding the issue, but, the UNCTAD analysis points out, for trade policies to be truly effective, coordinated, global rules are needed.

“The way countries have been using trade policy to fight plastic pollution has mostly been uncoordinated, which limits the effectiveness of their efforts, says Ms. Coke-Hamilton. “There are limits to what any country can achieve on its own.”

5) Promote planet and job-friendly alternatives

Whilst implementing these measures would make a huge dent in plastic pollution between now and 2040, the Pew/ Systemiq report acknowledges that, even in its best-case scenario, five million metric tons of plastics would still be leaking into the ocean every year.

 A dramatic increase in innovation and investment, leading to technological advances, the report’s study’s authors conclude, would be necessary to deal comprehensively with the problem.

Furthermore, UNCTAD is urging governments to promote non-toxic, biodegradable or easily recyclable alternatives, such as natural fibres, rice husk, and natural rubber. These products would be more environmentally-friendly and, as developing countries are key suppliers of many plastic substitutes, could provide the added benefit of providing new jobs. Bangladesh, for example, is the world’s leading supplier of jute exports, whilst, between them, Thailand and Côte d’Ivoire account for the bulk of natural rubber exports.

“There’s no single solution to ocean plastic pollution, but through rapid and concerted action we can break the plastic wave,” said Tom Dillon, Pew’s vice president for environment. As the organization’s report shows, “we can invest in a future of reduced waste, better health outcomes, greater job creation, and a cleaner and more resilient environment for both people and nature”.

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ADB Finances Largest Private Gas Power Plant to Improve Access to Energy in Bangladesh

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The Asian Development Bank (ADB) has signed a $200 million financing package with Reliance Bangladesh LNG and Power Limited (RBLPL) to build and operate a 718-megawatt (MW) combined-cycle gas-fired power plant in Bangladesh. The project will ease ongoing energy shortages and drive further private sector investments in the country’s power sector.

The assistance comprises a $100 million loan from ADB and a further $100 million loan from the Leading Asia’s Private Infrastructure Fund (LEAP), which will be administered by ADB. The financing agreement was signed by the Director of Infrastructure Finance, South Asia, Central Asia, and West Asia at ADB’s Private Sector Operations Department Shantanu Chakraborty, and Chief Executive Officer of RBLPL, Ranjan Lohar. The project is cofinanced by the Japan Bank for International Cooperation as well as four commercial banks, with insurance for the commercial banks provided by Nippon Export and Investment Insurance.

“This highly energy efficient project will help address a widening gap between the demand and supply of electricity in Bangladesh, which is critical for continued industrial and economic growth,” said Mr. Chakraborty. “ADB has been instrumental in mobilizing crucial commercial financing, incorporating best practices in environmental and social standards, and establishing precedents for future financings of similar large scale projects in Bangladesh by boosting investor and lender confidence.”

“RBLPL is privileged to have the support of international development banks including ADB for this power plant project in Bangladesh,” said Mr. Lohar. “Through the project, RBLPL aims to contribute towards the country’s robust economic growth.”

Despite a significant increase in installed generation capacity in Bangladesh over the past decade, demand for electricity is not yet fully met through domestic supply. To help close the gap, the Government of Bangladesh continues to emphasize greater private sector investments in power generation. The plant will be located on the banks of the Meghna River, southeast of Dhaka. It will boost national generation capacity by about 4%, reducing the need for electricity imports and the use of environmentally harmful and expensive fuels like coal and oil. ADB has been involved in this project as a leading anchor lender since the early stages of its development.

LEAP was established in 2016 with a $1.5 billion capital commitment from the Japan International Cooperation Agency. It is focused on delivering high quality and sustainable private sector infrastructure projects that reduce carbon emissions, improve energy efficiency, and offer accessible and affordable health care, education, and communication services to ADB’s developing member countries.

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South Africa: COVID-19 pandemic raises the urgency of structural reforms

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South Africa responded swiftly to the COVID-19 pandemic, but the sharp drop in activity adds to long-standing challenges and raises the urgency of structural reforms, according to a new OECD report released today.

In the latest Economic Survey of South Africa, the OECD indicates that the nationwide lockdown enacted in March 2020 reduced activity in mining and industry while bringing the tourism, entertainment and passenger transport sectors to a near-standstill. Growth has collapsed, unemployment is rising and more will need to be done to strengthen responses to the crisis and ensure that the recovery brings about sustainable and more inclusive development.

The Survey recommends a wide range of measures to improve the quality of and access to health care and support businesses and people. This includes lowering interest rates; providing temporary financial support to households and businesses; and extending financial relief in sectors hard hit by the crisis, particularly if there is a renewed virus outbreak later in the year.

The pandemic adds to South Africa’s long-standing challenges, the Survey says. Under a so-called double-hit scenario, a new outbreak affecting South Africa and its trading partner countries will curtail exports, deepening the recession to -8.2% in 2020, and limiting the recovery in 2021 to GDP growth of just 0.6%. In the single-hit scenario, where a second wave of the virus is avoided, economic activity will still fall by 7½percent in 2020 before picking up progressively to growth of 2½percent in 2021.

Presenting the Survey today, OECD Economics Department Country Studies Director Alvaro Pereira said: “South Africa cannot afford to delay reforms. It is essential to undertake reforms to restore long-run fiscal sustainability and growth, while continuing to support the economy in the short run.”

Macroeconomic and structural policies are needed to put growth on a sound footing going forward. Bold fiscal measures are needed to curb spending pressures and restore fiscal sustainability, including taking steps to reduce the government wage bill and transfers to state-owned enterprises. Structural policy reforms to boost competition, restructure state-owned enterprises, improve the regulatory framework and improve public investment in transport infrastructure, skills and education are also called for.

The pandemic has demonstrated that further action is needed to build an inclusive social protection system. The Survey suggests South Africa consider additional means-tested support for households below the food poverty line, better coverage for informal workers and a gradual increase to the public financing of health care, through a form of public insurance.

The tourism sector was hit hard by the pandemic and resulting containment measures, yet it has good potential to contribute to the economy and future employment growth, the Survey said. Implementation of electronic visa programmes for emerging target markets and increasing the number of countries falling under the visa-waiver agreement will boost arrivals, while a reduction of red tape and regulatory burden for entrepreneurs and small enterprises will improve market access. Investments in transport and tourism infrastructure have to be aligned to connect tourists to places.

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