Jim Yong Kim

'We Need a Clear Signal'

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World Bank Chief Jim Yong Kim speaking in Lima, Peru, at an economic forum in early October.
  • Why it matters

    Why it matters

    The 2015 United Nations Climate Change Conference is taking place in Paris from November 20 to December 11.

  • Facts

    Facts

    • More than 168 states are presenting national climate protection goals in Paris this month.
    • The conference aim is to create a legally binding climate agreement signed by every country.
    • Countries have already agreed to check on CO2 goals every five years.
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  • Audio

    Audio

  • Pdf

Since 2012, Jim Yong Kim has headed the world’s largest development institution, the World Bank. He was born in 1959 in what was then still desperately poor South Korea and grew up in the United States. He is the first World Bank chief to hail from neither the policy nor the financial sector.

Dr. Kim is a physician and founder of the aid organization “Partners in Health.” Prior to his appointment to the World Bank, he worked for the World Health Organisation (WHO) and was the president of Dartmouth College.

The World Bank president sat down with Handelsblatt to discuss the two-week United Nations climate change summit, which began in Paris on Monday. He also discussed global poverty and his bright outlook for the future.

Read a summary of this interview.

Handelsblatt. Mr. Kim, the World Bank’s mission is to fight poverty. Why is it making climate change such a big focus of your efforts?

Jim Kim: We just published a report on the connection between poverty and climate. And the estimate is that if we don’t take strong action on climate change by 2030, we’ll have an additional 100 million people living in poverty.

How have you come to this conclusion?

Three factors have a huge impact on people living in poverty. We already know that access to water is going to be a major problem. First of all it will have an effect on agriculture and the inability to grow the basic food that people in Africa will need. And water does not just affect agriculture but health. Diarrhea and Cholera outbreaks will increase because of an inability to access clean water. With the changing micro environments the number of people at risk from malaria too will expand. So health is the second factor. The third factor is natural disasters, which hit poor people particularly hard. Every time there is an extreme weather event in Mozambique, the outcomes are disastrous. There are no water management systems, no dikes.

But wasn’t China particularly successful in fighting poverty without doing anything about climate change?

What we are experiencing now is the fundamental shift between economic growth and emissions. Yes, China has burned a lot of coal and lifted 600 million people out of extreme poverty. There is no case like it. But if you look at the current ambition to fight climate change, one can see the carbon emission reduction goals for China are enormous. Moreover, they have said that in 2017 they want to enter into a nationwide carbon trading program. I know that this is going to move markets.

Tackling climate change is entirely related to tackling poverty – poverty drives many different phenomenons.

Up until this point Beijing has merely announced such changes though…

Not just. I had my first conversation with the Chinese leader about CO2 in February 2013 during the G20 meetings in Moscow. Back then, air pollution was so bad that even the Chinese themselves said, “We have to change our path to transform.” What we see is a willingness to fundamentally transform how they deal with carbon. While it is hard to think about a solar and wind-based approach in many parts of the world, I don’t think we’re that far away from it.

The important question is how expensive this green network of energy supplies will be.

Even in the three and a half years that I have been here, the price has come down dramatically. The most important message is that yes, everyone deserves access to development, and there are opportunities for us all to decouple industrialization from fossil fuels. That’s why the conference in Paris is so important. We need a clear statement that the states are committed to change.

Paris is still in shock. Are you worried that the dangers of terror will overshadow the long-term risks of climate change?

This is a clear threat for countries all over the world. We saw it not just in Paris but in Turkey and with the recent downing of a Russian plane in Egypt. From my perspective what is clear is that we don’t have simple answers to why this happened. It is not just about ideology, religion or poverty because the causes of this problem are complex. It’s a mix of all these things. Every different terrorist has their own motivation.

What came out of the G20 was that we need to tackle these issues together. We need to be innovative to create livelihoods. We have to tackle the ideological issues. We have to give voice to the Muslim people who say this is not their version of Islam. There were many conversations going on. At the same time, we never lost sight of the climate change issue.

Do you think that global warming is a security issue? Are today’s refugee streams just the messengers of future climate crises? 

There are forecasts that say that the Gulf region will be uninhabitable by the end of the century. Can droughts, hunger and disasters bring about instability and conflicts? We have to assume that they do. For us, tackling climate change is entirely related to tackling poverty – poverty drives many different phenomenons. And even if the fight against climate change is successful, we will experience global warming – more droughts, floods and the loss of farmland.

So are you saying: adaption instead of prevention?

Not instead but as well as. We need to decouple growth from emissions but at the same time, we need to invest in adapting to the changing climate conditions. There is a growing consciousness for this issue. The developing countries are telling us: We need help.

The goal of the community is to reduce global warming to 2 percent. The current emissions goal would increase global warning by 3 percent.

2.7 degrees to be exact…

That won’t make the situation on earth any better. Climate experts such as James Hansen warn that even the 2 percent goal is a recipe for disaster in the long term.

Already at .8 degrees we are seeing the number of extreme weather events going up… if you look at El Nino, the coastal waters are 6 degrees warmer than usual. This is the warmest temperature we have had in over 50 years. We are already seeing the consequences: forests burning down in Australia, rainfall in Chile, like we have not seen in 80 years. Of course, not every weather phenomenon is associated with climate change but there is no question that oceans have absorbed an enormous amount of CO2 and water temperatures are rising.

 

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Source: Reuters

 

Has the critical point been reached?

We definitely don’t have any more time to lose. We need a very, very ambitious plan. But there is also a lot of potential, so many great opportunities from which we can profit. The costs of solar energy and wind are decreasing. There are new ways to get energy in a geothermal way. Experts who have built geothermal platforms in Iceland are developing similar projects in Ethiopia. Or let’s look at the Philippines. There are households generating solar energy on their roof tops and save money that way. In Bangladesh there is the biggest project for solar cells in the world.

You sound very optimistic.

Of course there is enough to do. We need to find an adequate price for CO2. Politically that is hard to do. But one and a half years ago we did not think that so many companies would charge a price for CO2, even energy companies. We have come very far. Who would have thought that more than 168 states would present national climate protection goals. The fact that this is happening is giving me hope that we will get ahead in Paris and that we will form a base on which we can then continue our efforts.

What does that mean concretely?

There is an agreement whereby every 5 years we’ll check whether countries are on track with their climate change goals. I am convinced that as soon as we create new markets, there will be a push of innovation leading to developments that we cannot even dream of today. That’s what it’s about at the core: it’s not about agreements and contracts but about generating market forces so that everyone says: “It’s in the interest of my family, my company and my country to look for the most efficient CO2 solutions.” There are many people who are engaged in climate protection because they are convinced that they are doing the right thing. But then we will only get this additional bonus if we make economic sense of this first.

Are you concerned about the ongoing debate about climate change in the United States? Other nations are concerned the U.S. may not to keep its promises if a Republican wins the election in less than a year.

As you know, I studied science. The consensus about whether climate change is man-made is stronger than any other scientific debate. Only in a few science questions is there a 97 percent consensus of experts about the relationship between A and B. Research from climate change is therefore not up for discussion.

You should try and tell the Republicans that.

I don’t want to dispute that there is a debate in the United States. But what we will see is that American companies discover where the market is going. This process is already happening and will accelerate. I met a company founder in India who sold solar panels at a very low cost to villages. I asked him: where did you get these panels from? He said, “From Ohio.” But aside from what a political group wants or does not want: research is pointing us in one direction and the markets are shifting and when that happens it is in everyone’s interest to meet the demands that will come.

Is there not a billion-dollar risk for the finance industry here? The shares of oil and coal companies might plummet if the world takes climate change seriously. Their reserves would be worthless. Insurers and pension funds could run into problems.

My friends in the finance sector are viewing the developments of climate politics very closely. But the moods of the markets are hard to predict. It is not about destroying someone’s business model but to do your share on the planet and to save those who are mostly affected by climate change.

This is how it works: if people think about a future that involves green energy then they are thinking about a future with dim lights. They think that their basic needs are not met and that their laptops’ batteries are always empty. They doubt that it is possible to decouple growth from CO2 emissions.

What are you expecting instead?

I see bright future literally and figuratively with enough electricity for everybody. We will be able to perform in a way we cannot even dream about today. In Africa, they are thinking about a green rampart to stop the deserts from expanding. This is a future that we can create if we make the right decisions.

 

The interview was conducted by Moritz Koch. To reach the author:koch@handelsblatt.com.

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