Environment and Development: the contributions of Hans Opschoor

You first came to ISS in 1996 when you became Rector of the Institute. What were the reasons for your interest in ISS? What were the most important issues you had to deal with during your rectorship?

I came to ISS in 1996 and served two terms as Rector (from 1996 till the end of 2004), seizing the opportunity to make changes in management and to further my own research agenda on global environment and development. I found ISS to be an extremely stimulating place: it is a truly international institute because of the origin of both students and staff and it is an ideal place to learn and gain perspective. ’Things look different depending on where you stand‘, as Gunnar Myrdal reminds us, and ISS offers an excellent observation point. As Rector, one of my main objectives was to move ISS away from being an educational institute and to focus on international capacity development and research. I felt we had to specialize in what we do best: multidisciplinary research matched by an attempt to produce research that matters, i.e. to understand and also to change things. We started to move towards a policy aiming at the development of research potential arising from experience gained in a range of projects in the global South. This research, which would be policy relevant and scientifically sound, would radiate back into quality capacity development and teaching.

It is now once again a time of change for ISS. What is your own perspective on the merger with Erasmus University Rotterdam (EUR)?

This merger represents a challenge and also an opportunity for ISS. The challenge is to raise interest in EUR for the type of work we do and in issues related to global development. Potential opportunities arise from potential linkages between ISS and the social sciences and medical faculties of EUR and, more in general, from the possibility of ISS being able to expand its research interests into areas where EUR is already present. ISS can certainly add an international perspective to the rest of EUR. In this context, I am thinking about issues such as poverty and migration in the Netherlands itself. Further complementarities arise from the fact that EUR does not have a development economics component anymore, while this is a strong field for ISS.

You came from being the director of the Institute of Environmental Studies (IVM) of the Free University Amsterdam (VUA) to ISS. Can you tell me how environment and development issues came to be your main interest?

I started my career as a welfare economist. In the 1970s my work already focused on environment and development, and especially on poor people’s coping mechanisms with respect to environmental stress. In 1971 I started working on what later would be called environmental and ecological economics. This research resulted in several studies on themes such as environmental spaces, focusing on resource origin and resource use to highlight how asymmetries are bound to create problems. Other themes relate to irreversibilities, inequality and scarcity, biodiversity, agriculture, and more recently, of course, to climate change.

In the 1980s I became Director of the Institute of Environmental Studies. The main concerns there at the time were European environmental issues, but development issues were increasingly recognizsed as being important too. The focus of my attention has been on the costs and benefits of climate change, on adaption and mitigation. One continuing concern was always how to share the carbon space across individuals and countries and how to distribute responsibilities for staying within these limits. Also, I worked on issues in the field of environment and poverty.

Your contribution to the Intergovernmental Panel on Climate Change (IPCC) reports in 2001 and 2007 brings us to one of the main issues in the current debate on environment and development: climate change.

The issue of ‘shared but differentiated responsibilities’ arose from the 1992 Rio Conference and was incorporated in the United Nations Framework Convention on Climate Change (UNFCC) in 1992. The Kyoto Protocol should then have applied the concept, but the mitigation measures for the North and adaptation provisions for the South were far too modest. Now we are in the middle of negotiations for the post-2012 agreements. Certainly China and India should be part of the deal, but the question remains: who should pay, and how should we pay for the costs associated with any agreement? How is the principle of differentiated but shared responsibilities going to work in an agreement that is ambitious in terms of both mitigation (i.e. greenhouse gas emissions abatement) and adaptation (i.e. adjustment to climate change) measures?

Experiences of local development and environmental objectives have been associated with the Clean Development Mechanism (CDM) initiative, which was a Brazilian proposal inspired by northern actors. Unfortunately the implementation of these projects was flawed. While looking at efficiency measures (i.e. at achieving emission reductions in the least expensive way) the instrument basically allows the North to grab the cheapest abatement options that are often available in developing countries. On the receiving end, most initiatives are being undertaken by China, Brazil and India, but very little by African countries. Eventually, it is the countries that are growing anyway that get their investment in new/clean technologies supported by the North. A final problem is that CDM deals only with the state and with private enterprise; local perspectives are neglected and the bottom-up approach has remained theoretical at best.

Another scheme to involve and make developing countries partners and beneficiaries in the policies to fight climate change is emission trading with a cap and distribution mechanism. The problem is that the current experience within the EU is not convincing: there were technical problems since the emission rights were given for free and the whole trading scheme amounts to a commoditization of pollution. Market mechanisms might not work anywhere: if they failed in Europe, that is often considered the top notch in terms of environmental policies, what can we expect from China and India? When societies developed markets in the north, economists qualified markets by studying so-called ‘market imperfections’: market failures including externalities and a lack of concern for future generations. Traditionally we turned to government policies (e.g. taxation) as ways to correct these problems, while in a neoliberal approach more markets are being established to solve the problems created by already existing markets.

Many poor people are not familiar with market mechanisms and we need to understand their perspectives and start to think and build policies that are based on collective action. The issue here is to stop thinking as mainstream economists applying our science and our theories in a deductionist fashion by seeing every problem through the prism of markets. The English saying goes that ‘if you only have a hammer everything looks like a nail’. If we economists only use neoclassical economics and market theory, we are only going to see market failures that can be corrected by market-based adjustments.

In any case, trading mechanisms will result in pricing carbon that, in turn, will have an impact on income distribution. We are not paying enough attention to the distributional effects that these mechanisms can have, especially at the individual level. One crucial issue here is consumption and emission related to the satisfaction of basic needs. These emissions should be seen as entitlements whereas emissions related to luxurious consumption and wasteful production modes should be the ones to abate. Unfortunately, there is no distinction at the moment, nor is there is a clear debate about the distribution of responsibilities within countries. Looking only at nations obscures the fact that in developing countries elites are contributing to emissions.

The UN initiative Reduced Emissions from Deforestation and Degradation (REDD) is meant to create global environmental benefits, but it displays the same handicaps mentioned above. There are issues related to the consideration of indigenous people and their territories that should be the subject of new environmental regulations. The new constraints should be matched by compensation, but it is unclear how things will play out in practice. The mechanism does not consider people’s needs and there are only state to state deals. There can, however, be no trickle down of benefits – from the state to poor individuals – unless there is prior assurance that local people will benefit and that no damage to their livelihoods will be done. An upfront developmental orientation is needed, but missing.

The current DevISSues is focused on migration: how is migration linked to the environmental issues you have been studying?

Migration can be understood as an extreme response option to stresses, including environmental stress. The number of people that might choose this adaptation measure and ‘decide’ to migrate because of climate change could reach anywhere between one and three billion over the next 50 years. The main forces will be drought in Africa and the melting of ice caps in the Himalaya regions that, in turn, will affect major rivers in China and India, causing water scarcity problems and a rise in sea levels.

Given the potential size of this migration, the issue needs to be taken very seriously as even forecasts of ‘only’ 500 million people migrating would have enormous consequences. In developing countries in particular, the poorest have the least possibilities to adapt and migration might be their only option.

Alternative adaption strategies can be encouraged directly (e.g. building dykes to avoid floods) but also indirectly (e.g. developing local and regional capacities to cope with floods and storms). It is development per se that helps the poor to adapt, hence measures that are conducive to lifting the poor out of their poverty are ultimately helping them to cope and adapt to environmental stresses. Indirect measures to discourage migration include developing capabilities to predict climate change effects and measures to facilitate migration. Other examples include insurance (community-based and national) to deal with damage caused by extreme weather events. In any case, we know that people will migrate and some migrations might even be a result of climate-related adaption strategies (e.g. dam building).

The environmental problems driving migration are exacerbated by increasing competition for land due to high energy needs in the north. Energy use is essentially an addiction and, accepting that our energy systems are not sustainable, we need to look more closely at carbon-free and carbon-poor alternatives: sun, wind, nuclear, biomass.

Biomass in particular is problematic, especially when its production competes with food production and forest space. There are different generations of biomass: first (crops), second (dead wood, residues and shrubs) and third (algae). The first one in particular is problematic as the crops it depends upon (maize, corn, sugar cane, rape seeds) and the diffusion of the use of these crops for energy purposes, will certainly result in environmental and developmental problems. Second generation biomass and third generation might have more potential to provide for some energy needs without adverse impacts on development. Indeed, some second and third generation biomasses can easily satisfy the energy needs of marginal communities and contribute to decreasing oil dependence.

Now scarcities and competition for land are manifest when there are price hikes of primary commodities, but inevitably these problems will become more prominent in the future.

To conclude, what do you think are the upcoming issues for academics interested in environment and development?

Some of the issues I mentioned pose challenges that will need engaged research for a number of years: I’m referring to all the issues linked to climate change and energy and especially the issues of land and water scarcity. We need to look at how globalization influences these phenomena and shapes institutional responses.

Now that the neoliberal paradigm is contested in terms of its environmental and developmental outcomes, a pending issue is to analyse the implications in terms of institutional structures beyond market mechanisms. Last year’s economic crisis has lead to a requirement for new institutions, new responses and a new developmental model. Unfortunately, the G20 did not rise to this challenge, merely focusing on marginal regulation changes and strengthening existing institutions. We need to regain the control of markets that was lost with globalization, that is clear. The challenge is how to do this: how to build mechanisms to substitute some of the functions of markets? We cannot look back, because the environmental and socioeconomic challenges we are facing are new. We need genuinely innovative solutions that can help us structure the institutions able to face contemporary developmental challenges.

Hans Opschoor is Professor of Economics of Sustainable Development at ISS (opschoor@iss.nl).

Lorzenzo Pellegrini is lecturer in Development Economics at ISS (pellegrini@iss.nl).