Fossil-fuel subsidies matter.

They matter for sustainable development; they matter for government budgets; they matter for the poor who benefit very little; they matter for women and accessing daily necessities such as heating, lighting, cooking and transport; and they matter for the environment in that they work in the opposite direction of a low-carbon future, impede renewable take-off, stifle energy efficiency and dwarf climate finance.  Global pre-tax subsidies amounted to US$480 billion in 2011, whilst post-tax subsidies reached US$1.9 trillion. Reforming and redirecting subsidies will be an important piece of the jigsaw if we are to solve the climate change puzzle.

This report, produced by IISD-GSI provides input to the Nordic Council of Ministers by identifying options and opportunities for increased Nordic cooperation on the phasing out of fossil-fuel subsidies in developing countries. The research explores existing Nordic cooperation efforts in the fields of energy, climate change and extractives, outlines Nordic development trends and priorities, proposes partner countries, identifies potential areas of cooperation, and presents four recommendations for future action. Savings enable governments to manage deficits—they can be redirected at building sustainable energy networks or targeted at social spending.

This report from the Global Subsidies Initiative of IISD was launched in conjunction with the Asia Europe Foundation, at a conference exploring the financing of future Sustainable Development Goals (September 29–30, 2014).

The report finds that fossil-fuel subsidy removal and the subsequent taxation of fossil fuels via carbon taxes and VAT could provide significant fiscal resources to Asian governments in order to support the implementation of Sustainable Development Goals (SDGs) via a “Means of Implementation.” The report estimates that in Emerging and Developing Asia fossil-fuel subsidies account for US$104 billion annually, or close to the OECD’s total aid to the developing world. The report analyzes three areas: the potential savings from fossil-fuel subsidies to fund other more productive and targeted government spending, the impact from the persistence of fossil-fuel subsidies on wider proposed Sustainable Development Goals and case studies from the Philippines and Indonesia where governments have reformed fossil-fuel subsidies and been able to channel part of the savings towards social spending and investment in infrastructure. The reports includes a framework for revealing the links between fossil-fuel subsidies, their reform and opportunities for the financing and delivery of the SDGs. It is released as a working paper produced from the GSI with support from the Asia Europe Foundation and core funders. Comments to the author on the paper are welcomed.

The repository illustrates possible adaptation indicators and their application context, thereby supporting their context-specific formulation.

It systematically presents various indicators for four focus areas:

• climate parameters
• climate change impacts
• adaptation actions
• adaptation results

The examples have been selected from currently proposed national adaptation M&E systems (i.e., they reflect the first generation of indicators). Each indicator has its adaptation relevance, limitations, data needs and sources described. The repository is meant to illustrate possible indicators—their applicability to other contexts needs to be assessed on a case-by-case basis. It is an output of the study on “Monitoring and Evaluating Adaptation at Aggregated Levels: A comparative analysis of ten systems.”

For more information, visit the Adaptation Community website.

Climate variability and change are already affecting food security of vulnerable populations.

Poor communities are particularly exposed to climate shocks, as their livelihoods are often highly climate-sensitive, and resources for coping and adapting to change are limited. Adaptation and resilience-building measures can reduce adverse impacts on food security. To do so requires an understanding of where weaknesses and strengths lie in local, regional and international food systems. In other words, what makes a food system resilient to any shocks and stresses?

This briefing note presents insights into how one can measure and monitor the resilience of food systems in order to better inform food security interventions, based on the application of a new food security and resilience assessment methodology in Honduras and Nicaragua. It also draws recommendations for future food-security assessments in the context of a changing climate by stressing the importance of adopting a systems perspective to food security to encompass the many factors determining that security beyond the farm.

The Chinese government has responded to the challenge of increasing energy consumption and environmental pollution with ambitious targets for renewable energy generation; 15 per cent of primary energy is to be generated from renewable sources by 2015.

This report discusses the trends in renewable energy investment, the role of public finance in the renewable energy industry, the impact of renewable energy subsidies and the international experience of raising revenues from carbon pricing mechanisms to promote renewable energy.

The international context is of direct relevance to policy making in China as it continues plans to develop fiscal instruments that will provide public support to renewable technologies, including wind energy, hydro-electric generation and solar photovoltaic (PV) installations.

The amounts at stake in investment treaty arbitration are very often high. The average claim in investor–state arbitrations based on international investment agreements (IIAs) is about half a million U.S. dollars.

There have been over 50 multibillion-dollar claims, which are increasingly common. At the same time, the number of cases continues to rise. In 2013 alone, investors sued host states at least 57 times under IIAs, bringing the total number of known cases to 568 at year’s end.

In this context, entering into treaties with investor–state dispute settlement clauses carries significant financial risks for governments, particularly developing countries, whose fiscal position can be seriously affected. States are always the respondent parties, never the claimants. In addition, even when they successfully defend themselves, they can incur significant costs, depending on factors that are largely outside of their control, such as the compensation claimed by the investor and the length and complexity of the proceeding. Furthermore, large claims may serve to sustain “threats of arbitration,” increasing the bargaining power of investors in informal discussions with governments to water down regulatory measures or to settle a dispute.

This paper discusses the financial implications of investment treaty arbitrations. It reviews the amounts of compensation claimed by investors from states, and the amounts of compensation awarded when they prevailed on the merits. It also discusses the trend among tribunals to award compound rather than simple interest on the amount of compensation. Next, it looks at three types of arbitration costs in more detail: lawyers’ costs, arbitrators’ fees and administrative costs.

In conclusion, the paper advances potential reforms to investment arbitration in order to contain costs. Among the recommendations are streamlining the arbitration process to reduce legal and institutional costs, improving governments’ defence capacities, and discouraging speculative or inflated claims. Treaties could also provide guidance to arbitral tribunals on the determination of the amount of compensation, the type and level of interest rates on compensation as well as cost allocation decisions. Deeper reform also needs be explored to respond to systemic faults in the system, such as establishing an international investment court or an appeals mechanism, and conceiving alternatives to investor–state arbitration, including at the national level.

This report seeks to contribute to the discussion on innovation and sustainable public procurement (SPP) through the investigation of the use of performance-based specifications (PBSs) in public procurement in the European Union and the United States.

The report examines the benefits and limitations of the use of PBSs at different points in the procurement cycle in different sectors, particularly around their ability to support sustainable development goals and deliver environmental benefits.

PBSs enable public procurers to specify a desired performance level or target to be achieved when they purchase goods, services and infrastructure, which provides a useful tool for the integration of environmental and social considerations into tenders and encouraging private sector innovation.

However, the use of PBSs can ultimately be burdensome for the public authority, as monitoring and verifying performance delivery once a tender has been awarded requires long-term commitment and management. As such, they simply shift the work of the procuring authority from the specifications/bid-writing stage into the evaluation and monitoring stage.

This working paper analysis, developed by Dr. Robert Repetto and Dr. Robert Easton, analyzed the most prominent climate economics assessment model (DICE), and found that recent estimates used by the U.S. and others prove to be too pessimistic about the ability to balance efforts to fight climate change while maintaining economic growth.

The analysis reveals that if major emitting nations, such as the USA, adopt efficient policies to reduce emissions, world output over the period 2010-2050 would expand at 2.28% percent per year and warming would stabilize below a 2 degree increase. That is virtually the same rate, 2.31% per year, at which GDP would grow if global warming were not kept to safe limits. However, in the more protective scenario, emissions per unit of output would decline more than twice as rapidly.

On June 2, 2014, the United States Environmental Protection Agency (EPA) released proposed regulations for regulating greenhouse gas emissions from electric utility generating units in the country.

In the wake of its announcement, the EPA has been emphasizing that its proposed electricity rules will reduce emissions from the country’s most significant source of emissions—power plants.  Conversely, the messaging from the Government of Canada has been that Canada took similar action on coal-fired plants in 2012, and that the percentage drop in emissions from those plants is likely to be proportionately greater than those proposed by Washington.

However, both these perspectives leave unanswered the question of how these policies will affect total national emissions and contribute to mitigation pledges. It is this question that this policy brief attempts to answer.

After decades of international isolation, Myanmar is going through a process of political transition toward democracy.

As part of the reform process, the Government of Myanmar is attempting to attract more foreign investment to the country and has already taken several steps toward achieving this objective. One policy choice facing the government of Myanmar is the decision of whether to enter into investment treaties with foreign governments and, if so, on what terms.

This note examines the legal and policy implications of the Myanmar–Japan Bilateral Investment Treaty (BIT), signed on December 15, 2013. Although Myanmar is already a party to a handful of bilateral and multilateral investment treaties, the Myanmar–Japan BIT is particularly significant for two reasons. The first is that it is the first investment treaty to be negotiated and signed by the transitional government that took power in 2011. As such, it provides insights into how the current government might approach other investment treaty negotiations over the coming years. The second reason is that the Myanmar–Japan BIT differs significantly from recent ASEAN investment treaty practice to which Myanmar is a party.