Integrated Approach to Climate Change in Bangladesh Jed Shilling, Chairman Board of Trustees DFID -- October 7, 2009 You cannot solve the problem with the same thinking that created the problem Albert Einstein

Why We Need Systemic Tools Bangladesh faces serious challenges New challenges need to be addressed by innovative new methods Conference in Bellagio last year demonstrated Bangladesh had done serious work on climate change and sought new tools to apply better policies We will introduce an innovative and effective tool to help address these issues

Bellagio Conference Results Meeting of experts in Bangladesh sponsored by Rockefeller Foundation and BCAS Summarized the work on climate change done by Bangladeshi experts and the challenges Recognized the need to understand the cross- sector effects of climate change impacts and of the country’s policies Concluded that a systemic model was needed to analyze alternate policies and assumptions about climate change, and recommended T21

Bangladesh’s Challenges Achieving sustainable development Assuring benefits distributed to significantly reduce poverty Dealing with Climate Change impacts to reduce the risks and costs –Take account of cross sector impacts –Address increasingly complex issues –Promote more cooperation

Why a Systemic Approach? Conventional analyses rarely look beyond the sector specific and beneficial results Activities in any sector can have effects, direct and indirect on other sectors We now face broader systemic problems –Economic activities affect society and the environment -- Pollution and climate change –Social activities affect the economy and environment -- Migration and land degradation –Environmental factors affect the economy and society -- Floods and droughts and heat waves It may be years before the impacts are evident, but we can determine that they are coming and be precautionary

Systemic Example

We Need to be Careful

To Avoid Unexpected Results!

The Millennium Institute MI was established in 1983 to promote innovative, holistic, long-term strategic planning MI’s Goals are to help reduce poverty, increase sustainable growth, and improve living standards MI achieves this through Threshold 21, which Is an innovative tool for better strategic decision making Helps convert strategic visions into achievable, sustainable development plans and investment programs Builds capacity of the users to apply the model to achieve their goals sooner and avoid negative side effects Incorporates stakeholders’ concerns into the process

System Dynamics Modeling The Global 2000 Report raised serious issues about the lack of tools for integrated analyses Sector and macro models did not address cross sector issues, and still typically don’t “Discovery” of System Dynamics This led to the invention of the THRESHOLD 21 Model and application in many countries Continued innovation added sustainability issues, MDGs, PRSPs, Climate change, energy, food, risk factors, etc. Support for private sector planning -- GM Application to Green Economics issues -- WWF, UNEP,

MI Around the World T 21 Countries MI Partner MI Head Office M 3 Countries MEG Countries

Range of Economic Models Political Economy and conceptual models that try to explain basic relations Linear models and Econometrics Accounting frameworks: RMSM, MTEF Matrix models: I-O, SAM, and CGE Sector models: MARKAL, WEM Broader Systemic models: T21

The Threshold 21 Approach System dynamics methodology  Reflects observed real world relations  Based on existing sector analyses  Analyzes cross-sector links and feedback loops T21 is composed of three main pillars  Economic -- SAM, key market balances, and production  Social -- dynamics in population, health, HIV/AIDS, education  Environmental -- area specific issues and information Adapted to priority goals and vision for each individual country, based on its own data, structure, and patterns of activity Calibrated against history to provide reality checks and learn more Generates multiple medium-to-long-term scenarios

The Basic T21 Structure

The Key Connections in T21

Threshold 21 Advantages Powerful and fully integrated tool helps understand the full range of effects of policies to achieve your goals Based on real-world causal relations across economic, social, and environmental sectors, not just on theory Scenarios illustrate options to see how different policies help achieve medium to longer-term objectives Sector detail integrated into holistic framework Promotes productive dialogue among different stakeholders to build broader support Fast, User-friendly, Transparent

Threshold 21 Experiences Malawi -- Coordinating policy makers to reach consensus on national strategy Guiana -- Spreading the benefits of Structural adjustment to help the poor Mozambique -- Incorporating stakeholder views to prevent negative side-effects Mali -- Demonstrating what is needed to achieve targets China -- Food security, energy, GHG emissions USA -- Energy, Industrial security UNEP -- Integrating Green sectors into a comprehensive Green Economy

How T21 Is Applied To help achieve MDGs Deal with climate change issues Address energy and food security For risk analysis

Achieving the MDGs Tracks these non-economic elements of well- being overall, by region, and income level Incorporates their interactions and relations across sectors Identifies synergies in achieving goals and coordinating policies to get best results Analyzes costs and benefits of supporting these goals in relation to other options and overall development Demonstrates how targets are being achieved

Dealing with Climate Issues Water availability, source, and pollution Sea Level rise Land use, degradation, forest change Natural disasters: impacts, proactive and reactive policies, etc. Social protection Coordination of programs in different sectors Testing effects of different assumptions about rates of climate change

Bangladesh Climate Issues Water Challenges Agriculture Challenges Health Challenges Social challenges Economic Challenges Regional Challenges

Food Security Examines domestic production options for both in relation to adaptation and mitigation Considers land degradation, water availability, and pollution issues Analyzes price sensitivity and relation to trade Examines means of increasing domestic production sustainably and effects on jobs, etc. Tests how increased domestic production can improve development over time and at what cost Analyzes risks and means of dealing with them

Energy Security Examines benefits and costs of increasing energy efficiency Illustrates sensitivity to external shocks Examines application of more renewables Analyzes options to reduce energy demand without diminishing development Tests risks of energy shortages

Risk Analysis Future is unknown and not predictable Bangladesh faces risks from shifts in structure, trends, and exogenous factors, which can be tested in scenarios T21 can analyze risks by Monte Carlo estimates, by assuming exogenous shifts, by endogenous structural change, confidence parameters, or by including long-term limitations, e.g. on resources Impacts are based on previous experiences or specific studies These risk scenarios help identify where adaptation, mitigation, or precautionary measures are needed and what their costs and benefits will be

Systematic Analysis of Issues Test different assumptions about rate of climate changes Examine the effects of policies in one sector on the others, –Water on agriculture, land, and health –Infrastructure on food and energy security and urbanization –Migration on productivity and civil security Economic, social, and environmental costs and benefits of different programs

Data for T21 Uses data from existing sources, other models, special studies, etc. for economy, society, and environment Uses inputs from local experts on data and relationships Structuring and calibration of model helps identify data inconsistencies and gaps T21 organizes relatively complex data into more transparent and easily understandable structure We have been able to gather necessary data for wide range of countries

T21 Application Process Information collection -- data and real world relations Local capacity building -- modelers and users Stakeholder involvement in design and application Testing and calibration with local experts Dialogue promotion with different parties Transfer of ownership and use of model

T21 Values Learn a lot in building model Helps bring together stakeholders and provides a common transparent, non-partisan language Calibration builds confidence in reliability of model representing the real world Long term view of results across sectors Readily modified to address new issues, add new information, and examine new goals Transparent and easy to use as Weishuang will demonstrate

Thank You for Your Attention Questions and comments are welcome

Our Experience Sustainable strategic development, customized models, and reports fo over 45 countries Islands: Jamaica, St Lucia, Cape Verde, Mauritius, Poverty, MDGs, and job creation: Ghana, Mali, Malawi, Mozambique, Jamaica, Bhutan Energy: USA, North America, China, Denmark, Mozambique, Jamaica, Ecuador Education and Health: Ghana, Mali, Malawi, Mozambique, Swaziland, Thailand, Malaria, HIV/AIDS Environment: Papua, Mozambique, Bhutan, China Natural disasters and External shocks: Jamaica, Mali, Mozambique, USA, Denmark Current activities: Swaziland, Mauritius, Senegal, Ohio, Maui, Lollands, China, USA, ECOWAS, UNEP Green Economy,

T21’s Analytic Strengths Highly flexible and readily adapted to each user’s issues Integrates the best available sector models and other sources of information and helps improve data consistency Combines economic, social, and environmental factors into a single holistic model where most variables are endogenous Based on real experience, not text book based solutions Generates scenarios to compare different ways to achieve goals, monitor progress, and evaluate results across all sectors Supports full cost-benefit analyses Identifies tipping points and other risks related to climate change, external factors, and possible shocks

T21’s Operational Strengths Helps understand the real development processes and what is needed to achieve the user’s goals over long time horizon Easily updated to include more recent data, new sectors or issues, and other strategic factors Shows cross-sectoral feedback; unintended consequences on the society, economy, and environment; long-term structural changes over time; and non- economic benefits and risks Helps design better policy combinations and investment programs to achieve strategic goals, sustainable development, Graphic and tabular outputs make it easy to show, compare, and analyze results Tracks and shows the causal relations producing results, which helps identify where mitigation is needed

T21’s Functional Strengths Provides a transparent tool to unite various parties around consistent policies and build support for necessary actions. Helps link short- medium- and long-term planning to assure more sustainable policy choices Supports cooperation among stakeholders at the planning, technical, and implementation levels Identifies needed behavioral changes that influence society, economic, and environmental spheres. Generates a very positive return on the investment in this innovative, dynamic process Provides scenarios of likely results, not perfect projections

“MI’s integrated dynamic models have been vital for GM’s sales forecasts” Paul Ballew, GM “MI’s long-term, integrated perspective is essential” Pablo Guerrero, World Bank “MI’s T21 analytical tool is essential for effective national development strategies” Ed Cain, Carter Center Fascinating! David Cohen, Counterparts International If only we had known such a tool existed…. Chorus of planning experts from 11 countries in Southern Africa We need to use this tool at the Headquarters, in our embassies and help our country partner acquire it… Dutch Ambassador Ton Boon von Ochsen I want that T 21 planning team in my office… Président Amadou T Touré, Mali It has been my dream since ten years to get the the POIJ departments to work together…now its happening with T21; With T21 I can see team building and networking across the ministries and government agencies and effective communication Wesley Hugh, Director Planning office Jamaica What Partners and Clients Are Saying