By threatening the health and livelihoods of populations across the globe, climate change stands to undermine human development and worsen poverty. Traditional bilateral and multilateral aid and development programs must now be reconsidered. In a hotter and more volatile world, emissions-intensive export industries can no longer form a just basis for development, and new attention is required to building resilience and adaptive capacity.

Resilience Building
Increasingly, major non-government organisations are researching the impact of climate change on poverty alleviation, in particular the Climate Centre of the International Red Cross and the UK based Working Group on Climate Change and Development. From this work a number of case studies of low technology, grass roots programs to increase food security, water security, local disaster preparedness and emergency response are emerging.[1]

These case studies indicate that funding for community managed resilience building or adaptation programs is crucial to averting the displacement of vulnerable communities. Increasingly, it can be expected that aid will need to deliver ecological benefits where they directly help affected communities. In many instances, good land management will reduce the direct impacts of global warming driven events: mangrove regeneration programs in Vietnam, for instance, provide a natural flood barrier during the typhoon season (Red Cross 2002 World Disasters Report).

International financial institutions and governments are increasingly supporting climate change and disaster preparadness programs, although such programs are slow to deliver on-the-ground outcomes of increased resilience and preparedness. Well resourced and long term projects have potential to establish alternative energy supplies, monitor local climatic conditions, rigourously measure any greenhouse gas emissions and build community resilience to changing weather patterns.

The Red Cross Climate Centre recommends a seven-step process for reducing climate risk in aid and development projects. This process starts with an initial assessment of climate variability in the project area, followed by awareness raising among project participants and partners. Importantly, The Red Cross Climate Centre also recommends advocacy programs to highlight the impact of climate change on vulnerable peoples, and the need to slow global warming.

Phase out Climate Intensive Development
Funding resource extraction and support of export markets across the Global South has historically been a major activity of many international financial institutions, government aid agencies and export credit agencies. Greenhouse gas emissions from industrial consumption of fossil fuels is now widely recognised as the cause of anthropogenic climate change. It is clearly now inappropriate to pursue emissions intensive development as the basis of poverty alleviation.

In 2000 the World Bank President James Wolfensohn commissioned the Extractive Industries Review (EIR) to evaluate how much or whether extractive industries (oil, coal and gas) contribute to poverty alleviation. After a two-year consultation process directed by Dr Emil Salim, a former director of Indonesia's largest coal company, the EIR was released. Itrecommended that several reforms be adopted to ensure that the World Bank be able provide the enabling conditions to meet its goals of poverty alleviation and sustainable development, including that it:

• Immediately cease funding coal projects,
• Phase out investments in oil production by 2008,
• Increase investments by 20% in both renewable energy and other greenhouse gas emissions reductions initiatives such as energy efficiency,
• Integrate human rights protection into all operations and programs in line with international law and obtain free, prior and informed consent from Indigenous peoples affected by projects.

Disappointingly, the World Bank did not accept these recommendations and continues to fund fossil fuel projects. In 2004 analysis of the World Bank's funding activities by the Sustainable Energy and Economic Network (SEEN) found that the Bank on average approved a fossil fuel project once every 14 days between 1992 and 2002. Its renewable energy lending is overwhelmed by fossil fuel financing by a 17 to 1 ratio.

Australia's export credit agency, Export Finance Insurance Corporation (EFIC) is tax-payer financed agency that underwrites loans to aid and development recipients and provides credit insurance and risk insurance. AidWATCH and the Mineral Policy Institute found that between 1993 and 2003, EFIC has backed fossil fuel projects over renewable energy projects at a rate of more than 100 to 1 with $7.2 billion dollars invested in fossil fuel (coal) exports in the eleven year period. This is not an uncommon pattern: half of all new greenhouse gas-emitting industrial projects in developing countries have some form of export credit agency support.

The principle objective of aid and development agencies is to assist the world's most impoverished communities to end poverty and promote human and economic development. Support for ultimately destructive fossil fuel projects is inconsistent with this goal, and should be replaced with support for genuinely sustainable social and economic development.