The policy challenges of green rural transformation for Asia-Pacific emerging and developing economies in a post-COVID world

Rural transformation is a process of comprehensive societal change whereby countries diversify their economies and reduce their reliance on agriculture and other primary product industries. “Greening” rural transformation implies making this process of structural change and economic diversification less environmentally damaging, including reducing dependency on fossil fuels and carbon emissions. To be successful in Asia-Pacific emerging and economies, such a transformation must be compatible with the most important development goal, which is poverty alleviation. This includes reducing poverty levels as well as related objectives, such as increasing access to energy, safe water and basic sanitation. An additional policy challenge is that many developing and emerging economies in the region remain highly dependent on primary products for exports, GDP and employment, and these activities are accompanied by significant land use change, especially for tropical countries. In a post-COVID world, emerging and developing countries will need to find cost-effective and innovative policy mechanisms to achieve sustainability and rural transformation aims in the absence of significant infusions of additional financing from major economies and international organizations. This article identifies affordable policies that can yield progress towards several development goals together, rather than sacrificing some goals to achieve others. Three policies meet these criteria: a fossil fuel subsidy swap to fund clean energy investments and dissemination of renewable energy in rural areas;reallocating water subsidies to expand water supply and sanitation services for the rural poor;and using proceeds from a carbon tax to fund natural climate solutions.

Habitat loss and the risk of disease outbreak.

Evidence suggests that emerging infectious diseases, such as COVID-19, originate from wildlife species, and that land-use change is an important pathway for pathogen transmission to humans. We first focus on zoonotic disease spillover and the rate at which primary human cases appear, demonstrating that a potential outbreak is directly related to the area of wildlife habitat. We then develop a model of the costs and benefits of land conversion that includes the effect of habitat size on the risk of disease outbreak. Our model and numerical simulations show that incorporating this risk requires more wildlife habitat conservation in the long run, and how much more should be conserved will depend on the initial habitat size. If the area is too small, then no conversion should take place. Any policy to control habitat loss, such as a tax imposed on the rents from converted land, should also vary with habitat area.

Sustainability and development after COVID-19.

Developing countries are highly vulnerable to the COVID-19 pandemic, in part due to the lack of international support for ensuring progress towards the 17 Sustainable Development Goals (SDGs). Yet the mounting financial burden faced by all countries means that additional support is unlikely to be forthcoming in the near future. It is critical that developing countries find innovative policy mechanisms to achieve sustainability and development aims in a cost-effective manner. This requires identifying affordable policies that can yield immediate progress towards several SDGs together and aligns economic incentives for longer term sustainable development. We identify three policies that meet these criteria: a fossil fuel subsidy swap to fund clean energy investments and dissemination of renewable energy in rural areas; reallocating irrigation subsidies to improve water supply, sanitation and wastewater infrastructure; and a tropical carbon tax, which is a levy on fossil fuels that funds natural climate solutions. Such innovative and cost-effective policy mechanisms do not require substantial external support, and they foster greater progress towards achieving the SDGs in poorer economies.

Greening the Post-pandemic Recovery in the G20.

Rebuilding G20 economies after the COVID-19 pandemic requires rethinking what type of economy we need and want in the future. Simply reviving the existing 'brown' economy will exacerbate irreversible climate change and other environmental risks. For G20 economies, investing in a workable and affordable green transition is essential. A good place to start is learning what worked and what did not from previous efforts to green the economic recovery during the 2008-2009 Great Recession, examining the cases of the United States and South Korea. Policies for a sustained economic recovery amount to much more than just short-term fiscal stimulus. Transitioning from fossil fuels to a sustainable low-carbon economy will require long-term commitments (5-10 years) of public spending and pricing reforms. The priorities for public spending include support for private sector green innovation and infrastructure, development of smart grids, transport systems, charging station networks, and sustainable cities. Pricing carbon and pollution, and removing fossil-fuel subsidies, can accelerate the transition, raise revenues for the necessary public investments, and lower the overall cost of the green transition.