1. Seminar on South-south Cooperation
between China and IFAD (9.23-9.29)
Climate-smart Rural
Development and Poverty
Reduction Approach
Dr. Wendao Cao
Rural Development Specialist
World Bank, Beijing

2. Outline
• Climate change: processes, characteristics and
threats
• Climate Change and Poverty – An Integrated
View
• Climate-smart, Watershed Approach: Loess
Plateau Concepts and Experiences
• Conclusion

3. Climate change:
processes,
characteristics and
threats
Source: UNEP/GRID–
Arendal

4. Incremental risks – present and pipeline
• Increase in exposure to drought and long-term
drying
• Reduced agricultural productivity, especially in
rainfed areas:
- Global modelling points to losses of 10% for developing
countries, ranging 7% Asia to 17% SSA, with gains for developed
countries (Cline 2007)
- Ricardian modelling for dryland SSA points to losses of 25% by
2060
- Probabilistic Monte Carlo crop modelling reveals high (95%)
probability of large losses for southern African maize, West
African root crops and sorghum in Sahel (Lobell et al 2008)

5. Incremental risks continued
• Coastal/Delta flooding and sea surges
(Bangladesh, Vietnam and Egypt)
• Port city exposure (50 150m by 2070:
Mumbai, Guangzhou, Shanghai…OECD 2008)
• Storm damage (eg Central America)
• Increased water stress on ecosystems
• Glacial melting
– Short-term flooding risks (Nepal, Central Asia)
– Long-term threat to irrigation systems (Indus, northern India
and China)
– Urban water supply (Peru)

6. Climate risks and vulnerability
• Inability to cope with climate risk is already a major
cause of poverty
• Incremental risks superimposed on global picture of 2bn
living on less than $2 a day and 1/3 children
malnourished
• ‘Low human development traps’:
• Ex ante losses in productivity
• Asset erosion
• Capability erosion (health, nutrition, education)
• Human impacts
• Ethiopia: children aged -5 are 41% more likely to be stunted if born in
drought year and affected
• Global modelling for growth impacts have tended to
obscure distributional concerns: the poor face earliest
and deepest damage

7. Climate
Change
• Increased severity and
frequency of weather
events
• Gradual changes in
temperature, sea level
and climate zones, and
fresh water
Economic, Equity and
Poverty Outcomes
• Growth and its
distributional pattern will
be affected
• Increased variability.
Poverty traps (country,
region and household)
• Increased risk and
vulnerability to climate
change
Transmission
Channels
• Effects on livelihoods
• Changes in capital stock
and productivity
• Increases in mortality and
morbidity rates
• Changes in settlement
patterns
• Political tensions and
conflict
• Changes in relative prices
• Macro and fiscal effects
Climate Change and Poverty – An Integrated View (PR Board)

8. Increased short-term variability Gradual changes in mean
Protection -Protective infrastructure (dams, flood
walls, levees)
-Same as short-term, although
multiplies risk and overtime
become prohibitive (negative
externalities)
Adaptation -Drought resistant agriculture
-Adaptive infrastructure (houses on
stilts, schools and health centers in
boats)
-Vaccination campaigns, improved
services
-Building code regulations
- Land taxes and resettlement
initiatives for vulnerable areas
------Subsidies and incentives to
promote less climate sensitive
activities.
-Improved water and energy and
management and pricing
policies
Response -Emergency response plans (national
and community levels) (water,
housing, resettlement, etc.)
-Improved and rebuilding of services
and infrastructure in vulnerable areas
-Disaster Insurance (public/private)
-Targeted safety net programs
-Disaster and meteorological
monitoring systems (national and
community based).
Policy Options and Trade-offs (PR Board)

9. Case from China, Loess Plateau

10. Loess Plateau in China
• Size: 640,000 km2
• Rural Population: 70m
• Location: upper &
middle reaches of the
Yellow River
• Stretches over 7
provinces
Map of China

11. The Loess Plateau
one of the most seriouslyone of the most seriously
eroded places on earth.eroded places on earth.
home to more than 50 millionhome to more than 50 million
mostly very poor farmers.mostly very poor farmers.
centuries of
overuse of the
natural
resources and
unsustainable
farming
practices.
1.6 b tons of
sediment
annually clog
up the Yellow
River, pose a
serious flood
risk in the
lower
reaches.

12. Eco-environmental Impact
• Reduction in water storage capacity
• Loss of soils, soil productivity; loss of farmland
• Loss of vegetation, biomass & biodiversity
• Climate changes
• Poor air quality, increased dust storms
• Increased pollution
• Sedimentation downstream

13. Economic Impact
Lower yields & returns; Higher production costs
⇒ Farm income decline
⇒ Reduction in GDP
Loss of
grain production

14. Social Impact
• Poverty
• Reduced food security
• Increased health problems
• Vulnerability
• Accelerated migration

15. Climate-smart, Watershed Management
Approach (1994-2008)
Dual Objectives:
1. Improving income and livelihood
2. improving ecological conditions
Equally important. Impact
each other

16. Inner
Mongolia
Shanxi
Shaanix
Gansu
Project Area
The project covers 48
counties, 4 provinces, with
area of 30,000 km2 in total.
Project Scale
The total investment of the
project (two phases) was US$
500million, among which US$
300 million from the Bank
loan.

17. Institutional Measures
• Participatory watershed planning process
• Huge incentive through transfer of State
land to farmers through long-term lease
• Emphasize both bottle-up and top-down
approaches

18. Central PLG
Central
TP
Provincial PLGs
Provincial PMOs Provincial TP
Prefecture PLGs
Prefecture PMOs
county PLGs
County PMOs
township PLGs
Township station
Legend consultive function
Administrative function
CPMO
Project
Structure

19. Financial Instruments
• High counterpart funding (50%); strong
government ownership
• Community in-kind contribution
• Clear distinction between public and private
goods
• Make clear that the WB loan needs to be
repaid by farmers

20. Implementation Arrangements
 Structure and no-structure interventions
 Sufficient staffing, clearly defined roles &
responsibilities, stressing institutional and
community capacity building
 Strong emphasis on technology transfer
 Enforcement of policy
 Strict supervision of physical and financial
progress, problem solving and feedback
mechanism and rigorous M&E
 Foster inter-agency collaboration partnership &
networking

21. Policies and Enforcement
• Banned free range grazing of sheep and
goats
• Enforced land tenure policy: farmers
receive contracts with 30-50 years use
rights
• Banned planting on steep slopes

22. Impact
• Physical: 920,000 ha rehabilitated; terrace 190,000 ha;
diversified agriculture; beneficiaries = 2.5 million
people; improved rural infrastructure
• Financial: Grain production from 428 kg to 630 kg per
capital; per capita income increased from US$ 45 to
US$ 203 (US$ 44 more than non-project areas)
• Social: 2.5 million people out of poverty; women’s
social status and children school enrollment raised
• Environmental: vegetation cover from 17% to 33%;
bio-diversity increased and micro-climate improved;
annual soil erosion reduced by over 107 million tons;
downstream improvements

23. BEFORE: Mainly slope-
land cropping; sever soil
erosion; very poor natural
vegetation; gullies grazed
heavily by goats
AFTER: moderate slopes are
terraced; good yields due to
water conser-vation; steep
slopes planted with shrubs/
trees using contour trenches;
entire watershed is
disallowed for grazing,
allowing vegetation to return

24. 1999: Project site - site
preparation for tree planting;
earth shaped water
harvesting pits to catch run-
off; protection ridges along
gullies to prevent further
cutting
2004: Similar site in the same
watershed - water harvesting pits
disappear in grass & vegetation

25. 1999: Project site - pits for
tree planting on top of
hills, protected by stones
preventing soil from
further erosion
… a similar site 5
years later

26. Contour planting of black
locust trees at early stage of
project implementation
… the same location in 2004

27. Comprehensive watershed
treatment in 1999
the same location in 2004

28. Large-scale Chinese
pine plantation in
northern Shanxi in
1999
… the same location in 2004
(notable strong grass
vegetation returns after
grazing ban)

29. Lessons
1. Planning process
2. Participation approach
3. Coordination mechanism
4. Investment mechanism
5. M&E system

30. 1. Planning Process
• Considering interaction of land, water &
other natural resources
• Decentralized and participatory
• Iterative learning

31. 2. Participatory Approach
• Re-define government role as regulator
and service provider
• Communities and farmers are central in
rehabilitation programs
• Secured land tenure & other natural
resources users rights

32. 3. Coordination Mechanism
Institutional framework:
– Among Government agencies
– With farmers / private sector /
NGOs
– National watershed management
network

33. 4. Investment Mechanism
• Integration and coordination of
fiscal resources
• Work in partnership with private
sector
• Combine resources with policies

34. 5. M&E Process
M&E system to inform all stakeholders about:
a) socio-economic and environmental impacts of
watershed-based interventions
b) interactions between people and environment
c) long-term changes within the watershed
⇒ improve the quality and efficiency of data collection,
handling, analysis, and sharing
⇒ ensure accountability
⇒ be cost effective
Innovative approaches: participatory M&E

35. Conclusion/checklist: climate-smart approaches (WDR 2010)
• Mgnt aligned with ecological processes and defined at appropriate spatial
scale
• Cooperation among administrative levels, sectors, and line departments;
• Broad stakeholders and research centers, in problem solving and decision
making
• Enabling legislation and legal framework to support local action
• Adaptable legislation and policies to response to new information
• Long time horizon for planning and capacity building
• Assessment of flexible and reversible measures
• Experimentation and learning through policy experiments to inform
management
• Full consideration of alternative scenarios and of structural and
nonstructural measures
• Mechanisms to understand and challenge assumptions
• Explicit communication of assumptions and consideration of uncertainty
• Use of information and monitoring to inform policy
• Generation of scientific and technical knowledge to develop new practices
• Appropriate financing system

36. Thank You!
For more information, please contact:
Dr. Wendao Cao
World Bank Office Beijing, P R China
Tel: (86-10-58617693); Fax: (86-10-58617800)
Email: wcao1@worldbank.org