Rachel Kyte, incoming head of climate change at the World Bank, on political leadership, carbon pricing, the psychology of communicating and rising anger at climate change inaction

The World Bank can sometimes come across as a lumbering bureaucratic beast, so it's refreshing that the woman tasked with co-ordinating its climate change strategy is a straight-talking, no-nonsense campaigner with a warrior-like spirit.

Rachel Kyte, who will next year move to a new position as group vice president and special envoy for climate change, talks here about the need for political leadership, why carbon pricing is essential, the psychology of effective communication and rising anger among citizens at the lack of action on global warming.

Kyte enjoys widespread respect among both business and NGOs and they have voiced concern about her move from her broader portfolio as vice president for sustainable development, where she has been responsible for agriculture, environment, energy, infrastructure, urban, and social development. They say the success of her new post will be dependent on World Bank president Jim Yong Kim giving her the resources and backing to drive change across the institution, which provides loans to developing countries for capital programmes.

How important is political leadership in addressing climate change?

Political leadership cannot be substituted for. If you have political leadership, which sets its sights on ambitious targets, markets respond. You've heard a lot about regulatory and policy certainty, but, before you get to those, you've got to have a sense of where you're going, and that's the big thing that's missing.

Give me an example of political leadership?

When you have leadership you see countries and cities making big strides in very short periods of time. Chile made a decision to pursue solar. They've given very clear signals from the top, put a very clear policy framework in place, given very clear instructions to certain parts of the private sector, knocked a few heads together and off they go. They'll need a bit of help externally with that but not very much.

How do you see climate change affecting the world?

Climate change is posing a systemic risk to long-term economic growth and stability, and you've got to get your head around it now, and depending on which country you are, you've got different challenges. Wherever you are on the planet, whichever government you're the minister of finance of or whichever company you're the CEO of, this is a risk that you need to understand. Both the fund [IMF] and the bank have to change our macroeconomic and our fiscal policy conversations with our clients to take that into account.

You talk about climate change being a great leveller. What do you mean by that?

To give an example. If the UK is at risk from more animal and crop related diseases coming to the shores of the UK as a result of climate change, then you need to factor in climate resilience into UK domestic agricultural policy. That should affect agricultural research, which puts the UK on a par with every other country that depends on agriculture in the world that's wrestling with the same problem. So Tanzania, Malawi and the UK – what have you all got in common? Your agricultural systems are at risk from climate change.

How far has the World Bank come in recognising the need to act on climate change?

The institution has moved so far, so fast that you have to step back sometimes to appreciate it. I can remember a period when we were instructed not to talk about climate change, and then we went through a period under new leadership of asking why is a development organisation talking about climate change?

We've come to a situation where we fully realise that development is taking place in the context of a quickly changing world. Climate change isn't something that our clients, whether they be public or private, have to think about as a future risk; it's actually pummelling them now if they are a country with a coastline in the tropics or an arid country with an agricultural economy.

There's a real debate within the bank about language and positioning. So I think there is a certain resistance within the institution about, "Does everything have to be labelled climate first?", and I'll be the first to say no.

What difference has World Bank president Jim Yong Kim made to your engagement on climate change?

There's traditionally been a fear about how we use our voice, and I think that both he, and now Christine Lagarde [IMF managing director], are speaking out globally. In the G20 or the G8, they're making the case very clearly for policy reform when it comes to fiscal policy and subsidies for fossil fuels and the need to price carbon etc. And then I think he's spoken unequivocally about the fact that you can't solve poverty without solving climate, and you can't solve climate without solving poverty. He's been unafraid to link those two issues at a time when many others were pussyfooting around.

Are you concerned by the lack of progress?

With Jim Kim, we talk about this constant drumbeat of risk, risk, risk, opportunity, opportunity, opportunity.

Every month we're coming out with some piece of evidence and data that helps you understand the size of the risk, and then what we're trying to do is come forward, often not so much at the macro level, but at the country level with how you can think through the solutions. But, yeah, the urgency isn't there and you worry about that.

How important is getting the communications right?

We've started talking to behavioural psychologists and other disciplines about how to communicate so that you can convey urgency in a way that people can respond. There's a long history in the environment movement of fear-mongering and a) not providing alternatives or b) not having those fears realised. So we feel a responsibility to be able to communicate this in such a way that people can say: "OK, so what now?"

Extreme weather events is the place where the public and science and policy-makers seem to agree that they're prepared to accept the climate is having an impact. Obviously, that grabs people's attention and for a few weeks after superstorm Sandy you had everybody's attention, but then it starts to ebb away.

There is a particular problem in the US, which is the role of science in the society, which seems to be up for question, not just in the area of climate but elsewhere. Communicating science poses a set of challenges in the US that is not necessarily the case in other parts of the world.

From your research, what have you learned about how to communicate more effectively?

The tendency with a lot of social movements is to talk to ourselves, so we develop language that we're comfortable with, that speaks to other environmentalists or other engineers but which means absolutely nothing to the lay public.

We're very reluctant or reticent to come up with language and idioms that will perhaps not express every little nuance in that one sentence, but which will actually resonate. We've known for a very long time that the phrase "sustainable development" is kind of clunky and we've never come up with anything better, and that's OK as long as we tell stories and build images and pictures about what we're really talking about.

There's lots of behavioural psychology that some of these words just land really cold: they don't mean anything and they don't speak to the emotional brain. What does "green" mean? It doesn't evoke very much.

Jim Kim feels very strongly that, if you're going to paint a picture of the future where it's sackcloth and ashes, don't be surprised if you don't have a long line of people following you. We have to paint a picture of opportunity.

You talk about the need to price carbon and get rid of fossil fuel subsidies. Why are they so important?

You put a tax on that which you don't want to have a lot of and you incentivise that which you want to have a lot of, and at the moment we're doing the reverse. So that's the big enchilada.

The only thing that's stopping carbon prices from being set in different markets and different countries is the lack of political ambition around setting that target. In countries where the government decides to set a carbon price it happens.

Where are you going to focus your attention on over the next couple of years and for what reason?

The internal focus is that we've got to demonstrate that it can be done. We have to prove concept, we have to innovate, we have to be the first, and we have to open up the space. We're a development bank, we have goals around poverty and prosperity, but climate threatens to push us right off track on reaching those goals. So what I'll be doing is sitting down with all of the management of the bank and making sure that they understand the risks from climate change and the opportunities from a different growth path. That's true for our transport lending, our water lending, and our health lending.

Then externally we're on a 25-month timeline. By the end of 2015, as an international community, we will have come together again around a climate agreement that makes sense, which responds to the urgency and which has a sufficient ambition level. We will also have agreed a new framework for development with the post-millennium development goals.

In what ways do you think the bank can be more effective?

We have to be able to show that if you put a dollar into this kind of mechanism for this kind of project, you can get this kind of emissions reduction or you can get this kind of adaptation benefit. At the moment there's very little real data on what your money buys you and we have to be a guinea pig as it were; we've got big enough shoulders.

Finally, what do you think is going to be a real trigger for change?

There is anger, and how it's going to get manifested I don't know. But, if people feel that the policy response to climate is cutting off their options for the future and cutting off their kids' options for the future, I think people will get really angry.

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