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The cable car, alas, didn’t go far. Thirteen climate summits later, as delegates gather in Dubai, Clinton’s offer stands as a glaring example of the myopia with which the world’s economic powers contemplate the urgent task of preventing disaster.
It goes without saying that they did not meet Clinton’s pledge. After much foot-dragging, the latest hope is that the $100 billion target might be hit this year. Yet what now stands out about that magic moment in Copenhagen is how pusillanimous the offer looks against a challenge that stands to actually cost between $2 trillion and $3 trillion a year for developing countries.
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Climate diplomats in Dubai must have an urgent conversation about how developing economies around the world can finance themselves to meet the climate challenge mostly on their own. And, critically, how they will do this at a time when the United States and other developed nations are souring on the benefits of liberal trade.
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America is walking tall on the global climate stage, having finally joined the effort to mitigate carbon emissions: The passage of the Inflation Reduction Act last year unleashed enormous incentives to develop clean-energy technologies. While it’s true that reducing greenhouse gas emissions in the United States might help nudge the world toward net zero emissions by mid-century, the main battle for the climate will happen elsewhere. The most critical challenge, at this stage, is to decarbonize the developing world’s energy supply.
Half of the world’s people live in Bangladesh, Brazil, Nigeria, Pakistan, Indonesia, China and India, where the average gross domestic product per capita is one-tenth to one-third that of advanced nations. For years to come, these countries’ overriding priority will continue to be economic growth, and this will take a lot of energy.
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From 2011 to 2021, while average carbon dioxide emissions from the industrialized nations of the Organization for Economic Cooperation and Development declined by one-tenth, India’s grew 39 percent and Indonesia’s, 41 percent, according to the U.S. Energy Information Administration. Those of Bangladesh and Nigeria ballooned by 70 percent-plus.
Altogether, developing countries outside of the OECD produce about two-thirds of the world’s carbon dioxide emissions from energy, up from about half two decades ago. And their share is bound to expand as they work to achieve a standard of living closer to that of the rich world.
Selling more electric vehicles in the United States will be useful. But it is way more important to deploy them in India. As Richard Baldwin of the IMD Business School in Lausanne, Switzerland, points out, if India’s growing middle class goes out to buy internal-combustion cars and air-conditioning units of the type installed in most New Yorkers’ windows, the world will blow its carbon budget in no time. It desperately needs new technology to ensure lower emissions.
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What is most needed from affluent countries is not that they promise another few billion dollars (and then walk that back). The United States and other rich nations must commit to allow their poorer peers to raise their own money to pay for the technologies they need to accomplish the energy transition. Mainly, the rich need to open their markets so the poor can sell them goods and services to pay their own way.
This will not be easy. Manufacturing exports, which enabled Japan, China and other Asian nations to ascend the development ladder, plateaued more than 10 years ago. Manufacturing exports are no longer a surefire path toward development.
As an alternative for today, Baldwin suggests outsourcing business services: workers in Dhaka or Lagos can run back offices for financial and legal firms in New York City and London; coders in Bangalore and Jakarta can work for IT companies in Silicon Valley. Outfits such as the World Bank and the International Monetary Fund have been banging this drum for some time, encouraged by Zoom and other technologies that enable remote work.
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The big question for this strategy is whether the rich will open their markets. I remember the hysteria over outsourcing some 16 years ago, when U.S. policymakers freaked out over the prospect that, having already lost millions of manufacturing jobs to cheaper labor in developing countries, they would now lose millions more service-sector jobs to the Third World.
Politics in the rich world seem just as stingy today. American climate change policy is larded with protectionist measures, such as local content rules for electric vehicles to qualify for government subsidies. European leaders are turning in the same direction, mulling regulations to ensure shares of domestic production in industries essential to decarbonization.
Policymakers in Washington, Brussels and the rest of the affluent West must face the consequences of such decisions. “The disenchantment with globalization and the embrace of inwardness are, in their own way, forms of intellectual neo-imperialism,” Arvind Subramanian, a former economic adviser to the Indian government, and two colleagues argued in a recent paper. They are also a critical obstacle in the battle to save the climate.
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It was in Copenhagen 14 years ago that Secretary of State Hillary Clinton “saved” a faltering U.N. climate summit with a bold pledge that rich nations would deliver $100 billion a year by 2020 to help developing countries decarbonize their economies and cope with climate change. “Hold tight and mind the doors,” Yvo de Boer, the U.N.’s top climate diplomat said after Clinton spoke. “The cable car is moving again.”
The cable car, alas, didn’t go far. Thirteen climate summits later, as delegates gather in Dubai, Clinton’s offer stands as a glaring example of the myopia with which the world’s economic powers contemplate the urgent task of preventing disaster.
It goes without saying that they did not meet Clinton’s pledge. After much foot-dragging, the latest hope is that the $100 billion target might be hit this year. Yet what now stands out about that magic moment in Copenhagen is how pusillanimous the offer looks against a challenge that stands to actually cost between $2 trillion and $3 trillion a year for developing countries.
Climate diplomats in Dubai must have an urgent conversation about how developing economies around the world can finance themselves to meet the climate challenge mostly on their own. And, critically, how they will do this at a time when the United States and other developed nations are souring on the benefits of liberal trade.
America is walking tall on the global climate stage, having finally joined the effort to mitigate carbon emissions: The passage of the Inflation Reduction Act last year unleashed enormous incentives to develop clean-energy technologies. While it’s true that reducing greenhouse gas emissions in the United States might help nudge the world toward net zero emissions by mid-century, the main battle for the climate will happen elsewhere. The most critical challenge, at this stage, is to decarbonize the developing world’s energy supply.
Half of the world’s people live in Bangladesh, Brazil, Nigeria, Pakistan, Indonesia, China and India, where the average gross domestic product per capita is one-tenth to one-third that of advanced nations. For years to come, these countries’ overriding priority will continue to be economic growth, and this will take a lot of energy.
From 2011 to 2021, while average carbon dioxide emissions from the industrialized nations of the Organization for Economic Cooperation and Development declined by one-tenth, India’s grew 39 percent and Indonesia’s, 41 percent, according to the U.S. Energy Information Administration. Those of Bangladesh and Nigeria ballooned by 70 percent-plus.
Altogether, developing countries outside of the OECD produce about two-thirds of the world’s carbon dioxide emissions from energy, up from about half two decades ago. And their share is bound to expand as they work to achieve a standard of living closer to that of the rich world.
Selling more electric vehicles in the United States will be useful. But it is way more important to deploy them in India. As Richard Baldwin of the IMD Business School in Lausanne, Switzerland, points out, if India’s growing middle class goes out to buy internal-combustion cars and air-conditioning units of the type installed in most New Yorkers’ windows, the world will blow its carbon budget in no time. It desperately needs new technology to ensure lower emissions.
What is most needed from affluent countries is not that they promise another few billion dollars (and then walk that back). The United States and other rich nations must commit to allow their poorer peers to raise their own money to pay for the technologies they need to accomplish the energy transition. Mainly, the rich need to open their markets so the poor can sell them goods and services to pay their own way.
This will not be easy. Manufacturing exports, which enabled Japan, China and other Asian nations to ascend the development ladder, plateaued more than 10 years ago. Manufacturing exports are no longer a surefire path toward development.
As an alternative for today, Baldwin suggests outsourcing business services: workers in Dhaka or Lagos can run back offices for financial and legal firms in New York City and London; coders in Bangalore and Jakarta can work for IT companies in Silicon Valley. Outfits such as the World Bank and the International Monetary Fund have been banging this drum for some time, encouraged by Zoom and other technologies that enable remote work.
The big question for this strategy is whether the rich will open their markets. I remember the hysteria over outsourcing some 16 years ago, when U.S. policymakers freaked out over the prospect that, having already lost millions of manufacturing jobs to cheaper labor in developing countries, they would now lose millions more service-sector jobs to the Third World.
Politics in the rich world seem just as stingy today. American climate change policy is larded with protectionist measures, such as local content rules for electric vehicles to qualify for government subsidies. European leaders are turning in the same direction, mulling regulations to ensure shares of domestic production in industries essential to decarbonization.
Policymakers in Washington, Brussels and the rest of the affluent West must face the consequences of such decisions. “The disenchantment with globalization and the embrace of inwardness are, in their own way, forms of intellectual neo-imperialism,” Arvind Subramanian, a former economic adviser to the Indian government, and two colleagues argued in a recent paper. They are also a critical obstacle in the battle to save the climate.
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