Press Release

A New Grand Bargain on Global Warming: Cooperation, Not Cash for Cuts

November 19, 2012


Washington, D.C. (November 20, 2012) – Key assumptions underpinning the UN climate negotiations have been overtaken by changes in the world economy requiring a new grand bargain, according to a new book from the Center for Global Development.

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Catherine An
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The UN negotiations, which will enter their 18th round this month with a huge conference in Doha, Qatar, on November 26, have failed to produce a binding agreement on either emissions reductions or substantial funding to help poor countries cope with climate changes already underway.

“There is deep disagreement on who needs to act, how, and when,” says CGD senior fellow Arvind Subramanian, co-author of Greenprint: A New Approach to Cooperation on Climate Change. “The world urgently needs a new framework in which to approach these talks.”

Until now the focus has been on emissions reductions, with a strong expectation that any future deal would include some element of cash-for-cuts, that is, rich countries would compensate developing countries for cutting their emissions.

Subramanian and his co-author Aaditya Mattoo, a World Bank trade policy economist, argue that this model was flawed from the start and is now wildly unrealistic, since the high-income countries are saddled with heavy debt while the emerging powers are cash-rich.

Instead, the authors of Greenprint call for a role reversal with the emerging powers, acting in their own best interest, sharing the mantle of leadership, and looking for ways to encourage the United States and other rich countries to take action.

“Developing countries have been waiting for rich countries to act to prevent climate change,” says Mattoo. “But now countries like China and India must also lead, because while rich countries have the resources to adapt to climate change, developing countries don’t.”

The proposal also takes into account that insisting now on emissions cuts from developing countries, which have much lower per capita emissions than the rich countries, would make it impossible for them to meet basic needs, like transport and energy.

The Greenprint calls for rich countries to price carbon — through emissions taxes or cap-and-trade — highly enough to sharply reduce emissions and spark a technology revolution in cheap renewable energy. For Europe and the United States, an important side benefit would be new revenue to address their debt and deficit woes.

In exchange, the cash-rich emerging powers would end their fossil fuel subsidies and contribute to a global clean tech fund to support development and deployment of new energy technologies. They would also agree to accept limited tariffs on carbon-intensive products, such as steel and cement, to help make higher carbon prices in the rich world politically acceptable.

Finally, the emerging powers would also promise to make substantial emissions cuts of their own in the future, once renewable energy technology that is cheaper than coal and oil becomes available.

“All major emitters, the rich and dynamic poor alike, must make contributions calibrated in magnitude and form to their development levels and prospects,” says Subramanian.

While the idea would mark a radical departure, it has attracted warm endorsements from several climate policy leaders, including:

“This important book sets a sensible and specific way forward. It should be read by all involved in economic development and international action on climate change.”

— Lord Nicholas Stern, author of the Stern Review

“Greenprint presents a fresh out-of-the-box approach to climate cooperation and proposes a concrete menu of options. It should be seriously considered by political leaders and the armies of climate negotiators.”

  • Jairam Ramesh, India’s minister for rural development and former minister for the environment

“Mattoo and Subramanian are the masters at rethinking global compacts in a way that is free of the wishfulness, abstraction, and process-obsession that sometimes bedevil the debate.”

— Sebastian Mallaby, Center for Geo-Economic Studies, Council on Foreign Relations

Global negotiations on climate change have been hampered as much by a neglect of scientific facts as a lack of objective analysis. Greenprint fills a large gap and provides a useful departure from standard literature on the subject.”

— R. K. Pachauri, Nobel Prize–winning Chairperson of the Intergovernmental Panel on Climate Change

The overview chapter of the book is available online together with a video of the authors explaining the key concepts.



The Center for Global Development: CGD works to reduce global poverty and inequality through rigorous research and active engagement with the policy community to make the world a more prosperous, just, and safe place for all people. As a nimble, independent, nonpartisan, and nonprofit think tank, focused on improving the policies and practices of the rich and powerful, the Center combines world-class scholarly research with policy analysis and innovative outreach and communications to turn ideas into action.