For Richer Countries, Climate Mitigation Should Begin at Home

It is sad that Xi Jinping, the leader of the country that is world’s largest source of greenhouse gases, isn’t at the Glasgow COP. China is responsible for about 27 percent of global emissions, evidence of the inadequacy of a traditional “developed/developing” dichotomy for thinking about roles and responsibilities around climate. That said, the world’s poorest countries—those classified as low- and lower-middle-income—contribute just one seventh of global emissions despite being home to half of the global population. A just solution to these countries’ dual challenges of climate change and development should be a central concern of the COP, and political realities suggest the best thing richer countries could do in that regard is develop cost-competitive low carbon technologies as a byproduct of speeding their own path to decarbonization.

Global access to energy remains deeply inequitable, and that drives huge variation in responsibility for climate change. CGD’s Gyude Moore points out nearly 600 million Africans have no access to electricity at all. Californians use more electricity playing video games than the country of Kenya uses in total. Vijaya Ramachandran notes that India’s electricity consumption per person is eight percent of US consumption (or about a fifth of China’s). Home to nearly one in five of the world’s population, India is responsible for only one fourteenth of global emissions.

Meanwhile the costs of emissions will fall disproportionately on the poorest. By mid-century, for example, climate change may be responsible for around 600,000 deaths a year, the vast majority in poorer countries. And it is vital to remember the growing challenges of climate come on top of the immense toll of poverty today. 1.5 million people die each year from vaccine preventable causes, again the vast majority of whom live in poorer countries. Burning fuels like dung, wood and coal in inefficient stoves is behind 3.8 million premature deaths from cooking fires each year. There are numerous other contributions to the deadly cost of being poor, so erecting further barriers to development of the world’s lower-income countries is passing a death sentence.

Richer countries have outsourced the worst effects of the climate problem they created to poorer countries that are least able to bear it. At the same time, there’s long been a move to outsource much of the solution as well. For decades, economists and global development wonks (including many at CGD –and including me) have suggested the considerable efficiencies of paying poor countries to reduce emissions. That’s based on two things: first, the utterly accurate insight that it is cheaper to reduce emissions growth in poorer countries than to reduce existing emissions in richer countries, and second that, if we’re going to stop climate change for good, we need the whole world to take part.  

Sadly, the equitable, scaleable version of outsourcing the solution has failed. Global cap and trade markets turned out to too great an institutional and political challenge, and hopes for them largely died with the Kyoto accord. The world’s largest carbon offset program, the Clean Development Mechanism, appears to have allocated more than half of its offsets to projects that would have happened anyway,and may have had a net positive impact on emissions overall. (Hopefully the Glasgow COP will at least agree rules to reduce the risk of “double-counting” emissions reductions in cross-border programs.)

In the absence of an active, large scale global carbon market, richer countries have engaged with poorer countries through exhortation, restriction, tariff threats, and IOUs: exhortations to adopt national greenhouse gas reduction programs (“nationally determined contributions”); increasingly aggressive restrictions on the use of development finance for power projects (for example, a number of European countries that are building a new generation of gas-fired power plants at home are busy trying to stop the World Bank financing gas-fired power projects in poorer countries); the threat of carbon tariffs on goods from countries with emissions per capita a fraction of those in the importing countries; and weakly worded pledges to provide $100 billion in additional annual finance to support mitigation and adaptation across the entire developing world.

It is worth putting what the United States has been proposing to India—that the country adopt a net zero commitment by 2050—in the context of promised climate finance.  Even allowing for continued technology change that brings down the cost of renewable energy, one analysis of a 2030 peaking to 2050 net-zero scenario for greenhouse gas emissions in India suggests a price tag of $1.4 to $1.9 trillion by 2050. Meanwhile, of course, the country will also need to pay for adaption to the climate change already locked in by past emissions: perhaps another trillion dollars this decade alone.

Meanwhile, under any reasonable definition, rich countries are utterly not meeting their climate IOUs (they do better under the OECD definition).  And much of the climate finance they do provide is through scarce aid diverted into often-ineffective emissions reduction programs, short-changing both poverty reduction and climate mitigation. But even if the $100 billion annual global target was actually met, and if it was grants rather than a grab-bag largely made up of loans and “mobilized finance,” it could just about cover the cost of net zero and adaptation in India alone under a scenario of “business as usual” technological progress.

The financing target ought to be much bigger, the financing terms should be far more generous, and the spending should prioritize adaptation in the poorest countries most at risk. And grants to low- and lower-middle-income countries can be accompanied by loans to richer developing countries for mitigation as well as adaptation. Scott Morris and I have suggested a climate dedicated capital increase at the World Bank and IFC, for example. But the politically plausible scale of outside financing is still going to be completely inadequate compared to the costs that poorer countries face in speeding transformation to a climate-resilient development path, let alone a lower-carbon one—at least absent far more rapid technology advance.

Regarding restrictions, the poorest developing countries face a lot of challenges that they can often best address by lower-carbon rather than no-carbon solutions.  For example, switching to liquid natural gas cooking would be better for the climate than using wood and dung and it would cut the 3.8 million annual death toll from indoor air pollution. It isn’t zero carbon, but it is undoubtedly sustainable development progress. Similarly, switching from diesel generators and coal fired plants to natural gas generation reduces emissions of local and global pollutants. Until renewable electricity and storage technologies combined become a practical and cost-effective solution for the grid, these changes are likely the best they can do for both climate and development. It is an obscene idea for richer countries to cut off the already meagre support they provide for such investments.

The good news with regard to climate is that the world’s poorest countries will not become major emitters for another decade or more, even under rosy growth scenarios. But, hopefully, rapid economic growth will mean that, in a few decades, new infrastructure, better housing, and improved transport are providing a higher quality of life to hundreds of millions in those countries. By then, the world needs low-carbon low-cost technologies to ensure lower income economies don’t become a major source of global emissions.

And this news points to the greatest impact the rich world can have on ensuring a sustainable emissions path for poorer countries: to develop, scale, and make affordable the technologies for low-carbon growth including zero-carbon energy sources that can respond to fluctuating demand alongside low-emission steel and concrete. In practice, that means support for research and development alongside domestic rollout, accompanied by subsidies and domestic carbon taxes. Research, subsidies, and regulation concentrated in richer countries is a major factor behind global growth of solar power production far more rapidly than predicted, for example. And those activities are the focus of the Build Back Better legislation in the US Congress, which (in its latest iteration) allocates $555 billion for climate and clean energy over ten years. Compare that to bilateral US assistance for climate of around $2 billion, and it is clear where the real money is and where the real impact is likely to be.

But if the only politically plausible way to square justice, development imperatives, and protecting the climate is for richer countries to deliver new low-carbon low-cost technologies at scale, those countries need to move very fast to develop the technologies. And that suggests the group of “Like Minded Developing Countries” is absolutely right that high income countries should rapidly and fully decarbonize, preferably this decade.  That said, we shouldn’t Like Minded Developing Country members like Saudi Arabia, China, or Malaysia off the hook, given they are on the debit side of the global greenhouse gas budget. These upper middle income economies must rapidly and aggressively cut their emissions as well, both to limit future climate change directly and further spur global demand for low-carbon innovation.

Richer countries can’t offer the world’s poorest countries a message of delayed development through premature net zero or development derailed because of climate change. Instead, they should provide the technologies to make a low-carbon transition low-cost, and the financial support to adopt them. And given the likely limits to finance, that means leaning in heavily on the technology. Richer countries created the climate crisis at home, political realities and climate justice demand they fix it at home too. Scotland would be a great place to start.