Update from Ghana: Creative Ways to Engage Developing Countries

Even if every industrialized country were to reduce its emissions to zero by 2050, atmospheric carbon levels would still be above what scientists tell us is dangerous.

That’s a pretty powerful statement, and it leads to the question: How do we convince developing countries to set limits on their emissions? A possible answer to that challenge brought me to Ghana this week.

Environmental Defense Fund has long been a staunch supporter of market mechanisms to achieve environmental goals. “Clean investment budgets,” or CIBs, are one such mechanism that could help move the world towards a global climate deal. It’s a potential grand bargain between industrialized and some developing countries.

CIBs would reward developing countries that take a firm cap on emissions earlier than would otherwise be required. They take advantage of timing, allowing developing economies to use the global carbon market to help finance their transition to cleaner energy production.

Please consult our overview of how CIBs work for more on the actual mechanism and a concrete example. To get a sense of the discussion among economists, you might visit a blog post I wrote for Environmental Economics, which is getting some thoughtful comments. (I wrote that post in response to an article that Carter Bales and Rick Duke published in Foreign Affairs.)

Here in Ghana, we are looking forward to making a presentation about CIBs at a side event this evening. We’ll help the delegates and our colleagues understand how this mechanism can help avert dangerous changes to our climate.

This post is by Gernot Wagner, an economist in our Climate and Air program who is attending this week’s negotiations in Accra, Ghana.