A Fairer Way to Help Developing Economies Decarbonize
Global carbon pricing is an essential part of any long-term solution to the climate crisis. But advanced economies also need to provide the developing world with highly concessional financing and technical expertise to help it decarbonize – all guided by a World Carbon Bank.
CAMBRIDGE – With US President-elect Joe Biden’s incoming administration promising a fresh, rational approach to climate change, now is an ideal time to make the case for a World Carbon Bank that would transfer and coordinate aid and technical assistance to help developing countries decarbonize. The proposed Green New Deal in the United States and the European Commission’s European Green Deal have laudable environmental goals but are too inward-looking. When an entire building is burning, to concentrate firefighting resources on one floor would only delay, not prevent, its destruction.
According to the International Energy Agency (IEA), almost all the net growth in carbon dioxide emissions over the next two decades will come from emerging markets. Although China recently pledged to achieve zero net emissions by 2060, it is sobering to consider that it accounts for half of the world’s coal output and half of its coal consumption.
India, too, is highly dependent on its plentiful coal reserves, and will likely remain so despite strong advances in solar power. For all the fanfare accompanying the 2015 Paris climate agreement, the share of clean energy in global energy investment is still only around 34%, almost exactly the level five years ago. Wind and solar account for only 8% of global energy. The IEA estimates that allowing existing power plants to operate for the remainder of their expected lifespans in their current form would by itself cause global temperatures to rise by 1.7 degrees Celsius relative to pre-industrial levels.