Does climate policy promote development?

Abstract

With the publication of the IPCC’s 4th Assessment Report (IPCC 2007) and the Stern Review on the economics of climate change (Stern 2006), the natural science background and the economic implications of climate change have become very clear. The IPCC states that “warming of the climate system is unequivocal” and the Stern Review stresses that “ignoring climate change will eventually damage economic growth” while “the benefits of strong, early action considerably outweigh the costs.” These findings will put pressure on policymakers to embark on climate policy. This pressure will be reinforced by public reactions on an increasing number and intensity of extreme weather events. However, powerful interest groups representing the large greenhouse gas emitters will retard action to reduce greenhouse gas emissions and try to deflect policy attention to embark on adaptation to, rather than mitigation of climate change (for a public choice explanation of climate policy decision making with regards to emission reduction and adaptation see Michaelowa 2001). For politicians in industrialized countries, it is often easier to start policies that do not impact on powerful interest groups at home but can be implemented abroad and are financed through general taxpayers’ or consumers’ money. Thus, implementation of climate policy in developing countries is increasingly becoming attractive. Development assistance is flowing into renewable energy projects and afforestation, adaptation is becoming a buzzword in development agencies and the Clean Development Mechanism (CDM) which allows projects in developing countries to generate greenhouse gas reduction certificates becomes a hotbed of activity, with over 1,500 projects submitted within only 2 years, and that aim to generate more than 1.5 billion certificates. Climatic Change (2007) 84:1–4 DOI 10.1007/s10584-007-9266-z