An ‘equal effort’ approach to assessing the North–South climate finance gap

Bowen, Alex; Campiglio, Emanuele; Martínez, Sara Herreras

doi:10.1080/14693062.2015.1094728

Cited by 16 publications

(5 citation statements)

References 25 publications

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“…aa Further work on climate finance disbursement is found in ‘gray literature’ on country‐level distribution and on principles of climate funds disbursement …”

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confidence: 99%

From climate finance toward sustainable development finance

Steckel

Jakob

Flachsland

et al. 2016

WIREs Climate Change

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Decarbonizing the global energy system requires large‐scale investment flows, with a central role for international climate finance to mobilize private funds. The willingness to provide international finance in accordance with common but differentiated responsibilities was acknowledged by the broad endorsement of the Paris Agreement, and the Green Climate Funds in particular. The international community aims to mobilize at least USD 100 billion per year for mitigation and adaption in developing countries. In this article, we argue that too little attention has been paid on the spending side of climate finance, both in the political as well as the academic debate. To this end, we review the challenges encountered in project‐based approaches of allocating climate finance in the past. In contrast to project‐based finance, we find many advantages to spending climate finance in support of price‐based national policies. First, the support for international climate cooperation is improved when efforts of successively rising domestic carbon pricing levels are compensated. Second, carbon pricing sets incentives for least‐cost mitigation. Third, investing domestic revenues from emission pricing schemes could advance a country's individual development goals and ensure the recipient's ‘ownership’ of climate policies. We conclude that by reconciling the global goal of cost‐efficient mitigation with national policy priorities, climate finance for carbon pricing could become a central pillar of sustainable development and promote international cooperation to achieve the climate targets laid down in the Paris Agreement. WIREs Clim Change 2017, 8:e437. doi: 10.1002/wcc.437 This article is categorized under: Climate Economics > Economics and Climate Change Climate and Development > Decoupling Emissions from Development

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“…aa Further work on climate finance disbursement is found in ‘gray literature’ on country‐level distribution and on principles of climate funds disbursement …”

mentioning

confidence: 99%

From climate finance toward sustainable development finance

Steckel

Jakob

Flachsland

et al. 2016

WIREs Climate Change

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“…The theoretical desirability of a global carbon price depends on there being appropriate lump-sum transfers to compensate the heaviest losers. Various schemes have been devised for equitable transfers among nations to accompany global carbon pricing, or other ways to make climate action fair (173)(174)(175)(176). Empirically, it appears that mitigation opportunities are disproportionately concentrated in developing countries (177).…”

Section: Implications For Mitigation Policymentioning

confidence: 99%

The Economics of 1.5°C Climate Change

Dietz

Bowen

Doda

et al. 2018

Annu. Rev. Environ. Resour.

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The economic case for limiting warming to 1.5°C is unclear, due to manifold uncertainties. However, it cannot be ruled out that the 1.5°C target passes a cost-benefit test. Costs are almost certainly high: The median global carbon price in 1.5°C scenarios implemented by various energy models is more than US$100 per metric ton of CO2in 2020, for example. Benefits estimates range from much lower than this to much higher. Some of these uncertainties may reduce in the future, raising the question of how to hedge in the near term. Maintaining an option on limiting warming to 1.5°C means targeting it now. Setting off with higher emissions will make 1.5°C unattainable quickly without recourse to expensive large-scale carbon dioxide removal (CDR), or solar radiation management (SRM), which can be cheap but poses ambiguous risks society seems unwilling to take. Carbon pricing could reduce mitigation costs substantially compared with ramping up the current patchwork of regulatory instruments. Nonetheless, a mix of policies is justified and technology-specific approaches may be required. It is particularly important to step up mitigation finance to developing countries, where emissions abatement is relatively cheap.

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“…The allocation scheme determines whether inflows are significant or negligible (Us-ing ReMind-R, Jakob et al, 2015, find ranges to vary between <1% for Sub Saharan Africa in a grandfathering-like approach to 14.5% in an equal per capita regime). Bowen et al (2015) find annual North-South financial flows of up to USD 2 trillion in the year 2050 when applying an equal-effort burden sharing in several integrated assessment models.…”

Section: Rents From Permit Exportsmentioning

confidence: 99%

The climate rent curse: new challenges for burden sharing

Kornek

Steckel

Lessmann

et al. 2017

Int Environ Agreements

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The literature on the "resource curse" has strongly emphasized that large incomes from resource endowments may have adverse effects on the growth prospects of a country. Conceivably the income generated from emission permit allocations, as suggested in the context of international climate policy, could have a comparable impact. Effects of a "climate rent curse" have so far not been considered in the design of permit allocation schemes. In this study, we first determine when to expect a climate rent curse conceptually by analyzing its potential channels. We then use a numerical model to explore the extent of consequences that a climate rent curse would have on international climate agreements. We show that given the susceptibility to a curse, permit allocation schemes may fail to encourage the participation of recipient countries in an international mitigation effort. We present transfer schemes that enhance cooperation and limit adverse effects on recipients.

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An ‘equal effort’ approach to assessing the North–South climate finance gap

Cited by 16 publications

References 25 publications

From climate finance toward sustainable development finance

From climate finance toward sustainable development finance

The Economics of 1.5°C Climate Change

The climate rent curse: new challenges for burden sharing

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