Financing for climate change

This paper argues that the 2009 pledge of $100 billion in 2020 by rich countries for mitigation and adaptation should not be used for mitigation by commercial firms in developing countries, since that would artificially create competitive advantage for such firms and provoke protectionist reactions in the rich countries where firms must bear the costs of mitigation, thereby undermining the world trading system. The costs of heating the earth's surface should be borne by all emitters, just as the price of copper and other scarce resources is paid by all users, rich or poor. That will still leave scope for rich country help in adaptation to climate change and in bringing to fruition new technologies to reduce emissions. - Highlights: ► Slowing climate change significantly cannot occur without the participation of the largest emitters among developing countries. ► The cost of GHG mitigation must be the same for all competing firms, wherever they are located. ► The world trading system is seriously at risk in the face of a poorly designed system for global mitigation of greenhouse gases. ► No significantly emitting firm, anywhere, public or private, should be protected from the incentive to reduce its emissions. ► Higher prices for fossil fuels need not reduce national growth rates in consuming countries.