Global Climate Change Mitigation, Fossil-Fuel Driven Development, and the Role of Financial and Technology Transfers: A Simple Framework

20 Pages Posted: 3 Aug 2022

See all articles by Johannes Wiegand

Johannes Wiegand

International Monetary Fund (IMF)

Multiple version iconThere are 2 versions of this paper

Abstract

Climate financing and compensation have emerged as key themes in the international climate mitigtion debate. According to one argument in support of compensation, advanced economies (AEs) have used up much of the atmosphere’s absorptive capacity, thus causing global warming and blocking a similar, fossil-fuel driven development path for emerging markets and developing economies (EMDEs). This paper develops a simple model of a sequential, fossil-fuel driven development process to discuss these issues systematically. The results suggest: (i) AEs have typically a stronger interest in climate change mitigation than EMDEs, (ii) from an equity perspective, compensation is called for only if EMDEs are relatively small; (iii) there can also be an efficiency case for compensation, however, with AEs buying EMDEs out of some of their GHG emissions; (iv) ultimately, a superior option—for both the world’s climate and growth prospects—is the development of clean energy technologies by AEs and their transfer to EMDEs. The latter requires strong mitigation efforts by AEs even if EMDEs fail to play along initially.

Keywords: Development, Climate change, Climate Change Mitigation, Climate Financing

Suggested Citation

Wiegand, Johannes, Global Climate Change Mitigation, Fossil-Fuel Driven Development, and the Role of Financial and Technology Transfers: A Simple Framework. Available at SSRN: https://ssrn.com/abstract=4180066 or http://dx.doi.org/10.2139/ssrn.4180066

Johannes Wiegand (Contact Author)

International Monetary Fund (IMF) ( email )

700 19th Street NW
Washington, DC 20431
United States

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
2
Abstract Views
40
PlumX Metrics