Monday, December 21, 2009

Copenhagen--Next Steps:

Is There a Win-Win in the Financial Commitments?

I will leave it to others to analyze the success or failure of the Copenhagen conference. However, now that the dust has begun to settle, I want to focus on one issue that I think did not get enough attention during the conference--that is, the issue of how the financial support from developed countries to developing countries can be implemented.

Even here, I don't want to address the entire issue of financial support. I do not want to debate whether it is a wealth-transfer mechanism, and if so, how much money the developed countries should pay and whether China should be a beneficiary. These are truly important questions, but I have no special insight to offer.

The neglected area that I want to address is whether we can make the financial commitment--whatever the amount and whatever countries are involved--work for the developed countries as well as the developing countries.

In particular, it seems to me that we can use the financial assistance we provide to developing countries to benefit the industries of the developed countries at the same time. Rather than handing out money--which sometimes results in disastrous misuse of funds anyway--shouldn't the governments of the developed countries purchase products from their domestic companies and send those products abroad? Shouldn't money provided by the US be used to put US technology in the developing countries, whether that technology is nuclear power plants, or solar collectors, or windmills?

I would think the populations of the developed countries should view the demands of the developing countries far differently if the financial support is structured so that it also contained an opportunity for us to foster the development and growth of new domestic energy-supply industries. And it might also help change the viewpoint of China, which would like to be a supplier nation.

True, the financial support the developing countries want must cover costs other than hardware alone, so the entire package cannot be spent this way. Still, a large fraction of it could be.

And true, the developing countries will want to develop some of their own capabilities. This idea doesn't preclude that possibility, but that may come later and through different mechanisms. If the developing countries are truly serious that they need financial support to help them reduce their emissions, then they should welcome the chance for a quick start using technology from developed countries. And they should realize that it is still the developing countries that are going to suffer the most from climate change in the years ahead.

I can conceive of several different ways a financial program such as this might be implemented, each of which may have some pros and cons. However, the first step is for the developed countries to recognize the opportunity that should exist in the "demands" from the developing countries and to proceed with that thought in mind in further discussions on this subject.


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