Will the scripture be paired with actual climate action and the scale of additional funding needed? Much more ink will be spilled on this topic soon.
This year could be a turning point in terms of international commitments to stop unsustainable global warming ahead of the November 2021 Conference of the Parties (COP) in Glasgow, the United Kingdom and beyond – it should even prove for humanity. Political stars now appear to be increasingly turning political attention towards other global challenges, with the Biden administration’s multilateral re-engagement with the US and the vaccine-focused COVID-19 recovery. Will the scripture be paired with actual climate action and the scale of additional funding needed? Much more ink will be spilled on this topic soon.
Those of us who know about international development finance but do not claim deep climate expertise, initially assumed there were a small handful of well-planned questions; real climate finance experts found it difficult to seek answers beyond their current understanding. Once emerged, this knowledge will need to be widely disseminated to policy makers and other stakeholders to catalyze political decisions in Glasgow and beyond and unlock great additional resources for the defense of the planet.
We borrow Donald Rumsfeld’s infamous “known unknowns” label to refer to such glaring, inaccessible, key loopholes in our global arsenal, similar to the incomplete evidence of effective COVID-19 vaccines as this possibility barely appears. one year ago. So what are the biggest known unknowns (KU) of climate finance today?
Who can this question be asked? We contacted three senior researchers from development and climate policy think tanks. We had them pick their number one KU from the four stylized one-line questions we presented, or when we failed any of them, we invited them to another question they thought was more important. Each then chose two more experts and asked them to choose their own best KU, and in turn, they chose the two best ones that could be done similarly in a classic pyramid sales cascade.
When the potential KU list (see below) reached 9, we stopped expanding a month later, getting 21 valid responses from the 38 approached people. at universities or think tanks, as well as from governments, intergovernmental organizations and broader-based NGOs. As we understand it, they come from a wide variety of countries and professional backgrounds operating in multiple overlapping climate policy networks.
The responses in descending order of preference are:
|Do green trajectories deliver better economic outcomes in the short term, as well as the medium to long term, than Business-as-Usual?*||7|
|Are deep decarbonization plans feasible for places like China that are simultaneously trying to grow rapidly?*||3|
|Is (any) global growth consistent with limiting (global) temperature increase to 1.5 degrees C?||3|
|Are there robust estimates of the impact of climate change on the incomes of poor people?||3|
|Instead of chasing growth, what will it take to establish resilience at the center of macroeconomic fundamentals?||2|
|What’s the most appropriate shadow price (range) of carbon—and does it vary by economy—post-pandemic?*||1|
|Is setting global emissions on track to reach net zero by mid-century politically feasible?||1|
|Which developing country institutions (with national/local ownership) have scalable capacity to deliver climate change finance?||1|
|Which developing country institutions (with national/local ownership) have scalable capacity to deliver climate change finance?*||0|
The first finding is that there is a reasonable concentration of response. The “winner” KU on the short-term economic consequences of the green trajectories was chosen by one-third of the respondents, and the following three partners make up 16 of the 21 votes cast with equal KU. (One caveat: our “pyramid” polling approach did not allow early-stage voters to see the questions framed in subsequent rounds; on the contrary, latecomers were given more options. Note also that this bias is one of the first questions, especially when compared to others, but the only question that will get zero votes).
Second, this response model, together with voluntary written comments, reveals two broad underlying types of anxiety. The first, and arguably dominant, explores the tensions between economic growth and the feasibility of net zero trajectories in different ways. The second focuses more on distribution issues, particularly for different country contexts and disadvantaged groups. These are two sides of the same coin: For example, if we do not know how climate change is affecting the income of the poor, we cannot form sufficient compensatory policies at either domestic or domestic levels. We cannot neutralize the potentially regressive effects of high carbon pricing, where political support for green trajectories will weaken not only in low-income countries but in many developed countries.
Third, KUs are definitely worth exploring, especially those that owe the first three on this list to their clear “yes / no” answers. This gives us an early idea of what state of the world is implied in both scenarios, with what possible consequences. Suppose then, for example, that green trajectories turn out to be absolutely NOT better economic in the short term. So how can we counter this strong incentive to do business as usual at the household, firm and government levels, i.e. what mix of subsidies, taxes and regulations, and how to produce and sustain political support for them? Likewise, if deep decarbonisation schemes are NOT suitable for fast-growing large companies like China, what can the international community realistically do about it?
Selected Write-In Comments
Open-ended comments and additional questions raised by the expert group also provide insight into knowledge gaps:
- “What is the impact of decarbonization in developed countries on the trade prospects of poor countries?”
- “Questions about (China) and (technologies to scale) arrive at the practicality of fundamental decarbonisation based on experiments and tests. In comparison, the questions about (income effects, shadow prices) relate mainly to economic forecasting, which depends heavily on assumptions about models and parameters.”
- “The extent of vulnerability to climate change varies widely among developing countries. More research is needed to understand whether there are threshold risk levels that change the overall policy approach to resilience or require different international support for the most exposed countries.”
- “The relationship between climate and COVID can be realized in the way most governments fail to respond to the pandemic. What are revealed are systemic weaknesses that would otherwise take decades to emerge. Failure in pandemic responses is largely a failure to deal with external non-financial shocks; This may point to us where we should go, especially since the world will not be able to return and return to the world before February 2020.”
We all feel urgent to do something, but what? While the answer is inclusive, decarbonized growth, the technical and financial ways to get there are unknown. Our modest endeavor suggests that at our peril there are also a few large “known unknowns” to add to the “unknown unknowns” that we ignore but cannot define by definition for now. Asking the right questions before starting answers seems like a good place to start, even if time is short. Readers’ comments and suggestions are welcome. In particular, would it be a useful endeavor to conduct a more rigorous survey with similar inspiration but different methods of engagement and sampling?