Nick Santos
University of California, Davis
Quick note: this is an off-the-cuff policy idea I thought of this morning and it is meant to further the discourse on international energy policy rather than propose a concrete plan on how to solve climate problems. Please feel free to criticize and elaborate on this.
The non-signatories, including the US, of the current international climate treaty, the Kyoto Protocol, heavily indicated that the primary reasons they were not joining in were related to equity issues for international development (or a perceived lack of those issues for the United States). While much more grassroots pressure is available for a climate treaty, my impression is that the general consensus among experts is that we will need to solve these equity issues before the world’s carbon giants will sign on.
The initial solution from liberals, including myself, is technological aid. The developed world provides solar, wind, and geothermal technology to rapidly developing nations so they develop with clean energy rather than coal. But this solution understandably has conservatives up in arms over giveaways to nations like China and India – nations we are currently in economic rivalries with.
My proposed “solution” to this is an international fund for technological development (can someone point out if one already exists somewhere at the IMF or something? I did some cursory looks before writing, but didn’t find anything yet). The fund’s purpose is to provide just enough money to make renewable energy projects cheaper than fossil fuel projects – maybe bring them to something like 5-10% cheaper in a short-run cost analysis. This fund would involve contributions from developed nations, but funds would only be dispersed if the following conditions are met:
- The funds will be used to install clean energy systems or supporting infrastructure.
- It can be shown that in the relatively short term (about a year), a fossil fuel power system in the region of installation would be cheaper than a renewable energy system for the area. This proof would not be terribly difficult for the next decade or so, but would put a built-in time limit on the fund to prevent abuse.
- A portion of the components larger than the percentage contribution of money from the fund is bought from nations that contribute to the fund. For example, if the funds provide 25% of the funding for the project, more than 25% of the components for the project would need to be bought from fund contributing nations. The number would likely need to be some sizable percentage to provide incentive – maybe something like double the amount (if possible).
- A nation cannot both contribute to the fund and receive money from it.
Anyway, this was just my thought. The hope was that it provides incentives for developing nations to install renewables instead of fossil power while incentivizing developed nations to provide this technology because they receive some of the benefit from it. Contribution to the fund is voluntary, but is the only way to have fund money used to buy components from your country. In my opinion, this should be a separate agreement from the Copenhagen agreement to prevent new complexities, but should be implemented at the same time to provide incentive.
Ok, I promised this would be quick, so I think that’s it. As I said, this was just a quick thought and I’d love to do some economic analysis on it, so if you have thoughts, speak up. Please critique/comment below or provide feedback via email to nick.mylastname at rooseveltinstitution dot org
