December 2009
Concerns about the high costs of climate change mitigation dominate the global debate to be resumed at Copenhagen. The question of who is to pay for the investments that will undoubtedly be needed receives far greater attention than the corollary question of who is to gain from them. From a macroeconomic perspective, one economic agent’s cost is always another agent’s income. But as this policy brief argues, the concept of cost is misleading in the context of climate change mitigation. Once the process of structural change necessitated by climate change mitigation is in full swing, there will be huge new market opportunities.
The policy issue is: how will costs and incomes be distributed in this process? UNCTAD believes that developing countries, although they face considerable costs, can also generate new income if they adapt their development strategies to the requirements of climate change mitigation. This policy brief also stresses the role of government in facilitating the process of structural change, not only by fostering “green” consumer preferences, but also by implementing pro-active industrial policies that support the production of climate-friendly equipment and appliances. In short: The world can move to a low-carbon economy without feeling paralysed by the costs – and can do so without sacrificing growth in the developing world.
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