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Who Needs Development If the World Ends First?

June 20, 2011

At a recent panel titled “Power Implications of the 21st Century,” Carnegie scholar Uri Dadush offered a surprising observation about the consequences of globalization: climate change, he claimed, would be the world’s most challenging economic problem over the next fifty years.

Source: Chris Madden

Maybe this is old news for some (sorry, Al Gore), but in development, the large focus on economic growth often surpasses consideration for environmental issues.

Dadush’s remark came during an event promoting his and co-author William Shaw’s new book, Juggernaut: How Emerging Markets are Reshaping Globalization. Dadush and Shaw w forecast the rise of emerging economies like India, China, and Brazil and their potential to raise billions out of poverty. They call on developed nations to develop a “global conscience” and to help usher developing nations through globalization’s four largest growing pains: protectionism, financial crisis, geo-political breakdown, and climate change.

During the Q&A, audience members responded eagerly to the first three concerns, seizing on the need for governments to reduce corruption and income inequality. Consciously or not, the audience drifted to problems that involved policy makers rather than forces of nature. Climate change was never mentioned until the very end, when Dadush made the above observation.

We’ll grant that the development community has a lot of Big, Complicated Issues to consider (social institutions, civil society, fraudulent book sales etc.), but the threat of climate change is so fundamentally linked to development that it may eclipse these other concerns in severity and scope.

Source: Center for Security Studies

The relationship between energy use and industrialization is nothing new. In 2000, the International Energy Agency (IEA) estimated that global energy use will increase by 70% in the next twenty years. Moreover, developing economies would account for a whopping accounting for 90% of this growth. If left unchecked, the dramatic increase in carbon emissions could raise global average temperatures up to 6ºC and increase the frequency of severe weather.

While these consequences would be felt all over the globe, they would dis proportionately affect developing countries. The 2006 Stern Review on the Economics of Climate Change, a report prepared for the British government, highlights a trifecta of factors that magnify the impacts of climate change in emerging nations:

  • Geographical location: developing countries already have a higher average temperature than developed nations, and their climate is also subject to greater variability.
  • Local economic activities: developing nations are heavily dependent on agriculture, which is highly sensitive to temperature changes.
  • Weak coping capability: low incomes leave individuals and families with very little flexibility to respond to emergency situations while weak government institutions, coupled with corruption, make aid distribution difficult.

Testimony to this principle can be found in the 2011 Failed State Index, prepared by the Fund for Peace and published by Foreign Policy magazine. Benin (flood), Niger (drought), Haiti (earthquake), and Chile (ditto) all tumbled in the rankings after natural disasters devastated already fragile social and political institutions, magnifying the consequences of global warming.

As far as economic harm, the Stern Review concluded that the costs of climate change associated with unregulated economic growth would be “equivalent to losing at least 5% of global GDP each year, now and forever.” It advocates an aggressive approach that would include a cap-and-trade program and increased investment in low-energy technology. Although these conclusions have come under some criticism for their dramatic short-term measures (notably by Yale professor William Nordhaus), most scientists and economists agree that unregulated growth is unsustainable.

That being said, placing limits on carbon emissions and reducing the use of fossil fuels would inevitably increase the cost of development, according to a World Bank report. Spiraling energy costs could dampen industrialization and slow economic growthSevere weather patterns would necessitate more durable (and expensive) infrastructure as well as greater disaster relief funds. And in order to compete in a new global economy, developing nations would have to expend precious resources to invest in new technologies. Thus, emerging economies are caught between two evils: while ignoring the risks of climate change would be devastating, pursuing an adequate response nevertheless extracts its own pound of flesh.

An effective resolution to the threat of global warming must balance the economic growth of developing countries with the carbon emissions that this growth will inevitably produce. As the Commission on Climate Change and Development notes, there exists a popular sentiment among developing nations “that the North [developed nations] caused climate change, so the North should sharply cut its own GHG emissions, leaving the South [emerging economies] to develop along a carbon-intensive path until it is much richer.” Unfortunately, this logic doesn’t really work, and the Commission’s report warns that “a fossil-fueled South will undermine its own development long before it reaches Northern income levels.”

The material trappings of the modern world are a Trojan horse, and countries in all stages of development must be wary, lest they open the gates to economic and environmental disaster. After all, economic growth can only exist if the world is still standing.

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