Ways to spend money on climate change

Presented with the massive problem of climate change (including the possibility of extremely severe impacts) states with set resources and capabilities must choose between different kinds of responses:

1. Domestic actions to reduce emissions
2. Domestic actions to enhance sinks
3. Funding emission reductions elsewhere
4. Funding sink enhancement elsewhere
5. Investing in resilience, either general (emergency response) or specific (engineering measures to combat certain expected effects)
6. Helping others invest in resilience: either as compensation for past emissions, an inducement to take action, or out of compassion
7. Investing in future mitigation technologies
8. Amassing resources and waiting for greater certainty about what will happen

Choosing between these is very challenging and, realistically, we cannot expect governments to rationally and explicitly choose a strategy. Rather, an overall approach will emerge as a combination of semi-overlapping elements: some reinforcing one another and some conflicting. Furthermore, many choices will be made for non-climatic reasons. If we can spend $X in Canada, cut Y emissions, and employ 1,000 Canadians, we might find that option preferable to spending $X elsewhere to eliminate 100Y in emissions.

Multiple axes of uncertainty – about economic and technological development, future resource availability, total and regional climate change impacts, etc – further complicates the problem of prioritization. Economic analyses like the Stern Review argue that investing in mitigation urgently is a better choice than waiting or investing primarily in adaptation. Unfortunately, that is also the strategy with the most barriers. It requires taking somewhat costly action now, at a time when other states have not necessarily committed to equivalent behaviours.

Thankfully, there is the possibility that early action will have a signalling effect, showing that climate change mitigation is achievable at an acceptable cost, and that significant co-benefits can arise, such as advancing the transition towards a sustainable energy system built on renewables.

Author: Milan

In the spring of 2005, I graduated from the University of British Columbia with a degree in International Relations and a general focus in the area of environmental politics. In the fall of 2005, I began reading for an M.Phil in IR at Wadham College, Oxford. Outside school, I am very interested in photography, writing, and the outdoors. I am writing this blog to keep in touch with friends and family around the world, provide a more personal view of graduate student life in Oxford, and pass on some lessons I've learned here. View all posts by Milan