Wanted: A climate agency for a bottom-up world

Nancy Birdsall, founding president of Center for Global Development and Lawrence MacDonald, vice president for communications and policy outreach at the Center for Global Development. Photo by: CGD

EDITOR’S NOTE: A new entity with a global mandate is needed to ensure the “consistent and high-quality” provision of “nonfinancial technical, legal, verification, and policy” services, write Nancy Birdsall, founding president of the Center for Global Development and Lawrence MacDonald, CGD’s vice president for communications and policy outreach.

From the signing of the Kyoto Climate Protocol in December 1997 until the Copenhagen Climate Conference in 2009, everybody assumed that collective action to address climate change required a top-down approach: a binding international treaty that would cover both emissions reductions and climate finance. When that proved to be politically impossible, world leaders tried to put a good face on failure by adopting a bottom-up approach: all countries were encouraged to announce targets for emissions reductions, and rich countries were asked to also announce aspirational goals for how much money they would provide to help developing countries lower emissions and cope with the impact of climate change already underway.

Since then, much of the discussion of the climate challenge at the international level has focused on the need for financial transfers to developing countries for mitigation and adaptation—now to be a key function of the newly created Green Climate Fund. Financial support to developing countries is important, to be sure, as is setting a global price on carbon emissions to create incentives for reductions and for the technological innovations that would enable reductions.

But finance for developing countries, bottom-up actions by rich and poor countries alike, and whatever market-based carbon pricing arises within and across nations will all be less effective and ultimately harder to sustain politically in the absence of an institution with a clear, transparent, and internationally agreed mandate to carry out a wide range of nonfinancial technical, legal, verification, and policy activities.

The functions listed below are classic public goods—in this case global public goods—in the sense that no nation or other single entity can fully capture all the benefits that would flow from investing in them. Without convergence among key players on an institutional arrangement to provide the functions, they will, as is typical of public goods, be undersupplied, and the bottom-up approach will be at risk of deteriorating into tiresome rounds of unmet and unmeasured commitments.

The functions include but are not limited to the following:

  • data creation, collection, acquisition, management, and dissemination (analogous to the World Bank’s role creating and disseminating the World Development Indicators)

  • research and policy recommendations at the country and global levels

  • third-party monitoring, reporting and ideally verification of greenhouse gas emissions at the country level (analogous in some ways to the surveillance functions carried out at the International Monetary Fund of members’ domestic macroeconomic and financial-sector issues relevant to global stability)

  • tracking of governments’ financial contributions to international climate funds and to energy and climate-relevant research and development

  • supervisory and regulatory functions to support the emergence of private markets in emissions rights at national, regional, and global levels

  • new product development (e.g. advance market commitments for creation of publicly open technologies and creation of endowment funds to finance forest people’s protective services)

  • organization and facilitation of third-party financing of technology transfers to low-income countries where new technologies are protected by intellectual property rights

  • making the case for increased government funding of basic and applied research on clean energy and forest conservation

  • provision of arbitration functions, operational insurance, and dispute resolution when and if there is an international market in emissions rights (analogous to the role of the World Trade Organization in trade disputes)

Many governmental and nongovernmental organizations are already actively involved in the provision of one or more of these services. None, however, has a clear global mandate to do so, or the solid financial footing necessary to provide these activities globally and at appropriate scale. We believe that it makes sense for the international community to identify or create an entity that would take the lead in ensuring the consistent, high-quality provision of these services. For the sake of convenience and clarity, we will refer to this proposed entity as a “global climate agency,” though the actual name could take many possible forms.

Republished with permission from the Center for Global Development. View the full report.

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