Pay the Global South for climate damage, but only if it prices carbon, says economist Greenstone
Economist Michael Greenstone proposes that wealthy nations pay developing countries for climate damage, provided those countries implement carbon pricing. This market-based approach aims to address the failure of traditional climate finance models.
Why it matters
It offers a controversial but novel economic framework for global climate justice that shifts the focus from moral appeals to financial incentives.
Rich countries should pay people in developing countries for the climate damage their emissions cause , on condition that those countries put a price on carbon. That is the central proposal of a forthcoming book, Just Economics , by University of Chicago economist Michael Greenstone, with Nobel-Prize winning economists Abhijit Banerjee and Esther Duflo.
“We’re proposing Indians receive money unencumbered,” Mr. Greenstone, who is Director, Energy Policy Institute, University of Chicago, said in an interview. “Spend it on whatever you want. That is based on the amount of damage the OECD countries’ emissions are doing.” The payment, he said, “would go directly to the people, not to the government.”
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