Pointing out that developing countries’ growth must not be held back by concerns over global warming, former World Bank chief economist Lawrence H Summers on Tuesday said industrialised countries must share clean technologies with developing countries. He added that the developed countries must make “far greater commitment” to funding of research into reduction of greenhouse gases (GHGs).
The developing countries led by China and India must lead the fight against global warming, Summers said, adding that the industrialised countries, which are responsible for 75% of past emissions, must bear the financial burden.
Summers delivered the KB Lall Memorial Lecture on ‘Global Warming and Global Finance’ on Tuesday. “The central challenge of international global finance,” he said, is managing the flow of funds from industrialised countries to developing countries to the latter take steps to tackle global warming.
Suggesting that development banks be reconceptualised as development and environment banks, Summers aid their task should be to ensure that finance flows from rich to poor countries, and not as loans but as grants and credit guarantees, to help the latter take steps to reduce GHG emissions.
Summers, currently President Emeritus of Harvard University, US, added that an international mechanism to measure policy action in industrialised countries must be evolved, and there should be a universal commitment to end all energy subsidies by 2025 – estimated at $250 bn worldwide – to check excessive use of energy.
Pointing out that 75% of future emissions of GHGs will come from developing countries, Summers said the relation between energy use and GDP growth is not necessarily directly proportional, and it is possible to achieve growth without increasing emissions. He added that developing countries must not and need not recapitulate the development path of industrialised countries as the context is vastly different today given the availability of clean technology and the emerging global consensus in favour of cutting emissions.
Summers also pointed out that developing countries, which are in the process of developing infrastructure and adopting growth strategies, can cover more ground at a lesser cost than the industrialised countries.