I am currently not optimistic about suggestions that we should pay developing countries to adapt to their worsened environments or to transition their economies into ones that are less carbon-intensive (read: slower-growing). When it comes to adaptation funds, given the extremely low level of government capacity in some of these countries and the general lack of aid effectiveness,what are the chances that these transfers will actually be used for their intended purpose? It’s far more likely that the funds will just act as a payout: reparations for making the lives of the poor worse off. Chris Berg makes a compelling case against cash-for-climate in this article:
Climate aid is just another illustration of what the economist William Easterly calls development paternalism: a belief well-paid international experts, equipped with enough power and resources, should take the third world’s destiny under their benevolent wings.
When I started a post in Malawi several years ago, I spent my first day on a long drive from the south of the country to the capital, Lilongwe. I had arrived in the middle of Malawi’s dry season, when the terrain is orange, dusty and sparsely vegetated. This was my first developing country experience and, overwhelmed by this barren landscape, my immediate thoughts were: this place is a hell-hole that will never be developed, what we need to do is fly in helicopters and move everyone to a place they can live a decent life.
It wasn’t long before I was laughing at my brash, knee-jerk reaction but that isn’t to say that the policy prescription was completely crazy. Many sub-Saharan countries like Malawi are facing both internal and external climate pressures: depleted soil, extreme deforestation, volatile rainfall, and now the looming threat of rising temperatures. In some of the worst-hit, least hospitable locations, is it really reasonable that people must be stuck in such environments, just because they were unlucky enough to be born there?
There is one obvious, glaring inefficiency in the global market that is frequently overlooked by the development community: international labour mobility. The poor are eager to vote with their feet, but cannot, because of strict controls by the developed world. There is more than a little hypocrisy in our support for the fight against poverty and our lack of enthusiasm for immigration: we’re fine with attempting to provide public goods to foreigners, the same sort of public goods we value ourselves (education, health, good governance, etc), but as long as those people remain foreigners. We’re happy to act partial governments to the world’s poor, as long as they stay in the front yard.
Michael Clemens at the Center for Global Development is one of the biggest proponents for the immigration-as-development approach. He makes the case convincingly in his recent paper with Lant Printchett:
It is likely that by a reasonable international standard of poverty, two of every five living Mexicans who have escaped poverty did so by leaving Mexico; for Haitians it is four out of five. And on the order of tens of thousands of infant deaths are prevented each year for the sole reason that those infantsâ€™ parents left poor countries. Although there is no clear point at which migration becomes development, we suggest that by any reasonable standard a very large part of the developing world is already past that point.
So, given that the developing world is to suffer, and seem to be due some sort of compensation, and that immigration seems to be an effective way to fight poverty and remove people from affected areas, here is my proposal for a new global climate-change incentive scheme:
First, every country in the globe gets a certain amount of “emigration” points, which constitute a budget for purchasing the right to move to a new country. These points are indexed to the relative rise in average temperature for that country (they would be set at zero for those living in areas least affected by climate change). When an emigration slot is purchased using this budget, the government allocates that slot via a lottery system (perhaps on a family-by-family basis).
On the supply side, countries are free to continue polluting, but the more carbon they emit, the more immigration slots they have to offer up for sale.
Where, might you ask, is the incentive to reduce carbon-emissions? Xenophobia is the key. We (the West) are scared of immigration – the Lou Dobbs and BNPs of the world might be relatively marginal, but they rest upon a deep-seated unease of letting too many outsiders in too quickly.
The political ramifications of excessive immigration (and I’m talking about mass immigration) would act as the shadow price of pollution. If they acted as incentive enough to reduce emissions, then we are ok – disaster averted. If they are not, then the worst polluters must accept those that are the worst effected. It is not a perfect internalisation of the externalities at hand, but it would suffice.
Is this politically feasible? Not in the slightest; it’s only slightly less likely to happen than Lou Dobbs outsourcing his show Guadalajara, but that’s what makes it so fun to think about.