The climate crisis is expensive -- here's who should pay for it | Avinash Persaud
Aug 17, 2023
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Economist Avinash Persaud is working on the Bridgetown Initiative to change how rich countries finance poor countries during the climate crisis. He discusses the impact of global climate change on small countries and the importance of a green transformation. The chapters explore rebuilding after natural disasters, addressing responsibility and financing for climate action, new sources of public finance, and lowering the cost of the climate crisis with the involvement of affected communities.
The Bridgetown Initiative aims to make small countries profitable by focusing on green transformation and making resilience affordable through funding from emission taxes and financial transaction taxes.
The Bridgetown Initiative recognizes the need for shared responsibility in tackling climate change and calls for financing plans that make resilience affordable, flow of finance after disasters immediate, and the green transformation profitable.
Deep dives
Making Small Countries Climate-Resilient
Small countries, particularly tropical ones, feel the brunt of climate change but lack the resources to combat it. Avi Nash Persaud presents the Bridgestown Initiative, a plan to make small countries profitable by focusing on green transformation. After witnessing the devastation of Hurricane Maria in Dominica, Persaud realized that the key is making resilience affordable, financing immediate post-disaster recovery, and investment in renewable energies. This involves funding through emission taxes, financial transaction taxes, and international development banks. By tackling resilience, savings, and revenue, the initiative aims to break the impasse of inaction and make a significant impact on climate change.
The Responsibility of Developing Countries
While rich countries bear historical responsibility for global warming, the majority of greenhouse gas emissions now come from developing countries experiencing rapid growth. The challenge lies in not cementing inequality or burdening developing nations with the full cost of tackling climate change. The Bridgestown Initiative recognizes that a green transformation of developing countries is essential for stabilizing planetary systems. It emphasizes the need for shared responsibility and calls for financing plans that make resilience affordable and the flow of finance after disasters immediate, all while making the green transformation profitable.
The Three Buckets Financing Plan
The Bridgestown Initiative proposes a financing plan that includes three buckets: small, medium, and large. The smallest bucket funds things that don't generate savings or profits, such as rebuilding low-income homes destroyed by climate events. This requires new sources of public finance, including emission taxes and a small financial transaction tax. The medium bucket covers investments in resilient infrastructure that generate immediate savings. It calls for multilateral development banks to lend more on sustainable development goals and for rich countries to provide additional capital. The largest bucket focuses on revenue-generating projects like solar farms and wind turbines, attracting private sector investment through the lowering of currency fluctuation risks.
The world's smallest countries, often tropical places, are the first to feel the effects of global climate change, but they lack the funds to fight it. Economist Avinash Persaud is working on a plan to change that: the Bridgetown Initiative, an ambitious proposal to change how rich countries finance poor countries during the climate crisis. He lays out what a green transformation for small nations could look like -- and how it could be profitable for everyone involved.