Thomas C. Schelling - IA de Investigación especializada en el MIT

Tomas C.. Schelling

International Coordination to
Address the Climate Challenge

Climate change is real, but its future is marked with uncertainties. We cannot pre-
dict the kinds of societies that will be faced with the most severe impacts of climate
cambiar 50 years or a century from now: What sort of lives will people lead? Qué
kinds of technologies will they use?

Still, we do know some things about the future effects of climate change, y
with high confidence. Sobre todo, we know that “developing” countries will experi-
ence the greatest impacts from climate change. (I put “developing” in quotes
because many of the places to which this term refers are, En realidad, not developing;
today they are, regrettably, simply poor.) For the countries most vulnerable to cli-
mate change, the most reliable defense lies in economic development itself. El
advanced industrial countries that have been primarily responsible for bringing
about climate change will most likely not experience its most severe impacts. Ellos
have a responsibility to assist both poor and genuinely developing countries to find
a path of development that does not exacerbate global harm. More urgent, it is
unlikely that China, India, Brasil, Indonesia, and other large emitters of green-
house gases can be induced to participate in massive changes in energy supply and
use without substantial assistance from the countries that can afford to assist.

Bilateral aid is probably not the right approach for mobilizing such aid and
directing it toward the most promising investments. Por ejemplo, a bilateral rela-
tion between China and the United States to help finance Chinese energy improve-

Thomas Schelling is the Lucius N. Littauer Professor of Political Economy, emeritus,
at Harvard University and a Distinguished University Professor, emeritus, at the
Universidad de Maryland. De 1948 a 1953, he worked in Europe with the Executive
Office of the President in support of the Marshall Plan. During the Carter adminis-
tration, he was selected to chair a committee of the National Academy of Sciences on
global warming. En 2005, he received the Nobel Prize in Economics, shared with
Robert Aumann, for “having enhanced our understanding of conflict and cooperation
through game-theory analysis.”

This essay is based upon remarks delivered on September 25, 2009, at the Leadership
for a Changing World conference hosted by the Center for Social Value Creation at the
University of Maryland’s Robert H. Smith School of Business.

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Tomas C.. Schelling

ments would probably get tangled in other issues, like Taiwan, North Korea, civil
rights, exchange rates, and trade policy. Institutions that isolate energy and climate
from other politics will certainly be preferred.

We can learn from a few from models of actual international cooperation. El
purpose of this essay is to describe precedents for such collaboration, and how it
might be structured to best address the climate challenge.

WHAT WE KNOW AND DON’T KNOW
ABOUT THE IMPACT OF CLIMATE CHANGE

For the countries most
vulnerable to climate
cambiar, the most reliable
defense lies in economic
development itself.

Unique to our solar system, the Earth has a combination of carbon dioxide and
water vapor that keeps the planet both warm and cool enough. Atmospheric mois-
ture doesn’t freeze solid, nor does it
become so hot that it all evaporates.
We have known for a century that
Mars, lacking a greenhouse atmos-
phere, is too cold for water to exist as
a liquid. Venus’s dense greenhouse
atmosphere has the opposite effect:
agua
steam.
Además, we’ve known that if you
shine an infrared light through a
chamber full of carbon dioxide, menos
of it comes out of the other end. Un
observer can monitor a proportional
difference between the reduced infrared light and the rise in temperature of the
carbon dioxide in the chamber.

exists

solo

como

Por supuesto, climate change is a much more complex phenomenon than is sug-
gested by this experiment, and by the formerly dominantly used term, “global
warming.” What is more, even when we talk about climate change, we are really
talking about change in hundreds of climates around the world, all different from
entre sí, all potentially affected by concentrations of greenhouse gasses in dif-
ferent ways. Some places will get hotter as a consequence of climate change, a few
will get cooler; some will get cloudier, some will get sunnier. Some will get more
storms, some will get fewer storms; some will suffer drought and some will suffer
flooding; some may suffer both. Climates differ between the east and west coasts
of continents, between high altitudes and low altitudes, between the northern and
southern hemispheres.

From the standpoint of both science and policy, global averages do not tell the
whole story. The way that climate change affects very specific places has enormous
implications for future human well-being. Por ejemplo, we know very little about
what kind of climate change will occur above 3,000 meters. Only a few Tibetans
and Bolivians live at such altitudes. Sin embargo, a great deal of the water that irrigates
agriculture around the world depends on snow that falls in the winter in the high

innovaciones / caer 2009

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International Coordination to Address the Climate Challenge

mountains and then melts gradually, beginning in late spring and continuing
through the summer irrigation season. Si, arriba 3,000 meters, what used to fall as
snow were to fall as rain, farms would lose that moisture unless they can rely on a
huge infrastructure to capture it. And if it falls as snow but melts too early in the
primavera, farmers can’t use it for irrigation because it has already flowed to the
oceans. De este modo, what happens at high altitudes will affect few people directly, pero
will have a crucial impact on the more than three billion people who live in China,
India, and Southeast Asia, and in Peru, Chile, and Argentina, not to mention
California and Colorado.

That significant uncertainties exist regarding the dynamics of climate in the
long term should come as a surprise to no one. While the science underlying the
phenomenon of
clima
change has been well under-
stood for a century,
el
inter-disciplinary field of
climate science has devel-
oped only during the last
couple of decades. Sin embargo,
the biggest uncertainty, I
believe, arises not from our
understanding of
the cli-
mate itself, but from our
vision of the kinds of soci-
eties that will exist in the
second half of this centu-
ry—the societies that will
experience the most significant impacts of climate change. To consider the effects
of climate change on human populations over time, we are compelled to consider
how a changing planet will affect the way people live and work in the second half
of this century.

We should not compel
developing countries to
drastically transform their
energy sectors in order to slow
climate change, but we must
offer them coordinated and well-
considered assistance to do so.

To illustrate this idea, imagine that we are in the 1920s, when I grew up, y
consider the climate challenge from the point of view of people living then. Qué
sorts of concerns would they have projected upon us, the people of the future?
Claramente, people in the 1920s would have been far less interested in hotter summers
than warmer winters. En los Estados Unidos, especially, many would have worried
about what would happen to roads. How much mud would a change in seasons
bring about? Back in the 1920’s, automobile tires measured about two and a half
inches in width. Pumped up to 60 pounds per square inch, they felt and acted like
madera. One of my uncles made money every summer using a team of horses to pull
automobiles out of the mud in the road near his house.

So we remain uncertain, even in our imaginations, of how people will earn
their living, even how they will entertain themselves, not only in the United States
but in sub-Saharan Africa, Southeast Asia, and the Andes, late in this century.

innovaciones / caer 2009

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Tomas C.. Schelling

Developing countries will see the worst damage. People in the developing
world depend on outdoor activity—particularly agriculture—to a far greater
extent than do people in advanced industrialized countries. Agriculture in the
United States and in most of the rest of the developed world—whether in France,
Alemania, Japón, Israel, or Norway—accounts for less than five percent of gross
domestic product. Whatever happens to agricultural productivity, Americans will
likely be able to afford high-
er-priced food. Hoy, entonces
few American
farmers
make their living from agri-
culture that the Census
Bureau has stopped count-
ing them. If the cost of food
goes up as a consequence of
climate change, the world’s
poor will suffer most.
Americans will likely have
doubled their per capita
income by the time all of
this happens. The develop-
ing world is thus particular-
ly vulnerable to climate
cambiar. Their best defense
against climate change is
their own development.

Among the ideas that I do not
believe will get serious attention
in Copenhagen is one I see as
critical to addressing the climate
challenge: creating a new
institutional structure to
coordinate assistance from
advanced industrialized countries
to developing countries with the
objective of transforming the way
that people in the developing
world produce and utilize energy.

We should not compel
developing countries
a
drastically transform their
energy sectors in order to
slow climate change, but we
must offer them coordinated and well-considered assistance to do so. Anything
that slows down their own development will worsen their situation as climate
change occurs.

En cambio, potential donor nations have been reticent to fully endorse efforts
to stop climate change at the expense of their own economic growth. En 1997, en
the time of the Kyoto Conference that led to the draft treaty about climate change,
Estados Unidos. Senate unanimously passed a resolution: it would not ratify any climate
treaty in which the major developing countries did not participate fully. As presi-
mella, Bill Clinton said at the time that he would not submit the treaty to the Senate
for ratification until diplomacy had brought China and India and other major
developing countries into compliance with a Kyoto-type program; that adminis-
tration did nothing. Then we had a president who either didn’t believe in climate
change or pretended not to. I think we now have a president who does believe in it
and who takes it seriously, and Congress has begun to take it seriously as well.

innovaciones / caer 2009

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International Coordination to Address the Climate Challenge

As for international action, I’m not optimistic about anything of great sub-
stance coming out of the upcoming Copenhagen Conference. If there were sub-
stantial agreement among major parties, worked out over the preceding six
meses, Copenhagen might generate the finishing touches. But the participants in
the conference cannot accomplish much new work over only two weeks in
Copenhague.

Among the ideas that I do not believe will get serious attention in Copenhagen
is one I see as critical to addressing the climate challenge: creating a new institu-
tional structure to coordinate assistance from advanced industrialized countries to
developing countries with the objective of transforming the way that people in the
developing world produce and utilize energy. If we want China, India, Brasil, y
others to transform their energy sectors drastically, they must engage in costly and
systemic transformations of their energy infrastructures. The array of actions they
must take will include removing carbon from the emissions of power plants and
putting it underground permanently, developing wind or solar power on a large
escala, and converting from coal to oil or natural gas. To make such changes will
require assistance from advanced industrialized countries.

A PROPOSAL AND ITS PRECEDENTS

Rich countries will need to negotiate how they will share the cost of contributing
resources to the developing world. Countries within the European Union, el
United States, Canada, Japón, Australia, and New Zealand will need to find a way
to agree upon how much they will put up to help major countries in the develop-
ing world to transform their energy economies, and how they will share the costs
of transferring resources to the countries that most need to transform their use of
energía.

We will also need some kind of institution within which the major developing
nations that will have the greatest impact on the greenhouse problem (Porcelana,
India, Brasil, Indonesia, and a few others) can decide how they will share in what-
ever resources the rich countries make available for the purpose of transforming
their energy sectors.

The recipients should also declare what they will commit themselves to do in
return for the kind of help they may get. Idealmente, potential recipients within the
developing world would negotiate among themselves on how to share the money
made available by the rich countries. Por supuesto, they may not agree at first; después
todo, India and China battled barely 45 years ago and they still have military con-
frontations in the Himalayas. The institution would provide a forum where they
can at least attempt to reach an agreement on how they would share what the rich
countries have made available.

A third institution would channel funds to the developing world, acting as an
intermediary between the donor countries and the receiving countries that does
not rely on bilateral relations. We will need this intermediary agency to monitor
what recipients do with all of the funds, and to create an entire climate-oriented

innovaciones / caer 2009

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Tomas C.. Schelling

investment program in each recipient country. The recipient countries must have
a coherent program for making changes in their energy sector, and a subsequent
plan to channel the internationally transferred funds to specific projects. Donor
countries should not simply finance one or two particular investments that substi-
tute for what the country itself might have done.

I can’t think of any precedent in the last 50 years for what I suggest. Sin embargo,
the Marshall Plan provides a model whose potential has intrigued me for years.
During the early years of the Marshall Plan, beginning in April of 1948, los unidos
States first contributed $5 billion for a 15-month period to the 15 countries of Western Europe that constituted the Organization for European Economic Cooperation (OEEC). The initial $4 billion per year represented about two percent
of the U.S. gross national product—a lot of money. The United States divided it up
among the recipient countries of
Western Europe. For the second
año, spanning 1949 a 1950, el
United States said it would appro-
priate a
for the
lump sum
Europeans to divide among them-
selves.

I can’t think of any precedent
in the last 50 years for what I
sugerir. Sin embargo, el
Marshall Plan provides a
model whose potential has
intrigued me for years.

That was quite a challenge.
The OEEC had
to develop
detailed questionnaires that every
recipient nation filled out in order
to indicate how much aid it qual-
ified for and how much it request-
ed out of the forthcoming total.
This involved making up national accounts, something that was brand new in the
United States and that no economist in Greece knew anything about. These coun-
tries suddenly had to figure out how to allocate their gross national product—rel-
ative to Marshall Plan funding—between public investment, private investment,
and private consumption. These investments could take the form of anything from
repairing roads and railroads and dredging canals to building schools and homes
and hospitals. The nations even had to decide how to ration gasoline, meat, y
butter.

They spent six months developing this program, essentially a claim for a part
of the resources that the U.S. would make available. At the ministerial level in Paris,
they negotiated for about six weeks, cross-examining each other and bearing in
mind that more for one country meant less for the rest of them. They negotiated
peacefully, on a first-name basis and in good will, and reached nearly final agree-
mento. Then the Secretary General of the OEEC and the Belgian delegate—Belgium
didn’t ask for any portion—went off to Fontainebleau and spent a weekend
preparing a proposal for how to share the funds among the 14 countries that had
aplicado. They came back and presented it to the ministers of the 14 countries, y
the delegates unanimously accepted the division.

innovaciones / caer 2009

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International Coordination to Address the Climate Challenge

This is the only precedent I have ever found of countries getting together and,
in gentlemanly fashion, negotiating how to share a crucially large lump sum of
resources, available only if they could find a way to divide it among themselves.

tiempo

they would

Have recipient countries ever agreed on how to share their own contributions
to a joint project? A few precedents do exist, again from 50 o 60 years ago. En 1951,
the Marshall Plan became the Mutual Security Program and aid became tied to the
burdens that European countries would bear if they would share in NATO defense.
Again they went through something like what had happened with the Marshall
Plan division in 1949-1950, the “Burden-Sharing” Negotiation. En 1951, los unidos
States made aid to Western Europe available only in connection with the commit-
ments that the recipient countries would undertake, such as the number of men
they would raise for the armed
forces, the number of months they
would train them, and the amount
serve.
de
Commitments also included their
expenditures for military equip-
ment and ammunition, and provi-
sion of real estate for military
maneuvers, NATO pipelines, mili-
tary housing, and the like.

A treaty or an agreement on
what to do about reducing
greenhouse gas emissions
has greater odds of success
when countries commit to
actions they will take rather
than to results in the year
2030 o 2050.

The NATO treaty differs signif-
icantly from most climate change
treaties in that the NATO signato-
ries declared what they would do,
instead of stating results 20 o 30
years down the road. The Dutch
didn’t say, “We will contribute to
retarding a Soviet invasion by two and a half days.” And the French didn’t say, “We
will contribute enough to reduce the likelihood of a Soviet attack by two and a half
percent.” Instead, they committed themselves to the troops they would raise, el
money they would spend, and the real estate they would make available. Por lo tanto,
they knew whether or not they honored their commitments—and so did every-
body else. You could look and see what they had done. Y, En realidad, NATO com-
mitments were substantially carried out. That suggests to me strongly that a treaty
or an agreement on what to do about reducing greenhouse gas emissions has
greater odds of success when countries commit to the actions they will take rather
than to results in the year 2030 o 2050.

To say that we will reduce greenhouse gas emissions by 50 percent by 2030 o
por 80 percent by 2050 doesn’t indicate what steps we need to take. Along the way,
no one will be able to say whether our completed activities will contribute to what
needs to happen to meet the long-term target.

In response to this issue I see another precedent, the one set in 1946 by the
Bretton Woods negotiation, which established the International Bank for

innovaciones / caer 2009

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Tomas C.. Schelling

Reconstruction and Development and the International Monetary Fund (IMF),
both of which required contributions to their capital assets. Both institutions had
to sell bonds to accumulate funds and then lend out the funds for reconstruction
and development or financial solvency, and they needed capital assets. The capital
assets had to come from the countries that could afford to contribute, and donor
countries had to negotiate to determine how much and in what currencies the var-
ious contributing countries would make their contributions. They managed to
arrive at an agreement. The IMF and the World Bank did get funded and estab-
liado, and have operated for more than a half a century.

Por otro lado, some other precedents warn us to be cautious about agree-
ments to share costs or revenues. Consider the League of Nations after World War
I. Seeking an appropriate model to replicate, it found one in the International
Postal Union of 1874, which taxed its participants for shares in the funds that the
union needed. The league ultimately experienced the same results as the union
had. The Postal Union formula involved geographical size, population size, y un
few other variables, none of which corresponded to any notion of “ability to pay”
or likely benefits from the union.

And consider the United Nations. After World War II, it tried to establish
something analogous to a progressive income tax: countries with a higher per capi-
ta income would contribute a higher share of the U.N. budget. It largely turned out
that way, except that the U.N. had a special problem: the United States played such
a huge role in the world economy that almost any reasonable formula would
require it to contribute more than half of all the funds. Not only did the U.S. find
that unacceptable, most other countries felt it would create a dominating situation
for the United States. Estados Unidos. ended up with a share of slightly more than one
third of the total. The U.N. also engages in separate negotiations for specific pro-
grams like peacekeeping; different countries negotiate shares of the costs depend-
ing on where the peacekeeping occurs. These and other myriad examples illustrate
the problems that a new multi-lateral institution may confront.

USES OF A GLOBAL FUND

How would the resources gathered by such a fund be spent? To fully enumerate the
options for each place and speculate on priorities is well beyond the scope of this
essay. Other contributions to this special issue of Innovations provide some ideas.
I believe it important to identify the aid with specific projects. Pure financial trans-
fers are likely to appear as bribery or extortion. Here I offer just two illustrative
examples.

Countries like China or India, with a vast wealth of natural resources and a
steep curve of improvements in industrial infrastructure expansion, will require a
huge number of investments, and large ones. Wind power is an attractive source of
energy that involves no greenhouse gas emissions in its operation. Sin embargo, wind
power depends on the wind blowing fairly regularly. Además, the turbines can-
not lie too far from the electricity’s destination because transmitting that electric-

innovaciones / caer 2009

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International Coordination to Address the Climate Challenge

ity does cost something, especially if it has to go a few thousand kilometers. Porcelana
has exceptional potential for developing wind energy, especially in northeast China
and Manchuria. Tibet has an enormous amount of steady wind, but Tibet lies far
away from the areas that most need electricity. If China had the funds to reduce its
dependence on coal, wind power might present itself as a more than viable option.
China has advanced significantly in developing ways to convert sunlight directly
into electricity, but by nature that technology requires huge installations and lots
of investment.

A second example is capturing carbon dioxide as factories emit it, which has
spurred a great deal of interest recently. Carbon capture and sequestration takes
the carbon dioxide that comes out of a smokestack, separates it from the rest of the
gases, converts it into a liquid-like substance (called its super critical form), y
subsequently requires transport to sites that can handle deep storage underground.
(See the case narrative authored by Frank Alix in this issue.) Oil companies have
used this technique for 30 o 40 years to get more oil out of depleted wells. Este
could mean that China, which has enormous coal deposits and is building coal-
fired electric power plants at the rate of more than one a week, could exploit its
valuable coal resources, separate out much of the carbon dioxide, and inject it
underground to seal it in. That would require a lot of geological exploration and
experimentation. The process is expensive because it includes constructing an
entire plant to capture the carbon dioxide and the pipelines to inject it under-
ground.

CONCLUSIÓN

Who will lead in creating the sort of institution I have tried to describe? To my
conocimiento, no part of the U.S. government is currently focused on ensuring that
we have the institutional structure we will need, one that will allow the rich coun-
tries to coordinate their climate assistance to developing countries, and allow the
developing countries to determine how to allocate funds to the projects with the
highest global return, and that can monitor and account for the way the aid is
invested.

To address these climate challenges, we must find mechanisms so that those
countries in the developing world that are most likely to contribute to growth in
carbon emissions over coming decades can upgrade and transform their energy
infrastructures in ways that do not cripple their own development. The multi-lat-
eral nature of the climate impacts demands that solutions come about through a
multi-lateral process. Though we cannot know the particular paths by which we
would avoid the most severe consequences of climate solutions, we can act now to
lay the foundation.

innovaciones / caer 2009

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