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Climate Change and Economic Development

Illiterate African women become solar engineers


Economics Nobel Laureate calls for 'contingent' climate change treaty

Dealing with climate change requires a strong international treaty to limit greenhouse gas emissions – but getting such a treaty will not be easy. This is where a 'contingent treaty' could help, according to economics Nobel laureate Professor Eric Maskin, who will present his idea at this week’s 2010 Global Economic Symposium.

Reducing emissions is economically costly, but the costs of reduction are not publicly known and are therefore not verifiable. This means that if a treaty suggests to a country that it should reduce its carbon emissions by a specific amount, the country may well object on the grounds that it will be too costly – especially if it is a developing country – and the treaty negotiators would be unable to definitively prove the country wrong.

Rather than specifying targets, a contingent treaty could instead offer each country a menu of choices. These would range from high reductions with high compensations – in the form of trade concessions or technology transfers from richer countries – to low reductions with low compensations.

After signing the treaty, the developing country could then choose the option best suited to it. By making use of mechanism design theory – for which Maskin was awarded the Nobel prize in 2007 – the treaty could be designed so that each country would in fact choose the reduction level that it would have been assigned had reduction costs been publicly known in the first place.

Eric Maskin says:

'If the rich countries were to help the poor countries implement new technologies, there would be a triple dividend: CO2 emission reductions, energy savings and new jobs.'

Eric Maskin was awarded the 2007 Nobel Memorial Prize in Economics, which he shared with Leonid Hurwicz and Roger Myerson, for his work on mechanism design.

Contingent Climate-Change Treaties

Eric Maskin, Nobel laureate

We probably can’t deal successfully with climate change without a strong international treaty limiting greenhouse gas emissions. But getting such a treaty is hard. One important reason is that reducing emissions is economically costly, but the costs of reduction are not publicly known.

Thus, if a treaty negotiator proposes that country A reduce its carbon emissions by x%, that country may well object – especially if it is a developing country – that to do so would be prohibitively expensive – and the negotiator would be hard pressed to prove the country wrong.

That is where a contingent treaty could help. Rather than specifying that developing country A should reduce by a specific amount, the treaty could offer country A a menu of choices, ranging from high reductions (with correspondingly high compensations, in the form of trade concessions or technology transfers) to low reductions (with low compensations).

After signing the treaty, country A would then choose the option that best suited it. In fact, by making use of the mechanism design theory, one could design the treaty so that country A would choose the reduction level that it would have been assigned had reduction costs been publicly known in the first place.


Developed countries must take responsibility for climate change, UNESCO  representative says

The burden for dealing with climate change rests primarily on the developed world – they have nine times the wealth, eight times the consumption and eight times the carbon emissions of the poorest countries despite having only one fifth of the population. This is among the arguments of Dato Lee Yee-Cheong of UNESCO, speaking at this week's 2010 Global Economic Symposium.

He will argue that the two main challenges facing humanity are climate change and global poverty and that the main concern of developing countries should be economic development to eradicate extreme poverty. It adds that this should be achieved by focusing on infrastructure at the local level using local human resources. This recommendation goes against the current trend for 'mega-projects' that exclude the local economy and which Dato Lee Yee-Cheong says will 'plunge their countries deeper into poverty'.

He will warn that global consumption on the scale of the average American would be unsustainable for our planet. To realise the necessary culture of sustainable consumption, drastic changes in life-styles are necessary, especially in richer countries. This will require resolute political and social will along with the 'Asian Values of self-reliance, hard work, thrift and investment in education'.

Date Lee Yee-Cheong is Chairman of the Governing Board, UNESCO Science, Technology and Innovation Centre for South-South Cooperation


Illiterate African women become solar engineers

Illiterate mothers and grandmothers in the least developed countries in Africa are becoming solar engineers for the 21st century, supplying their communities with clean, low cost, household lighting powered by the sun.

Speaking at this week's 2010 Global Economic Symposium, Sanjit Bunker Roy will describe how the Barefoot College (, which he founded, brings African women to India for six months, where they receive practical training in the installation and maintenance of clean, low cost solar-powered household lighting systems. The women then return to their villages to work as the local solar engineer.

Since 2005, 140 rural African grandmothers from the 21 least developed countries in Africa have solar-electrified nearly 10,000 remote rural homes. The programme targets rural communities living on less than $1 per day where women often spend hours fetching wood or kerosene and where lighting is the second highest family cost after food.

Training local women to be fully competent solar engineers removes the need for an urban, 'paper-qualified' solar engineer and eliminates the dependency on urban experts. Each household agrees to pay a fee between $5 and $10 a month for the solar lighting.

While this is roughly what households used to spend on lighting, they save on environmental and health damage. The average kerosene lamp in Africa produces one ton of carbon dioxide in under 10 years.

Sanjit Bunker Roy says:

'Just because they cannot read and write, there is no reason that very poor women cannot be water and solar engineers, designers, communicators, midwives, architects and rural social entrepreneurs.'

The Barefoot College in India is supported by the government of India, which provides funding for the air travel and training costs of the African women. Since 1971, the Barefoot Approach has been used to reach remote, poor, rural villages in 25 countries in Africa, Asia and Latin America.

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