Michael Jakob, Jan Christoph Steckel
Abstract: Avoiding dangerous climate changes requires emission reductions in not only industrialized but also developing countries. This opinion piece argues that even if the ‘full incremental costs’ of abatement in developing countries would be covered by industrialized countries, the former's development prospects could be hampered by climate change mitigation due to the following reasons. First, financial inflows have the potential to induce a ‘climate finance curse’ similar to adverse effects related to natural resource exports. Second, increased use of more expensive low-carbon energy sources could delay structural change and the build-up of physical infrastructure. Third, higher energy prices could have negative effects on poverty and inequality. We conclude that these considerations should not be seen as an indication that one should abstain from emission reductions in developing countries. However, until developing countries' most severe concerns can be appropriately addressed, attention should be focused on measures that promote human well-being while saving emissions.