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The time for a “New Deal” for climate change is now

In less than three months, world leaders will convene in Paris for COP21, in what is being billed as the “crunch conference” to reach an international agreement to combat the effects of climate change and limit global warming to below 2 degrees Celsius. The statistics and science on climate change continue to make grim reading. A recent report commissioned by the G7  highlights that climate risks cut across themes such as availability of freshwater, food insecurity, damage to infrastructure, and loss of ecosystems. The report—A New Climate for Peace—says that climate change will constrain access to resources in certain parts of the world in the future, which will lead to increased competition producing new tensions and fragility, particularly in politically unstable states.

View climate change as an opportunity

This year alone, we are slowly starting to witness some of the national security and migration implications of climate change. The severe drought, crop losses, and high food prices resulting from rising temperatures are thought to be one of the reasons behind both the rise of Boko Haram in Nigeria and the civil war in Syria. The latter has led to more than 400,000 refugees crossing the Mediterranean Sea and fleeing to Europe, which is now under tremendous social, economic, and political strain to accommodate and resettle these people.

While this may all seem hopeless, the truth is that climate change is as much an opportunity as it is a threat. In fact, climate change may represent a fundamental transformational opportunity, one where we can transform our economic and energy systems and build a sustainable planet.

Just as the Second World War served to usher in the New Deal, thereby bringing the U.S. out of recession and onto the path of becoming the world’s sole superpower, similarly, the threat level of climate change can serve to shock our systems into positive transformational change.

It is clear that in order to avoid dangerous levels of global warming, serious radical steps will have to be undertaken to decarbonize our energy systems. This, in turn, requires huge political and economic investments into technology innovation and R&D, most of which will have to be kick started by the public sector. In many ways, a ”New Deal for the Climate” is inevitable; the question is how far are we willing to wait before we are shocked into a response rather than producing it as a systemic reaction to a changing global landscape?

Climate change and the “creeping normalcy” effect

The problem with climate change—in the way it is distinct from WW II—is that the threat may at times be very abstract and removed. There is also a sense of what Jared Diamond termed “creeping normalcy,” where the rate of change is slow enough that we are getting normalized to extreme weather events and natural disasters. In many parts of the Global South, climate change induced natural disasters are slowly becoming the norm rather than the exception. And yet, our inertia to transformational change remains as high as ever.

There is a certain level of compassion fatigue that has clicked into gear with respect to climate change events. Yet, with time, such events will only be more and more likely for both developed countries of the West and developing countries—such as China and India—that are highly vulnerable to impacts of climate change. Human beings are unfortunately very poor at reacting to unfolding misery, but instead, need to be shocked into transformational action by quantifiable tragedy, as we have seen in the past two weeks with the Syrian refugee crisis. Do we really need a New York or Shanghai to go under water before we produce the right reaction to the threat of global warming?

Breaking out of this cognitive deadlock soon is crucial because in the future, extreme weather events will likely be so drastic that incrementalism and sanguinity will be useless. The fact is that the ability to undertake sweeping transformational change is there. Previous examples from history confirm this. For example, post 9/11, countries in the west found the political and economic capital to invest in a high tech security apparatus both at home and abroad. After the financial crisis of 2008, trillions of dollars were found to save the banks as our entire financial system was potentially at risk. More recently, the refugee crisis in Europe has led to unprecedented support and commitment from governments to grant asylum and support humanitarian ideals. In all these extraordinary times, previously dysfunctional governments came together, pooled resources, and undertook massive campaigns to save entire systems or create new ones.

The threat of climate change is in many ways far greater than these other crises, yet there is lack of political incentive to spearhead this transformation. Economists, such as Joseph Stiglitz, have pointed out the lack of aggregate demand in the world economy today, and the potential that creating a “green economy” has to stimulate employment, foster economic growth, and reduce social inequality. 

It’s time for a “New Deal” for climate change


The time has come for a “New Deal” to combat climate change. While the UNFCCC treaty will leave little room for such a declaration, world leaders in Paris need to push the green economy agenda strongly. They can do this through a declaration or communiqué, which will help set domestic agendas in different countries and provide a framework of support for any legal treaty agreed at COP 21.

This “New Deal” should guide governments to create a market for technology adoption and innovation, thereby supplying the “push” that comes before private sector capital and consumer demand will generate the inevitable “pull” for technology innovation. Carbon taxes should be introduced for fossil fuel based sources of energy by corporates and conglomerates, but designed for consumption and not production. This way, access to lifeline energy for the poor is protected while large corporations are pushed to go “green,” which will reinforce the “pull.” As my colleague Samir Saran and Rathin Roy write, financing of the clean energy revolution needs to be enabled by clear signaling that de-risks climate finance and creates a financial ecosystem that rewards investments into building a green economy.

Without the creation of a market case for a transformation of the energy system, innovation and capacity addition will proceed at a pace that is too slow to effectively combat climate change— constrained by national budgets, bureaucratic inefficiency, and limitations on the political capital available to undertake transformational change.

Across the financial and technological sphere, governments must play a leading role in setting a new agenda to orient markets away from decisions that undermine our chances to avoid dangerous levels of climate change, and instead to strategies that will support governmental and global processes on climate change. The markets that were given a free reign to pollute must now be regulated and reoriented to deliver a clean energy revolution and build a global green economy that will be responsive to the needs of the planet and its people.

As Laurence Tubiana, France’s special Representative at COP 21, has noted, “the business sector [in Copenhagen 2009] was looking for a signal to deliver a low carbon economy. Now they are pushing for the signal.” Governmental urgency on climate change must reach the levels that followed 9/11 and the financial crisis. While Paris may not be the starting point of climate action, and is definitely not the end, it may just be the turning point.

The findings, interpretations and conclusions posted on are solely those of the authors and not of The Brookings Institution, its officers, staff, board, funders, or organizations with which they may have a relationship.

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