Climate Challenge As Development Opportunity

When climate change is framed as a global problem requiring collective regulation of greenhouse-gas emissions, developing-country governments see little reason to prioritise the issue over others. After all, the rich, industrialised countries that contributed disproportionately to the problem are themselves backing away from decarbonisation and climate-finance commitments, while low-income countries bear the brunt of the costs of climate change. Decision-makers in developing countries understandably conclude it may be more rational to hunker down and focus on climate resilience rather than emissions reductions.

But this is not the only way to frame the problem. While climate change undoubtedly poses a global collective-action problem, in practice, climate outcomes are shaped by myriad decisions concerning development objectives such as industrial development, urbanisation, job creation, and local pollution management. Because late developers often have not entirely locked into energy systems, transport infrastructure, urbanisation plans, and energy consumption patterns, they have greater flexibility to steer investment and consumption choices towards lower-carbon and climate-resilient options.

Climate equity

In other words, the climate challenge can be framed as a choice among alternative development pathways. In many cases, development choices are also climate choices, and in a world where being a low-carbon economy confers a competitive edge, the absence of structural lock-in could be turned into an advantage. Pursuing a climate-as-development approach is not easy or foolproof: It requires considerable state capacity, strategy-setting capabilities, and full mobilisation of the necessary technologies and finance. Importantly, it does not negate concerns about climate equity. 

Developing countries may opt to pursue the climate-as-development opportunity, but rich countries that disproportionately caused the problem remain on the hook to support this transition. Yet, this perspective offers an alternative to the zero-sum framing of climate policy and a basis for nationally specific visions. An important starting point is that elites internalize and support low-carbon development as a potential opportunity, with climate resilience as a necessary component. Climate objectives cannot trump development goals, but, equally, development innocent of climate considerations is no longer viable. 

To be politically feasible, any strategy must be rooted in the national context. Low-carbon development pathways are not easily replicable and need to be tailored to geography, local capacities, and other variables. And, as with any long-term structural change, a durable, widely shared national narrative is needed. Shifting from narrative and vision to policy and implementation requires high levels of state capacity. Technical capabilities, along with the ability to identify climate-as-development opportunities and sources of climate vulnerability, are necessary, but by no means sufficient. In addition, as sociologist Peter Evans’ analysis of East Asian industrial policy reminds us, the state must be simultaneously “embedded” to engage and support private-sector players, and maintain sufficient “autonomy” to avoid capture.

In practice, this means building institutions that can set the strategy, coordinate across sectors and at different scales, and provide trusted platforms to mediate conflict, ideally enshrined in law. All too often, climate policymaking is entrusted to relatively weak or siloed environmental ministries that cannot organise or enforce an all-of-government approach. Moreover, because broad structural changes can introduce distributional concerns and leave some communities behind, deliberative bodies – such as South Africa’s Presidential Climate Commission – can help to entrench low-carbon options by mediating social frictions and maintaining broad-based political buy-in.

Another major challenge for developing and emerging economies facing high capital costs is mobilising adequate finance for capital-intensive low-carbon development. There are no easy answers here. According to BloombergNEF, global investment in the low-carbon energy transition in 2024 was only around one-third of the annual amount required through 2030, and there were wide disparities in spending. Developing countries have experienced few tangible gains from multilateral initiatives to scale up climate finance and reform the international financial architecture. Holding advanced economies to their financing commitments should remain a priority; but developing countries also need to mobilize more domestic finance and develop credible investment programmes to attract global capital.

Recent efforts to create “country platforms” – government-led coordination mechanisms that articulate a vision and identify financing pathways to achieve it – suggest one way forward. In preparing to host this year’s United Nations Climate Change Conference (COP30), Brazil is seeking to lead the way with a comprehensive multisectoral development programme to mobilise investment. Independent research suggests that Brazil has all the ingredients for a successful green industrial transformation: a strong resource base, a legacy of advanced manufacturing, and a large market. Such models are worth exploring elsewhere, provided that they reflect a national vision, not donor-driven objectives.

Direct action 

One common criticism of nationally led, multi-objective development strategies is that the urgency of the climate crisis demands more direct action focused on emissions reduction, rather than on the indirect pathways suggested here. But this view ignores political reality. If climate action is seen to be at odds with other development objectives, it will lose. The only option is to devise strategies that can realise both sets of goals. The most effective climate policy over the long term might be one that shapes structural choices regarding urbanisation and industrialisation, rather than one that focuses narrowly on regulating emissions.

With the scope for global cooperation receding in today’s fraught geopolitical environment, these arguments should not be interpreted as a call for atomisation. On the contrary, developing national visions for low-carbon, resilient economies would benefit from mutual learning and enhanced coordination rooted in attention to local contexts. Moreover, deploying low-carbon technologies will require investment in stable value chains, which depend on political and economic predictability. Developing countries, in particular, will have to be strategic and nimble in finding a niche for themselves. And the provision of finance at the necessary scale will still depend on a threshold degree of global cooperation. But there is only one foundation that can support all these elements: a domestically developed vision of a low-carbon, competitive, and resilient economy.

(The author is Professor of Public and International Affairs at the High Meadows Environmental Institute at Princeton University.)

- Project Syndicate