Táíwò asks whether nation-states can be corralled to create a green global economy—a starting point, he argues, for anything else that might improve the lives of the world’s poor.

As an economist and a social innovator, we see the prospect from both practice and theory, but it is important to situate the matter historically. The state was central to postwar industrialization; it has been invoked again, following the demise of the Washington Consensus, in efforts aimed at healing society from the human costs of neoliberal globalization. More recently, the call to “bring the state back” has often amounted to viewing the state as a mere platform for creative experimentation with new global governance models. We think this gets it wrong. A successful global fight against climate change will have to be based on reinvigorated states that are, if not democratic, then at least developmental. 

The absence of a workable mechanism for global governance undermines the efficient allocation of the decarbonization burden. So far, we’ve seen only scattered breakthroughs rather than sustained progress. This is not a new problem: multilateral processes have historically stalled on trade, development, and conflict resolution. Today’s geopolitical fracturing makes any supranational steering and sanctions regime even less credible. Institutions like the Bretton Woods system, the Kyoto Protocol, the Treaty on the Prohibition of Nuclear Weapons, the Geneva Conventions, and the World Trade Organization are not a path forward; they are based principally on reciprocity rather than true globalist norms. This pseudo-governance model would be even less workable in combating climate change, since mere state-to-state reciprocity isn’t practical on this issue.

Hopes of seeing poorer countries cooperate with climate goals are not misplaced.

How are we to overcome this collective action problem before it’s too late? The most realistic option seems to be a path suggested by economist William Nordhaus, whereby “clubs”—voluntary associations of countries—take charge, each led by a large stakeholder that can internalize global externalities and would be willing to enforce trade sanctions among club members. The megastates—the EU, United States, and China—are the natural leaders here. They account for around half of global GDP as well as half of global CO2 emissions. (China alone emitted about 35 percent of global emissions in 2023.) One can expect gaming among them on burden sharing, but that should not prevent cooperation given the high cost of inaction. Indeed, they are all moving fast—not just on decarbonization, but also in pursuit of dominance in green technology, as if they are fairly certain that these markets are here to stay. 

This still leaves 50 percent of emissions. Close allies of the three hegemons, which include all other high-income and upper-middle-income countries, account for about another 30 percent. These countries are deeply interconnected through trade relations, capital movement, and technological exchange, and in a club arrangement they would thus be likely to be disciplined by one or more of the hegemons. Europe has already instituted a tariff system, the Carbon Border Adjustment Mechanism, that will tax imports produced with brown technologies. Even if the United States or China uses subsidies instead of tariffs to attract more of the production of new technologies to their economy, other players are likely to retaliate with trade policy rather than by terminating their effort to green the planet in self-beneficial ways. 

The remaining roughly 20 percent of emissions come from poorer countries, which collectively emit around 7 gigatons each year. Global attention is currently lax about their contributions, for understandable practical and historical reasons. Yet the countries in this unrestrained club will represent more than half the world population in 2050, and they could easily emit more than 10 gigatons annually by then if they are not constrained. With the climactic system increasingly sensitive to marginal shifts, emissions from this group could tilt the balance over safe temperature thresholds. 

Roping in the unrestrained club is widely seen as a function of climate finance. The price tag of aligning the interests of the unrestrained club with high global ambition by funding appropriate mitigation and bankable adaptation projects has been estimated at about $1 to $2 trillion per year between 2030 and 2050. But having failed to disburse pledged commitments of just $100 billion a year, the richer countries appear in no mood to assume the full magnitude of the climate finance burden.  

Yet hopes of seeing poorer countries cooperate with climate goals are not totally misplaced. For one thing, renewable technologies are becoming more affordable; solar electricity is already cheaper than fossil-based electricity at relatively low interest rates (as it is capital intensive). Moreover, poorer countries—the true Global South—will want to export to the rich North and to China, and as climate cooperation progresses, that will be possible only if these countries green their export industries—and, more broadly, their formal sectors.

Still, even in the best-case scenario, some poorer countries will fail to go green. Economically, they will be restricted, more or less, to the informal sectors of the Global South—the south of the south, so to speak. They would be joined by some pariah states specializing in “illicit” activities: the drug trade, arms sales, and tax evasion, along with coal, oil, and gas trafficking. Rich countries might be more likely to invest in police states that will restrict (climate) migration from these places than in global green development. (The EU already outsources migrant policing to Turkey and Tunisia.) In place of “fossil imperialism,” then, we may end up with a new, green colonialism—a proliferation of regimes that keep poorer countries poor and specialize in stopping the barbarians at the gates, as the North would see it. A dictatorial, poor, and repressed Global South would be the price we pay for a green planet. 

To avoid this dystopian result, progressive forces need to mobilize both South and North to build responsible states invested in the national common good. This is a huge undertaking, no doubt, but we see the old “state effectiveness” trope making a comeback in some of the baby steps of programs like the EU’s Global Gateway. What should this responsibility look like? Responsible southern states would be developmental, refusing to limit their ambition to becoming a border police force. (Witness Botswana’s “sustainable development pathway” approach or Namibia’s bold plan to reduce 91 percent of its emissions by 2030 through green industrialization.) Meanwhile, responsible northern states would finance responsible southern states that are willing to pursue inclusive and sustainable development—because it’s in their interest to do so. They need stronger, progressive allies in the Global South to preserve the international coalition for a rules-based normative system that is both humane and developmental. Above all, they need such alliances to offset the threats to global order posed by revanchist powers eager to align with southern states frustrated by a status quo big on rhetoric yet light on results. 

This proposal may have sounded naive in the past. But in light of the realist calculus of burden-sharing clubs, it appears to be the only pragmatic and acceptable pathway for countries optimizing national interests to achieve global emissions goals.

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