Beyond the baseline - large scale climate friendly development

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University of Cape Town

A deep impasse has emerged between industrialized and developing countries on the task of reducing carbon--the former arguing that the task is essential, and the latter putting a higher priority on development. The compromise, so far, has been to focus carbon abatement in developing countries on marginal activities that reduce carbon below a "baseline." The extra cost is paid as compensation by investors, and the emission credits are traded in markets. We suggest a different strategy that integrates climate protection and economic development. We illustrate with two large-scale development programs--one in South Africa, the other in China- -and demonstrate that there are significant quantities of emissions to be saved and that these do little harm to, and can even encourage, economic development. For these developing countries, we show that it is impossible to achieve these savings under current emissions mitigation mechanisms, and as such, they may not be realized until it is too late.