The Politics of Climate Finance: Bridging the North-South Divide

The Politics of Climate Finance: Bridging the North-South Divide

Alexander Thompson

Principal Investigator: Alexander Thompson, Department of Political Science

Since 1995, countries of the world have gathered in the annual Conference of Parties, or COP, to assess goals and progress toward the United Nations Framework Convention on Climate Change, the international environmental treaty whose objective is to prevent dangerous climate change by stabilizing levels of greenhouse gases in the atmosphere.

One of the most contentious parts of this annual meeting concerns costs. Industrialized countries have agreed to provide substantial financing to help developing countries lower emissions, adapt to the effects of climate change, and develop clean energy technology. This financing is an important part of “common but differentiated responsibilities,” or the principle that each country has different capabilities and different responsibilities in addressing climate change.

Historically, industrialized nations are not only wealthier than developing countries, but also more responsible for the carbon emissions that cause climate change, since they have been burning fossil fuels for much longer. Developing countries are more subject to the effects of climate change but less able to cope, even though they are less responsible.

However, as developing countries expand their economies in the present day, their emissions are beginning to surpass those of developed nations. Nor do poorer nations have any incentive to scale back development when substantial portions of their populations do not have access to basic needs such as electricity.

These dynamics make questions of who is going to pay for what extremely contentious. Transfers of resources from wealthier countries to the developing world can occur in the form of grants, loans, technology, or investments, and can be done by government, industry, or NGOs. But which of these should count? And should such pledges be legally binding?

These are some of the questions that Alexander Thompson is studying. The 2009 Copenhagen Accord requires industrialized countries to supply $100 billion a year in financing, but talks in 2013 in Warsaw broke down over the details of how such financing was to take place.

Thompson is conducting systematic research into the politics of international cooperation over climate finance, with a goal of diagnosing key obstacles and finding potential solutions. In this project, he is tracking the positions of key countries or blocs at each annual climate conference since 2007, as well as at meetings of its Subsidiary Body for Implementation.

Key players include the United States, European Union, Canada, Japan, Australia, and Russia, as well as developing countries in the BASIC group (Brazil, India, South Africa, and China), the G77, and the Alliance of Small Island States, whose existence is threatened by climate change.

Sources of information include the formal proposals offered by each delegation at the start of negotiations; the Earth Negotiations Bulletin, a summary of negotiations published by the International Institute for Sustainable Development; and documents each country submits as part of its reporting requirements under the framework convention. Thompson has also attended climate negotiations in Lima in 2014 and Paris in 2015 to observe and interview participants.

This research will contribute to Thompson’s forthcoming book on the evolution and design of global climate agreements, as well as allow him to contribute to current debates by recommending policy instruments that are both effective and politically acceptable.


Alexander Thompson, Professor of Political Science