Reducing poverty and human suffering in the least developed countries is the right thing to do from an ethical/moral perspective, and it is in everyone’s own strategic self interest. Throughout human history, extreme poverty has led to war and environmental destruction. Lands are deforested, top soil eroded and villages plundered.

It is in the interest of the developed countries to do what they can to avoid these environmental and security threats through effective development assistance. Because climate change will only make a bad problem worse for most of these countries, we need to step-up our global greenhouse gas mitigation efforts and help these countries adapt to future changes in the world’s climate.

There is a direct correlation between access to electricity and both the quality and longevity of human life. Electrification directly alleviates poverty through providing clean drinking water, refrigeration of food and medicines, and by expanding education and productivity. In many developed nations, the transition to clean electric technology began in the 1970s when they significantly expanded nuclear energy as one response to the Middle East oil embargo. This effectively displaced the use of oil in the electricity system for many of these countries.

The United States and other developed countries can help developing nations most by first reducing their own GHG emissions by rapidly deploying a portfolio of clean energy technologies, including nuclear energy and renewable energy. Electrification in the least developed countries can be accelerated through distributed renewable resources.

In addition to the humanitarian benefits, development assistance to these countries should be thought of as a long-term business development opportunity. We can build sustained trading partnerships over time, exporting U.S. clean energy technology while creating quality jobs at home. As they say, we can do well by doing good.

In the context of the negotiations, developing countries are not budging from their position that their cooperation will come only with significant financial contributions from developed countries. The latest draft text says developing countries “shall” undertake actions supported by assistance provided by developed countries. And what about what the draft text calls ”autonomous mitigation actions”? Why that’s a “may.” So as things stand now, developed countries are on the hook.

The proposals by the EU being floated here of tens of billions of dollars in finance don’t begin to scratch the surface of what might be needed, as developing countries have pointed out throughout the week. So how much in assistance would be needed? The UN’s World Economic and Social Survey 2009 suggests developing countries will need international support to the tune of 1% of global GDP a year, currently about $500 to $600 billion. A report out of MIT estimates that if developing countries are fully compensated for their mitigation activities through a global emissions trading scheme, the implied financial transfers from developed countries to meet a 50% reduction in emissions by 2050 could amount to over $400 billion annually in 2020 and about $3 trillion in 2050—and that doesn’t even include adaptation.

Just as important as how much is how. Developing countries are insisting that such assistance be government-to-government. The US and other developed countries would like to see carbon markets provide the bulk of this. No matter how it’s collected, there is a real concern that these financial flows could be used to underwrite the modernization and competitiveness of often state-run firms in developing countries, putting private firms at a distinct disadvantage. We have to ensure, then, that financing goes to support activities, not governments. Otherwise, we’ll just wind up subsidizing our competition.

It is inconceivable that the governments of the industrialized world, including the United States, will come up with sufficient foreign aid to satisfy the demands for financial transfers being made by the developing countries (both for adaptation and mitigation) here in Copenhagen. However, governments can -- through the right domestic and international policy arrangements -- provide key incentives for the private sector to provide the needed finance through foreign direct investments.

For example, if the cap-and-trade systems which are emerging throughout the industrialized world as the favored domestic approach to reducing CO2 and other greenhouse gas emissions are linked together through the existing common emission-reduction-credit system, namely the Clean Development Mechanism (CDM), then powerful incentives can be created for carbon-friendly private investment in the developing world.

Clearly the CDM, as it currently stands, cannot live up to this promise, but with apppropriate reforms there remains significant potential. Of course, problems of limited addiitonality will inevitably remain. Therefore, what is needed is for the key emerging economies -- China, India, Brazil, Korea, South Korea, South Africa, and Mexico -- to take on meaningful emission targets themselves (even if equivalent to business as usual in the short term), and then participate directly in international cap-and-trade, not government-government trading as envisioned in Article 17 of the Kyoto Protocol (which won't work), but firm-firm trading through linked national and multi-national cap-and-trade systems.

Such private finance -- unlike government finance -- will of necessity be efficient, that is, targeted to reducing emissions, rather than to other (possibly meritorious) purposes in developing countries. So, all in all, the job can be done, and governments have a role, but as facilitator of finance, not provider of finance.

Representative Markey suggests many of the answers to his own question. If one accepts the inevitability of the impacts of climate change on the developing world, a clear case exists for international investment to address the need for adaptation in developing nations. First and foremost, a moral case exists that large emitters, whose historic and currently increasing emissions have contributed most to the problem of climate change, have some ethical obligation to help those developing nations who have contributed the least yet will suffer the most. Moreover, large economic opportunities abound in emerging economies if markets for green technology investment can be developed . And the risk of further destabilization in already volatile regions of the world from climate impacts might justify the economics of adaptation investments on its own.

Perhaps the most persuasive case for international investment surrounds the ticking clock associated with the rampant build out of infrastructure in the developing world. As Representative Markey points out in his question, nations such as India may develop up to 4/5 of their infrastructure over the next two decades. Should that infrastructure be developed in a way that is unsympathetic to the climate challenge – i.e., with standard fossil fuel power generation, diffuse transportation infrastructure, inefficient building designs, etc. – the inertia that would need to be overcome in order to reorient such infrastructure to a low carbon economy might be insurmountable. It would be in all nations’ interest to direct that infrastructure in a more constructive direction.

But this clear case for collective action also begets the class quandaries of collective action: Who leads? Who contributes and how much? All are interested in the benefits of adaptation funding, but all are also interested in maximizing other nations’ willingness to pay for those benefits.

That is a question for negotiation. But how that negotiation will be framed depends on where you sit. For example, in providing Overseas Development Assistance under the current treaties, is the United States the leader or the laggard? Take a look at the two charts below. By cumulative funding, the United States’ 2008 contributions of over $26 billion makes it the largest contributor by nearly a factor of two. However, evaluated as a percentage of its Gross National Income, the same U.S. contribution puts it at the bottom of the list of OECD donors. For the negotiations in Copenhagen and beyond, these sort of differences in perception must be resolved if the international community is to provide funding for adaptation commensurate with the need.

The same tropical forests that combat global climate change also provide a natural line of defense against increasingly ravaging disasters.

When Indonesia protects lowland rainforests from deforestation, it reduces carbon emissions and prevents cataclysmic fires whose smoke is felt across Southeast Asia.

When Madagascar protects mountain forests, it reduces carbon emissions and ensures clean water flows to rice growers downstream.

When the Philippines restores coastal mangrove forests, it sequesters “blue” carbon and provides a natural buffer against deadly storm surges.

And when Mexico replants forests on steeply sloping mountainsides, it sequesters carbon while protecting villages from mudslides.

Protecting forests is cost-effective, and doesn’t require new technology—just photosynthesis. Negotiators have worked tirelessly to agree on the details of a mechanism called REDD+, which would pay developing countries to protect and restore their forests. The structure of REDD+ stands on the eve of completion—let’s hope world leaders will cut the ribbon.

I’ll take on the first part of Congressman Markey’s question: How much should wealthy countries help poor ones protect themselves from climate extremes? The answer depends on exactly what we’re asking.

The United States should step up with substantially greater (and more effective) international development assistance than it has to date – for reasons that have nothing to do with climate change. The more-than-two-billion people who live on less than two dollars a day desperately need help with food, health, education, and a host of other critical needs. Climate change will exacerbate many of those problems, but most of the challenges will exist with or without global warming – and most of the needed responses will be the same. Except in limited cases (such as building seawalls or relocating low-lying populations), climate adaptation will be indistinguishable from other economic and social development efforts. That means that the world should avoid setting aside a massive amount of money for climate-specific protection. Money will be more effectively spent if it is integrated into broader development efforts. It will also do more good for the recipients.

There is, however, a strong case to be made for a significant but limited amount of money that would be targeted specifically toward adaptation assistance. Last Friday, the European Union declared that it would direct about $3B during each of the next three years to climate-related assistance; as I argued in response at the New York Times, the United States should pledge a commensurate (but not necessarily identical) amount. That money would probably go primarily to adaptation and to help avoid deforestation. It would show an (admittedly minimal) commitment from the United States to the poorest developing countries – something that’s politically significant as the United States tries to get those countries onside for a Copenhagen deal. And it could be targeted at climate-specific opportunities, such as building countries’ capacities to integrate climate change into their overall development efforts, which would in turn have broader payoffs.

Ultimately, though, we should avoid going too far in creating a separate climate adaptation track in our international development efforts. It might make us feel better to deal with the impacts of our past emissions, but, in a world where foreign aid dollars are scare, it could squeeze out needed support for more urgent developing country priorities.

The opportunity at this junction is for wealthy nations to help themselves while assisting developing nations to build their own energy infrastructure -- and at the same time help avert climate change.

Developing nations need energy to protect themselves from the extremes of climate change, as well as to develop and fight against poverty. Adaptation and mitigation efforts need energy. The International Energy Agency reports that the largest increases in energy demand in the next decades will come from developing nations, rather than from wealthy nations.

This situation provides a uniquely profitable opportunity for U.S. energy industry to help build power plants where they are needed most, focusing the industry's efforts in regions of the world with the largest increases in energy demand. Clean energy is of course a great new area of business, and it includes building solar, wind and other clean power plants, all of which increase energy available without producing emissions. The strategy is one of the smartest moves that the energy industry can make at this stage. As reported by Rep. Markey, for example, a recent McKinsey study noted that 80 percent of India’s 2030 infrastructure remains to be built.

This strategic opportunity for the energy industry was discussed since the first days of the Copenhagen conference.

But there is a further opportunity that has not yet been observed, and has the potential to transform the investment strategies of the energy industry worldwide while helping the poorest developing nations achieve funding for their infrastructure from the Clean Development Mechanism of the Kyoto Protocol. It could help resolve the current impasse between the industrial and developing nations about funding for adaptation and mitigation of the extreme damages produced by climate change.

All that is needed to achieve what is proposed here is the adoption of appropriate emissions limits to continue existing ones post 2013. Because of the carbon market, such limits will automatically unleash the positive business changes that reported below.

New technologies that suck carbon from air are available today, as reported recently by Dr. Pachauri, head of the Intergovernmental Panel on Climate Change. These technologies allow power plants that co-generate power production with carbon capture from air to be built. The approach has the ability to suck more carbon than what is produced, namely produce "negative carbon" - or a "carbon sink" namely an area that absorbs more carbon than it emits.

Power plants of this sort could be built with funding from the Kyoto Protocol Clean Development Mechanism, as they clean the atmosphere. The process can also be very profitable for the energy industry, as it adds the value of carbon credits to the value of the electricity sold when built in poor nations. This can make the world's energy industry a best friend of the environment as well as a major investor in developing nations energy infrastructure.

The solution proposed here favors the wealthy nations' energy industry, as it increases its exports and creates domestic employment. It also favors the developing nations who get to build new energy infrastructure. When coupled with the "negative carbon feature" that is mentioned above, this ensures that funding can be achieved from the Kyoto Protocol mechanism for regions such as Africa, Latin America and the Small Island States that until now could get little in terms of CDM investments. With this approach these nations can capture more carbon than they emit.

The approach is therefore attractive to developing nations as well as to private investors in developed nations who routinely invest in the energy field.

On this basis, I have proposed the creation of a $200 bn/year private fund to be underwritten by OECD nations (so as to reduce the largest slide of risk) designed to build power plants that suck carbon from air in the poorest nations of Africa, Latin America and Small Island States.

These plants can sell power as well as carbon credits, thus obtaining funding for their development. Developing nations from low emitting regions can be compensated with carbon credits for reducing more carbon than what they emit (negative carbon). The fund I propose could well become a solution for the current impasse in Copenhagen, as it will bring substantial funding and energy that are needed for adaptation and mitigation in developing nations. It will also favor employment creation and exports from OECD nations, and would be part of a strategy of focusing in demand growth areas that favors the world's energy industry in OECD nations.

I welcome Rep. Markey's response to the proposal presented here, and how it could perhaps help the passage of his excellent climate change bill when it goes to Senate.

The world's poorest countries will face the most devastating effects of climate change, despite contributing the least to the problem. While we must immediately reduce the emissions that cause global warming and avoid impacts, it is also clear that assisting poor countries now and in the future in adapting to climate change is an equal priority. Little support internationally has been given thus far to the poorest in the world, which is one reason why those countries now in Copenhagen lack trust to seal a deal.

Beyond the moral and ethical priority to ensure that these countries can adapt to the changes, however, the U.S. security community has said very clearly that these conditions can create chaos and lead to conflict. Competition for scarcer resources and increased migration — two possible outcomes of climate change — can breed instability in volatile regions. Serious commitment to adaptation from the developed world can lessen these threats. As General Chuck Wald said in recent Senate testimony: “In the military, you learn that force protection isn’t just about protecting weak spots; it’s about reducing vulnerabilities well before you get into harm’s way,” an apt analogy for adaptation.

Should we act now? Many preeminent economists estimate that the cost of inaction on climate is around five times the cost of taking action today to build the clean energy economy. Those costs are primarily in rebuilding after natural disasters, coping with security threats and trying to secure the food supply. Another group of U.S. economists have criticized studies that look only at the costs of action without considering the substantial benefits to society and particularly to the vulnerable. For example, large numbers of Americans suffer from asthma and other pulmonary diseases that are worsened by pollution – reducing emissions therefore will have a large societal benefit. Furthermore, investments in the clean energy economy will create productive new assets, industries and jobs.

American ingenuity has contributed to solving some of the world’s most pressing problems, and climate change technology should be no exception. But helping poor countries is not the only reason the United States should make clean technology a priority.

Investing in clean technology allows the United States to get in the game. Countries around the world understand that a low-carbon economy is the only way forward, and a vast new marketplace is growing. In China, they are quintupling their wind capacity goal for 2020 after consistently outpacing their previous goals. The world clean technology market is exploding, and U.S. businesses want to compete. Here at COP-15, technology will be a critical part of an agreement, providing that much more certainty about the demand for clean energy technology. American companies, such as those in the U.S. Climate Action Partnership are here to ensure they are poised to catch that wave.

Acting now to develop and deploy clean technologies is not just a win for the climate, it’s a win for our country.

With the second week of Copenhagen now upon us and the days rapidly counting down to the conclusion of the summit, the true meaning of climate change politics is showing its hand – money. At issue are two things: 1) How much should developed countries effectively compensate developing countries for past emissions by helping them to adapt to the changing climate; and 2) How much should developed countries pay developing countries to get them to reduce future emissions. The first of these I find impossible to make any judgment on at all, in part because I struggle to understand just what such money might be spent on (save for the expatriation of residents of some island states now literally disappearing) and then how it might be divided so that we get meaningful benefit from it that is actually related to the issue at hand.

But the second issue is not quite as difficult, so I will venture an opinion on it. A view on this comes from considering the abatement curve (a chart of cost and volume for emission reduction activities) for the potential emission reduction opportunities in developing countries. Broadly speaking it can be divided into two parts.

The left side of the chart shows a range of projects that give positive returns over time. They are largely energy efficiency plays in one form or another. These are things we should be doing anyway at current energy prices, but we shy away from them for all sorts of reasons ranging from capital allocation to plain laziness. Such projects exist in every country (well perhaps not Denmark, which seems to thrive on finding energy efficiency opportunities) and are found in every sector. They range from home insulation to excellence in operation of industrial facilities.

The right hand side of the abatement curve features projects that really need a carbon price to deliver positive returns over time. The best example is carbon dioxide capture and storage (CCS), which can never be revenue positive without a carbon market. A number of renewable energy technologies will continue to need the additional revenue that a carbon market can deliver, at least for some years, as might advanced biofuels with their low carbon footprint and more distant technologies such as hydrogen.

Coming back to the issue at hand, money, the abatement curve offers a mechanism for judging just what type of help should be given to the rapidly developing economies (for the poorest countries help is desperately needed simply to provide energy in the first place, which is yet again another issue and arguably not one for a climate change conference.) Energy efficiency projects should not really be funded by the developed economies given that they are attractive projects to do anyway. So the emphasis here needs to be on accelerating the uptake of such actions through loans, foreign investment and domestic policy initiatives.

But projects requiring a carbon price are different. A carbon price is an artificial construct, which effectively delivers actions that the economy would not otherwise take. This does impose a cost on the economy and it is this cost that could be borne for a period of time by the developed countries for developing country projects. With developing country per capita incomes often a fraction of those in developed economies, it is a ‘big ask’ to expect a developing economy to do this itself. But as incomes rise, there should also be an expectation that developing countries eventually implement their own carbon price policies.

Looking at a technology such as CCS, this would mean developed country cap-and-trade systems accepting credits from CCS projects in developing countries as well as providing some up-front capital for the early projects (depending on the cost of abatement and the prevailing cost of carbon.) The story would be similar for some renewables. Possibly the simplest way to steer this is to focus the money flow to developing countries on the electricity sector only, with the aim of accelerating de-carbonization. This has a number of benefits; results are likely to be very tangible for questioning voters in developed economies (e.g. xx coal fired power stations in South Africa had CCS fitted this year), major project opportunities result for technology companies and it has limited impact on competitiveness concerns emanating from developed countries – i.e. there is little appetite to fund projects in developing economies which simply enhance their industrial competitiveness. All of this means that future offset mechanisms should be targeted on the electricity sector and not across all emission activities within a developing economy.

Finally, there is the major issue of forestry / deforestation. This will also require assistance from developed economies in that it is really about land, and land has a value. Dictating how land should be used changes its value, so some compensation will be necessary in that area. This can come both through government-to-government deals and via the private sector using carbon markets.