CiR2P Option 8 | Promise or deliver economic incentives

DISCUSSION:

The promise or delivery of economic incentives can be used to modify government behaviour or policies in the target country. Economic incentives (sometimes called “positive inducements”) can take such forms as favourable taxation regimes such as tariff reductions, new investment, access to technology, and the lifting existing sanctions.

Western governments have a range of climate-related positive inducements that they can employ, individually or in combination, to encourage governments in target countries to adopt climate action strategies to protect their population from direct and indirect climate-related harm such as drought, loss of livelihoods, and possibly even conflict. 

For example:

New investments and trade. Governments can transfer and fund new mitigation and adaptation technologies, and expertise, through these a range of bilateral and multilateral channels and incentivise private investment overseas.

Modernise infrastructure. Governments can grant loans to the target government to renovate old and build new energy and transport systems. Loans can be under preferential conditions for example meeting GHG reduction targets or the targeted roll-out of adaptation strategies. 

Financial cooperation. Donor and recipient government ministers can sign a declaration on financial cooperation and agree to open a swap currency line to improve the stability of the target country’s finances – incentivising foreign and domestic private investment in climate action activities in the target country. 

Worker and training exchanges. Donor and recipient countries can establish employment and training exchanges on the technical, legal and social issues relating to climate mitigation and adaptation activities.

Development aid. Governments can also promise or deliver increased development assistance to commence or progress tailored climate action programs in the target country.