Ten Observations on Climate Change and Green Growth

This briefing appendix provides a matrix analyzing the potential positive, negative, and indeterminate effects of various climate mitigation policies—including carbon taxes, emission trading schemes, and REDD+—on developing countries across five dimensions: trade, capital flows, aid/development finance, technology, and growth.

• Carbon taxes and emission trading schemes (ETS) can have mixed impacts on developing countries. While they may cause 'leakage' by increasing exports to countries without taxes, they can also increase foreign direct investment (FDI) to non-taxing countries and potentially provide aid if revenues are allocated to developing nations. ETS specifically may reduce the growth sacrificed for mitigation and increase trade in Certified Emission Reductions (CERs).
• Border tax adjustments are generally viewed as having negative effects on developing countries, potentially leading to lost export revenues for affected sectors, increased protectionist tendencies that lower global growth, and reduced flows of technology and capital.
• REDD+ and the Clean Development Mechanism (CDM) are identified as drivers of financial inflows and technology transfer. Both allow countries to sell credits to those with emission targets, though REDD+ carries a risk of 'Dutch disease' if high aid inflows damage the competitiveness of other economic sectors.
• The liberalisation of environmental goods and services (EGS) and general technology transfer are expected to be broadly positive, increasing welfare for importers, creating new export opportunities, and raising productivity through increased technological capacities.

APA

Maxwell, S. (n.d.). Ten Observations on Climate Change and Green Growth. Climate and Development Knowledge Network. https://cdkn.org/sites/default/files/files/Interactions-between-climate-policies-growth-and-poverty_Maxwell.pdf

Chicago

Maxwell, Simon. Ten Observations on Climate Change and Green Growth. Climate and Development Knowledge Network, n.d. https://cdkn.org/sites/default/files/files/Interactions-between-climate-policies-growth-and-poverty_Maxwell.pdf.

Wikipedia

{{cite report |last1=Maxwell |first1=Simon |title=Ten Observations on Climate Change and Green Growth |publisher=Climate and Development Knowledge Network |url=https://cdkn.org/sites/default/files/files/Interactions-between-climate-policies-growth-and-poverty_Maxwell.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{maxwellndten, author = {Maxwell, Simon}, title = {{Ten Observations on Climate Change and Green Growth}}, institution = {Climate and Development Knowledge Network}, url = {https://cdkn.org/sites/default/files/files/Interactions-between-climate-policies-growth-and-poverty_Maxwell.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }