Ten propositions on climate change and growth

This report by the Climate and Development Knowledge Network (CDKN) examines the intersection of economic growth and climate change, specifically focusing on the needs of developing countries. It argues for 'climate compatible development'—a strategy that minimizes climate harm while maximizing human development opportunities. The document outlines ten propositions, asserting that while growth is an imperative for poverty reduction in poor nations, it must be transitioned toward low-carbon models to be sustainable. It emphasizes the need for national strategies, the leveraging of private finance, and the creation of political consensus to manage the disruptive shifts in global production and markets caused by climate policy.

• Economic growth is an essential requirement for the poorest countries to meet basic human needs, as redistribution alone is insufficient. For countries with consumption per capita under $2,000 per year at 2005 PPP, the marginal tax rates required to fill the poverty gap are described as 'prohibitive', often reaching 100% or more.
• Climate change and the policies implemented to combat it both impact economic growth. Direct climate impacts include reduced grain yields—estimated at a 10% decline for every 1 degree rise in temperature above the optimum during the growing season—and damage to infrastructure. Mitigation measures, such as carbon taxes, may increase production and transport costs, potentially reducing real income and demand in the short term.
• Climate change and related policies create a global shift in production possibilities and market opportunities, resulting in both winners and losers. Examples include Bolivia's potential to develop battery manufacturing using its estimated 50% of the world's lithium reserves, and China's growth in the solar cell industry, where a single firm, Renesola, produced over 1 GW for export in 2010.
• Low-carbon or 'green' growth is considered feasible and can act as an industrial policy to create jobs and competitive advantages. For instance, a World Economic Forum study on South Africa suggested that if renewables accounted for 15% of total energy production, up to 50,000 jobs could be created. UNEP identifies agriculture, buildings, forestry, transport, renewable energy, and waste management as sectors with significant growth potential.
• Effective climate-compatible development requires national strategies that move away from 'blueprint planning'—which is often top-down and inflexible—toward 'process planning', which is open, participatory, and flexible. The document notes that current UN-mandated documents like NAMA (Nationally Appropriate Mitigation Actions) and NAPA (National Adaptation Programme of Action) are being superseded by more comprehensive Low Carbon Development or Growth Plans.
• Climate finance must prioritize leveraging private investment, as public funds alone are insufficient. The goal is to use public money to 'crowd-in' private capital, with some discussions suggesting a leverage ratio of 18:1. To attract this investment, countries need 'investment-grade' policy frameworks that provide stability and predictability.
• Securing long-term political consensus for climate policy is difficult because the dangers are not immediately tangible (Giddens' paradox) and the scale of winners and losers creates conflict (Maxwell's paradox). Proposed solutions include using all-party parliamentary groups, setting up independent monitoring bodies, and employing scenario planning, as demonstrated by South Africa's Long Term Mitigation Scenarios (LTMS).

APA

Maxwell, S. (n.d.). Ten propositions on climate change and growth. Climate and Development Knowledge Network. https://cdkn.org/sites/default/files/files/Ten-observations-on-climate-change-and-growth.pdf

Chicago

Maxwell, Simon. Ten propositions on climate change and growth. Climate and Development Knowledge Network, n.d. https://cdkn.org/sites/default/files/files/Ten-observations-on-climate-change-and-growth.pdf.

Wikipedia

{{cite report |last1=Maxwell |first1=Simon |title=Ten propositions on climate change and growth |publisher=Climate and Development Knowledge Network |url=https://cdkn.org/sites/default/files/files/Ten-observations-on-climate-change-and-growth.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{maxwellndten, author = {Maxwell, Simon}, title = {{Ten propositions on climate change and growth}}, institution = {Climate and Development Knowledge Network}, url = {https://cdkn.org/sites/default/files/files/Ten-observations-on-climate-change-and-growth.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }