CRED: A New Model of Climate and Development

The Climate and Regional Economics of Development (CRED) model examines the relationship between global equity and climate outcomes. It finds that while optimal climate policy requires substantial capital transfers from high-income to developing nations, more realistic constraints typically lead to worse climate outcomes unless accompanied by low discount rates. The model suggests that scenarios prioritizing equity result in superior climate protection.

• The CRED model's primary innovations include its approach to global equity, the calculation of optimal interregional resource flows, and the application of McKinsey marginal abatement cost curves for mitigation cost projections.
• Optimal, unconstrained climate policy within the CRED model necessitates very large capital flows from high-income countries to developing countries, though such flows may be politically unrealistic.
• Under realistic constraints, climate outcomes generally decline; achieving climate stabilization then depends on either moderate capital flows to developing nations or the application of a very low discount rate.
• The model indicates that scenarios emphasizing greater equity lead to improved climate outcomes, suggesting that the primary policy challenge is convincing high-income nations to support both international equity and climate protection.

APA

Stockholm Environment Institute (2011). CRED: A New Model of Climate and Development. https://www.sei.org/publications/cred-a-new-model-of-climate-and-development/

Chicago

Stockholm Environment Institute. CRED: A New Model of Climate and Development. 2011. https://www.sei.org/publications/cred-a-new-model-of-climate-and-development/.

Wikipedia

{{cite report |author=Stockholm Environment Institute |title=CRED: A New Model of Climate and Development |date=27 May 2011 |url=https://www.sei.org/publications/cred-a-new-model-of-climate-and-development/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{stockholmenvironmentinstitute2011cred, author = {{Stockholm Environment Institute}}, title = {{CRED: A New Model of Climate and Development}}, institution = {Stockholm Environment Institute}, year = {2011}, month = may, url = {https://www.sei.org/publications/cred-a-new-model-of-climate-and-development/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }