Financing SD: Country Undertakings and Rights for Environmental Sustainability

R. Quentin Grafton, Frank Jotzo and Merrilyn Wasson ()
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Merrilyn Wasson: Australian National University, Research School of Pacific and Asian Studies

Economics and Environment Network Working Papers from Australian National University, Economics and Environment Network

Abstract: The paper proposes a global mechanism to finance and promote sustainable development (SD) that is multinational, provides incentives for rich and poor countries to promote SD, incorporates the principle of common but differentiated responsibilities and links incentives and funding for SD to structural benchmarks and performance targets. The mechanism would operate as a large fund into which rich countries would pay based on their level of population, per capita income and change in an individual or composite measure of environmental sustainability. The approach offers a number of features that make it a superior mechanism to the Global Environmental Facility (GEF). Receipts from the funds, called Country Undertakings and Rights for Environmental Sustainability (CURES), would be made to poor countries based on their population, per capita income and absolute level of environmental sustainability. To illustrate the mechanism, Genuine Savings (GS) is used as a measure of environmental sustainability and country contributions and payments from a $10 billion annual fund are calculated and compared. The control of Indonesian forest fires is used as an example where CURES could be used to fund initiatives that could generate very large global benefits.

Keywords: sustainable development; environmental performance; genuine savings (search for similar items in EconPapers)
JEL-codes: O1 O2 Q2 (search for similar items in EconPapers)
Pages: 34 pages
Date: 2003-01
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