Thomas Schelling: A Marshall Plan for Climate Change?

marshal-planBy: Scott Shuffield

The global warming debate is over.  Now the argument moves to solving the crisis of climate change.  Though often referred to in the context of “global warming,” the issues of climate change don’t just involve “warming” around the world but rather a general instability that could lead to innumerable negative externalities.  

During the Leadership for a Better World forum hosted by the Center for Social Value Creation, Thomas Schelling, Nobel Laureate and economist who helped shape the Marshall Plan, spoke on the institutions needed to cope with climate change.

First off, a little background information from his talk:

1.    “Developing” countries will be hurt the most by climate change.
2.    The cost of food will go up and the poorer countries will suffer more than richer countries.
3.    Agriculture makes up a large part of many developing countries’ economies.
4.    Developed countries cannot solve the problem of climate change without the help of developing countries.

After outlining these few points, Schelling presented his ideas on bringing a “Marshall Plan” to climate change.  He insisted that the developing and the developed countries (like China and the U.S.) should not communicate directly, but through an intermediary.  Affairs between the two countries are already so muddy that a mediator is a necessity.  The mediator could be an existing institution like the World Bank, but the issue is so large, that a new group may need to be created to serve as the climate change negotiator.

Next, he suggested that the developed countries meet together and accumulate a large sum of capital.  He equated it to the Marshall Plan, where the U.S. pledged 2% of its GDP to the Organization for European Economic Cooperation (OEEC).  After the funds are pledged, then the 6-12 developing countries thought to be playing the largest role in the climate change discussion, will sit down with the mediator and distribute the money themselves.  This same thing happened with the Marshall Plan when Western European nations met and distributed funds amongst themselves.

That’s it, the whole plan.  The only real stipulation is that the money would have to have allocation for spending on certain technologies like carbon sequestration and capture (taking the carbon out of pollution and pumping it into the ground).

Is this a viable solution?  Could the solution work for developing countries?  Is there willingness on the part of developed countries to simply give away money?  Are the consequences of climate change enough to justify huge “donations” to developing countries?  And the biggest question of all, how do we know that this will even help the problem at all?

What do you think?


Scott Shuffield is an undergraduate international business student at the Robert H. Smith Business School at the University of Maryland.  He has worked with Prisma Microfinance Honduras and and is Co-President of the Global Business Society at the University of Maryland.

The posts on this page are contributed by students from the University of Maryland's Robert H. Smith School of Business in conjunction with the newly launched Center for Social Value Creation. The center's mission is to develop leaders with a deep sense of individual responsibility and the knowledge to use business as a vehicle for social change. These posts are a way to continue the dialogue outside of the classroom and share the viewpoints of Smith students on the challenges and opportunities of triple bottom line thinking.

4 responses

  1. “(Climate change) could lead to innumerable negative externalities . . ..”

    Yes! But that seems to be a rather vague description
    Of the bad things that “climate change” will bring about
    But like all clouds it may have a lining of silver
    That will put all the world’s troubles to rout.

  2. When you review the scientific papers out there you find that nothing has done more to “GREEN” the planet over the past few decades than elevated levels of atmospheric CO2 together with moderate sun-driven warming of the planet. If you should doubt this assertion, simply Google “Biological Effects of Carbon Dioxide Enrichment” and “Solar Inertial Motion (SIM) model of global warming”. Then review the basic documents and a sampling of the scientific bibliographic references. One has to ask the question, “Why have environmental groups and our government turned this obvious gift of nature on its head and buried us in propaganda designed to convince us of just the opposite reality?” As a consequence, I have stopped all donations to environmental organizations and to their favored political party. I highly encourage you to do the same. All my financial donations stay within 25 miles of my home, where I can keep an eye on their use.

  3. Climate Change is definitely one of those issues that is life changing if you talk to Dr Yunus on it. First Bangladesh will probably be the first 100+ million nation to be washed away if we world citizens mess this up in the 2010s. Secondly since 1996 Grameen Energy has developed solar in a way that is now microloan affordable across the rural poor -in other words thriving carbon negative economies are entrepreneurially possible if your countries leading community builders are in charge, use microeconomics’ social business system models and if you have sun. 3rd when I was last in Dhaka (visit 4 to grameen bank and visit 2 to BRAC ) I was preceded by 2 senior British ministers who spent 2 days meeting leaders in Dhaka congratulating them on becoming open source sustainability epicentre of the world and asking them to take a lead voice at Copenhagen. 4th my friend polar and solar explorer and broadcaster at the BBC blogs this on dr yunus 69th birthday party for sustainability

    I have a naive question – do you see the day when Obama would send ministers to Dhaka to celebrate this or when national US media cover this good news story? Why or why not?

    It was my take on Schelling’s talk that in the pre-mass tv media days of the Marshall plan national leaders ultimately acted as hi-trust people rather than people boxed in by perceptions of promises made, or short-term voting rewards to come. I don’t think its healthy when bankers or politicians make decisions mediated by 90 day numbers and I am absoluetly sure it was not what adam smith meant by free market economics having read the 250th anniversary talk Dr Yunus gave at Glasgow – one of the 12 global universities now helping his collaboration research of how social value multiplies in a network economics age . usa 301 881 1655

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