12/19/2014 11:26 am ET Updated Feb 18, 2015

Growth vs. Emissions Cuts: A False Dilemma

Last week United Nations member countries reached an agreement at the Lima climate negotiations that perhaps somewhat predictably left no one completely satisfied but also, perhaps surprisingly, gave everyone something at least somewhat positive to bring home. Most importantly, the talks advanced the likelihood of a major global deal in Paris next year, although admittedly not as much as many hoped. Less surprising is that during the Lima talks, the debate centered on two well-worn dichotomies. The first is the rich countries vs. developing countries conflict, and the second is the growth vs. curbing emissions choice, which I view as a something of a false dilemma.

In the run-up, during, and in the aftermath of these events we are told by experts, politicians, and pundits that developing countries should not bound by pledges to cut emissions because they have not had the same opportunities as developed countries to grow their economies without regard to how much CO2 they produce. Likewise, certain people in developed countries, particularly in the United States, argue that now is not the time to agree to binding cuts while economies are still fragile. Both of these arguments presuppose that in order to curb carbon emissions, countries must sacrifice growth -- that developing countries cannot boost incomes and lift people out of poverty and developed countries cannot maintain their middle classes if they are shackled to a legally-binding international carbon regime.

This may have been the case a decade or two ago when clean energy technologies were prohibitively expensive and untested. Now we know, however, that in many countries renewable energy is actually the cheapest option available, especially if governments would stop artificially suppressing the cost of fossil fuels with subsidies. This is particularly important for developing countries that do not already have the brown energy infrastructure in place. They can "leap frog" the dirty stage of development and employ green energy from the get-go. Indeed we are beginning to see several examples of this phenomenon.

Costa Rica, for instance, has plans to be a carbon neutral country by 2021. Similarly, Ethiopia, one of Africa's fastest growing economies and success stories, has adopted a national policy framework aimed at growing its economy to middle income status by 2025 through deploying green energy technology. Large economies have also in recent years taken serious steps to adopt low carbon growth policies, which aim to severely cut carbon emissions while still creating jobs. Germany, for example, is on track to fuel its economy with 80 percent renewable energy without sacrificing growth.

The key elements to realizing low carbon green growth are finance and political will. On the former, adequate financial resources already exist to smooth and hasten the transition to a green economy. For developed countries, aging energy infrastructure requires heavy investment anyway, so it makes sense, and is in fact cheaper, to make green investments rather than doubling down on fossil fuels. For developing countries, there is ample funding available from the public and private sectors to assist with green energy infrastructure projects. The obstacles preventing this are government readiness and whether they have created an environment that minimizes risks for investors. However, this too is changing with an increasing number of international organizations and agencies, including my own, the Global Green Growth Institute, focusing on assisting countries to develop projects that are investment-ready. This will help get the finance flowing much more rapidly.

It is true that the result at Lima was a watered-down version of what many people hoped for, but it was enough for it still to be possible to reach a meaningful agreement next year in Paris. However, for that to happen, we must stop believing in the false choice between growth and cutting emissions. We must focus on the economic opportunities presented by adopting green energy technologies.