My colleague Apurva Sanghi organized a fascinating discussion on the implications of climate change for the world's poor.  The keynote speaker, Rob Mendelsohn of Yale University highlighted the fact that the biggest effects of climate change will be felt in the "low latitude" regions where most of the world's poor live (see picture).  Inasmuch as these people are already very vulnerable to shocks, the case for adaptation policies is that much stronger.  But the other side of this finding, that the effect on rich countries will be milder, raises the question of whether these countries will engage in mitigation policies.  One of the discussants, Homi Kharas (an old friend and former colleague), pointed out that a successful mitigation program will require rich countries to keep their side of the bargain, especially if they want the fast-growing poor countries (such as China and India) to curtail their carbon emissions.  But these same rich countries appear not to be keeping their promise made in 2002 to double foreign aid by 2010 (last year the total amount of official development assistance fell in nominal terms).  If you add the fact that agriculture in northern countries may actually benefit from low levels of climate change, the political impetus for mitigation may be quite limited. 

That leaves adaptation.  While the case for public intervention in adaptation is clear, whether on market failure or equity grounds, I made the point that, as with other instances where we have intervened to correct a market failure such as health and education, there is enormous opportunity for government failure.  I don't want to think about the potential for corruption in contracts to build protective barriers to withstand rising sea levels, for instance.  We have already seen an example of government failure in mitigation, with the diversion of resources to corn producers for producing ethanol, whose mitigation benefits are suspect, and which has the effect of raising the price of rice, hurting importing countries such as Bangladesh.   That said, everyone agreed that most adaptation policies are really good development policies, such as reducing the incidence of malaria, so the main effect of the current interest in climate change may be to stimulate greater support for development in poor countries.