On Forbes web site, Prof. Aseem Prakash and colleague Prof. Nives Dolšak tell us why BlackRock's CEO Larry Fink is wrong to suggest an annual $100 million for developing countries to fight climate change.
The professors think Fink is wrong for more than one reason:
The money is a fraction of what is needed and the remaining amount won't easily be filled by investors, as Fink suggests; "In Fink’s perspective, an annual aid infusion of $100 billion “in the form of grants and subsidies can absorb some of the risks that come with investing in emerging economies. They can make climate projects a viable option for institutional investors.” Thus, $1 of foreign aid would attract $9 from institutional investors.
Fink needs to clarify what will be subsidized and how this will reduce political risks that institutional investors fear."
"Second, many question the effectiveness of foreign aid in achieving governance and development goals. Recall the criticism directed at Jeffrey Sachs’ 2005 book, The End of Poverty, which proposed, ironically, annual $100 billion foreign aid. Why should climate aid be different?"