It could incentivize nations to transition to greener energy sources.

World Carbon Bank

The World Bank's stated goal is to reduce poverty across the globe by providing nations in need with interest-free loans and technical assistance.

We now need to create a similar agency to address the climate crisis, Harvard University professor of economics and public policy Kenneth Rogoff writes in a new commentary piece published by Project Syndicate.

"It is high time to create a new, focused agency, a World Carbon Bank, that provides a vehicle for advanced economies to coordinate aid and technical transfer," Rogoff wrote, "and that is not simultaneously trying to solve every other development problem."

Justifiable Cost

According to Rogoff, developing nations in Asia and Africa won't be able to transition away from available coal power unless properly incentivized and guided — and we need them to make the change if we want to have any hope of avoiding climate catastrophe.

"A new World Carbon Bank is almost surely a necessary piece of any comprehensive solution," Rogoff wrote, "even given the miraculous technological developments everyone is hoping for."

However, Rogoff expects convincing these nations will be quite an expensive undertaking.

"How much it will cost depends on assumptions and ambitions, but one can easily imagine a trillion dollars over ten years," he wrote. "Crazy? Maybe not, compared to the alternatives."

READ MORE: The Case for a World Carbon Bank [Project Syndicate]

More on climate change: "Climate Apartheid" Is Imminent. Only the Rich Will Survive.

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