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The “climate imperative”—the urgent need to both mitigate and adapt to global climate change—has important implications for economic development paths in general and industry and energy policies in particular. Development models and practice historically have treated climate—and the natural environment—as exogenous. Future development models will need to incorporate both climactic uncertainty and the economic threats and opportunities arising from an evolving global climate regime. Developing countries will need to design energy and industry policies which aim to achieve not only economic and social objectives but which also enhance climate resilience.

This paper explores the broad contours of climate-resilient industrial development paths. It defines development as an increase in local capacities for production and innovation and argues that the overarching goal of development is the generation of sustainable livelihoods. It suggests that to be climate resilient, industry policies should have five key design features: 1) they are pro-active; 2) they promote industrial diversification; 3) they focus on mobilizing investment in environmentally sustainable industries and infrastructure, 4) they are highly responsive to local geo-physical conditions and are based on principles of adaptive management; and 5) they are designed, implemented and governed via accountable partnerships involving government, business, and community actors.

The paper evaluates three development macro-models—neo-liberal, sustainable globalization, and new developmental—against the five design principles and finds that aspects of both climate vulnerability and climate-resilience are embodied in each. The paper concludes that responding to the climate imperative will require not a new synthesized one-size-fits-all model but a multiplicity of economic development paths.

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