Decentralization in many countries has given subnational governments certain spending responsibilities, revenue-raising authority, and the capacity to incur debt. Furthermore, rapid urbanization in developing countries is requiring large-scale infrastructure financing to help absorb influxes of rural populations. Not surprisingly, the subnational debt market in some developing countries has been going through a notable transformation.
While consensus in the COP18 negotiations has yet to be reached, most can agree that national governments cannot be solely responsible for addressing climate change. Local governments, the private sector and individuals must each play a part in supporting and growing the green economy. However, one way national governments can easily step up to the plate is to remove policy barriers for subnational actions on climate change.