A Dynamic Analysis of Fairness in Global Warming Policy: Kyoto, Buenos Aires, and Beyond
AbstractIn December 1997, 34 industrialized countries signed the Kyoto Protocol committing to targets and timetables to reduce 6 greenhouse gases (GHGs). Why were the only signatories industrialized countries? Two reasons are usually put forth. The first is pragmatism, in that only this group, as opposed to developing countries, can afford the costs of mitigating GHGs. Still, this explanation is imperfect since 12 of the signatories are transitional economies of Eastern Europe and the former Soviet Union. The second reason is fairness, in that industrialized countries are responsible for the vast majority of the GHGs already built-up in the atmosphere and are responsible for over 60% of the current emissions. The fairness explanation is further supported by the fact that "differentiation" was invoked in Kyoto, i.e., not all signatories agreed to equal cutbacks, several citing special economic circumstances. In the future, both pragmatism and fairness will be relevant to the question of when and how developing countries will sign a global GHG agreement. Another major influence will be the pursuit of economic efficiency or, at least, cost-effectiveness, i.e., making sure that the targets are met at the lowest global cost. This can be fine-tuned in future agreements by the use of incentive-based instruments and the timing of commitments. Efficiency may also be affected by relative burden-sharing, since this will influence the number of countries that make mitigation commitments in the future. The purpose of this paper is to analyze fairness, or equity, aspects of the current Kyoto Protocol and its extension to a truly global agreement that includes developing countries. This is done in the context of a policy approach gaining increasing favor - tradeable emission permits. A dynamic model of intercountry CO2 permit trading is used to address the following questions: 1) To what extent does permit trading lower global CO2 mitigation costs? 2) How are intercountry welfare impacts influenced by alternative permit distributions according to various equity criteria? 3) How might developing countries be brought into the agreement without requiring CO2 reductions, yet promoting global efficiency gains by utilizing their relatively lower cost mitigation capabilities? 4) To what extent does allowing for permit trading over time further lower global mitigation costs? 5) How are intercountry welfare impacts distinguished by not just static definitions of equity but also dynamic versions, such as sustainability criteria?
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Universidad del CEMA in its journal Journal of Applied Economics.
Volume (Year): I (1998)
Issue (Month): (November)
Contact details of provider:
Postal: Av. Córdoba 374, (C1054AAP) Capital Federal
Phone: (5411) 6314-3000
Fax: (5411) 4314-1654
Web page: http://www.cema.edu.ar/publicaciones/jae.html
More information through EDIRC
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Eyckmans, Johan & Proost, Stef & Schokkaert, Erik, 1993. "Efficiency and Distribution in Greenhouse Negotiations," Kyklos, Wiley Blackwell, vol. 46(3), pages 363-97.
- Larsen, Bjorn & Shah, Anwar, 1994.
"Global Tradeable Carbon Permits, Participation Incentives, and Transfers,"
Oxford Economic Papers,
Oxford University Press, vol. 46(0), pages 841-56, Supplemen.
- Larsen, Bjorn & Shah, Anwar, 1994. "Global tradable carbon permits, participation incentives, and transfers," Policy Research Working Paper Series 1315, The World Bank.
- Samuel Fankhauser, 1994. "The Social Costs of Greenhouse Gas Emissions: An Expected Value Approach," The Energy Journal, International Association for Energy Economics, vol. 0(Number 2), pages 157-184.
- Rose, Adam & Stevens, Brandt, 1993. "The efficiency and equity of marketable permits for CO2 emissions," Resource and Energy Economics, Elsevier, vol. 15(1), pages 117-146, March.
- Stevens, Brandt & Rose, Adam, 2002. "A Dynamic Analysis of the Marketable Permits Approach to Global Warming Policy: A Comparison of Spatial and Temporal Flexibility," Journal of Environmental Economics and Management, Elsevier, vol. 44(1), pages 45-69, July.
- Nordhaus, William D & Yang, Zili, 1996. "A Regional Dynamic General-Equilibrium Model of Alternative Climate-Change Strategies," American Economic Review, American Economic Association, vol. 86(4), pages 741-65, September.
- Adam Rose & Brandt Stevens & Jae Edmonds & Marshall Wise, 1998. "International Equity and Differentiation in Global Warming Policy," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 12(1), pages 25-51, July.
- William R. Cline, 1992. "Economics of Global Warming, The," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 39.
- Stephen C Peck & Thomas J. Teisberg, 1992. "CETA: A Model for Carbon Emissions Trajectory Assessment," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 55-78.
- Johan Eyckmans & Michael Finus, 2007. "Measures to enhance the success of global climate treaties," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 7(1), pages 73-97, March.
- Gary E. Bolton & Axel Ockenfels, 2004. "The Behavioral Tradeoff between Efficiency and Equity when a Majority Rules," Papers on Strategic Interaction 2003-12, Max Planck Institute of Economics, Strategic Interaction Group.
- Adam Rose & Brandt Stevens, 2001. "An Economic Analysis of Flexible Permit Trading in the Kyoto Protocol," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 1(2), pages 219-242, April.
- Kohn, Robert E., 2001. "Unilateral transfer of abatement capital," Resource and Energy Economics, Elsevier, vol. 23(2), pages 85-95, April.
- Weidner, Helmut, 2005. "Global equity versus public interest? The case of climate change policy in Germany," Discussion Papers, Research Unit: Civil Society and Transnational Networks SP IV 2005-102, Social Science Research Center Berlin (WZB).
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Valeria Dowding).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.