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Encouraging developing country involvement in a post-2012 climate change regime: carrots, sticks or both?

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  • Zhang, ZhongXiang

Abstract

The climate-trade nexus has become the focus of academic debate, and has gained increasing attention as governments are taking great efforts to forge a post-2012 climate change regime to succeed the Kyoto Protocol. With concerns about their own competitiveness and growing greenhouse gas emissions in developing countries, some industrialized countries, if not all, are considering whether to impose unilateral trade measures against developing country trading partners. While it is clear that greenhouse gas emissions targets of developed countries need to be tightened further in a post-2012 climate change regime, developing country involvement is also crucial for climate change mitigation and adaptation, given that climate change is a global problem requiring a global response. This raises the issue of which approach would be most likely to stimulate developing countries to take appropriate actions in the post-2012 climate regime. Would positive or negative incentives work best, in other words, do we need carrots, sticks or both? This paper seeks to answer this question. By revisiting the six options for China that I envisioned a decade ago and examining a variety of factors, the paper first discusses how far developing country commitments can go in an immediate post-2012 climate regime. It argues that developing country commitments are most unlikely to go beyond defined policies and measures in this timeframe. The type of border adjustment provisions currently being discussed by most developed countries include more sticks than carrots for developing countries. Sticks can be incorporated, but only if they are credible and realistic and serve as a useful supplement to push developing countries to take actions or adopt policies and measures earlier than would otherwise have been the case. In order to encourage developing countries to do more to combat climate change, the paper suggests that developed countries should rather focus on carrots.

Suggested Citation

  • Zhang, ZhongXiang, 2009. "Encouraging developing country involvement in a post-2012 climate change regime: carrots, sticks or both?," MPRA Paper 13174, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:13174
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    File URL: https://mpra.ub.uni-muenchen.de/13174/1/MPRA_paper_13174.pdf
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    References listed on IDEAS

    as
    1. ZhongXiang Zhang & Lucas Assunao, 2004. "Domestic Climate Policies and the WTO," The World Economy, Wiley Blackwell, vol. 27(3), pages 359-386, March.
    2. ZhongXiang Zhang, 2003. "Open Trade with the U.S. without Compromising Canada’s Ability to Comply with its Kyoto Target," Working Papers 2003.68, Fondazione Eni Enrico Mattei.
    3. Zhongxiang Zhang, 2007. "Why has China not embraced a global cap-and-trade regime?," Climate Policy, Taylor & Francis Journals, vol. 7(2), pages 166-170, March.
    4. Zhang, ZhongXiang, 2000. "Can China afford to commit itself an emissions cap? An economic and political analysis," Energy Economics, Elsevier, vol. 22(6), pages 587-614, December.
    5. James Poterba & Julio Rotemberg, 1995. "Environmental taxes on intermediate and final goods when both can be imported," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 2(2), pages 221-228, August.
    6. Zhang, ZhongXiang, 1998. "Greenhouse gas emissions trading and the world trading system," MPRA Paper 12971, University Library of Munich, Germany.
    Full references (including those not matched with items on IDEAS)

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    Cited by:

    1. Holzer, Kateryna & Karapinar, Baris, 2012. "Legal Implications of the Use of Export Taxes in Addressing Carbon Leakage: Competing Border Adjustment Measures," Papers 215, World Trade Institute.

    More about this item

    Keywords

    A post-2012 climate change regime; Developing country commitments; Climate-trade nexus; Climate change mitigation and adaptation; Border adjustment measures; WTO scrutiny; The Lieberman-Warner bill;

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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