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Cross Country Fairness Considerations and Country Implications of Alternative Approaches to a Global Emission Reduction Regime
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Cross Country Fairness Considerations and Country Implications of Alternative Approaches to a Global Emission Reduction Regime

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  • Huifang Tian
  • Xiaojun Shi
  • John Whalley

Abstract

The UNFCCC process of negotiating multilateral carbon emissions reductions thus far has focused on approximately equiproportional cuts in annual carbon emissions by country along the lines of the Kyoto Protocol agreement. But now, with the objective of involving large developing countries such as China and India in a post 2012 regime, broader considerations imply alternative approaches to emissions reduction arrangements by countries be considered. Here we consider the implications of alternative cross country fairness considerations entering the global negotiation process using a numerical simulation model which captures the potential impacts of alternative emission reductions across major economies which in turn reflect different fairness arguments. We put other fairness considerations, such as intergenerational equity, on one side. We use a global equilibrium emissions and trade model with transfers which are calibrated to a 2005-2050 BAU scenario and treats damage from climate change as utility damage. It thus captures the benefit side of emissions reduction agreements as well as the implications of such considerations for financial transfers agreed as a part of the process. Our analyses consider four alternative justices formulations. One is equal per capita allocation of absorptive capacity of the atmosphere given a temperature change target for global emissions. Yet another is where cuts by countries yield equal benefits per capita to other countries. A third is where there are equal costs per capita to countries making cuts. Finally, we also consider financial transfers to developing countries to compensate them for the costs of meeting emission restraints. The impacts of alternative emissions reductions differ sharply from the equi-proportional cuts of annual emissions implied by a continuation of the Kyoto process. These impacts emphasize the large and ill defined bargaining set for a post Kyoto Process involving large developing countries in a significant way.

Suggested Citation

  • Huifang Tian & Xiaojun Shi & John Whalley, 2012. "Cross Country Fairness Considerations and Country Implications of Alternative Approaches to a Global Emission Reduction Regime," NBER Working Papers 18443, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:18443
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    References listed on IDEAS

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    1. Huifang Tian & John Whalley, 2008. "China's Participation in Global Environmental Negotiations," NBER Working Papers 14460, National Bureau of Economic Research, Inc.
    2. Tian, Huifang & Whalley, John, 2010. "Trade sanctions, financial transfers and BRIC participation in global climate change negotiations," Journal of Policy Modeling, Elsevier, vol. 32(1), pages 47-63, January.
    3. Cai, Yuezhou & Riezman, Raymond & Whalley, John, 2013. "International trade and the negotiability of global climate change agreements," Economic Modelling, Elsevier, vol. 33(C), pages 421-427.
    4. Martin L. Weitzman, 2007. "A Review of the Stern Review on the Economics of Climate Change," Journal of Economic Literature, American Economic Association, vol. 45(3), pages 703-724, September.
    5. Stern,Nicholas, 2007. "The Economics of Climate Change," Cambridge Books, Cambridge University Press, number 9780521700801.
    6. Huifang Tian & John Whalley, 2008. "Chinaã¢Â‚¬Â„¢S Participation In Global Environmental Negotiations," Trade Working Papers 22793, East Asian Bureau of Economic Research.
    7. Goulder, Lawrence H. & Mathai, Koshy, 2000. "Optimal CO2 Abatement in the Presence of Induced Technological Change," Journal of Environmental Economics and Management, Elsevier, vol. 39(1), pages 1-38, January.
    8. Uzawa,Hirofumi, 2009. "Economic Theory and Global Warming," Cambridge Books, Cambridge University Press, number 9780521066594.
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    Cited by:

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    2. Schleich, Joachim & Dütschke, Elisabeth & Schwirplies, Claudia & Ziegler, Andreas, 2014. "Citizens' perceptions of justice in international climate policy: Empirical insights from China, Germany and the US," Working Papers "Sustainability and Innovation" S2/2014, Fraunhofer Institute for Systems and Innovation Research (ISI).
    3. Peterson, Sonja & Weitzel, Matthias, 2014. "Reaching a climate agreement: Do we have to compensate for energy market effects of climate policy?," Kiel Working Papers 1965, Kiel Institute for the World Economy (IfW Kiel).

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    More about this item

    JEL classification:

    • F00 - International Economics - - General - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • 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

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