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Financing Climate Change:
Per Capita Emission Rights

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Greenhouse gas emissions produced by the largest developing countries are rising very quickly, as the number of motorized vehicles on their roads increase and new power plants are built to meet the rising demand for electricity. In fact, it has been estimated that by 2015 India and China will overtake the United States, currently the world' s biggest producer of greenhouse gases. While this country-to-country comparison is often quoted in the media, it is quite misleading when you take into account the huge populations of China and India (some 2.1 billion people or 33% of the world' s population).

Anil Agarwal and Sunita Narain of India' s Centre for Science and Environment argue that since the atmosphere is a global resource, every citizen of planet Earth should have an equal entitlement to greenhouse gas emissions. The Kyoto Treaty, they argue, gives North America, the European Union, and the former Soviet Bloc countries (the Annex B nations listed in the accord) "atmospheric pollution rights" based on their current emissions, minus the small percentage they have agreed to cut. Annex B countries will have the right to trade or bank these assigned amounts under the free-market emissions trading system that the treaty foresees.

As a fundamental principle of equity, developing countries, Agarwal and Narain believe, should have the same per capita emission rights as the nations of the North. There would be two immediate advantages: this would eliminate the incentive for developing countries to increase their emissions as rapidly as possible, so that when they become signatories to the treaty they will be entitled to maintain higher levels of emissions. Second, developing countries would have emission credits that they could sell to countries of the North or bank for future use. This would put developing countries on the same footing as Russia and other eastern European countries, which will have excess emissions credits to trade because their economies have contracted and their greenhouse gas emissions have declined since 1990, the baseline year under the Kyoto Protocol.

If developing nations had emission credits they could sell, it would also generate a new source of revenue, which they could invest in sustainable energy technologies. "In this way, developing countries would enter into the most meaningful form of participation [in the Kyoto Protocol] to use the oft-repeated U.S. phrase," Agarwal and Narain point out. "In fact, the emissions trading price should be pegged more to a cost that would encourage developing countries, which have more solar energy, to move away from fossil fuels.... Such trading would truly help to prevent climate change instead of the 'creative carbon accounting' that is currently envisaged 'to help industrialized countries to meet their reduction targets.' "

The ideal scenario, Agarwal and Narain believe, would be a "contraction and convergence" in emission levels between North and South, eliminating the gap in fossil fuel consumption that currently exists. For this convergence to occur, the industrialized countries would have to make significant cuts to their greenhouse gas emissions, and this would be in the true spirit of the UN Framework Convention on Climate Change, the authors believe. [equitable entitlement to greenhouse gas emissions]




Word Watch
Word Watchcontraction and convergence n. cutting of carbon emissions by some to the point that they converge with future entitlements to emit carbon dioxide so that they are equalized globally per capita

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In Depth
In DepthNordhaus, William D., ed. Economics and policy issues of climate change. Washington, D.C.: Resources for the Future, 1998. 324 p.

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Virtual Ideas
Virtual Ideas Centre for Science and the Environment

Global Commons Institute - info on contraction and convergence

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