Cover Image
close this bookThe Global Greenhouse Regime. Who Pays? (UNU, 1993, 382 p.)
close this folderPart I Measuring responsibility
Open this folder and view contents1 Introduction
Open this folder and view contents2 The basics of greenhouse gas indices
Open this folder and view contents3 Assessing emissions: five approaches compared
Open this folder and view contents4 Who pays (to solve the problem and how much)?


The greenhouse effect
What was decided at Rio?
Protocol negotiating difficulties
Key issues for climate change negotiations

Peter Hayes and Kirk R Smith

At the 1992 Earth Summit in Brazil, which was attended by more heads of state than any other meeting in human history, the UN Framework Convention on Climate Change (included as the Appendix to this volume) was opened for signature. By mid-October 1992,158 nations had signed it. To become law, it must be ratified by national legislatures of at least fifty countries, a process that may take two years.

Unfortunately, the Convention did not contain any specific provisions for funding its implementation. This lack is a major obstacle to its realization. The questions of how to decide who should pay and how much it might cost are the central topics of this book.

The participation of developing countries in a Climate Change Convention will determine whether the world responds prudently to the greenhouse effect. Even if the wealthy states radically reduce their greenhouse gas emissions, the poorer states will replace and eventually surpass them as major contributors to the greenhouse effect. Action by members of the Organization for Economic Co-operation and Development and other industrialized countries can significantly slow the rate and reduce the magnitude of global warming. But unless the developing countries also act, the threat remains to everyone. Based on current trends, big poor countries like China, Indonesia, India, and Brazil will become major carbon dioxide contributors. They are already big methane gas emitters even though their per capita output is small.

As is argued below, the Climate Change Convention itself is still mostly symbolic. Unresolved issues include the practical implementation of the Convention in protocols to the Convention on technology and resource transfer; obtaining commitments from parties to limit carbon emissions; and the design and implementation of abatement strategies. All this and much more remains to be settled in protocols to be negotiated now that the Convention itself has been signed.

In this book, we do not tackle all these important issues. Instead, we postulate that the major determinant of developing country participation will be the terms offered by the developed world. The need for the rich and poor nations to work together to respond to the greenhouse effect could create a new political-economic interdependence between them. Alternatively, as Norwegian analyst Anne Kristin Sydnes warns, it could portend 'another twenty years of fruitless North-South bargaining. The authors of this book examine the grounds for, the scale of, and possible conditions on possible resource transfer agreements from rich to poor states that will be central to any successful greenhouse management regime.

In this chapter, we undertake four tasks. First, we review the basic scientific understanding of the greenhouse gas effect that gave rise to the Climate Change Convention. Second, we describe the content of the Convention and note its limitations. Third, we review the novel negotiating difficulties that will arise in the course of developing effective protocols under the Convention. Fourth, we summarize the key issues for the ongoing negotiations under the rubric of the Convention as presented in this book. In the latter section, we also provide a synopsis of each chapter of the book.

The greenhouse effect

Planet Earth's capacities for dispersing, diluting, and degrading most humangenerated pollutants are large, but limited. As pollution rates increase, the natural processes that absorb and assimilate pollutants are eventually overwhelmed, leading to rising concentrations of pollutants in the environment. Depending on the pollutants, this overloading can create local disruptions in human health and ecosystem sustainability or, eventually, even global effects, such as climate change.

The authors of this book focus on the largest and oldest of all human pollutant releases, carbon into the atmosphere. Since their mastery of fire, human beings have disrupted the global carbon cycle by burning wood and other biomass at greater rates than occur naturally. Being about half carbon, biomass upon combustion releases carbon dioxide, methane, carbon monoxide, and other carbon-containing pollutants, which must be transported and broken down by natural processes.

Some of this release has been the direct result of using wood and other biomass forms such as crop residues as fuel. Another part is due to the clearing of biomass so that the land could be used for farming or other human purposes. Throughout most of human history, however, it is thought that human biomass combustion did not create large disturbances in the atmosphere. That is, natural processes such as regrowth replaced sufficient portions of the burned biomass to prevent significant build-up of these carboncontaining pollutants in the atmosphere.

The industrial revolution in what are now the economically developed countries increased the combustion of fossil fuels, which are mostly carbon. Today, fossil fuel combustion is the major source of atmospheric carbon releases although biomass burning has also probably increased. The rates of release became such that in the second half of the twentieth century, it became clear that atmospheric levels of important carbon-containing gases, particularly carbon dioxide and methane, were steadily increasing over their natural levels.

The atmospheric concentrations of these gases are far from those thought to be toxic or otherwise of much acute concern. Their impact is more subtle, for they act to blanket Earth, keeping in more of the sun's warmth than otherwise would be the case. This effect is indisputable because humans have observed the warming due to natural levels and variations of these same gases. Indeed, without the existence of these natural amounts of greenhouse gases', Earth would be too cold for life.

The higher-than-natural rates of greenhouse gas releases resulting from human fossil fuel and biomass combustion are boosting carbon dioxide and methane levels at greater rates than has occurred in recent Earth history. Earth's natural systems may not be able to cope with the extra heat being absorbed except by an overall increase in temperature, that is, global warming. This warming may in turn be associated with significant disruptions in local weather, such as patterns of precipitation and cloudiness. It may also have global impacts through thermal expansion of the oceans and melting of glaciers to cause sea-level rise. It may even disrupt ocean current patterns and marine and terrestrial ecosystems.

The nature and magnitude of global warming and associated climate change and sea-level rise resulting from greenhouse gases released by human activities are not known with certainty. The global atmospheric/ocean/climate systems are extremely complex, so much so that even the largest computers can only model a small portion of them at one time. Some natural processes seem to reduce the effect. Extra heat, for example, leads to more evaporation, which leads to more clouds, which leads to more sunlight being reflected, which leads to less heat. In contrast, other processes may enhance the effect. Extra heat, for example, leads to more snow melting, which leads to less sunlight reflection, which leads to more heat. Thus, contemporary estimates of the global effects are imprecise and so uncertain as to be not usable for predicting effects at any one place and time.

Nevertheless, a growing number of scientists believe that there is a significant chance that damaging levels of global warming will occur sometime before the middle of next century if existing trends of greenhouse gas emissions are continued. The most authoritative source for this view is the scientific report of the Intergovernmental Panel on Climate Change (IPCC)

The IPCC consists of scientists from many countries working together under the aegis of the World Meteorological Society and United Nations Environment Programme and who have reviewed and summarized the available knowledge and uncertainties about greenhouse gases and climate change. As part of its conclusion, the IPCC predicts that unless emissions patterns change, there will be: a rate of increase in global mean temperature during the next century of 0.3C per decade (with an uncertainty range of 0.2-0.5C per decade); this is greater than that seen over the past 10,000 years. This will result in a likely increase in global mean temperature of about 1C above the present value by 2025 and 3C before the end of the next century.

Its collective judgement is that:

Rapid change in climate will change the composition of ecosystems; some species will benefit while others will be unable to migrate or adapt fast enough . . . The effect of warming on biological processes . . . may increase the atmospheric concentrations of natural greenhouse gasses.

IPCC's impact report concluded that this warming could cause major and mostly negative local impacts on agriculture, forestry, water resources, natural ecosystems, air quality, and coastal zones among other sectors important to humanity

Recognizing that there are still significant uncertainties, particularly about the timing of impacts, and that some countries, notably the United States, have not yet officially acknowledged a need to take immediate steps, this book nevertheless starts with the premise that the world community decided when it signed the Climate Change Convention that a serious effort must be made to reduce the probability and magnitude of adverse impacts from global warming. According to the IPCC, a successful response strategy is likely to be one which recognizes that:

• 'Climate change is a global issue, effective responses . . . require a global effort',
• '[Effective responses] may have considerable impact on humankind and individual societies',
• 'Industrialized countries and developing countries have a common responsibility in dealing with problems arising from climate change.

Although the developed countries have emitted far more greenhouse gases to date, based on the current relationships between economic development and greenhouse-gas emissions, and on the sorely needed increases in economic welfare that are required, large poor countries such as China, India, Indonesia, Nigeria, and Brazil will also turn into major greenhouse-gas contributors. Whether developing countries are engaged adequately in the implementation of a Climate Change Convention will be a major determinant of how quickly and completely the world responds to the dangers presented by human-enhanced greenhouse warming. Action in the Organization for Economic Cooperation and Development (OECD) and other developed countries alone can slow the rate and magnitude of global warming in the short term, but unless action is also started in developing countries, significant threat remains. The b As discussed in some detail in Chapters 2-4, when making international comparisons it is important to distinguish carefully between cumulative past emissions and present emission rates as well as between emissions per nation and per capita. fact - often discussed in this book - that there are attractive greenhouse amelioration projects in developing countries, however, does not necessarily mean that developing countries should pay for them.

The challenge facing humanity, therefore, is to find ways that the many benefits accompanying economic development can be attained by the world's poor without simultaneously emitting the amounts of greenhouse gases that have accompanied such economic development in the past; and to reduce dramatically the emissions from rich countries at the same time.

What was decided at Rio?

The Climate Change Convention signed at Rio sought:

1 to stabilize 'greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system';
2 to do so quickly enough 'to allow ecosystems to adapt naturally to climate change',
3 'to ensure that food production is not threatened',
4 'to enable economic development to proceed in a sustainable manner'.

To paraphrase, the world's leaders committed themselves to work together in first slowing and then stopping the growth of greenhouse gases in the atmosphere at concentrations that would not be so greatly above natural levels as to significantly threaten human welfare and natural ecosystem balance. In this process, other important goals must not be sacrificed, including provision of adequate food supplies and eradication of poverty.

Abatement commitments

Developed countries committed themselves to a vaguely worded 'aim of returning individually or jointly to their 1990 levels [of] these anthropogenic emissions of carbon dioxide and other greenhouse gases not controlled by the Montreal Protocol.' Developing countries which signed the treaty undertook to provide an inventory of greenhouse gas emissions and sinks and a national climate change response strategy. They undertook no specific commitments to reduce their greenhouse gas emissions.

Indeed, developing countries asserted their right to increase their greenhouse gas emissions. As the preamble to the treaty states:

All countries, especially developing countries, need access to resources required to achieve sustainable social and economic development . . . In order for developing countries to progress towards that goal, their energy consumption will need to grow taking into account the possibilities for achieving greater energy efficiency and for controlling greenhouse gas emissions in general, including through the application of new technologies on terms which make such an application economically and socially beneficial.

In effect, parties from developing countries made any future possible abatement commitments on their part contingent upon the developed world demonstrating its intent to make available atmospheric space for future growth in emissions from the poor countries; and upon financing and technology transfer that would enable the poor countries to fulfil more stringent commitments in the future. This refusal to commit to reductions enabled the developed world to leave vague the exact scope and scale of their commitments to provide funds and technology.

The Climate Change Convention addressed four key issues that determine who will pay for the costs of incremental abatement in developing countries. These are the provision of financial resources, technology transfer, an interim financial mechanism, and the definition of incremental abatement cost. The following sections briefly outlines the agreement reached on each of these concerns.

New and additional financial resources

In Article 4 of the Convention, developed country parties committed themselves to 'provide new and additional financial resources to meet the agreed full costs incurred by developing country Parties in complying with their obligations under Article 12.' They also pledged to 'provide such financial resources, including for the transfer of technology, needed by the developing country Parties to meet the agreed full incremental costs of implementing measures.' The flow of financial resources and technology, states the treaty, is to be accomplished at a level adequate to the task, and in a predictable fashion.

The Convention also declares that developing countries can claim extra assistance if they are particularly vulnerable to the adverse effects of climate change and related adaptation costs. In addition to small island, land-locked and transit states, countries are also eligible for extra help if they have: lowlying coastal areas; arid and semi-arid areas, forested areas and areas liable to forest decay; areas prone to natural disasters, drought and desertification; high urban atmospheric pollution; fragile ecosystems, including mountainous ecosystems; or are highly dependent on income generated from the production, processing and export, and/or on consumption of fossil fuels and associated energy-intensive products.

Technology transfer

The developed country parties also undertook to 'take all practical steps' to 'promote, facilitate and finance, as appropriate, the transfer of, or access to, environmentally sound technologies and know-hong' to developing country parties, as well as to support the development of endogenous capacities and technologies within developing countries.

Not only did the developed countries recognize that the ability of developing countries to fulfil their commitments will depend on provision of financial resources and transfer of technology; but they also recognized that developing countries must develop at the same time. In effect, developed countries admitted the obvious: that emissions from developing countries must and will increase and that reductions in the rich countries must offset this inevitable increase in emissions by the poor.

Financing mechanism

In Article 11, the signatories to the Convention declared that they would create a mechanism whereby grants or concessional financing would be achieved. Moreover, they decided that this mechanism would be accountable to the conference of parties to the Convention. Thus, although it was agreed that the World Bank's Global Environment Facility (GEF) would be entrusted with this responsibility as an interim measure, ultimate control over the mechanism does not rest with the Bank but with the parties to the treaty. As the treaty states that the financial mechanism shall have en 'equitable and balanced representation of all Parties within a transparent system of governance', the signatories effectively defined a reform agenda for the governance of the GEF. GEF is given four years to work effectively, at which time the parties reserved their right to review and redefine the financial mechanism used to implement the Convention. To reinforce this point, Article 14 declares that the GEF must tee 'appropriately restructured and its membership made universal'.

Full incremental cost

The treaty did not define what constitutes the 'full incremental cost' of abatement in developing countries, except to refer to the costs of reporting on national emission sources and sinks and in conducting research on climate change, and for costs incurred on such activities as are agreed between developing countries with the international financial mechanism created under the Convention.

The latter step, however, implies that the international community will adopt guidelines as to what are admissible costs. The mandate of the new Working Group Ill of the Intergovernmental Panel on Climate Change covers these technical and economic issues. Almost certainly, the restrictive criteria adopted by the Global Environment Facility will be widened as it would not support many sound greenhouse abatement measures under its current guidelines.

In short, the signatories to the Convention did not define the specific levels of abatement nor the scale and content of the effort required to achieve the overarching goals of the treaty. While some found this disappointing, most analysts viewed it as inevitable that, as a 'framework,' the Convention would only outline a set of general principles and obligations in various areas. Subsequent negotiations are to produce specific targets and quantitative reductions which - if agreed to - will be added as protocols to the framework Convention.

Protocol negotiating difficulties

Protocols to the Convention that deal with carbon dioxide, methane and other greenhouse gases must address and resolve much more difficult and complex issues than the Vienna Convention that covers ozone depleting gases. Relative to ozone depleting gases, for example, these gases are far more integral to lifestyles. Take, for example, methane emitting rice paddies in Indonesia, carbon dioxide spewing automobiles in cities such as Melbourne, or slash and burn agriculture in the highlands of Papua New Guinea. Moreover, the number of producers and consumers of these greenhouse gases is far greater than was the case for ozone destroying gases which created a trading cartel devoted to eliminating its major product. In comparison, climate change presents many novel negotiating difficulties to the international community (see Table 1.1) which have not been overcome in the Convention.

First, free riding on a greenhouse gas reduction regime is likely and attractive at all levels of human society - international, regional, national, and local. Second, a successful agreement will be based on measures that are in national self-interest, are normatively self-policing or are economically selfregulating. Third, greenhouse polluters are separated in time (crossgenerationally) and space (due to global mixing rates relative to mean residence time of greenhouse gases) so that liability is difficult to determine. Fifth, responsibility is clouded further by uneven regional climate impacts. Sixth, institutional change within states to implement greenhouse reductions will also be major compared with those entailed by past environmental agreements.

Finally, the economic costs of reducing greenhouse gases may be large, concentrated on existing interests at the national or subnational level, and may involve restrictions on existing resources rather than the allocation of new resources as in the Law of the Seas negotiations. These costs are given a great deal of attention in this book due to their importance in determining who should pay what to whom in a global greenhouse regime (see Chapters 5-13).

Table 1.1 Greenhouse gas negotiating novelties

1 The atmosphere is a true global commons precluding appropriation
2 The dispersed users of the atmosphere and the huge number of dispersed sources of GHGs mean that:

• monitoring is difficult
• free riding is easy
• self-policing is based on selfinterest

3 Liability for damages is difficult to allocate
4 There are big costs now, potent blocking coalitions versus uncertain benefits later, weak promoting coalitions
5 There are unconventional negotiating axes
6 Discounting of GHG damage is controversial
7 Prudence may delay validation of models
8 There is uncertainty about the benefits of GHG abatement due to frequent' rapid, and unforseeable changes in scientific assessment of climate change
9 Treatment of sinks 10 GHG equivalencies are controversial; GHGs are largely non-substitutes
GHG: greenhouse gases

Admittedly, the economic benefits of curtailing greenhouse gases may be also large because damages from climate change may be immense. But the realization of the benefits of avoiding climate change is uncertain, will likely come later rather than sooner, and will be distributed diffusely. Moreover, the benefits of using current emissions are widespread; and stakeholders in the status quo are well organized and powerful.

As was evident in the negotiations leading up to the Climate Change Convention (see Chapter 14), the size and ranking of greenhouse gas polluters (depending on how emissions are measured) cut across virtually all prior axes of interstate negotiation on security, economic, or environmental grounds. Simple targets make little sense as the energy intensities of economies vary internationally by an order of magnitude. Other simple criteria such as population, per capita GDP, fuel mix, energy reserves, and industrial patterns greatly complicate emission reduction or energy efficiency targets.

Determining the net emissions of greenhouse gases is also more difficult than for ozone depleting gases. Ozone depleting gases come from a relatively small number of human sources, and the gases remain in the atmosphere for hundreds of years before they decompose. In contrast, the major greenhouse gases have large natural sources and sinks, and have much shorter lifetimes in the atmosphere. States may claim that nationally controlled sinks for greenhouse gases should be subtracted from national emissions of greenhouse gases in determining emission quotas. Others may object strongly on grounds of scientific uncertainty (nearly a quarter of the carbon sink is currently unexplained by scientific models) or to the allocation of sink property rights. The concept of sink itself is a shifting sand on which to base target emissions and allocations (see Chapter 2).

The IPCC has already produced an index of heating equivalence across greenhouse gases and normalized to carbon dioxide, as was done in the Montreal Protocol across ozone depleting gases. However, many of the ozone depleting gases were close technical substitutes. It may be more difficult to apply the scientific equivalencies that might be used to evaluate control activities within an overall weighted emission quota for greenhouse gases than it was in the Montreal Protocol. Either a CO2-only or a separated, gas-by-gas protocol is therefore more likely under the Convention than an integrated, multiple-gas protocol implied by the ozone precedent.

Faced with such vast uncertainty, many scientists suggest that a 'no regrets' policy should be implemented now by incurring short run costs of emission reduction in anticipation of uncertain, long-run benefits. Incontrovertible validation of scientific simulations of climate change may not be available until (if the models are right) massive climate change may be irreversible. By reducing climate change, prudent behaviour now may deny positive evidence that the scientific models were correct. Relatedly, frequent, rapid, and unforeseeable changes may occur in scientific assessments of climate change, making negotiations on protocols to the Convention crisis-ridden and fraught with uncertainty.

In this book, the authors explore the implications of a 'no regress' policy in which emissions-reduction measures are chosen along a 'least-cost' pathway. These measures consist of energy efficiency projects and other actions that will have many other benefits even if present climate change concerns should turn out to be unwarranted. This policy option entails radical reductions in carbon emissions to about 50-60 per cent less than those in 1990. This stringent reduction goal therefore poses an unambiguous and measurable challenge to today's decision makers that must be met if they are to fulfil their obligations to future generations.

Key issues for climate change negotiations

The major greenhouse gas emitters have not yet committed themselves to major emission reductions. Nor have the international donors backed up their words with money and action. The authors of this book explore a way that the greenhouse management contract between rich and poor states can be constructed in an open, efficient, and equitable manner.

These issues are not solely political and economic, however. They are also technical and scientific in nature, relating as they do to complex and poorly understood issues of climate and ecology. In Part 1, four authors explain these issues and produce a technical and scientific foundation for determining who is responsible for climate change.

In Chapter 2, Kirk Smith explains the science that underlies comparisons of different greenhouse gas emissions from different nations and time periods, that is, the indices that can be used. Implicitly or explicitly, an index of some sort must be used so that choices among options can be made. He concludes that there are some hidden value judgements in choosing indices and that the choice of index depends strongly on the particular policy question being asked.

In Chapter 3, Susan Subak compares the results of applying five different indices to the question of relative national contribution to global greenhouse gas emissions. These are:

1 cumulative carbon dioxide emissions from fossil fuel combustion only;
2 cumulative carbon dioxide from fossil fuel and land use changes;
3 current annual carbon dioxide emissions;
4 an expanded list of current emissions including methane from landfills and fossil fuel production;
5 a comprehensive range of current greenhouse gas emissions from energy, land use change, and agricultural sources.

When allocated on a per capita basis, each measure produces a different distribution of national responsibility for past and present contributions to climate change. Subak shows how the scientific and technical dimensions of building indices of responsibility have significant political and economic implications for different polluters. In short, depending on which index is chosen for the protocols that allocate responsibility, the Convention will impose differential burdens on states of widely varying characteristics. The outcome will be widely varying incentives and disincentives for future action under the Convention. It is incumbent on policy makers, therefore, to pay careful attention to these technical issues.

Drawing on these technical and scientific foundations, Dilip Ahuja, Kirk Smith and Joel Swisher present a simple, transparent method in Chapter 4 to determine who should pay the cost of creating a global greenhouse regime. A composite indice is proposed that includes both ability to pay on the one hand, and historical contribution to climate change on the other. The former index confronts the issues of equity and economic realism that will affect participation rates of the poor. The latter index embodies the polluter pays principle and reflects the practical politics that the poor, small polluters are not likely to constrain their behaviour unless the wealthy, big polluters recognize that they have occupied the available 'ecological space' and must compensate latecomers for this pre-emption.

Smith, Swisher and Ahuja's approach provides a powerful philosophical and practical underpinning for discussions of the distribution of cost associated with managing climate change. If accepted, it would influence the outlook of key parties even if they are unable to accept specific numbers based upon it in actual negotiations. Such indices can be recomputed to investigate alternative yardsticks of ability to pay and historic responsibility for climate change. Whatever the final numbers, what is crucial to creating an effective global greenhouse regime is that it rests on these twin principles of equity and polluter pays responsibility.

In Part II, Peter Hayes confronts directly the deceptively simple question: who should pay? In Chapter 5, he introduces a method to calculate the likely costs to developing countries of complying with a global convention of climate change. He calculates the incremental cost of abating carbon dioxide emissions from the use of fossil fuels by the following procedure.

He begins by estimating projected emissions and required reductions of carbon dioxide that meet stringent IPCC emission targets which would restrain the growth of realized temperature and sea level to 0.1C and 3 cm per decade respectively. To achieve this goal, the global permitted emission in 2025 is about 2.7 gigatonnes of carbon as carbon dioxide. This target is about 60 per cent of projected global emissions in that year, or about 50 per cent of emissions in 1990. Each country is required to reduce its emissions from projected 1995 levels so that it eventually reaches its fraction of this global permitted emission in 2025. This fraction is set to equal current national sink rights distributed to nations on the basis of current population and land area (although some other allocational criteria could and probably should be used to avoid problems associated with defining sinks, as noted in Chapter 4). High, medium and low marginal abatement cost curves are applied to these profiles of carbon abatement over time. In this way, the method generates a stream of annual incremental abatement costs for each country.

In Chapter 6, Hayes applies the quantitative allocational rules developed in Chapter 4 to the range of numerical estimates of the cost of carbon emission abatement and coastal protection from Chapter 5. He presents two rules that have been proposed to allocate the cost to various parties of meeting emission targets imposed by a climate change agreement. These rules are 'obligation to pay,' teased on each nation's historic emissions and ability to pay; and the UN scale of payments.

Under the UN scale, the OECD (North) pays about 77 per cent, the former Soviet Union and Eastern Europe (East) about 14 per cent, and the developing world (South) about 9 per cent of total UN cost. In the obligation to pay (OTP) index, the North's OTP is about 73 per cent; the East's about 20 per cent; and the South's about 7 per cent. Hayes argues that negotiations are likely to proceed therefore by countries making bids to vary their contribution relative to the UN scale until consensus is reached. The obligation to pay index provides a sound, transparent baseline against which to measure the fairness of departures from the UN scale.

In Chapter 6, Hayes treats the South's incremental cost, minus the South's obligation to pay, as the responsibility of the wealthy countries of the North and transfers it to the North's account. The annual transfer from North to South is estimated at $29-34 billion in the medium and high marginal abatement cost cases respectively. (There is no economic case based on incremental cost for transfer from the North to the South in the low cost case, although Hayes cites the need to finance front end costs of abatement measures and to increase scientific and technical capability in developing countries as reasons for providing funds in any case.) He concludes by examining how the substantial funds required might be collected and transferred by carbon taxes, or earned by the sale of traceable permits or abatement services that would also push countries toward equalizing their marginal abatement costs at a global level.

An alternative approach would have been to construct a global marginal abatement cost curve from national marginal abatement cost curves; and to apportion reduction activity to each country up to the marginal cost that delivers the desired total emission each year. The reduction activity would be paid for according to the relative obligation to pay for each country (as updated periodically). On this basis, no country would be asked to reduce emissions more than the then-current marginal cost level, and no nation would remain unpenalized for failing to undertake reductions found to be cheaper than the current marginal cost criterion. While attractive in principle, it remains difficult to put this approach into computational practice due to the lack of meaningful global and national marginal abatement cost curves as well as difficulties associated with allocating and quantifying emission rights over time.

The small island states most vulnerable to the impacts of climate change have been among the most vocal proponents of a strong Convention. In Chapter 7, Michael Wilford enumerates a proposal emanating from the Alliance of Small Island States that an insurance fund be established to cover the costs of adaptation to sea-level rise. Precedents exist for this approach in the oil and nuclear industries, but neither approaches the scale or scope of a fund that would cover losses implied by the greenhouse effect. The moral influence of these small states whose very existence is at stake is evident in the Convention article cited above which declares that vulnerable states are eligible for extra assistance.

A major difficulty that hampers calculations of the required funding by the rich countries of the incremental costs of developing countries is our ignorance as to the shape of the latters' emission abatement curves at various levels of required reduction. Part III contains the work of eleven authors who are deeply immersed in the empirical calculation of incremental costs associated with climate change and greenhouse gas abatement. These authors present abatement cost curves at the national or regional level in Asia, Africa, Australia, and Eastern Europe/Russia. All conclude that significant cost savings will likely accrue at the outset of carbon reduction programmes, although the absolute cost levels vary widely.

In India, (Chapter 8), Jayant Sathaye and Amulya Reddy show that while emissions are likely to grow, there are substantial opportunities to abate emissions or to fix additional carbon at low costs or a net saving. They demonstrate that India could largely offset its carbon emissions by fixing carbon in forestry reservoirs, thereby emphasizing the importance of the sink issue in determining responsibility for cost. However, they also identify public and private institutional and informational obstacles to the realization of this potential. They argue that a basic needs economic strategy will itself enhance development and reduce emissions. They conclude optimistically that for the first time ever, fundamental interests of the rich and poor countries are aligned in the climate change area - provided that these multiple barriers to abatement can be overcome.

In West Africa (Chapter 9), Ogunlade Davidson notes that although Africa contributes only a small fraction (about 3 per cent) of total global carbon emissions, its energy usage and greenhouse gas emissions will grow substantially. He estimates that emissions can be reduced in this region by between 13 and 36 per cent (depending on the country) by the year 2025, simply by introducing economically justified carbon conservation measures. As in other developing countries, he finds that a significant number of financial, institutional and technical obstacles exist which block the region from implementing these abatement options.

Because the generally poor management of energy and related institutions also hinders the effective implementation of these measures, he concludes that institutional reform is an essential ingredient of a carbon abatement strategy. He also finds that lack of investment finance is a major obstacle to energy development in the region. Weak capital markets and heavy indebtness require major economic reforms. These steps alone, however, will be inadequate to the task unless supplemented by external financing.

In Brazil (Chapter 10), Jose Moreira and Alan Poole present an aggregate cost curve for abating carbon emissions from Brazil's fossil fuel and biomass energy use which incorporates eighteen categories of abatement technology. Brazil is unusual in that a large fraction of its electricity is generated by hydropower and a large amount of alcohol from biomass is used in the transport sector. Moreover, the authors did not include steps related to re- or de-forestation in Amazonia in determining the potential for Brazil to abate or to offset its energy-related emissions. Nonetheless, they identified abatement potential that amounts to about 16 per cent of projected energy-related emissions, much of which can be obtained at negative cost (that is, at a savings).

In Thailand (Chapter 11), Peter du Pont, Somthawin Patanavanich, Mark Cherniack, and Michael Philips demonstrate that the most rapidly growing source of carbon emissions, the electric power sector, can be curbed significantly at a low or negative cost. They project that Thailand's carbon dioxide emissions from fuel combustion will double over the next decade, from 24 to nearly 50 million tonnes annually. They estimate that an aggressive demand side management effort in the power sector could reduce emissions by 2.5 million tonnes annually by the year 2001 at an average cost of conserved carbon of about US$1901tonne. While still nascent, Thailand's electric utility has an aggressive programme to tap this potential saving and may offer a good model for other countries to emulate.

In Central and Eastern Europe (Chapter 12), Stanislav Kolar produces aggregate cost curves based on detailed local research to demonstrate that carbon abatement can be achieved with major economic savings until high levels of carbon abatement are reached. Kolar points out that all the countries of the former Soviet Union are grossly energy inefficient. Equally, they also offer massive and relatively cheap carbon abatement. He concludes that energy efficiency is their most effective means of reducing carbon dioxide emissions and can achieve the twin goals of economic development and environmental protection. He concludes that these states have considerable flexibility as to which combination of price reforms and regulations would serve best to realize this potential.

Finally, in Australia (Chapter 13), Hugh Saddler examines estimates of the cost and scope of emission abatement measures and reviews estimates of the impact on the Australian economy of achieving various levels of abatement. Relative to a business-as-usual scenario, he reports that about 20 per cent of projected emissions can be abated with economically justified carbon abatement steps. He also notes that the local manufacturing-versus-import content of equipment needed to implement this strategy is a crucial determinant of the macroeconomic impact of carbon abatement - a variable that many developing countries may do well to examine carefully.

Generally, these studies indicate that abatement is possible at negative cost or a savings at the outset of the abatement strategy, but that costs will become positive fairly quickly. The studies also point to the obvious and urgent need for demonstration carbon abatement programmes and additional research into costs to obtain much better cost estimates necessary for the formulation of sound policy.

Politics will not end once robust analysis and widely accepted estimates of the cost are available. Part IV returns to these realpolitik considerations which will intrude into future negotiations over protocols to the Convention. For example, big wealthy countries anticipate a new wave of technological innovation associated with greenhouse gas abatement. As the major donors, they will seek to tie resource transfers to exports of their own equipment and services. For their part, recipient states will seek minimal ties on these funds. Aid flows justified on the grounds of greenhouse abatement will be no more or less susceptible to mismanagement, waste and corruption than existing development assistance.

In Chapter 14, Peter Hayes outlines some of the practical political issues that will arise in negotiations over resource transfers from the North to the South on the scale justified by the earlier chapters. Simply moving money across the North-South divide may only worsen existing development difficulties by creating an ongoing technological dependency. Studies of energy efficiency and related carbon abatement show that a wide range of scientific, technological and managerial capabilities must be created in developing countries to achieve effective carbon conservation. Financial shortages are a critical obstacle to the emergence of an endogenous technological capacity needed to reduce greenhouse gases - but they are only one of a range of issues that must be resolved before such programmes can be realized.

In Chapter 14, Hayes also analyses the potential for regional greenhouse initiatives in Pacific Asia as a precursor to a global climate change convention. He concludes that demonstration abatement projects in developing countries of Asia and the Pacific are needed urgently to demonstrate the viability of schemes such as traceable permits and trade in abatement services. He emphasizes that 'first in, first served' will dominate the emerging markets for greenhouse abatement markets and related technological competitiveness.

In summary, the authors of this book believe that signing the Climate Change Convention was only the first step on a long path to creating a greenhouse gas regime. It remains to be seen whether the parties to the Convention can muster the domestic political will needed to meet the commitments contained or implicit in the Convention.

In this respect, the 'review and pledge' procedure implied by Articles 4 and 10 of the Convention is particularly important. In Article 4, countries undertook to prepare and to communicate national greenhouse gas inventories using common methodologies and to implement mitigation measures on sources and sinks of emissions. In Article 10, they created an international body that will 'assess the overall aggregated effect of the steps taken by the Parties in the light of the latest scientific assessments concerning climate change.' Implementing these two commitments will create an iterative dynamic that will lead to stronger action under the Convention in the future.

Action, however, will require that resources be allocated to match the rhetoric of the Convention. The parties to the Convention must adopt a transparent method of calculating obligations and cost if the commitments on funding and technology transfer are to be fulfilled. The studies reported in this book illustrate the complex and difficult issues that must be addressed in such a method. At this stage, however, it is not the specific method nor its results that are important. Rather, what is vital is that negotiators of protocols to the Convention develop parallel ways of thinking that facilitate communication and agreement on these concerns. We hope that this book contributes to this task.


1 UN Conference on Environment and Development, Convention Climate Change, Final Text, Rio de Janeiro, Brazil, June 3, 1992; from Department of Public Information, Room S-845, UN, New York, New York, 10017, USA, October 1992

2 See D Lashof and D Tirpak (eds), Policy Options for Stabilising Global Climate; report to Congress, Environmental Protection Agency, Washington DC (Office of Policy, Planning and Evaluation), February 1989

3 A Kristin Sydnes, 'Global Climate Negotiations, Another Twenty Years of Fruitless North-South Bargaining', International Challenges, volume 11, no 1,1991, pp 58-66

4 J T Houghton et al, Climate Change, The IPCC Scientific Assessment, Cambridge University Press, New York, 1990

5 Ibid, p xi
6 Ibid, p xii

7 G Tegart et al, Climate Change, The IPCC Impact Assessment, Australian Government Publishing Service, New York, 1990

8 Intergovernmental Panel on Climate Change, Climate Change, IPCC Response Strategies, Island Press, Washington DC, 1991, p xxvi

9 Intergovernmental Negotiating Committee for a Framework Convention on Climate Change, Climate Change Convention, op cit

10 Article 12, ibid
11 Preamble, ibid
12 Ibid
13 ibid
14 Ibid
15 Ibid
16 Ibid

17 Scientific and Technical Advisory Panel, Criteria for Eligibility and Priorities for Selection of Global Environment Facility Projects, World Bank/Global Environment Facility, May 1992, pp 2-6

18 M Grubb, 'The Greenhouse Effect: Negotiating Targets,' International Affairs, volume 66, no 1,1990, p 71

19 G McBean and J McCarthy, 'Narrowing the Uncertainties: A Scientific Action Plan for Improved Prediction of Global Climate Change', in J Houghton et al, Climate Change, op cit. p 328

20 See R Pachauri and M Damodaran, "'Wait and See" versus "No Regrets": Comparing the Costs of Economic Strategies', in I Mintzer (ed) Confronting Climate Change, Risks, Implications and Responses, Cambridge University Press, 1992, p 238

21 J T Houghton et al, Climate Change, op cit. p xxxiv
22 IPCC Working Group I, 'Policymakers Summary', in ibid, pp xxii, xxxi, xxxiv

23 R Watson et al, 'Greenhouse Gases and Aerosols', in J T Houghton et al, Climate Change, op cit. Figure 1.8, p 15


Apples and oranges
Conclusion: indices do matter

Kirk R Smith

Deciding which greenhouse-gas emissions reduction or absorption projects to fund and which countries should contribute to the cost implies the use of indices to weigh the comparative net greenhouse gas (GUI) implications of potential projects and the net emissions of nations. These indices should be composed of individual indicators that are deemed to be relevant according to the criteria of scientific validity, economic efficiency, political equity, ease of use, and flexibility. The application of the appropriate index should not only rank but, preferably, also give a quantitative indication of how much better one project is over another or how much more one country should contribute than another.

Most of the indices that are used to determine accountability contain the structure, 'net greenhouse gases emitted per unit', where the unit is nation, population, income, energy use, etc., depending on the intended application. There are several important considerations and implications in choosing these various index denominators as will be discussed in Chapters 3 and 4.

Nearly all the indices also require the careful choice of appropriate numerator, the method by which the different greenhouse gases are weighted so that they can be compared or aggregated.

Apples and oranges

As late as the mid-1980s, policy discussions of global warming induced by greenhouse gases focused almost entirely on carbon dioxide (CO2), with relatively little discussion of the other greenhouse gases. Since then, however, it has become well recognized that the others play important roles. Indeed, recent conventional wisdom is that, in total, these other gases together account for an amount of warming comparable to that due to CO2, and, consequently, greatly shorten the time until an effective doubling of atmospheric CO2 content (CO2 equivalent) occurs (from 2075 to 2030, for example, in WRI 1990). Figure 2.1 duplicates one of the most commonly reproduced illustrations of the current relative contributions of the different gases.

Understanding the relative contribution of the different gases is vital to developing an appropriate index for comparing and ranking greenhouse-gas mixtures. This is because the different gases are produced in different relative amounts by different activities, which in turn are undertaken in different degrees by different countries. These differences can be seen in Figures 2.2 and 2.3 which are commonly reproduced illustrations of the relative importance of different activities and countries implied by the greenhouse-gas weightings of Figure 2.1.

Agreeing on the relative importance of the gases is a crucial first step in determining national accountabilities and the relative value of different greenhouse-gas reduction projects. Carbon dioxide, for example, is released mainly by fossil fuel use and land-use changes, while methane is released by livestock, wetland agriculture, and landfills. An index that weighted methane more heavily, therefore, would tend to make more attractive those projects addressing emission reductions within these agricultural activities and, conversely, make more accountable those countries, such as many developing countries, that are more engaged in such activities. An index weighting CO2 more heavily, on the other hand, would tend to focus attention on fossil fuel combustion, the bulk of which occurs in developed countries.

Figure 2.1 Relative contributions of different greenhouse gases to global warming during the 1980s

Figure 2.2 Relative impact of different activities on global warming

Figure 2.3 Relative contribution of different countries to global warming during the 1980s

Much of the discussion of policy alternatives has been based on indices of greenhouse gases that have not been carefully thought through (Smith and Ahuja 1990). The resulting confusion has led to a number of proposed indexing systems by which the different gases can be aggregated so that there is consistency both with physical reality and the needs of policy (for example, Krause et al. 1989; Fujii 1990; Ellington and Meo 1990; Lashof and Ahuja 1990; Agarwal and Narain 1991; Hammond et al. 1990; Rodhe, 1990; Shine et al. 1990; Smith et al. 1991; Gurney 1991; Grubler and Fujii 1991). The complexity of the problem has led to considerable controversy, not only about particular indexing alternatives (Environment 1991; McCully 1991; Mitchell 1992; Pachauri et al. 1992; WRI 1992) but even about the need to index at all (Victor 1990).

We argue here, however, that it is not possible to avoid indexing. To ignore all greenhouse gases except CO2, for example, is to implicitly give them a weight of zero. Alternatively, to aggregate them by weight or number of molecules creates implicit indices with little physical meaning or policy relevance. It is far better to meet the problem head on, to choose indices that address the issues of concern in a way that reflects both physical and policy realities. Indeed, it is such indices that act as the interface between the science and the policy, and thus those chosen must be sufficiently robust to survive the inevitable complaints that will occur on both sides that they are not ideal.

Radiative forcing

The release of a GG results in increased warming because of what is called the 'radiative forcing' of the gas molecules in the atmosphere. To quite varying degrees, the different GG molecules act to make the atmosphere retain additional amounts of solar energy reradiated from Earth's surface, thereby leading to warming. Relative to CO2, for example, a methane molecule in the atmosphere has a radiative forcing about 21 times higher, and a molecule of CFC-12 has nearly 16,000 times higher forcing. By weight, they are, respectively, 58 and 5700 times more effective. Clearly, with such widely ranging radiative forcings, neither the total weight nor number of molecules in a GG mixture is a good index of relative importance.

The relative radiative forcings, as shown in the second column of Table 2.1 for the most important GGs, are commonly used to index GGs. Used this way, they portray the relative radiative forcings of the GG at any one moment. If all the GGs acted the same in the atmosphere, including having the same lifetime, then the relative radiative forcings would also be appropriate measures of their relative total impacts. This, however, is not the case, because of two other factors: atmospheric residence times and chemical interactions (see box).

Table 2.1 Parameters for important greenhouse gases

Trace gases Radiative forcing relative to CO2 Estimated atmospheric residence times (years) Global warming potential
Direct effects Integration time horizon, years Direct + indirect effortsc Integration time horizon years
20 100 500 20 100 500
1 CO2 1 (120)b 1 1 1 1 1 1
(1)   (1) (1) (1) (1) (1) (1)
2 CH4 58 10.5 35 11 4 60 21 9
(21) (13) (4) (1.5) (22) (7.5) (3.2)  
3 CFC-11 4000 55 4500 3400 1400 - - -
(12000)   (13500) (10200) (4200)      
4 CFC-12 5700 116 7100 7100 4100 - - -
(16000)   (20000) (20000) (11500)      
5 N2O 210 132 260 270 170 - - -
(210)   (260) (270) (170)      

Conversion to CO2

6 CO2 weak < 1 1.6 1.6 1.6 7 3 2
    (1) (1) (1) (4.5) (1.9) (1.3)
7 NOx weak < 1 - - - 150 40 14
          (130) (35) (12)
8 NMHCa - <1 2.6 2.6 2.6 31 11 6
    (1) (1) (1) (12) (4.1) (2.3)

Numbers refer to ratios by weight numbers in brackets refer to ratios by molecule (or carbon atom far NMHC).

a NMHC = Non-methane-hydrocarbons, assumed to have a mean molecular weight of 17 per carbon atom.
b The duration of an increase in CO2 in the atmosphere is described only approximately by a single exponential decay (1/e) time of 120 years. The integrated value (infinite integration time) results in a period equivalent to about 320 years. (See Siegenthaler 1983.)
c Indirect effects refer to the impact of the gas on atmospheric chemistry, particularly with regard to the concentrations of ozone and water vapour, two powerful greenhouse gases. The original IPCC report (1990) listed indirect effects far all gases shown here. These are shown far CO NO, and NMHC (nos. 6-8). Those far CFCs and N2O (nos. 3-5), however, are not shown because of new evidence indicating possible indited cooling as well as warming effects (IPCC 1 992). It should be noted, however, that the 1992 IPCC Supplement considers ail indirect effects to be so uncertain as to be unusable for policy purposes at present. Far CO, NOx, and NMHC, this uncertainty is partly because there may be large variations in GWP depending an the local conditions where emissions occur. Recent recalculations of methane's indirect effects are shown here far the situation in which macerate emissions controls are implemented in the next decade (Lelieveld and Crutzen 1992).


The radioactivity analogy

To explain the need to choose appropriate indices for comparing different mixtures of greenhouse gases, consider an analogous situation with an entirely different kind of hazard, radioactive waste.

Imagine two containers of nuclear waste containing different mixtures of radioactive substances. Just as with GGs, the total weight of waste would not be a good index of relative hazard, since some substances are thousands of times more radioactive than others by weight. The amount of radioactive disintegrations per second measured in curies or becquerels is, in radiation, the rough analog to radiative forcing in GGs, useful as an index of the immediate relative hazard of radioactive mixtures.

To compare the total or long-term hazard of such nuclear waste mixtures also requires knowledge about the half-lives of the different radioactive substances and whether they change into other radioactive substances (daughter products) as they decay. One mixture could have a high initial radioactivity but be composed mainly of iodine-131, which has a half-life of 8 days. The other, however, might contain significant amounts of cesium-137 and plutonium-238, which decay with half-lives of 30 and 24,000 years, respectively. Clearly the total hazard would not be represented well by immediate radioactivity alone, which ignores that the iodine-131 would be essentially gone in a few months while the others would be nearly unchanged.

In some cases, radioactive material of one kind decays into radioactive material of another, uranium to radium, for example. Failure to take these 'daughter products' into account can lead to misrepresentations of the actual hazard represented by a mixture of radioactive substances.

Thus, both lifetime and physical transformation into other hazardous materials are taken into account when, for example, the long-term hazard represented by nuclear waste is calculated. So, too, must both residence time in the atmosphere and chemical transformation into other important materials be considered when comparing the global warming potential of different mixtures of greenhouse gases.

This analogy should not be taken too far, however. Unlike the half-lives of radioactive materials, the atmospheric residence times of greenhouse gases are not fixed, but are affected by many factors in the atmosphere, including concentrations of other gases. for example, carbon monoxide is not a greenhouse gas itself, but is thought to affect the amount of ozone and methane in the atmosphere, both powerful greenhouse gases. This makes the calculation of the relative warming produced by different mixtures of greenhouse gases much more complicated and uncertain than is the determination of relative radioactivity in different mixtures of nuclear waste.

Atmospheric residence times

Some GGs are removed from the atmosphere in a few years, while others remain for hundreds of years. Thus, to compare different GG mixtures, for example those emitted from different countries, it is important to consider the relative atmospheric lifetimes. These are listed in the third column of Table 2.1.

Figure 2.4 shows that as a result of having different lifetimes, the relative importance of different GGs can change dramatically over time. Here, the curves start from the relative radiative forcings of current global anthropogenie CO2 and methane emissions, shown on the vertical axis where t = 0. This point corresponds to an instantaneous index, one not considering lifetimes, where total methane emissions are about 86 per cent as important as CO2. This index is based solely on radiative forcing at the moment of release. The downward sloping curves after this point represent the change in relative radiative forcing that occurs as the GGs are removed from the atmosphere over time. Because methane has such a short lifetime compared to CO2, its relative importance decreases quickly. After 20 years, the methane released at the beginning of the period has become less than 11 per cent as important as the CO2. After one hundred years, less than one in ten thousand of the original methane molecules are left, while more than two-fifths of the CO2 remains. From most perspectives, therefore, the relative direct impact of current atmospheric methane concentrations is actually much less than the 86 per cent indicated by an instantaneous index.

Figure 2.4 Relative rates of removal from the atmosphere for CO2 and methane

It is not exactly true to say that an instantaneous index is wrong, for it does represent a systematic means to compare mixtures, albeit with a peculiar time horizon. Such an index is not suitable for addressing most policy questions, however. Societal concern about GGs clearly extends beyond the immediate year that emissions occurred, and an index should be chosen accordingly. The time horizon could take various forms:

Figure 2.5 The index year and year cutoff methods of comparing the contributions of CO2 and methane

• Index years. As shown in Figure 2.5 present GG mixtures could be weighted on the basis of their relative impact on radiative forcing in a particular future year, say 2050.

• Index periods. Instead of a particular year, a particular period could be chosen, say the relative forcing in the thirtieth year after release (Figure 2.6).

• Year cutoffs. Mixtures could be weighted according to the total radiative forcing from the date of emissions through to the year of cutoff, say 2050. These weightings are represented by the areas under the curves to the left of the chosen year in Figure 2.5.

• Period cutoffs. Instead of a particular year, a particular period could be chosen, say the integrated radiative forcing for 30 years beyond the year of emissions (Figure 2.6).

• Discounting. Radiative forcings in future years could be weighted according to how distant they are from the present, as is standard in economics for comparing monetary flows over time. As shown in Figure 2.7, at a 5 per cent discount rate, radiative forcings next year would only count about 95 per cent as heavily as those this year. The radiative forcing due to this year's emissions in the twentieth year would count less than 40 per cent as much. The discount factor is applied in addition to the decay factor due to GG removal from the atmosphere over time.

Figure 2.6 The index period and period cutoff methods of comparing the contributions of CO2 and methane

Figure 2.7 The effect of discounting on CO2 decay

Direct effects

We focus on period cutoffs in this book, which is consistent with the reports of the Intergovernmental Panel on Climate Change (IPCC 1990, 1992). Although not without problems, the best available way to make numerators for GG indices is to weight the different GGs by their respective global warming potentials (GWP), which is the estimated ratio of total warming produced by each gas over a particular period compared to an equal amount of CO2 released at the same time. This allows the impacts of different GGs to be aggregated or compared in units of CO2 equivalents. The middle set of columns in Table 2.1 show direct GWPs for three time horizons. Direct GWPs take into account the relative lifetimes and radiative forcings of the different GGs (IPCC 1992). Table 2.2, which applies to the same emission pattern as in Figure 2.4, shows that although instantaneously representing 86 per cent as much warming as CO2, over 20 years, 1990 global methane emissions represent just 52 per cent as much warming as the CO2 released and, over 100 and 500 years, only 16 per cent and 6 per cent, respectively.

Except for CO2, the major GGs have atmospheric lifetimes less than 150 years and, thus, the longest period cutoff shown in Table 2.1, 500 years, gives nearly the same warming for each as would complete integration (an infinite time horizon). Because some proportion of CO2 releases is thought to have a rather long residence time (at least 800 years), however, a 500-year time horizon accounts for something like four-fifths or less of what would be indicated by a complete integration (Seigenthaler 1983; Lashof and Ahuja1990). Thus, the GWPs, which are ratios of the warming of each gas compared to CO2, would continue to fall slowly, at longer time horizons than the 500 years shown.

Table 2.2 World anthropogenic emissions of CO2 and methane and global warming potentials

Year emitted Carbon (kt) Percentages Per cent of CO2 GWP
CO2 CH4 CO2 CH4 Direct Total
1990 6430 264 100 100 86 86
  Remaining in atmosphere
2010 3980 39 62 15 52 89
2090 2780 0.018 43 0.07 16 31
2490 2180 5.5 X10-19 34 2.1 x 10-19 6 14

Emissions data from Subak et al. 1992
GWP = global worming potential
kT = 1000 tonnes

Indirect effects

In addition to radiative forcing and atmospheric lifetime, which are used to determine direct effects of each GG compared to CO2, indirect effects through chemical reactions create additional complications in determining GWPs and constructing accurate indexing schemes. Several types of chemical interactions are important:

• Some GGs and non-GGs change into other GGs, as methane (a GG) and carbon monoxide (essentially a non-GG) can eventually change into CO2.

• Some non-GGs act to increase the atmospheric lifetime of GGs, as carbon monoxide does for methane, giving them GG equivalence even though they are not GGs themselves.

• Some GGs, as well as non-GGs, affect the creation of ozone and water vapor - important natural GGs.

This book is not the place to discuss these interactions in detail, partly because knowledge is still rapidly developing (IPCC 1992). Estimates of important indirect effects, which take account of various chemical interactions, are shown in the last set of columns in Table 2.1 for illustration. With the possible exception of methane (Lelieveld and Crutzen 1992), the magnitude of these indirect effects should be treated as extremely tentative.

The indirect effects are known with much less confidence than lifetimes, which, in turn, are less well understood than radiative forcing. In addition, local conditions have the largest influence on indirect effects, intermediate on lifetimes, and least on radiative forcing. Both indirect effects and radiative forcing depend on actual concentrations reached by the various gases over time; in other words, the GWPs change over time (Penner et al. 1989). Consequently, as more research is done, the magnitude of changes in estimates of these parameters can be expected to be roughly according to these relative uncertainties.

The impact of adding indirect effects is quite important for methane, as indicated in the last three columns of Table 2.1. As listed in the last column columns of Table 2.1. As listed in the last column of Table 2.2, including indirect effects actually increases the 20-year GWP slightly above the instantaneous level (89 compared to 86 per cent). Including indirect effects means that, at time horizons of 100 and 500 years, the 1990 methane emissions are 31 and 14 per cent, respectively, as important as 1990 CO2 emissions.

Which time horizon?

There is no unassailably objective way to choose the appropriate time horizon for GGs. It is not simply a technical question, but is related more to social and moral values and conventions as well as to the particular policy issue being addressed. Most people seem comfortable with a 100-year horizon. (For CO2, this is roughly equivalent to a discount rate of 0.84 per cent.) This period can be justified on the basis that society clearly has concerns extending beyond a few years and yet is not likely to feel obligated to make large sacrifices to protect generations hundreds of years into the future, the capacities and needs of whom are so uncertain today. Intermediate time horizons thus seem most logical, but there is nothing sacred about the precise figure of 100 years.)

In addition, as pointed out by the IPCC (1990), each type of potential impact from global warming has its own time-scale. General warming might be most appropriately indicated by a 500-year horizon, sea-level rise by 100, and rates of temperature change by 20, for illustration. Thus, gases that have different atmospheric residence times will tend to have a different pattern of influence on the impacts of concern. Too little is known at present, however, to apply such subtleties to policy-relevant indices.)

Past, current, and future emissions

The preceding discussion focused on greenhouse gas releases from a single year. Often, however, we will need to consider emissions over a number of years. Figure 2.8 shows how the individual contributions from single years combine in what look to be a pile of annual warming commitments. The warming commitment from each year's emissions extends to the 100-year cutoff (time horizon). At any year, the total radiative forcing is due to the total contribution remaining that year from each of the past 100 warming commitments. Between now and any point in the future, the total radiative impact is the area under all the warming commitments from now until that year.

Figure 2.8 Incremental warming from annual emissions

In some cases, one may want to examine past cumulative emissions as part of an index. With a 100-year period time horizon, no present effect is attributed to emissions previous to 100 years ago. For emissions during the last 100 years, radiative forcing impact could be indexed in three ways:

1 that expressed to date;
2 that committed out to 100 years after the original emissions, but not yet expressed;
3 the total of (1) and (2).

These periods are illustrated in Figure 2.9. We do not have space to compare the use of these different indices and have chosen here to rely on option 3 in our calculations. This option seems most consistent with our choice for present and future emissions, that is, period cutoffs.

Figure 2.9 Methods of indexing past emissions using a hundred-year time horizon


With this brief background of the constraints imposed on indices by physical reality, let us examine the implications concerning relative national responsibilities for choosing different kinds of indices. The entire landscape of nations and gases - historical, present, and future - is complex. Before addressing the total picture in the next chapter, therefore, we can take a cue from atmospheric scientists, who often make use of greatly simplified models of the world (only one-dimensional or two-dimensional, for example), in their quest to understand and predict the behaviour of extremely complex systems.

The one-nation, one-pollutant model

The most obvious measure of a nation's responsibility for greenhouse gas emissions is simply its present emissions. This measure has the clear benefit of being relatively easily determined and being the most responsive to control efforts. For these and other reasons, it has many advantages as an index.

A problem with this measure, however, is that it does not completely reflect physical reality. The extra greenhouse warming that occurs at any time is actually due to the cumulative amount of greenhouse gases remaining at that time, rather than to the emissions that year. That year's emissions are important only to the extent that they add to the accumulation.

The amount of greenhouse gases remaining in the atmosphere at any one year due to a nation's emissions has been termed the 'natural debt' (Smith 1989b, 1991). A national debt is built by borrowing financial resources from the future, but the natural debt is built by borrowing assimilative capacity of the atmosphere from the future, through the release of greenhouse gases faster than they can be naturally removed. Just as with the national debt, borrowing on the natural debt has allowed nations to build up their infrastructure and economic wealth faster than would have occurred otherwise. Like the national debt, however, if the natural debt becomes too large, problems are created. Just as with a financial debt, therefore, it does not seem unfair to ask nations to pay off the natural debt in the same proportion as it was borrowed.

Figure 2.10 Gross and depleted natural debts of US CO2 from fossil fuels

Figure 2.10 shows the relationship between current CO2 emissions from fossil fuels and natural debt for the United States. (It leaves out other greenhouse gases and other sources of CO2.) Current (1990) emissions are roughly 1.3 Gt (billion tonnes carbon as CO2) per year. Cumulative emissions since 1950, however, are approximately 41 Gt. Of this, approximately 70 per cent still remains in the atmosphere, making the US natural debt to be 29 Gt, or some 116 tonnes per living US resident. This natural debt might well be considered to be a reasonable measure of US responsibility (see Chapters 3 and 4). Tables 2.3 and 2.4 list the 1950-86 natural debts for the 62 largest nations in the world (with populations over ten million).

Table 2.3 Current and historical carbon emissions and population data by country

  1950-86 carbon emissions (megatonne) 1986 total population (million) 1950-86 cumulative capita/year (million) 1986 annual emissions (t/cap) 1986 undepleted natural debt (t/cap)
USA 37,284 240 7,360 5.01 155.0
Germany, United 9,123 78 2,784 3.50 117.0
Canada 2,911 26 751 4.09 112.0
Czechoslovakia 1,764 16 526 4.21 110.0
Belgium 1,081 10 349 2.68 108.0
United Kingdom 5,922 57 2,018 2.94 104.0
Australia 1,360 16 447 3.85 85.0
Poland 2,921 37 1,177 3.32 78.9
[USSR] 22,039 281 8,667 3.59 78.4
Netherlands 1,040 15 466 2.41 69.3
Bulgaria 618 9 306 3.60 68.7
France 3,646 55 1,820 1.79 66.3
Japan 6,924 121 3,929 2.11 57.2
Hungary 594 11 380 1.98 54.0
Romania 1,112 23 735 2.41 48.3
South Africa 1,456 33 835 2.79 44.1
Italy 2,294 57 1,955 1.66 40.2
Korea, Dem. 679 21 507 1.92 32.3
Spain 1,116 39 1,229 1.28 28.6
Yugoslavia 632 23 739 1.49 27.5
Greece 268 10 324 1.62 26.8
Venezuela 459 18 389 1.48 25.5
Argentina 698 31 874 0.85 22.5
Saudi Arabia 268 12 230 2.58 22.3
Portugal 156 10 339 0.79 15.6
Mexico 1,207 81 1,862 0.91 14.9
Chile 174 12 336 0.49 14.5
Korea, Rep. 584 42 1,126 1.08 13.9
Iran 534 46 1,030 0.68 11.6
Malaysia 176 16 310 0.58 11.0
Turkey 467 50 1,271 0.68 9.34
Colombia 262 29 734 0.44 9.03
Iraq 144 17 351 0.56 8.47
Syria 91 11 234 0.77 8.27
China 8,448 1,052 29,132 0.53 8.03
Algeria 160 22 518 0.69 7.27
Peru 141 20 480 0.29 7.05
Brazil 950 139 3,427 0.38 6.83
Egypt 281 48 1,194 0.41 5.90
Morocco 84 22 550 0.22 3.82
Philippines 207 56 1,343 0.16 3.70
Thailand 183 52 1,296 0.26 3.52
Vietnam 185 61 1,619 0.08 3.03
India 2,184 772 20,080 0.19 2.83
Indonesia 419 171 4,394 0.17 2.45
Ivory Coast 21 10 210 0.13 2.10
Pakistan 192 103 2,544 0.13 1.86
Sri Lanka 29 17 442 0.06 1.71
Kenya 34 21 428 0.05 1.62
Cameroon 16 10 249 0.17 1.60
Mozambique 22 15 322 0.02 1.47
Ghana 19 14 317 0.05 1.36
Nigeria 132 99 2,141 0.13 1.33
Sudan 28 22 525 0.04 1.27
Zaire 30 31 733 0.03 0.97
Burma 34 38 987 0.05 0.89
Madagascar 7 10 248 0.02 0.70
Tanzania 15 23 511 0.02 0.67
Uganda 7 16 348 0.01 0.44
Bangladesh 44 103 2,632 0.03 0.42
Ethiopia 10 44 1,135 0.01 0.23
Nepal 3 16 434 0.02 0.19
        International means
Total 123,889 4,560 124,629 1.20 28.60

Data for the 62 most populous nations (approximately 10 million or larger in 1986). The lost column shows the natural debts, as defined in the text. The emissions data reflect carbon dioxide from fossil fuel combustion and cement manufacture (data mainly from Marland et al.1988).


Conclusion: indices do matter

Table 2.7 on page 48 shows a summary of the various values in the one pollutant, two-nation model and illustrates the wide range of answers that could be derived from use of indices that vary only in two parameters current versus cumulative and per nation versus per capita. It is useful to note that these values are much more sensitive to the choice of index, than to the choice of emissions scenario. Assume, for example, that the USA was able to reduce its per capita carbon emissions use by 1.5 per cent each year for the 39-year period, reaching a total emission rate more than 30 per cent below that of 1986 (and bringing the per capita emissions down by more than 40 per cent). How much difference would this rather heroic effort make in the final ratios? It would be very little for cumulative per capita indices. As shown in Table 2.5, the difference in ratios for cumulative atmospheric carbon would be less than 15 per cent (14 versus 16). Conversely, if the USA were to continue to expand its fossil fuel use by 0.5 per cent, as it has been doing recently, the ratio would only rise to 17 by 2025.

Table 2.6 Greenhouse gas indices according to time horizon for India and the USA

  1987 emissions Total CO2 equivalents by time horizon (years)
Million tonnes Million tonnes 0 20 700 500 Infinite
C as CO2 C and CH4 (70^5 tonnes) (70^9 tonne-y) (70^9 tonne-y) (70^9 tonne-y) (70^9 tonne-y)
USA 1200 32 1900 29 79 210  
(24) (73) (200) (400)
India 150 23 630 10 18 37  
(6.5) (13) (30) (54)
Ratio, USA/lndia       2.9 4.4 5.7  
7.9 1.4 3 (3 7) (5.6) (6.9) (7.3)

Note that including methane and using short time horizons tend to make the US contributions seem relatively smaller, i.e., the USA/lndia ratio goes down.

Based on coefficients in Table 2.1 and emissions in WRI (1990), Table 24.1. CO2 emissions from fossil fuels and cement production only. Numbers in brackets refer to direct warming only (no indirect effects). See Table 2.1.

Note that including methane and using short time horizons tend to make the US contributions seem relatively smaller, i.e., the USA/India ratio goes down.

Based on coefficients in Table 2.1 and emissions in WRI (1990), Table 24.1. CO2 emissions from fossil fuels and cement production only. Numbers in brackets refer to aired warming only (no indirect effects). See Table 2.1.

Figure 2.13 Sensitivity of global warming potentials to time horizon

Table 2.7 Ratio of responsibilities: USA/India

  Current emissions Cumulative emissions
1986 2025 1986 2025 1987-2025
Per nation 8.3 1.0 16.0 3.6 2.3
Per capita 27.0 5.0 55.0 16.0 10.0

Based on data in Table 2.5, no-emissions-growth scenario for the USA. CO2 emissions from fossil fuels and cement production.

Any of these indices might be used to compare relative responsibilities for greenhouse gas emissions. In this book, natural debt indices are recommended, those three in the lower right quadrant, which are based on cumulative emissions per capita.

Some have argued that the need to choose a time horizon greatly diminishes the value of greenhouse-gas indices (Hammond et al. 1990). This argument misses the point, which is that when making choices between options with different patterns of consequences over time, there is no way not to choose a time horizon (Environment 1991). It may be done implicitly, but it is always involved in the choice made. Even if the choice is not to count future effects at all, a time horizon is implicit: an infinite discount rate. It is far better to bring the issue out into the open, make an explicit choice, explain the rationale, and allow it to become part of the review and negotiating processes.

There are many other possibilities to vary indices to reflect the real world of multiple criteria, greenhouse gases, and nations. We want to emphasize here, however, that the choice of index does indeed make a difference, sometimes a very large difference, and thus must be chosen with care to be relevant to the problem at hand and scientifically justifiable, as well as useful for policy.


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Comprehensiveness compared
Accuracy by category
Regional and national emissions by source
Appendix A: Estimates of greenhouse gas emissions
Appendix B: Calculating cumulative and current emissions

Susan Subak


In this chapter, I present a variety of ways to assess responsibility for greenhouse gas (GHG) emissions. The parameters that could define responsibility from a polluter pays perspective include: which greenhouse gases are counted; which sources are included; and what time frame is used for estimating them. A New Zealander who lives in a country with twenty methane emitting sheep for every person may prefer to keep the gases limited to carbon dioxide only. A Swiss citizen mostly emits carbon dioxide by burning fossil fuels, and may be unhappy if only this gas is controlled. And someone from a recently industrialized country such as Singapore might feel justified in pushing for the inclusion of historic emissions in global greenhouse negotiations. The definition of GHG emissions, therefore, has great practical impact on each country's relative responsibility for emissions. The feasibility of controlling emissions sources, linking national abatement actions efficiently with global targets, and verifying emissions after targets have been set are other important considerations that policy makers must take into account when assessing responsibility for emissions.

In the following analysis, five approaches for assigning responsibility among countries for greenhouse gas emissions are examined. They comprise two historical and three current emissions assessments which vary by level of coverage of sources (Table 3.1):

1 cumulative CO2, energy only;
2 cumulative CO2, energy and biota (including CO2 from both fuels and land clearance);
3 CO2, energy only (current);
4 partial CH4 and CO2 (including current emissions of CO2 from energy consumption and deforestation, and methane from energy production and landfills);
5 comprehensive (current emissions of CO2, CO, CH4 and N2O from energy, industrial, biotic and agricultural sources).

Table 3.1 Sources included in selected cumulative (1860-1986) and current (1988) emissions

1 Cumulative CO2, energy only X      
2 Cumulative CO2, energy & biotab X X    
3 COT, energy (current) X      
4 Partial CH4 and CO2 (current) X' X X  
5 Comprehensive (current) X X X X

a 'Other' includes cement production, and agricultural sources, including livestock, rice cultivation, fertilizer consumption, and biomass burning apart from deforestation. The gases include CO2, CH4, CO, and N2O.
b Includes estimated net CO2 release from soil carbon and from above-ground biomass in areas converted from forests to agricultural uses only.
c CO2 and CH4 emissions.

All of the approaches have already entered discussions, either in a political or an academic context. Most of the approximately two dozen countries that have pledged thus far to meet specific national targets to stabilize or control greenhouse gas emissions have focussed on the control of CO2 emissions from energy consumption. Setting targets for CH4 (methane) from energy and industrial sources and CO2 from biotic sources, in addition to CO2 from fossil fuel combustion is being seriously explored by several industrialized countries. The Framework Convention on Climate Change signed at Rio de Janeiro in June 1992, which requires developed country Parties to submit plans for stabilizing emissions, can be interpreted to apply to all greenhouse gas sources with the exception of halocarbons controlled by the Montreal Protocol. Allocating future emissions based on historical release of greenhouse gases has been proposed by a number of researchers (Krause et al. 1989; Smith 1991; Gruebler and Fuji 1991).

Any of these source categories could form a broad basis for resource transfers from North to South to fund technology transfers or greenhouse gas abatement projects. But as the baseline against which national targets or the allocation of traceable emissions permits are set, the national inventories must be accurate and verifiable. A consensus is more likely to be reached over setting targets for sources and gases that can be measured with confidence. Although in the past, regional environmental agreements have been signed before baseline national emissions estimates were completed, in the case of greenhouse gas emissions where the differences in countries' emissions rates are so great, nations are unlikely to favour setting specific targets for controlling sources for which accurate baseline inventories at the country level are not yet available and cannot yet be monitored.

In the following analysis, the relative comprehensiveness of the different source categories is briefly summarized, followed by a discussion of the problems in estimating emissions from these different sources and time frames. In addition, the implications of the five emission categories is illustrated for a selection of the major emitting countries. A brief description of the emissions totals used, and the method for calculating national inventories appear in Appendix A and Appendix B.

Comprehensiveness compared

Cumulative CO2, energy only

As it takes many decades for CO2 to be removed from the atmosphere, the increase in concentration of CO2 from pre-industrial levels is largely due to CO2 emitted in past decades. In this respect, historical CO2 emissions are much more relevant to the level of committed atmospheric warming than are current emissions. Emissions from past energy use, however, make up a smaller portion of total CO2 release than today's fossil fuel emissions because CO2 from land clearing may have been roughly comparable with fossil fuel related CO2 until the middle of this century (see Figure 3.1). Emissions from fossil fuel combustion since the start of the industrial revolution are estimated to be 175 to 215 gigatonnes (GT) of carbon (C), representing between about 55 and 70 per cent of total anthropogenic CO2 release (IPCC 1990). Contributions to warming, however, are considerably lower because CO2 is but one of the gases contributing to the heating effect. Considering both the change in fossil fuel emissions over time (Keeling 1973; Marland et al. 1990) and the estimated contribution of CO2 to total warming (IPCC 1990), it is calculated that cumulative CO2 emissions from energy may contribute about 40 per cent of the warming effect of the trace gases now in the atmosphere.

Figure 3.1 Historic CO2 emissions compared

Cumulative CO2, energy and biota

About 60 per cent of the warming effect of anthropogenic greenhouse gas emissions in the atmosphere is thought to be from CO2 or cumulative CO2 emissions from energy and biota (IPCC 1990).

CO2, energy only (current)

Although current CO2 emissions from energy is the least comprehensive of the five categories considered here, CO2 from energy alone is the major warming source from current emissions. Emissions from energy consumption contribute about 65 per cent of the expected warming effect of the trace gases now being emitted, if halocarbons are excluded from the total. This CO2 share of warming reflects the use of the IPCC's GWP for a 100 year period, published in 1992 (IPCC 1992). The estimated warming is only 60 per cent of the total if the IPCC's 1990 GWPs are employed and no doubt will change as the IPCC revises in the future.

Partial CH4 and CO2

This category, as defined above, covers about 80 per cent of the warming effect of current greenhouse gas emissions excluding halocarbons. Halocarbons have been omitted from the current emissions total because they are already being phased out under the Montreal Protocol.

Comprehensive emissions

The comprehensive approach to emission measurement theoretically represents 100 per cent of current greenhouse gas emissions.

The influence of time horizon

The relative comprehensiveness of the energy and modified comprehensive approaches varies considerably depending on how much of the heating effect of the different gases is taken into account. In Figure 3.2, current emissions are compared using three CO2 equivalence indices including the potential heating effect of the gases over a 20, 100, and 500 year time horizon. In the 20 year time horizon, CO2 from energy contributes only about 45 per cent of the total heating effect because the index based on the shorter time horizon does not capture the ultimate heating effect of CO2, which continues many decades beyond the atmospheric residence time of CH4, the next most important greenhouse gas. Accordingly, the proportion of the total heating contribution due to CO2 from energy is much higher about 70 per cent - over the longer time horizon.

Figure 3.2 Contributions to total emissions by source

Accuracy by category

Table 3.2 summarizes the difficulties in estimating emissions from each of the source groupings; it includes the IPCC's ranges of uncertainty in estimating emissions by source and gas globally for each of the five emissions groups.

Cumulative CO2, energy only

CO2 emissions from energy use have been estimated at the country level between 1950 and 1988 (Marland et al. 1989) and between 1860 and 1950 (Subak and Clark 1990). Marland et al. estimate that the uncertainty of their inventory is 6-10 per cent at the country level (Marland et al. 1988). The accuracy of the pre-1950 data set is limited because of changes in geographical borders and sovereignty, lack of information on the type of coal used in the past, and because data on fossil fuels traded in certain regions are incomplete or unavailable. To relate historical emissions to current concentrations, a coefficient or 'discount rate' must be applied to adjust for the CO2 that has been removed from the atmosphere over time.

Table 3.2 Estimated accuracy of GHG emissions accounts

Estimated range
(IPCC 1990 unless noted)
1 Cumulative CO, Energy (1860-1986)
Fossil Fuel Consumption (CO2) Medium 175-215 GT C (10%)
2 Cumulative CO2 (1860-1986)
Fossil Fuel Consumption (CO2) Medium 175-215 GT C (10%)
Land Use Changes (CO2) Lowa 82-152 GT C (30%)
3 CO2 Energy (Current)
Fossil Fuel Consumption (CO2) High 5.4 GT C (Marland et al. 1990) (5%)
4 Partial CH4 CO2 (Current)
Above Plus:      
Landfills (CH4) Medium 20-70 MT CH4 (50%)
Land Use (CO2) Medium 1.1-3.6 GT C (Houghton 1991) (50%)
Energy Prod. and Distribution (CH4) Medium 44-100 MT CH4 (40%)
5 Comprehensiveb (Current)
Above Plus:      
Fossil Fuel Combustion (N2O, CO) Medium 0.5-1.4 MT N2O (IPCC 1992) (50%)
Cement Production (CO2) High    
Biomass Burning (CH4, CO, N2O) Low 20-180 MT CH4 0.3-1.6 MT N2O
(IPCC 1991)
Enteric Fermentation (CH4) Medium 65-100 MT CH4 (20%)
Animal and Human Wastes (CH4) Low    
Rice Cultivation (CH4) Low 25- 170 MT CH4 (80%)
Fertilizer Consumption (N2O) Low 0.01-2.20 MT N2O (100%)
Halocarbons (CFCs, Halons, HCFCs) High    
Nylon Production (N2O) Medium 0.6-0.9 MT N2O (IPCC 1991) (20%)

a In this cave, the uncertainty at the country level is far greater than the estimated global range.
b This inventory coos not include stratospheric water vapour, which is thought to contribute about 4 per cent of the climate forcing (IPCC 1990), and O3 precursors-NO and volatile organic compounds.

Despite these accounting difficulties, estimates of CO2 from energy use since 1860 are more accurate than those of current emissions from land use changes and agriculture. Keeling (1973) has estimated the uncertainty of historical global estimates for CO2 emissions from fossil fuels at 13 per cent. This range of uncertainty compares with 100 per cent or more for CO2 emissions from biota in the current period and equivalent or greater uncertainties in estimating CH4 from rice cultivation and biomass burning, and N2O, NOx, and CO from all sources (IPCC 1990; Logan et al. 1981).

Cumulative CO2. energy and biota

Estimating national historical emissions from energy and biota involves all of the technical difficulties of estimating cumulative emissions from fossil fuels outlined above, plus the challenge of estimating biotic contributions. While data are available to calculate emissions from fossil fuels on an annual basis, comprehensive international forest surveys are conducted less frequently, generally every decade since 1949. Much of the pre-1950 data are for changes in area devoted to agricultural uses only and therefore omit forest conversion to other uses such as settlements, etc. For all periods, many of the forest surveys are considered unreliable. It is unlikely that additional scientific research will significantly improve the accuracy of these estimates on the national level as investigations of historical trace gas concentrations such as ice core and tree ring analyses shed light on global historic concentrations rather than on nation-specific emissions.

Energy, CO2 (current)

This is the most practical, that is, measurable and verifiable approach of the five. Carbon dioxide emissions from current energy consumption are estimated to be accurate at the country level within an error range of only about 6-10 per cent (Marland et al. 1989). A comparison of the (ORNL) Marland and Rotty inventory (Marland et al. 1988), which is based on United Nations energy statistics with a new inventory of CO2 release (don Hippel et al. 1992) from energy consumption that was derived from OECD/IEA statistics (OECD/IEA 1990a) suggests that the error range may be higher for some countries. Regardless, the level of uncertainty in estimating emissions from this source is far lower than the uncertainty associated with inventories of the other gases and sources and should improve in the near future as a number of agencies are refining emission factor estimates and end-use data at the country level.

Partial CH4 and CO2

This approach is midway in practicality between the CO2/energy only approach and the comprehensive approach. The additional sources - land use changes, landfills, and fossil fuel extraction - cannot be estimated as accurately as energy consumption. The error range for estimating CO2 from land use changes and CH4 from landfills and fossil fuel extraction is + 40 to + 50 per cent at the global level (IPCC 1990), with developing countries generally at the higher end. Nevertheless, these sources of CO2 and CH4 should be easier to monitor than the agricultural sources and remaining gases. The landfill and coal mine sources of CH4 are also potentially important sources of natural gas (US/Japan Working Group on Methane 1992). Employing technology to recover and utilize natural gas from these sources should eventually enhance our capacity to control and monitor CH4 release.

For a number of countries in the tropics where CO2 emissions from deforestation far outweigh emissions from energy consumption, per capita estimates change a great deal depending on the assumptions used to estimate land clearing and biomass levels. As the FAO's once-a-decade study of tropical deforestation and tree plantation establishment and the Brazilian Space Institutes (INPE) detailed remote sensing survey of the Amazon Basin are due to be published in the next few years, estimates of emissions from land use changes should improve significantly. In addition, new international statistics on forest growth in temperate countries recently completed by the FAO/ECE, as well as new country studies for Northern and Central Europe, provide further information on the magnitude of CO2 uptake in northern forests.

Comprehensive emissions

The additional sources and gases not included in the above list are far more difficult to inventory. Generally, emissions from the minor greenhouse gas N2O, and CO - which oxidizes to become CO2 and affects the atmospheric residence time of CH4 - are highly uncertain. All of the agricultural sources are included in this approach. Of these, the factors that determine the release of CH4 from livestock enteric fermentation may be the best understood. But even in this case, the accuracy of national estimates for many countries is doubtful at present, because the controlling factors, which include livestock diet, breeding, and management practices, vary from country to country and accurate data are not available for many countries, particularly in the developing world. Measured CH4 release from rice cultivation varies widely according to soil type, fertilizer application, climate, and irrigation regime, but the net effect of all these conditions on emissions is not yet understood. Calculation of CH4 release from animal and human wastes has only started to be undertaken in the last two years, and estimates are rough, reflecting extrapolations based on only a few site-specific studies. Emissions of CH4, CO, and N2O from biomass burning vary with the extent of crop or forest burning, and the moisture and carbon and nitrogen content of the biota. Emissions of N2O and CO from the remaining sources are all highly uncertain.

Unlike the sources covered only in the partial CH4 and CO2 approach (energy, deforestation, and landfills), the additional sources covered here (livestock, rice cultivation, cement production, and fertilizer consumption) pose greater problems as abatement targets because their control would likely entail directly curtailing economic activities rather than reducing the residuals stemming from these activities. The agricultural and industrial activities they represent may be considered essential subsistence activities by many countries (Parikh et al. 1991), although in the case of livestock management for some animals, reducing CH4 emissions through changes in diet and breeding may be compatible with development goals (Leng 1991).

Unlike the three CO2 approaches, the partial and fully comprehensive approaches require an index to compare the heating effect of CH4 and CO2 emissions. The problems involved in evaluating the relative warming contribution of the gases include the difference in estimating the atmospheric lifetime of gases (particularly CO2), calculating indirect effects of the emitted gases, and specifying the most appropriate time period for which to calculate the warming effect (IPCC 1990). In practice, however, the choice of CO2 equivalent applied to these sources may have little effect on most countries' relative ranking by warming contribution.

Regional and national emissions by source

The difference in relative emissions contribution from industrialized and developing countries is summarized in Table 3.3.

It is clear from Table 3.3 that the more current time frame and the addition of the non-energy sources increases the emphasis of emissions from developing countries. This overall pattern holds true for emissions from selected countries. Relative per capita emissions from ten countries that account for 60 per cent of current CO2 emissions from fossil fuels appear in

Table 3.3 Emissions from industrialized and developing countries (% of world total CO2 equivalent)

Emissions category Industrialized Developing
1 Cumulative CO2, energy 86 14
2 Cumulative CO2, energy and biota 68-80a 32-20
3 CO2, energy (current) 72 28
4 Partial CH4 and CO2 (current) 57 43
5 Comprehensive (current) 52-57b 48-43

a This range is based on alternate assumptions of historical land clearing rates.
b This range is calculated based only on differences between the short and longer GWPs. If CFCs are excluded from the totals, industrialized countries' emissions comprise 52 per cent of the total assuming the 100 year GWP.

Figure 3.3. The group includes the eight greatest emitters, in addition to Mexico and Nigeria.

The bars in Figure 3.3 show countries' emissions levels relative to the global mean. For example, the white bar for Germany indicates that per capita CO2 emissions from fossil fuels are three times the global per capita mean. The per capita emissions patterns illustrated fall into three general patterns:

Figure 3.3 Per capita emissions from selected countries

1 An upward slope from the bars sequenced first as cumulative emissions followed by current emissions and fossil-related CO2 followed by emissions from all greenhouse gases and sources. While the shape of curve is tentative for some countries, it is clear that emissions in the current period and emissions from biotic and agricultural sources emphasizes the contributions of these developing countries (Brazil, China, India, and Mexico).

2 The corresponding downward sloping pattern for industrialized countries is more dramatic. The scale of per capita emissions in the historic period and from fossil fuel emissions is significantly greater for these countries (Germany, UK, and USA).

3 A horizontal pattern emerges for the more recently developed countries Japan and USSR) where per capita emissions by time period is relatively constant and the biotic component minor.

Population-weighted emissions were selected as the most compelling form of comparison. A per capita emissions criterion is intuitively equitable in a spatial sense because it assesses individual responsibility regardless of political borders, although in practice the evenhandedness may be diminished because of individuals' disparate emissions release. Alternative allocators have major flaws. Per land area introduces undeserved entitlements to countries with large uncultivatable or uninhabitable regions. Per GDP is regressive in that late-developing countries tend to have high emissions levels per unit of output, as many developing economies are especially energy intensive. Several regions have advanced a population-based approach. Japan recently pledged to cap future CO2 emissions at current per capita levels. In preliminary discussions on approaches to meeting its overall CO2 stabilization goal, the European Community indicated a preference for national targets based on per capita CO2 emission levels. Analysts and scholars have also favoured the per capita approach, although with added variations and qualifications, e.g. considering cumulative population (Smith et al. 1990), weighting by adult population (Grubb et al. 1992), crediting carbon sinks on a per capita basis (Agarwal and Narain 1991) and designating an intergenerational per capita emissions allotment (Gruebler and Fujii 991).

In Figure 3.4, I compare three sets of data - greenhouse gas emissions, population, and GDP - for the selected countries. Two general patterns emerge. For the developed countries, the share of the world's total for each of the indicators forms an inverse U-shape, with the share of GDP (and UN contributions) greater than the countries' contribution to world population and emissions. For instance, Japan makes up 2 per cent of the world's population, produces 9 per cent of the global GDP, and releases only 5 per cent of annual fossil-fuel related CO2. In contrast, the pattern for developing countries, although not as pronounced, tends to be a U-shape, with relative GDP less than the other indicators. One implication of this pattern found among the ten countries examined here is that greenhouse gas intensity (GHG/GDP) is greater in developing countries relative to the corresponding ratios in developed countries than is the GHG/population ratio. Developing regions often release more CO2 (energy related) per unit of output than do developed countries (Grubb et al. 1992). In Figure 3.4, a comparison is also made with relative GDP, or purchasing power parity adjusted GDP, a newer index that attempts to adjust for differences in purchasing power in different parts of the world and for fluctuating exchange rates (Summers and Heston 988).

Figure 3.4 Socioeconomic assessments compared with GHG emissions

While analysts are already discussing ways of adjusting assessments in order to find an equitable solution and the right incentives, in practice the differences between alternate indicators such as population and adult population are often not as great as the differences between the levels of responsibility implied in the alternative emissions source categories discussed above. By way of comparison, Figure 3.4 shows that the difference between developing countries' share of the world's population versus adult population is not as great as the difference between countries' share of emissions from all greenhouse gases versus CO2 from energy only.


The choice of emissions source category can bear upon countries' implied responsibility for emissions if an agreement is based on some form of the polluter-pays principle. The emissions categories involving the greatest uncertainties in measurement - the more comprehensive approaches - also place relatively greater emphasis on emissions from developing regions, where a high proportion of emissions from agricultural and biotic sources originate. Per capita emissions of CH4 and N2O are frequently greater in developing countries.

Cumulative CO2 emissions from fossil fuels can now be estimated with more precision than can most of the sources in the comprehensive source category. However, the uncertainty associated with estimating current emissions from biotic and agricultural sources should diminish with time whereas flaws in historical data, in particular those relevant to land use, may be immutable. CO2 from fuel combustion is the most verifiable and comprises about 65 per cent of current contribution to global warming.

The partial CH4 and CO2 category, which includes CO2 and CH4 from energy, industrial, and biotic sectors (and excludes the more difficult-to-measure agricultural activities and the minor trace gases) makes up about 80 per cent of the total warming effect from current emissions (excluding halocarbons). It would be significantly more difficult to monitor emissions from these sources than to monitor CO2 emissions from fossil fuel combustion, but for a variety of reasons, economic as well as environmental, it may be time to develop emissions assessments applied to this more inclusive, but not comprehensive, approach.


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Appendix A: Estimates of greenhouse gas emissions

This list gives estimates of the emissions used in this chapter.

1 Cumulative CO2 energy (1860-1986):
  Fossil fuel combustion: 178 GT carbon as CO2 (CO2 C)
2 Cumulative CO2 (1860-1986):
  Fossil fuel combustion: 178 GT CO2 C
  Land use changes: 66 GT CO2 C
  Total: 244 GT CO2 C
3 Current CO2 energy (1988):
  Fossil fuel combustion: 5.4 GT CO2 C/year
4 Partial CH4 and CO2 (1988):
  Fossil fuel combustion: 5.4 GT CO2 C
  Land use changes: 0.9 GT CO2 C
  Landfills: 36 MT CH4 (170 MT Carbon Equivalence (CE))
  Fossil fuel production: 74 MT CH4 (424 MT CE)
  Total: 6.9 GT CE
5 Comprehensive emissions (1988)
  In addition to the above:  
  Fossil and wood combustion: 201 GT CO C (341 MT CE)
    1.3 MT N2O (103 MT CE)
  Cement production: 150 MT CO2 C
  Halocarbons: 1.4 MT CFC-11 equivalent (1,337 MT CE)
  Biomass burning: 36 MT CH4 (170 MT CE),
    276 MT CO C (251 MT CE),
    1.6 MT N2O (126 MT CE)
  Soil release, tropical pasture: 0.1 MT N2O (8 MT CE)
  Enteric fermentation: 75 MT CH4 (354 MT CE)
  Animal wastes: 28 MT CH4 (132 MT CE)
  Rice cultivation: 98 MT CH4 (463 MT CE)
  Fertilizer consumption: 0.8 MT N2O (63 MT CE)
  Total: 10.3 GT CE

Appendix B: Calculating cumulative and current emissions

This Appendix summarizes the sources and methods used for calculating emissions listed above.

Cumulative CO2, energy

Carbon dioxide emissions from fossil fuel combustion between 1860 and 1986 rely on Marland et al. (1988) for the 1950-1986 period, and Subak and Clark (1990) for emissions between 1860 and 1949. The cumulative estimates do not take into account the proportion of trace gas removed from the atmosphere. Energy consumption data used in Subak and Clark (1990) are based on Mitchell's (1981, 1982, and 1983) International Historical Statistics series. Global emissions factors were derived from Marland et al. (1988) and weighted by carbon density estimates by nation published in the United Nations 1986 Energy Statistics Yearbook (1988). In cases where political borders have changed since 1860, emissions were assigned to countries based on estimated energy use share. For example, fossil fuel consumption in the Indian States was assigned as follows: India, 80 per cent; Pakistan, 15 per cent; and Bangladesh, 5 per cent.

Cumulative CO2, energy and biota

Emissions of CO2 between 1860 and 1986 are based on the fossil fuel data set described above and the Richards et al. (1983) database on CO2 release from forest conversion to agricultural purposes. The Richards et al. data set for the 1860-1978 period is based on historical agricultural censuses and FAO land use surveys completed in 1950. To update the database to 1986, we used the FAO 1986 Production Yearbook (FAO 1987). As forest conversion to non-agricultural uses was not included, this database is not intended to be a comprehensive survey of CO2 emissions from land use changes.

Current CO2, energy

Current CO2 emissions from fossil fuel combustion are calculated at the Stockholm Environment Institute (don Hippel et al. 1992) based on 1988 energy consumption data published by the OECD/IEA, (1990a, 1990b). Carbon dioxide emissions from oil flaring were taken from the Marland et al (1990) compendium. As in the cumulative CO2 inventories, emissions from renewables, that is, fuelwood, are assumed to be in a steady-state, with no net CO2 emissions.

Partial CH4 and CO2

Methane emissions from coal mining are derived from ICF (1990b) and natural gas transportation and distribution from OECD/IEA, (1990a, 1990b) CO2 release from deforestation is based on land clearing estimates from FAO (1990), Fearnside et al. (1990), FAO (1988b) and Myers (1989), biomass levels by Brown et al. (1989) and carbon soil emission rates by Houghton (1991). Afforestation rates are primarily from ECE/FAO (1985) and FAO (1988b). The landfill CH4 source is based on a methodology outlined by Bingemer and Crutzen (1987) and waste generation, landfilling and waste composition information is compiled from disparate sources.

The current emissions are expressed in CO2 equivalent units, which compare the relative warming contribution of the trace gases. The CO2 equivalents are based on each trace gas Global Warming Potential (GWP), an index that includes the immediate radiative effect of the gases and the potential warming effect over the time the trace gas resides in the atmosphere. The GWP used in this study is calculated by the Intergovernmental Panel on Climate Change (IPCC) and corresponds to a 100 year time horizon.

Comprehensive emissions

To estimate methane emissions from livestock production, emission factors (Crutzen et al. 1986) were applied to FAO livestock population estimates (1990b), and Casada and Safely's (1990) study of CH4 release from animals wastes was used. Methane emissions from rice cultivation are derived from emission factors (Schuetz et al. 1989) and rice cultivation area (FAO 1990b). Emissions of N2O from fertilizer consumption was calculated using the mid-range of Eichner's (1990) emission factors and data from the FAO Fertilizer Yearbook (1988a). Halocarbon emissions were calculated using ICF's (1990) methodology for converting from UNEP's (1990) production figures to emissions. Release of CO2 from cement manufacturing was derived using emission factors from Marland et al. 1988. Biomass burning estimates were taken from Crutzen and Andreae (1990), and adjusted to avoid double counting with the fuelwood and deforestation emissions.


Indices of allocation: a brief review
Equity and efficiency

Kirk R Smith, Joel Swisher and Dilip R Ahuja

Those advocating creation of an international programme to address global warming from greenhouse gas (GUI) emissions are required to face, among other tasks, five categories of questions (Smith et al. 1991):

1 Is there adequate theoretical and observational evidence of significant potential harm if nothing is done?

2 If so, could a feasible programme of greenhouse remediation accomplish sufficient benefits to be justified?

- 2a What part of this programme is best devoted to reduction of GG emissions or to increases in GG sinks (natural or anthropogenic processes that absorb GGs from the atmosphere)?

- 2b What part of this programme is best devoted to reduction of human vulnerability to global warming through, for example, accelerated economic growth of certain kinds in countries with large poor populations?

3 If so, is there a rational and politically acceptable way of establishing priorities among potential remediation projects?

4 If so, is there a rational and politically acceptable way of allocating the costs for these projects?

5 If so, what kind of international institutional mechanisms are needed to facilitate the financing and implementation of such projects?

Although there is by no means universal agreement, many observers believe that the answers to questions 1 and 2 are likely to be in the affirmative, that is, there could be significant risk without action and significant reduction of risk with action. In any case, it is not our purpose to address these issues directly. Rather, we focus on the last three questions, with particular emphasis on 3 and 4, the means to decide both what needs to be done and who will pay.

The most common approach to question 3 (what should be done) in both international negotiations and unilateral declarations has been uniform cuts. Several European nations, for example, have proposed to unilaterally cut their own emissions by 5-25 per cent. Alternatively, with nearly the same result, it may be proposed to limit emissions to those of a particular year, 1990, for example, in some of the UNCED discussions. These approaches are similar to that followed in the original Montreal Protocol where the signatory nations agreed to cut production of selected compounds to 50 per cent by a specified time. A uniform cut in greenhouse gases was proposed by a number of European countries at the UNCED meeting, but not accepted by the USA and Japan. There are major problems with this (two political and one economic):

• By grandfathering currently inefficient emissions, uniform emissions reductions may seem to penalize those countries, like Japan, that have been able to develop economies that already emit less per unit of economic output.

• Equal reductions based on current emissions would be clearly unacceptable to developing countries as it would not allow the growth required to meet their development needs.

• Uniform cuts, by ignoring that the marginal costs of reductions may be quite different among countries, are likely to lead to substantial economic inefficiencies, that is, to be unnecessarily expensive.

Alternatives to uniform cuts that consider both equity and efficiency are described in the next two chapters. Here, our focus is on question 4: who should pay?

Indices of allocation: a brief review

Several investigators have attempted to allocate the global carbon budget based on exogenous considerations of the maximum acceptable warming or its rate of increase (for example, Krause et al. 1992), world averages (Mukherjee 1992), economic optimization models (Michaelis 1992), or other factors (Gurney 1991)

Dividing emissions rights equally among countries, coupled with the ability to sell or lease those rights, is the simplest scheme, yet fraught with inequities because it does not link emissions to human beings or activities. Thus it has few, if any, proponents. Another straightforward basis for allocating rights is land area (Welting 1989). Since 1950, national boundaries have not changed much (leaving aside the national break-ups of the early 1990s). Its stability as a measure, the ease of measurement, the avoidance of monitoring and verification difficulties are what recommend it. (Cheating is difficult.) There was a time, according to Grubb (1989), when the United States was arguing informally in international fore that its continental land mass necessitated enormous energy expenditures in having to move goods and people. Ultimately, with the possible exceptions of those countries with large wastelands (for example, Mongolia), land area is a measure of natural resources. Using it as an index to allocate emissions rights, however, favours large but sparsely populated nations (for example, Australia) and discriminates against small densely populated nations (for example, Japan).

If it is accepted that every person has an equal right to atmospheric resources - the ultimate global commons - then the most obvious and equitable basis is to distribute emissions permits in proportion to national populations (Feiveson et al. 1988; Agarwal and Narain 1991). If rights in subsequent years continue to be proportional to contemporaneous populations, however, a perverse incentive for population growth may be created. For this reason, and to make his scheme more palatable to industrialized countries, Grubb (1989) has suggested that allocations be based on adult populations. This would have the effect of reducing net transfers from countries with rectangular age distributions to developing countries with pyramidal age structures, but could be seen as discrimination against children. Depending on the definition of 'adult,' it would provide a 15-21 year delay between births and receiving the allotment, and thus reduce the pro-natalist incentive.

An alternate incentive for population stabilization could be built into the scheme by pegging the allotment to the entire population in a recent year and not increase future allotments. Compared to an index based on adult population, this would seem to represent less discrimination against children in the first years of an international protocol and no more discrimination in later years.

Arguing that any index based on per capita emissions alone would require unacceptably huge reductions in industrial countries (up to 75 per cent) or entail massive transfer payments to developing countries, Wirth and Lashof (1990) have proposed apportionment based half on per capita and half on per GDP, all the quantities being for the current or a recent year.

Similarly a multiplicative index could be structured that is directly proportional to emissions and inversely proportional to both GDP and population, the ratio being integrated over time. It is not clear, however, if GDP should find a place in an index for allocation, since countries would have already benefited from that economic activity.


In this book, we are coming to these issues from a somewhat different direction. Rather than decide on what the ideal allocation of emissions ought to be, we first seek ways that the present and historical patterns of emissions can be used in international negotiations to determine who should pay for any needed mitigation efforts and then, in later chapters, ways that the best mitigation efforts can be chosen. Thus, rather than concerning ourselves directly with allocation, we address accountability. In the long run, of course, consistent application of accountability should lead to a desired allocation by the simple process of nations attempting to reduce their accountability, a sort of 'invisible hand'. In the interim, however, rather than putting an onus on those countries that have exceeded their allocations, a focus on accountability simply asks that nations should accept responsibility for the emissions they have made, no matter how small or large. The result can be the same, but the moral implications are different.

To make practical the concept of individual rights over time, in this book, we link accountability at any one time to the amount of atmospheric assimilative capacity that has been 'borrowed' from the natural environment, individuals' natural debt as presented in Chapter 2 (Smith 1989b, 1991). The borrowed capacity at any one time is the greenhouse gases remaining in the atmosphere from past emissions (above natural levels). This is less than what was actually emitted, since various natural and human-influenced sinks have absorbed the different gases in amounts depending on the time since emissions. The longer ago the gases were released, the less remains today. We argue that an appropriate indicator of international accountability is the amount of assimilative capacity borrowed to date, the natural debt.

Equity and efficiency

It may be easier to find a point of international agreement on mitigation costs by separating the negotiating criteria, and the indices to measure them, according to the two general questions that we have set out to address (numbers 3 and 4 above). Using this approach, we can consider the competing goals of equity and efficiency, while maintaining a rational (but still negotiable) basis for assigning obligations at the national level.

We categorize the basic negotiating criteria in terms of the following questions:

• To determine the best projects (question 3) these questions must be addressed:

- What are the goals (globally, and who should do what)?
- What are the best opportunities (who can do what)?

• To determine who will pay (question 4) these questions must be addressed:

- Where are the resources available (who can pay)?
- Who has responsibility for the problem (who should pay)?

These four questions are organized in Figure 4.1. The 'Who can ...' questions in the left column are addressed by criteria that can be measured according to physical and financial quantities, and the 'Who should ...' questions in the right column are addressed by criteria that, while they can be quantified, must involve a large degree of value judgement. The 'Pay for . . .' questions in the top row involve equity criteria, based on past and present activities, while the 'Do this . . .' questions in the bottom row involve efficiency criteria, based on present and proposed future action.

Figure 4.1 Typology and indices for allocating greenhouse gas emission reductions

In Figure 4.1, the intersection of the rows and columns form four cells that contain the four criteria just defined. The ovals represent information flows that measure the corresponding criterion. For example, marginal cost is a measure of emissions reductions opportunities. The rectangles indicate allocation processes that would be needed to reconcile different criteria: resources and responsibility through international negotiation; and opportunities and goals through international trade or transfers.

The starting point of a negotiating process is the global goal for emissions reductions, based on a perceived common vulnerability to climate change. This goal may be the result of any combination of scientific, economic, and political considerations (questions 1 and 2, above). Once the general goal is set, each country's share of the responsibility for causing the problem can be determined, based on its past and present contribution to the source of the problem, namely carbon dioxide and other greenhouse gas emissions.

Responsibility is a useful but incomplete measure of a country's accountability for financing emissions reductions, however. A negotiated solution must also consider a country's available resources with which to pay. The overall obligation to pay (OTP), thus, addresses two issues, one ethical and one practical. The ethical issue is that those countries that have contributed most to the problem (and benefited thereby) should have some obligation to pay for its amelioration. The practical consideration is simply that a solution to the problem is more likely if those countries that have greater resources are willing to pay relatively more of the total cost.

By having a separate indicator for each of the top two boxes of Figure 4.1 (resources and responsibility), therefore, international negotiations can proceed in an orderly way to trade one against the other to obtain the politically optimum mixture that becomes the obligation to pay.

Once the obligations to pay for each nation are determined, they can be compared with the international distribution of opportunities for emissions reductions. Clearly, it should not be expected that the opportunities will be distributed among countries in the same way as obligations. Some countries will have a relatively high concentration of opportunities, while others will have relatively large obligations to pay for emissions reductions. The resolution of these differences will be taken up in later chapters.

As there are several concerns that need to be addressed in any scheme to determine obligations, the primacy given to such criteria as simplicity, equity, efficiency, the perceived ease of reaching agreements, etc., leads to different indices for obligation. Yet, it seems to us that it is preferable, and perhaps easier to obtain agreements as well, if the indices for different objectives are kept separate (and reconciled later in the negotiating process) than to assert that they are indicators of something that they do not measure.

We thus divide the question of 'Who pays?' in Figure 4.1 into two parts: (I) the 'ability to pay', which is indicated by present wealth and is completely separate from greenhouse gas emissions, and (21 a 'responsibility' index, based on cumulative per capita emissions. These address the respective subquestions 'Who can pay?' end 'who should pay?' of Figure 4.1.

Ability to pay (ATP)

In spite of its well-known difficulties, gross national or domestic product (GNP or GDP) is accepted widely as an index of national economic resources. GDP is the basic determinant of a country's contribution to the UN system, for example. With certain modifications, the international fund set up under the Montreal Protocol (Table 4.1) also relies on the UN scale to calculate a country's contribution to be used for technology transfer and financial assistance to signatory developing countries to use safer substitutes for CFCs. As seen in Table 4.1, however, by comparison, the contributions to the Global Environment Facility have come more from Western Europe and a few of the larger developing countries.

There are a few methodological problems with international comparisons of GNP statistics, arising from the presence of large informal sectors in some economies, the vagaries of fluctuating exchange rates, and from the differences in purchasing power. To some degree, adjustments can be made to correct these problems, for example in the development of purchasing power parity statistics (Summers and Heston 1988).

There is one drawback to using GNP, even if corrected for purchasing power, as an index of payments into a fund for the mitigation of the climatechange problem. This is that no allowance is made for 'disposable national income', so that poor countries like Indonesia and rich ones like Sweden would be expected to make similar contributions because their population ratio happens to be approximately equal to the inverse of their ratio of per capita GNP. To determine a country's ability to pay (ATP), it seems obvious that some measure of wealth based on per capita income is required.

One way to define an ability to pay would be to subtract from the GNP, some threshold of 'basic need.' In the case of the global fund set up under the amendments to the Montreal Protocol, countries that emit less than 300 grams of CFC-equivalent per capita per year are exempted from contributing. In a similar fashion, the Global Environment Facility uses a cut-off of $4,000 per capita for determining certain categories of contributions and recipients. Another such cut-off that could be used, for example, would be one of the 'poverty fine' estimates discussed in the World Development Report (World Bank 1990). The original precedent is the UN scale of assessments set up in 1946, which subtracts a threshold income (originally $1,000 per capita, more recently set to $2,200), before calculating dues (UN 1989)

Table 4.1 Relative and total contributions to the Global Environment Facility, the Montreal Protocol and the two combined

High Income        
USA 12.4 25.0 13.5 25.0
Germany, United 13.0 10.8 12.8 9.31
France 13.3 7.3 12.7 6.25
Japan 12.6 13.2 12.7 11.38
Italy 7.5 4.7 7.2 3.99
UK 6.2 5.7 6.2 4.86
Switzerlandb 4.7 1.3 4.4 1.08
Netherlands 4.4 1.9 4.2 1.65
Austria 3.1 0.9 2.9 0.74
Sweden 2.9 1.4 2.8 1.21
Norway 2.3 0.6 2.1 0.55
Canada 1.8 3.6 2.0 3.09
Finland 2.1 0.6 1.9 0.51
Australia 1.9 1.8 1.9 1.57
Denmark 1.9 0.8 1.8 0.69
Spain 1.2 2.2 1.3 1.95
(USSR) 0 13.5 1.3 11.57
Belgium 1.2 1.3 1.2 1.17
New Zealand 0 0.3 0.03 0.24
Ireland 0 0.2 0.02 0.18
UAE 0 0.2 0.02 0.19
Singapore 0 0.2 0.01 0.11
Luxembourg 0 0.1 0.01 0.06
Iceland 0 0.0 0.003 0.03
Bahrain 0 0.0 0.002 0.02
Liechtensteinb 0 0.0 0.001 0.01
Middle Income        
Mexico 0.47 0 0.4 0 94
Brazil 0.47 0 0.4 1.45
South Africa 0 0.6 0.1 0.45
Czechoslovakia 0 0.5 0.04 0.66
Greece 0 0.4 0.04 0.4
Poland 0 0.4 0.04 0.56
Portugal 0 0.2 0.02 0.18
Hungary 0 0.2 0.02 0.21
Bulgaria 0 0.1 0.01 0.15
Malta 0 0.0 0.0007 0.01
Low Income        
China 0.47 0 0.4 0.79
Egypt 0.47 0 0.4 0.07
India 0.47 0 0 4 0 37
Indonesia 0.47 0 0.4 0.15
Morocco 0.47 0 0.4 0.04
Pakistan 0.47 0 0.4 0.06
Turkey 0.47 0 0.4 0.32
World Bank 3.4 0 3.0  
TOTAL (%) 1 00 1 00 1 00 94.2
Total (million US$) 1212 127 1338 2147

Listed for each nation are the percentages of the global totals as of mid-1992. The nations are divided into income classes, and their total contributions are ranked within each class. Shown in the last column are 1989-91 assessments for dues to the United Nations. Data from UN (1989), NZMERT (1990), UNEP (1992), and World Bank (1992). 0 = zero; 0.0 = very small.

a The present maximum UN contribution is set at 25 per cent, although it started at 40 per cent in
1946. Otherwise the US contribution would be higher than the 25 per cent shown here. The original floor was set at 0.04 per cent, but in 1973 was set to 0.01 per cent (UN 1989).
b Not a full UN member.
c This total is divided as follows Russian Republic = 86 per cent; Ukraine = 11 per cent;
Belarus = 3 per cent.

One argument for using such a cut-off is that countries below this level require all the resources they have to bring their populations up to a minimum acceptable income. A rationale related directly to climate change is that countries below this limit are more vulnerable to the effects of adverse climate change and should devote most of their resources to reduce this vulnerability, which will have great advantages even if global warming does not occur in the period of concern.

Many would argue, however, that the poverty line is not a sufficiently high goal, and yet it is difficult to define some other income level as an acceptable minimum. Here, we take the somewhat different approach of choosing an income that seems to be capable of achieving a minimum 'qualify of life' based on the past ability of countries to achieve adequate levels of infant mortality, life expectancy, and literacy. These are combined in the Physical Quality of Life Index (PQLI) developed by Morris (1979)

Thus, we choose as a cut-off, income which is the average income of nations with a Physical Quality of Life Index of 80-90. This represents the approximate inflection point in the relationship of PQLI and GNP, or purchasing power parity (PPP) (see Figure 4.2). Below this point, small increases in income often lead to large increases in PQLI, while above it, large increases in GNP only produce modest increases in PQLl.

The second column of Table 4.2 shows this index calculated with two indicators of income: GNP and GDP corrected for PPP. The table shows that the US ATP changes by only 10 per cent (from 37 to 40) if income is corrected for PPP, but that other countries' ATP can change dramatically. The USSR ATP, for example, changes from 18 to 12 per cent (of the world total), while that of Mexico increases by a factor of 18 and Romania goes down by almost a factor of five.'



It is widely, although by no means universally, held that, to paraphrase Lord Keynes, economic growth by itself is only a means to certain ends. In other words, after an agreeable quality of life has been thereby achieved, society should consider placing its emphasis elsewhere. More explicitly, after reaching some, admittedly difficult-to-define, level of adequate physical well-being (ethical criterion), individuals should no longer expect special assistance by the broader society to help them develop further economically. This philosophy also is consistent with the physical reality inherent in a finite world; that is, there should be incentives to use finite physical resources in ways that lead to quicker achievement of these minimum levels by humanity at large (efficiency criterion).

One aspect of this approach that has not been well explored is what it implies for the measures of efficiency (indices) that should be used to judge various human activities. Rather than indicators such as income or energy use, which are usually open-ended, it implies the use of thresholds or indicators that actually have fixed ranges, that is, have a maximum corresponding to achievement of the level of adequacy, as already incorporated in the UN scale, for example.

It is thus no accident that our indices both for ability to pay (ATP) and for responsibility contain indicators with thresholds and that ATP is also based on an indicator with finite extent, PQLI. This means that as 100 per cent is neared, the indicator gives little credit for further advancement. Incentive then shifts to promotion of other objectives. If, on the other hand, an open-ended measure such as income is used, an extra 10 per cent looks to be as good for the rich as for the poor, no matter how rich the rich might become.

Implicit in the use of PQLI, therefore, is acceptance that the objective of development assistance and policy should be an improvement in the quality of life. It has long been recognized, however, that there exists a strong positive relationship between GNP (GDP, PPP) and many measures of quality of life, such as PQLI. As a result, it has been argued that PQLI tells us nothing new and should be rejected as an indicator. There are two counter-arguments: First, although there is a strong overall correlation, the GNP to PQLI ratios are quite different for different countries, an important consideration when assigning international responsibilities and costs. Second, it sends the quite different message that simple increases in per capita income should not be taken as ends in themselves, but as means to improve the quality of life.

Although the index proposed here includes a measure of historical responsibility (based on past greenhouse gas emissions), it counts for only half of the total obligation. The other half is based on current income. Thus, the obligations of countries that have economic problems, such as those in Eastern Europe and the former USSR, will be adjusted accordingly. In addition, only emissions since 1950 are counted, a concession to the political and practical difficulties of determining responsibility previous to the modern era. Combining both indicators also takes into account circumstances in which past emissions may be high, but current income low (for example, Eastern Europe), or vice versa (for example, Norway, which has been blessed with substantial hydropower).

We have now looked separately at indices of both responsibility and resources to determine the relative obligation for the costs of a global programme. Ways to combine the two together would be determined by direct negotiation in international fore, although the simplest combination is presented here as a start. What this chapter does is derive a way of measuring where the world is today, in terms of the present distribution of wealth and greenhouse responsibilities. Before we can judge the distribution of payments for greenhouse remediation projects, however, we need indicators of where the best projects are and where the world ought to be heading (the Who Can? and Who Should? questions of the bottom line on Figure 4.1). This is the task of the next chapters.


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