|The Global Greenhouse Regime. Who Pays? (UNU, 1993, 382 p.)|
|Part I Measuring responsibility|
|4 Who pays (to solve the problem and how much)?|
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?