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.