Global Climate Change Negotiations:A Perspective on Intergenerational and Social Equity

P.R. Shukla

NORTH-SOUTH EQUITY:NORTH-SOUTH EQUITY: UNFCCC UNFCCC

Article 3.1 “common but differentiated responsibilities”

Article 3.2

Special attention and considerations for parties: “that would have to bear a disproportionate or

abnormal burden under the Convention” “vulnerable to the adverse effects of climate change”

Carbon Emissions per Capita (1993)Carbon Emissions per Capita (1993)

0

1

2

3

4

5

6

7

Afr

ica

Ind

ia

Ch

ina

Oth

er A

sia

Lat

in A

mer

ica

Oth

er E

uro

pe

EU

12

For

mer

US

SR

Jap

an

Au

stra

lia

US

A

Can

ada

Car

bon

em

issi

ons

per

Cap

ita

(tC

/cap

)

Historic CO2 and Methane Contribution 1800-1988 (%)

Region Industrial CO2

TotalCO2

CO2 +CH4

1 OECD North America 33.2 29.7 29.2

2 OECD Europe 26.1 16.6 16.4

3 Eastern Europe 5.5 4.8 4.7

4 Former USSR 14.1 12.5 12.4

5 Japan 3.7 2.3 2.3

6 Oceania 1.1 1.9 1.9

7 China 5.5 6.0 6.3

8 India 1.6 4.5 4.8

9 Other Asia 1.5 5.0 5.2

10 N. Africa & Mid-East 2.2 1.7 1.8

11 Other Africa 1.6 5.2 5.2

12 Brazil 0.7 3.3 3.3

13 Other Latin America 3.2 6.5 6.5

Developed Countries (1-6) 83.8 67.8 66.9

Developing Countries (7-13) 16.2 32.2 33.1

EFFICIENCY: EFFICIENCY: UNFCCCUNFCCC

Article 3.3

“policies and measures to deal with climate change should be cost-effective so as to ensure global benefits at the lowest possible cost”

Why Delay Mitigation Actions?Why Delay Mitigation Actions?

Future Generations shall be:Affluent

More CapableKnowledge Technologies

BURDEN SHARING AGREEMENT:BURDEN SHARING AGREEMENT: Developing Country ConcernsDeveloping Country Concerns

UNFAIR BACKGROUND CONDITIONS

ASYMMETRY OF EMISSIONS & IMPACTS

UNFAVOURABLE TIMING

Intergenerational Concerns

Total Burden SharingMitigationImpactsRisks (including extreme events)

Minimize Welfare LossesBurden Sharing based on Income

NorthNorth EFFICIENCY (MARGINAL COST)

GRANDFATHERING

Equity Principles: Equity Principles: The North - South DivideThe North - South Divide

SouthSouth HISTORICAL RESPONSIBILITY

BASIC NEEDS

OBLIGATION TO PAY

ABILITY TO PAY

RAWLSIAN CRITERIA

PER CAPITA ENTITLEMENTS (EGALITARIAN)

Cumulative Carbon Emissions(1991 to 2100) for IPCC - IS92 Emission Scenarios

Emissions Cumulative Emissions: 1991 - 2100Scenario (Giga Ton Carbon)

IS92a 1500

IS92b 1430

IS92c 785

IS92d 975

IS92e 2187

IS92f 1845

Cumulative Carbon Emissions (GT Carbon)

Stabilization “S” Trajectory “WRE” TrajectoryTarget

450 ppmv 628 714

550 ppmv 872 1043

650 ppmv 1038 1239

750 ppmv 1194 1348

Cumulative Carbon Emissions (1991 to 2100):“S” and “WRE” Concentration Stabilization Trajectories

Mitigation Needed for Stabilization(from 1990 to 2100)

Stabilization Mitigation Needed Target for IS92 Case

(Billion Tons of Carbon)

450 ppmv 872 -786

550 ppmv 628 - 457

650 ppmv 462 - 261

750 ppmv 306 - 152

Convergence of Per Capita EmissionsConventional Concept

2000 2050 2100

Industrial Countries Emission Profile

Developing Countries Emission Profile

Convergence Target

0.3

0.7

2.0

Years

Equitable Convergence

Con

verg

ence

Tar

get

2000 2050 2100

Industrial Countries Emission Profile

Developing Countries Emission Profile

Convergence Target

Years

0.3

0.7

2.0

-80

-60

-40

-20

0

20

40

60

80

1990 1995 2000 2005 2010 2015 2020 2025 2030U

S$

Bil

lion

(19

93)

Grandfathered

Per capita

Gain/Loss for India under Different Gain/Loss for India under Different Permit SchemesPermit Schemes

• Distribution matters

• India’s gains/ losses can be several % of GDP

PROTOCOL WITH INCOME BASED ENTRYPROTOCOL WITH INCOME BASED ENTRYAND TECHNOLOGY CONDITIONSAND TECHNOLOGY CONDITIONS

EQUITY CRITERIAEQUITY CRITERIA Non- Annex I enters when income (in PPP) equals 2020 Annex I Income

TECHNOLOGY CONDITIOSTECHNOLOGY CONDITIOS (Annex I to implement after 2020) New Fossil Power Plants to scrub and dispose carbon from exhaust

New Synthetic fuels to capture and dispose carbon released in conversion

WHEN SOME NON-ANNEX JOIN IN?WHEN SOME NON-ANNEX JOIN IN? China in 2045; India in 2062

EFFICIENCYEFFICIENCY 30 percent expensive than most cost-effective mitigation

SEPARABILITY OF SEPARABILITY OF EQUITY AND EFFICIENCYEQUITY AND EFFICIENCY

COASE THEOREMStipulates

in absence of transaction costs, market exchange will lead to efficient resource allocation regardless of distribution of rights

Implies the process of minimizing burden size is

independent of the burden sharing scheme

SEPARABILITY OF SEPARABILITY OF EQUITY AND EFFICIENCYEQUITY AND EFFICIENCY

COASE THEOREM:TWO INTERPRETATIONS

1. Neo-Classical/ Northern World ViewEquity is irrelevant to global co-operation

2. Developing Country PerspectiveEfficiency is simple - just needs agreeing on instruments. Equity (sharing of burden) is vital

Sharing the BurdenSharing the Burden

1.1. Stabilization Burden shall be substantiveStabilization Burden shall be substantive

2.2. Significant mitigation shall be in NA-I Significant mitigation shall be in NA-I (“Where” Flexibility for Cost Effectiveness)(“Where” Flexibility for Cost Effectiveness)

3.3. Transition from Cost to Welfare Effectiveness Transition from Cost to Welfare Effectiveness (“Justice” in Burden sharing is vital)(“Justice” in Burden sharing is vital)

Conclusions: Conclusions: A Fair AgreementA Fair AgreementBurden Sharing Burden Sharing

Explicit Burden Sharing Regime

Fair CompetitionFair CompetitionPolluter PaysMarket Price for CDM Mitigation

Minimize Welfare LossesMinimize Welfare LossesAbility to PayCompensation for Impacts

Precautionary PrinciplePrecautionary Principle Hedge against extreme eventsProtect most vulnerable

“It is the nature and the advantage of strong people that they can bring out the crucial questions and form a clear opinion about them. The weak always have to decide between alternatives which are not their own.”Dietrich BonhoefferGerman Philosopher, anti-Nazi thinker (executed in Flossenburg concentration camp, April 9, 1945)