Paying the Climate Bill, Equitably

By Nelson Harvey

The biggest question currently confounding the human attempt to deal with climate change is not one of technology or economics. Repeated analyses have shown that we can achieve substantial greenhouse gas reductions by ramping up existing technologies, for a fairly modest cost in terms of Gross World Product (GWP). Rather, the most difficult question facing us is one of ethics.

Who is responsible for dealing with climate change? This question is as old as the problem itself, and it evokes many muddy ethical issues. Should rich countries responsible for most of our greenhouse gas emissions be the ones to pay, or should rapidly industrializing nations like China and India also chip in? Such questions have undermined international agreement on the issue since the Kyoto Protocol was drafted in the late 1990’s.

But what if we could attack this seemingly subjective question quantitatively? An organization called Eco-Equity has taken an initial step in that direction by developing an index called the ‘Greenhouse Development Rights Framework.’ I saw Eco-Equity co-founder Paul Baer speak at the NYU Law School last week, where he explained the assumptions behind this new tool for allocating climate change responsibility.

Inequality of wealth is widely acknowledged as a cause of inaction on climate change, since no poor country wants to sacrifice their right to economic development to solve a problem caused by rich nations. Thus, Eco-Equity assumes that no global solution will work if it makes inequality worse. The Development Rights Framework reasons that people with incomes below a certain ‘development threshold’ (about $9,000 annually) should not be required to pay to address climate change.

The idea that poorer nations shouldn’t pay was incorporated into the Kyoto Protocol. But in allocating responsibility among individuals rather than nations, the Eco-Equity approach picks up on an important fact: It’s rich people, not just rich countries, who contribute disproportionately to climate change. Therefore, anyone with an income above the development threshold should be required to contribute, including rich people living in poor countries.

So how does this approach change the way we allocate responsibility? Take the case of China vs. the United States. China may be emitting more greenhouse gases than the U.S. at present, but becuase of historical emissions rates and per capita wealth, they are required to pay a relatively smaller portion of the bill than we are. For example, if the total cost of climate change were 1 percent of GWP, China would pay $42 billion to the U.S.’s share of $214 billion.

Given the historical role of inequality in limiting progress on climate change, the Eco-Equity approch assumes that dealing with it may be the key to a solution. As Baer put it when he spoke at NYU, rich people are the only ones with the means to deal with climate change. Unless they step up to the plate, it’s likely that no one will.


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