Response: Equity is not the only way

January 05, 2001

Here at the Centre for Science and Environment we have received some responses to Equity Watch and its articles.  Here are some of the opposite points of view as expressed in regards to Anil Agarwal's editorial, US Tastes Cream Pie, which was featured in Equity Watch, Down to Earth magazine, and CSE's fortnightly email.

From: Michael Cummings
Stanford University

The New Delhi Centre for Science and Environment asserts the need to allocate global carbon emissions allowances on a per capita basis. Its scholars argue that emissions trading under Kyoto would: "freeze inequity in emissions," encourage trading in the fossil fuel sector (thus subsidising fossil fuels and raising the cost of renewable energy), and that trading would mean the absence of established property rights over the global commons (the atmosphere) and thus discourage developing countries from adopting renewable energy. While their argument for the need for equitable emissions worldwide is compelling, per capita emissions allocation and the implementation of the Kyoto Protocol are not mutually exclusive.

The need for a long-term global GHG emissions reduction mechanism that allocates emissions on a per capita basis is clear. It is the most equitable allocation mechanism and in turn has the highest probability of worldwide acceptance and sustainability. However, the adoption of the Kyoto Protocol with emissions trading does not preclude the implementation of such a mechanism in the future, nor does it necessarily freeze the inequity in emissions or discourage renewable energy development in developing countries.

First and foremost, implementation of the Kyoto Protocol would be an acknowledgement by the developed countries (especially the US) that they need to reduce GHG emissions. This is a critical step in the process of a "contraction and convergence." Although the US may not be "contracting" significantly at home, such an agreement would institutionalise the need for long-term GHG reductions and accordingly affect decision making at many levels.

If the US were to trade for the majority of its emissions reductions, this would not "freeze inequity in emissions." Clean Development Mechanism (CDM) or Joint Implementation (JI) projects would reduce emissions in less developed countries (LDCs) in comparison to development in the absence of such programs. However, it does not freeze the LDC’s emissions at that level or set any sort of number for the eventual emissions levels of the LDCs. The US is likely to be the biggest "trader" under Kyoto and there is great potential for the US to meet a significant amount of its Kyoto commitment by buying Russia’s "hot air". Thus, this should not freeze emissions inequity in most developing countries. Additionally, if CDM or JI projects utilise energy- efficiency or renewable energy, this would result in the same energy service as a higher GHG-emitting conventional energy. Since all countries desire the products and services that emissions enable, not the emissions themselves, CDM does not freeze overall inequity.

Kyoto would not necessarily discourage renewable energy in the developing world. Since implementing renewables is potentially cheaper in developed countries than LDCs, and establishing distributed renewables is often cheaper than extending fossil-fueled grid-connected electricity in many LDCs, many CDM projects may encourage renewable development projects in LDCs. Under any trading mechanism, even one under a per capita emissions allocation system, opportunities will exist for countries to profit from selling credits earned by having a more renewable or efficient energy system. Thus LDCs have every incentive to develop more renewables in order to profit from the developed countries’ enormous investments in fossil-fuel infrastructure.

Adoption of Kyoto will start the process of contraction and convergence to per capita emissions allocation. In the process, it does not freeze developing countries emissions levels at any level, and can potentially increase the use of renewable energy worldwide. Although per capita emissions allocation should be the end goal of all international climate treaties, an imperfect Kyoto may be necessary to start working towards such a goal.

From: Marian Diaz Goebes
Stanford University

Anil Agarwal, director of the Centre for Science and Environment (CSE), argues for carbon emissions based on a per capita allocation and cites the agreement of more developed countries’ (MDC) scientists. I disagree with Agarwal, particularly with his assertion that prior emissions based allocations hamper development in less developed countries (LDCs), his concept of the political feasibility of both schemes and his description of a per capita allocations scheme as simple.

The development gap has existed for over a century between LDCs and MDCs and continues to widen. For MDCs to provide substantial assistance, they need economic incentive. Clean Development Mechanism (CDM) in the Kyoto Protocol provides this opportunity, as their investment yields a profit in both countries involved. Opponents of the Kyoto Protocol argue that, for fairness, LDCs should be allowed to develop without regulation as MDCs did. This would damage people and environment as LDCs passed through a nightmarish industrial revolution and as MDC multinationals continue to plunder LDC resources. LDCs could develop faster and less painfully with the economic and technological assistance of MDCs coming from CDM and the Kyoto Protocol would create international legislation to control MDC-LDC interaction.

Agarwal calls the allocation of carbon allowances on past emissions "not politically feasible" to address the same complaint lodged against per capita allowances. However, while emissions allocations in the Kyoto Protocol make for a political stretch for LDCs, per capita emissions make for a political fairy tale in the US. The US congress has made it clear through the Byrd-Hagel resolution and its stance at CoP-6 that it will never pass a resolution that would drastically limit its emissions. Most of the other Annex I countries, while taking a more liberal stance than the US, would also not back per capita emissions allocations for fear of crippling their economies. An effective global climate treaty requires the participation of the majority of MDCs, scaring them away with near-impossible emissions limitations would kill all hopes of ratifying any protocol.

I disagree with Agarwal’s description of per capita emissions allocations as simple. Does the CSE propose using current populations, using projected populations, or readjusting emissions annually based on updated censuses? The last option seems the most equitable, but it would require large resources to determine, and corruption or charges of statistics fraud would cause international disputes. Also it would discourage a country from curbing population growth.

The Kyoto Protocol, with its allowances based on past emissions, stands as unfair. However, the measure governs only from 2008-2012. Agarwal quotes a British commission that states that the protocol "will eventually require" per capita emissions allocations. The key word is eventually. After 2012 (or a few years later, if the target years get pushed back), we will revise the system, including a possible change in emissions allocation scheme. But at the moment, we must focus on ratifying a measure that will curb greenhouse gas emissions and serve as the rough draft for future protocols. As a compromise, Kyoto Protocol should increase emissions allowances for LDCs to leave them a larger margin of growth. This will cause total emissions to exceed desired levels; but lenient controls are better than no controls, and LDCs and MDCs will probably require them before they join on. The alternative, not signing any protocol and allowing global warming to continue unchecked, will hit LDCs the most, exacerbating the development gap and inequity. No one wants this, least of all LDCs.

From: Molly Sullivan
Stanford University

The Centre for Science and Environment’s (CSE) argument for allocation of carbon permits based on a per capita method is one that promotes equity in some ways, and may someday be feasible, but as of now is impossible and promotes unwanted behaviors. The CSE has excellent criticisms of the reduction method in the Kyoto Protocol. Assignment based on past emissions levels does reward historically high emitters and penalises those with already efficient technologies in place, but per capita allocation is also not a reasonable means of allocation.

The greatest current environmental threat is not global warming, but unchecked population growth. Per capita emission quotas serve only to reward those countries that have been ineffective in combating population growth. Countries, especially developing countries, with high growth rates and low levels of development will be given no reason to attempt to develop with cleaner technologies, since their allocation will exceed what they realistically need to develop with clean technologies. While this would be a means for massive wealth transfer from the developed to the developing world through the buying and selling of carbon permits, unchecked transfers of money is neither the most efficient or effective way to aid the development of less developed nations.

In addition the CSE argues that this is essentially a northern problem. Although, the North is primarily responsible, the repercussions will be felt worldwide. The primary goal of the South should be to get the North committed to a reduction scheme as soon as possible. Allocation on a per capita basis is a political impossibility. There is no way to get around that a minority of the population is responsible for the majority of the damage. The only way to begin to counter the problem is to get that minority involved as soon as possible in any sort of reductions. Regulations can be tightened and allocation systems changed later. The priority is to get the heavy emitters to begin to take action, and a per capita allocation system will serve only to hinder negotiations.

The CSE also claims that a per capita emissions system will work because of simplicity. However, it is not a simple as it sounds. Do you allocate based on population in a base year? How do you change the allocation based on growth in the population? If we renegotiate as population increases, developing countries with unchecked population growth will be rewarded and more industrialised nations that have taken serious steps to control population will be punished. Who oversees and enforces the carbon market? Permit trading on a small scale such as the sulphur dioxide reduction in California was effective because it was easy to oversee. In a large international market nothing is simple, transaction costs are high, and even with a per capita method there are big questions as to how to fairly allocate and not reward population growth.

The per capita system has some major flaws and is politically infeasible. The northern countries are holding almost all of the bargaining chips, and so regardless of whether it is totally equitable, a system the North will agree to needs to be the one proposed. In addition, it is hard to see how per capita allocation will not promote population growth and high carbon infrastructure in countries whose allocation well exceeds their emissions.

From: Daniel Rutherford
Stanford University

The New Delhi Centre for Science and Environment’s essay upon the equity implications of the Kyoto Protocol injects a much-needed alternative perspective into the current international debate about climate change. The Centre’s position, which argues for a system wherein national GHG emission rights are allocated on a per capita basis, represents a fundamentally different method from that instituted under the Kyoto Protocol. This difference has important implications for international equity.

As the Centre correctly points out, allocations of future emissions caps predicated upon percentage reductions from a base year are fundamentally unfair to less developed countries (LDCs). By allowing developed countries (DCs) to demonstrate "progress" by reducing emissions from outrageous to merely astronomical levels, such a system serves to legitimise current inequalities in worldwide energy use. Future agreements which require LDCs to make the similar percentage reductions from a hypothetical baseline also run the risk of disadvantaging them by requiring painful cuts be made from an already comparatively low level.

Additionally, by instituting an international trading system through the CDM without creating a system by which pollution permits are distributed based upon a "right to develop", current emissions baselines are implicitly treated as morally justifiable. Few informed individuals would argue that the current distribution of wealth throughout the world is equitable. The system of emissions allocations instituted under Kyoto essentially argues that this is the case.

At the same time, there are reasons to be concerned about the institution of a system allocating national pollution rights based on population. Given that population growth will be one of the most important drivers of emissions growth in the future, such a system presents obvious perverse incentives. Additionally, the political feasibility of such a system is questionable. Although the Centre argues that any agreement that does not ultimately base emissions rights upon a per capita standard is also politically infeasible, it seems useful to distinguish between long and short-term political concerns. At its heart, the Kyoto Protocol represents a good faith effort by DCs to limit their emissions without requiring concurrent reductions by LDCs. Short-term political feasibility in DCs will thus be more important in determining the success of the Kyoto Protocol. Given that Kyoto has the potential to be an important starting point for international cooperative efforts to address climate change, it makes sense to take the route less controversial in DCs in the short term, while moving towards a more equitable per capita system in the future.

Perhaps a useful way of evaluating a given international climate policy would be to imagine some kind of equity "baseline". Few would argue that the world is currently an equal place. In the short term, a policy which will make the world more equitable relative to this hypothetical baseline would be desirable. The Kyoto Protocol, although flawed, represents such a policy, since DCs would limit their own ability to pollute the global atmospheric commons without demanding similar constraints for LDCs. Overly rigid demands by LDCs for a per capita standard has the potential to destroy Kyoto, thus leading to no relative increase in equity. In the long run, the Centre’s logic is undeniable: only a system allocating emissions rights upon a per capita basis is absolutely equitable. In the short term, however, it may be best to accept a relative improvement in equity in order to stimulate international cooperative efforts. Following this logic, I would argue that the interests of LDCs will be best advanced by supporting the Kyoto Protocol in its present form.