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Emissions targets: think globally not nationally

By Stephen Jones - posted Tuesday, 24 November 2009


A GCR would affect a significant transfer of wealth from rich to poor countries thereby addressing a key difficulty of greenhouse policy - that of safeguarding the interests of the poor while also including developing countries in a treaty that raises the price of energy. As such it is both a major development initiative and a low regrets policy in the face of uncertainties as to the causes, magnitude, impacts and potential for mitigation of global warming.

Because all costs are passed through to the consumer the total cost to a country is not determined by the greenhouse gases emitted within its borders but by the greenhouse gases embodied in the goods and services consumed in that country. This is appropriate as it reflects the true moral responsibility of countries for greenhouse gas emissions.

Inherent in the current national allowance based system is the assumption that justice requires more equal national emissions. This is a false assumption, confusing the means - greenhouse gas emissions, with the ends - a better distribution of the fruits of those emissions. Moreover it is counterproductive.

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Concentration and specialisation have been recognised since Adam Smith and practised since pre-history as means of achieving efficiency. Unlike the current system a GCR would be neutral towards concentration of emissions intense industries thus making available a powerful means of reducing emissions which is presumed against by Kyoto-style thinking. Conceivably big emitters could become even bigger emitters, as long as offset by even bigger reductions made elsewhere.

So, who would pay, who would receive and how much would go round?

Above average per capita emitters, like most OECD countries, would be net payers while below average per capita emitters would be net recipients. This applies irrespective of the size of the country or the level of its emissions. So large emitters with low per capita emissions such as China would be net recipients. Because all GCR payments are ultimately passed through to the consumer net exporters of manufactured goods, such as China, or of raw materials, such as Australia will end up paying less as rent than would be calculated from their national emissions accounts. Conversely net importers of manufactured goods and raw materials such as the USA and many European countries would pay more.

How much money would be paid as rent? The IPCC puts anthropogenic emissions at more than 50 billion tonnes of CO2 equivalent per annum. At US$20/t that amounts to over US$1 trillion p.a. Of course some rental receipts will be paid back to developed countries as rental payments. But not all. Overall money will flow from rich countries to poor. How much is yet to be determined. If it amounts to only one quarter of rental revenue, that would be US$250 billion per annum - two and a half times the total foreign aid provided by OECD countries in 2006.

Overall a Global Commons Rent is a fair and efficient means of putting a price on greenhouse gas emissions - and one that protects the interests of poor countries no matter what the merits of the debate on global warming.

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About the Author

Stephen R Jones has worked in the biomedical and hi-tech fields for 30 years. In 1979 he was part of the team that researched and wrote the feasibility study for the “bionic ear” cochlear implant. He has since worked in various roles in companies commercialising Australian biomedical devices and also more broadly in the field of technology transfer. He runs a biomedical company distributing products for heart failure. He is interested in greenhouse science and policy. Stephen can be contacted on stephenjones@infovironment.com.

Creative Commons LicenseThis work is licensed under a Creative Commons License.

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