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A Problem For A Climate Change Solution

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By Cass Sunstein

Many of the world's nations are finally coming around to the view that it would be a good idea to have an international agreement to control greenhouse gas emissions. But here is a problem that continues to be overlooked: Some nations would have to spend much more than others to control such emissions, and some nations are far more at risk, from climate change, than others are.

Here's a particular problem: China and the US are the world's leading emitters (in that order), and so both need to be included in any effective agreement. But as the leading emitters, the two nations would have to spend a lot to decrease their contributions to the problem. And on prominent projections, neither the United States nor China is among the nations most threatened by climate change. India and the nations of Africa apparently stand to lose much more. (For detailed discussion, see here and here.) What this means is that the leading contributors do not have the strongest incentives to try to reduce the problem.

In international law, the standard solution to this kind of difficulty is simple: The world should enter into the desirable agreement, and side--payments should be given to the nations that are reluctant to participate. Perhaps side-payments should and will be paid to China, if only in the form of large emissions rights. The Montreal Protocol, controlling ozone-depleting chemicals, is a precedent here. (But will the world, or will the United States, really be prepared to transfer large sums of money to China, to make it worthwhile for the world's leading emitter to scale back?)

No one is calling for side-payments to the United States--perhaps because the US is rich, perhaps because it has contributed so much (about 30%) to the existing "stock" of emissions. But as it becomes increasingly clear that significant emissions reductions by the US would be quite expensive, it will be interesting to see what sorts of incentives might be imposed, by Americans concerned about climate change or by the world, to encourage the US to take action.

Nations rarely participate in international agreements if the domestic costs are far in excess of the domestic benefits. Will climate change prove to be an exception? Or might new evidence suggest that for the United States, the purely domestic costs of emissions reductions are lower, and the purely domestic benefits higher, than prominent projections have indicated?

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