Hostname: page-component-8448b6f56d-42gr6 Total loading time: 0 Render date: 2024-04-23T06:44:44.027Z Has data issue: false hasContentIssue false
  • English
  • Français

Equity criterion for initial rights CO2 emissions allocations under emissions trading: cooperation or conflict among nations?

Published online by Cambridge University Press:  05 September 2014

Je-Liang Liou  and
Pei-Ing Wu
Je-Liang Liou
Affiliation:
The Center for Green Economy, Chung-Hua Institution for Economic Research, Taiwan. E-mail: jlliou@cier.edu.tw
Pei-Ing Wu
Affiliation:
Department of Agricultural Economics, National Taiwan University, No. 1 Section 4 Roosevelt Road, Taipei 106, Taiwan. Tel: +886-2-3366-2663. E-mail: piwu@ntu.edu.tw
Get access Rights & Permissions [Opens in a new window]

Abstract

This study constructs comprehensive operational equitable initial rights of emissions allocation models by estimating the total abatement cost based on the criteria of egalitarianism, sovereignty, the ability to pay, polluter pays and various scenarios of the Greenhouse Development Rights (GDRs) framework among groups of countries or individual nations. The analyses provide the potential crux regarding the agreements, cooperation and/or conflict among nations for joining the trading. The results show that the polluter pays principle generates the greatest total abatement cost saving for upper-middle and low-middle income nations, but not for others. Full capacity GDRs apply to China, egalitarianism to India and sovereignty to the United States on an individual basis. The results show that the disagreement and gaps with regard to an equitable initial allocation of rights among groups or individual nations is one of the possible obstructions and hindrances to the promotion and formation of a world trading scheme.

Type
Research Article
Information
Environment and Development Economics , Volume 20 , Issue 5 , October 2015 , pp. 587 - 610
Copyright
Copyright © Cambridge University Press 2014 

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Agarwal, A. and Narain, S. (2002), ‘The atmospheric rights of all people on earth’, Delhi: Centre for Science and Environment, [Available at] http://www.cseindia.org/content/atmospheric-rights-all-people-earth.Google Scholar
Aigner, D.J. and Chu, S.J. (1968), ‘On estimating the industry production function’, American Economic Review 58(4): 826–839.Google Scholar
Baer, P., Athanasiou, T., Kartha, S., and Kemp-Benedict, E. (2008), The Greenhouse Development Rights Framework: The Right to Development in a Climate Constrained World, Berlin: Heinrich Böll, Christian Aid, EcoEquity and Stockholm Environment Institute, [Available at] http://www.ecoequity.org/docs/TheGDRsFramework.pdf.Google Scholar
Berk, M. and den Elzen, M.G.J. (2001), ‘Options for differentiation of future commitments in climate policy: how to realize timely participation to meet stringent climate goals?’, Climate Policy 1(4): 465–480.CrossRefGoogle Scholar
Bonilla, J., Coria, J., and Sterner, T. (2012), ‘Synergies and trade-offs between climate and local air pollution policies in Sweden’, Working Paper in Economics No. 529, School of Business, Economics and Law, University of Gothenburg, Sweden, [Available at] https://gupea.ub.gu.se/bitstream/2077/29167/1/gupea_2077_29167_1.pdf.Google Scholar
Bureau of Energy (2009), Energy Statistical Annual Reports, Taipei: Ministry of Economic Affairs of Taiwan.Google Scholar
Chambers, R.G. (1998), ‘Input and output indicators’, in Fare, R., Grosskopf, S. and Russell, R.R. (eds), Index Numbers in Honour of Sten Malmquist, Boston, MA: Kluwer Academic Publishers.Google Scholar
Chung, Y.H., Färe, R., and Grosskopf, S. (1997), ‘Productivity and undesirable outputs: a directional distance function approach’, Journal of Environmental Management 51: 229–240.CrossRefGoogle Scholar
Cramton, P. and Kerr, S. (2002), ‘Tradable carbon permit auctions how and why to auction not grandfather’, Energy Policy 30: 333–345.CrossRefGoogle Scholar
Dales, J.H. (1968), Pollution, Property and Prices, Toronto: University of Toronto Press.Google Scholar
Dinan, T. and Rogers, D.L. (2002), ‘Distributional effects of carbon allowances trading: how government decisions determine winners and losers’, National Tax Journal 55(2): 199–221.CrossRefGoogle Scholar
Directorate-General of Budget, Accounting, and Statistics (2009), Taiwan National Statistics, Directorate-General of Budget, Accounting, and Statistics, [Available at] http://www.dgbas.gov.tw/mp.asp?mp=1.Google Scholar
EcoEquity and Stockholm Environment Institute (2009), Greenhouse Development Rights Online Calculator, [Available at] http://www.gdrights.org/interactive/basic.Google Scholar
Edmonds, J.S., Caputi, N., Moran, M.J., Fletcher, W.J., and Morita, M. (1995), ‘Population discrimination by variation in concentrations of minor and trace elements in Sagittae of two western Australian Teleosts’, in Secor, D.H., Dean, J.M. and Campana, S.E. (eds), Recent Developments in Fish Otolith Research, Columbia: University of South Carolina Press, pp. 655–670.Google Scholar
Eyckmans, J., Cornillie, J., and Regemorter, V. (2002), ‘Efficiency and equity of the EU burden sharing agreement’, Environment Working Paper No. Ete0002, Katholieke Universiteit, Leuven, [Available at] http://www.econ.kuleuven.ac.be/ew/academic/energmil/downloads/ete-wp00-2.pdf.Google Scholar
Färe, R., Grosskopf, S., and Noh, D.W. (2005), ‘Characteristics of a polluting technology: theory and practice’, Journal of Econometrics 126: 469–492.CrossRefGoogle Scholar
Färe, R., Grosslopf, S., and Weber, W.L. (2006), ‘Shadow prices and pollution costs in U.S. agriculture’, Ecological Economics 56: 89–103.CrossRefGoogle Scholar
Finkbeiner, M. and Neugebauer, S. (2013), ‘Carbon footprint of recycled biogenic products: the challenge of modeling CO2 removal credits’, International Journal of Sustainable Engineering 6(1): 66–73.CrossRefGoogle Scholar
Fletcher, S. (2001), Global Climate Change: The Kyoto Protocol, CRS Report No. RL30692, Washington, DC: Congressional Research Service, [Available at] http://ncseonline.org/nle/crsreports/05Feb/RL30692.pdf.Google Scholar
Frolova, A. (1998), ‘Ecological reasoning: ethical alternatives’, Ecological Economics 24(2–3): 169–182.CrossRefGoogle Scholar
Haites, E. and Yamin, F. (2000), ‘The clean development mechanism: proposals for its operation and governance’, Global Environmental Change 10: 27–45.CrossRefGoogle Scholar
Höhne, N., Galleguillos, C., Harnisch, K.B.J., and Phylipsen, D. (2003), Evolution of Commitments Under the UNFCCC: Involving Newly Industrialized Economies and Developing Countries, Research Report No. 20141255, UBA-FB 000412, ECOFYSGmbH, Berlin: Federal Environmental Agency, [Available at] http://www.peacepalacelibrary.nl/ebooks/files/C08-0081-Hohne-Evolution.pdf.Google Scholar
IEA (2007), World Energy Outlook 2007: China and India Insights, Paris: International Energy Agency.Google Scholar
Jones-Lee, M.W. (1992), ‘Paternalistic altruism and the value of statistical life’, Economic Journal 102(410): 80–90.CrossRefGoogle Scholar
Klepper, G. and Peterson, S. (2004), ‘The EU emissions trading scheme allowance price, trade flows and competitiveness effects’, European Environment 14(4): 201–218.CrossRefGoogle Scholar
Kuik, O. (2003), ‘Climate change policies, energy security and carbon dependency: trade-offs for the European Union in the longer term’, International Environmental Agreement: Politics, Law and Economics 3(3): 221–242.CrossRefGoogle Scholar
Kumbhakar, S.C. and Lovell, C.A.K. (2000), Stochastic Frontier Analysis, Cambridge: Cambridge University Press.CrossRefGoogle Scholar
Larsen, B. and Shah, A. (1994), ‘Global tradable carbon permits, participation incentives, and transfers’, Oxford Economic Papers 46(5): 841–856.CrossRefGoogle Scholar
Maradan, D. and Vassiliev, A. (2005), ‘Marginal costs of carbon dioxide abatement: empirical evidence from cross-country analysis, Swiss Journal of Economics and Statistics 141(3): 377–410.Google Scholar
Marklund, P.O. and Samakovlis, E. (2007), ‘What is driving the EU burden-sharing agreement: efficiency or equity?’, Journal of Environmental Management 85(2): 317–329.CrossRefGoogle ScholarPubMed
Miketa, A. and Schrattenholzer, L. (2006), ‘Equity implications of two burden-sharing rules for stabilizing greenhouse-gas concentrations’, Energy Policy 34: 877–891.CrossRefGoogle Scholar
Ott, H. (1998), ‘Operationalizing “joint implementation”’, Global Environmental Change 8: 11–47.CrossRefGoogle Scholar
Parry, I.W.H. (2004), ‘Are emissions permits regressive?’, Journal of Environmental Economics and Management 47(2): 364–387.CrossRefGoogle Scholar
Pizer, W., Burtraw, D., Harrington, W., Newell, R., and Sanchirico, J. (2006), ‘Modelling economic-wide vs. sectoral climate policies’, Energy Journal 27(3): 135–168.CrossRefGoogle Scholar
Ringius, L., Torvanger, A., and Underdal, A. (2002), ‘Burden sharing and fairness principles in international climate policy’, International Environmental Agreement: Politics, Law and Economics 2: 1–22.CrossRefGoogle Scholar
Rose, A. and Stevens, B. (1993), ‘The efficiency and equity of marketable permits for CO2 emissions’, Resource and Energy Economics 15(1): 117–146.CrossRefGoogle Scholar
Rose, A., Stevens, B., Edmonds, J., and Wise, M. (1998), ‘International equity and differentiation in global warming policy’, Environmental and Resource Economics 12(1): 25–51.CrossRefGoogle Scholar
Rubinstein, R.Y. and Shapiro, A. (1993), Discrete Event Systems Sensitivity Analysis and Stochastic Optimization by the Score Function Method, New York: Wiley.Google Scholar
Shapiro, A. (2008), ‘Stochastic programming approach to optimization under uncertainty’, Mathematic Programming, Series B 112: 183–120.CrossRefGoogle Scholar
Shogren, J. and Toman, M. (2000), ‘Climate change policy’, in Portney, P. and Stavins, R. (eds), Public Policies for Environmental Protection, Washington, DC: Resources for the Future.Google Scholar
Sinha, S.M. (2006), Mathematical Programming: Theory and Methods, Mumbai: Elsevier.Google Scholar
Tietenberg, T.H. (1985), Emissions Trading: An Exercise in Reforming Pollution Policy, Washington, DC: Resources for the Future.CrossRefGoogle Scholar
Tonn, B. (2003), ‘An equity first, risk based framework for managing global climate change’, Global Environmental Change 13: 295–306.CrossRefGoogle Scholar
UNFCCC (2007), Kyoto Protocol to the United Nations Framework Convention on Climate Change, New York: United Nations Framework Convention on Climate Change, [Available at] http://unfccc.int/resource/docs/convkp/kpeng.pdf.Google Scholar
UN Statistics Division (2008), National Accounts Main Aggregates Database, New York: United Nations Statistics Division, [Available at] http://unstats.un.org/unsd/snaama/dnllist.asp.Google Scholar
Victor, D. (2001), The Collapse of the Kyoto Protocol and the Struggle to Slow Global Warming, Princeton, NJ: Princeton University Press.Google Scholar
World Bank (2008), World Development Indicators Database, Washington, DC: World Bank, [Available at] http://web.worldbank.org/WEBSITE/EXTERNAL/DATASTATISTICS/.Google Scholar
WRI (2008), The Climate Analysis Indicator Tool Database, Washington, DC: World Resources Institute, [Available at] http://cait.wri.org/.Google Scholar
Yohe, G.W., Montgomery, D., and Balistreri, E. (2000), ‘Equity and the Kyoto Protocol: measuring the distributional effects of alternative emissions trading regimes’, Global Environmental Change 10: 121–132.CrossRefGoogle Scholar