How to split the costs of carbon emissions?

December 26, 2013 01:10 am | Updated 01:10 am IST

It is probably a safe bet that very few Americans unwrapping a brand-new iPhone left under their Christmas tree are thinking about its impact on the global climate.

U.S. citizens aside, about three-quarters of the carbon dioxide is considered the responsibility of other people in places like China and Taiwan, South Korea and Inner Mongolia, where the phone and its parts were made. It is increasingly evident that the effort to curb global warming is as stuck as ever, and also that, whether we like it or not, we’re all in this together.

The obstacles remain significant. Countless summit conferences, since the Kyoto Protocol on climate change was adopted more than 15 years ago, have failed to budge the fundamental roadblocks standing in the way of collective action: How should the costs be divided? Who did what to whom? Are emissions the responsibility of the countries that made them or of the countries for whom the products were made?

Understanding the impact of consumption-generated emissions on climate change is a necessary first step for concrete mitigative action.

Policymakers in Washington maintain that a deal that only required rich countries to limit emissions would be pointless: Heavy emitters of greenhouse gases like the agriculture and chemical industry would decamp from rich nations to the less carbon-restricted shores of the developing world.

Indeed, recent research suggested that if rich countries were to cut emissions by 20 per cent from 2004 levels without securing cooperation from developing countries, some 5 to 19 percent of the carbon savings would be lost to leakage.

Here’s the quandary, though. The standard approach being considered to account for the cost of traded carbon is to tax recorded emissions at the border. Big exporters like China, not surprisingly, don’t like that approach.

The study on emissions leakage found that imposing a carbon tax on imports would reduce the leaks by about a third. But China seems to have everything to lose. If China brought this up in negotiations it would be allowing the U.S. and Europe to regulate its exports.

Other research has concluded that imposing a border penalty would encourage China and other developing countries to tax their own carbon emissions and keep the money rather than have them taxed by others.

With colorful wrapping strewn across the floor and apps zipping from the old iPhone to the new, most Americans won’t be worrying about any of this Christmas morning. Who cares, in the end, about whose fault it is? But if the world is to prevent catastrophic climate change from eventually undermining civilisation, somebody somewhere must pay the cost of consuming less carbon. And nobody is volunteering. — New York Times News Service

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