Feasibility

The only way left to support the equal shares claim is to argue that it is a feasible way to reduce overall inequality. Because climate negotiations will one way or another divide up the atmosphere, the allocation of rights is salient. Equal rights is a natural focal point. It is easy to understand and intuitive. Moreover, by combining equal rights with a cap-and-trade system, we can improve the distribution of resources while ensuring the emissions reductions occur where they are cheapest. Equal division of rights to emit CO2, we might say, is a great opportunity to reduce inequality.

The problem, however, is that a treaty that allocated emissions rights this way is not feasible. Once we look at the size of the transfers and the problem with how the transfers would be made under such a system, it is evident that nations would never agree to this system.

To get a sense of the feasibility of an equal per capita emissions system, we can calculate the net transfers that would arise if emissions were at current levels.37 To do this,

I took the emissions, population, and GDP data for 201038 and calculated how much each country exceeds the global per capita average emissions. Multiplying this by the population of each country gives us the total excess emissions for each country. Multiplying that by the price of permits gives the net transfer each country would have to make to purchase or sell permits so that its emissions stay the same. We do not know what price permits would trade at. The number would depend on how ambitious the reduction target is. I used the same $35 per ton that I used for the corrective justice calculation. The number could easily be lower or higher. The transfers would scale accordingly.

The transfers are massive. The United States would be the largest payer on pure dollar terms. It would have to pay the rest of the world $163 billion per year to purchase the necessary permits. This is about eight times its current foreign aid budget. The total federal budget for the US each year is about $2 trillion so the payments would be about eight percent of total government spending, and would be roughly a third the size of Medicare (which is currently about $550 billion per year). Perhaps most importantly, the net transfers would be about 2% of GDP and would be near and likely exceed the benefits that the United States would receive from stopping moderate climate change (very substantial climate change might produce larger harms to the United States).

China currently exceeds the global per capita emissions so it too would have to make payments. Its net outgoing payments would be about $32 billion per year, which is about 1% of its GDP. Russia would have to transfer $47 billion per year, which is an astounding 5.2% of GDP. Brazil would have to transfer $28 billion per year, which is 2.5% of its GDP. The twenty-seven countries in the EU have relatively modest emissions on a per capita basis given their income: they would have to transfer $48 billion per year, but this is only 0.3% of their collective GDP.

The largest net recipient in absolute dollar amounts would be India, which would receive more than $200 billion per year, or 17% of GDP. Other large recipients include Bangladesh ($32 billion per year, 39% of GDP) and Pakistan $30 billion per year, 22% of GDP). A number of countries in Africa (Eritrea, Niger, Ethiopia, and Malawi) would receive annual transfers roughly the size of their current GDP.

Looking at these numbers, it seems clear that the United States, China, Russia, and Brazil—four out of the top five emitting countries—would never agree to this system. Compare it, for example, to a treaty in which countries agree to emissions reductions targets but can achieve them however they want. If a country achieves its target through a tax on emissions or a domestic cap-and-trade system, it would keep the revenue. It is hard to see why the largest emitters would not insist on this alternative route.

The system overall would likely be progressive because most rich countries would be net payers. It would not, however, be tailored to national income. As a result, some very poor countries would have to make substantial (or effectively impossible) net payments. Belize would have to make payments equal to 62% of GDP, Paraguay and Bolivia both would have to pay 33% of GDP each year. Uzbekistan, with per capita income of $752, would have to make payments of 5.7% of its GDP. Papua New Guinea, with per capita income of $955 would have to make payments of 4.3% of GDP. Middle- income countries such as Hungary, Croatia, Chile, and Turkey would also have to make very substantial payments.

An immediate reaction is that of course we would not ask Belize to pay 62% of its GDP as part of a global emissions rights system. It would be ridiculous to ask Papua New Guinea to further impoverish its people. But that is precisely the point. As Stephen Gardiner noted, would we actually support equal emissions rights if the distributive consequences were bad? Probably not, which is why we would not ask Paraguay and Papua New Guinea to further impoverish themselves. But if we are really pursuing distributive concerns, then we need to focus on how best to achieve those goals rather than on formal equality.

On top of these problems, the transfers would very likely go to governments not individuals. Government officials may be likely to misuse the transfers or, in many cases, appropriate them. Donor nations normally impose strict conditions on aid for this reason. If the transfers are part of a cap-and-trade system based on a theory of equal per capita rights, there would be no such limitation. If a country has a right, rooted in justice, to a resource, how could we then put restrictions on its use? But nations will not agree to transfers of this magnitude if their main effect is to enrich corrupt governments.

The equal per capita rights system continues to generate support because of its seeming fairness. But at its core, it is a claim about a feasible means of achieving distributive goals. It is not feasible, however. The most important countries for achieving emissions reductions—China, the United States, Russia, and Brazil—would all be substantial losers under this system. The transfers would go to governments who may misuse the resources. It is hard to see high-emitting countries agreeing to this. Moreover, applied strictly according to its own logic rather than as a means of achieving distributive goals, it would hurt many poor people. Despite its simple appeal, the logic behind equal per capita emissions rights is flawed.

 
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