Sharing the Cost of Global Warming

Abstract

For meteorological reasons, the distribution of climate‐change damage bears no relationship to the distribution of emissions across the globe. We argue in favor of offsetting this discrepancy. We propose a global insurance scheme of sorts, to be financed according to countries’ responsibilities in the matter. We analyze this horizontal equity problem using a responsibility/compensation framework, which we have adapted to a context of externalities. We characterize new versions of two well‐known cost‐sharing schemes.

Keywords: Climate change, responsibility, egalitarian liberalism, D62, D63, Q54