Can Equity Enhance Efficiency? Some Lessons from Climate Negotiations

31 Pages Posted: 21 Feb 2003

See all articles by Francesco Bosello

Francesco Bosello

University of Milan - Department of Economics, Business and Statistics; CMCC - Centro Euro-Mediterraneo sui Cambiamenti Climatici

Barbara K. Buchner

International Energy Agency; Fondazione Eni Enrico Mattei (FEEM)

Carlo Carraro

Fondazione Eni Enrico Mattei (FEEM); Ca' Foscari University of Venice; CMCC - Euro Mediterranean Centre for Climate Change (Climate Policy Division); IPCC; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute); Centre for European Policy Studies, Brussels; Green Growth Knowledge Platform; International Center for Climate Governance

Davide Raggi

University of Bologna - Department of Economics

Date Written: February 2003

Abstract

This Paper analyses the relationship between different equity rules and the incentives to sign and ratify a climate agreement. A widespread conjecture suggests that a more equitable distribution of the burden of reducing emissions would enhance the incentives for more countries - particularly big emitters - to accept an emission reduction scheme defined within an international climate agreement. This Paper shows that this conjecture is only partly supported by the empirical evidence that can be derived from the recent outcomes of climate negotiations. Even though an equitable sharing of the costs of controlling GHG emissions can provide better incentives to sign and ratify a climate agreement than the burden sharing implicit in the Kyoto agreement, a stable global agreement cannot be achieved. A possible strategy to achieve a global agreement without free-riding incentives is a policy mix in which global emission trading is coupled with a transfer mechanism designed to offset incentives to free ride.

Keywords: Agreements, climate, incentives, negotiations, equity, policy, transfers

JEL Classification: C70, H00, H30, Q38

Suggested Citation

Bosello, Francesco and Buchner, Barbara K. and Carraro, Carlo and Raggi, Davide, Can Equity Enhance Efficiency? Some Lessons from Climate Negotiations (February 2003). Available at SSRN: https://ssrn.com/abstract=382320

Francesco Bosello (Contact Author)

University of Milan - Department of Economics, Business and Statistics

Via Festa del Perdono, 7
Milan, 20122
Italy

CMCC - Centro Euro-Mediterraneo sui Cambiamenti Climatici

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Lecce, I-73100
Italy

Barbara K. Buchner

International Energy Agency ( email )

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France
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Fondazione Eni Enrico Mattei (FEEM) ( email )

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+39 04 1271 1461 (Fax)

Carlo Carraro

Fondazione Eni Enrico Mattei (FEEM) ( email )

Isola di San Giorgio Maggiore 8
Venezia, 30124
Italy
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+39 04 12700412 (Fax)

Ca' Foscari University of Venice ( email )

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Venice, 30121
Italy
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HOME PAGE: http://www.carlocarraro.org/

CMCC - Euro Mediterranean Centre for Climate Change (Climate Policy Division) ( email )

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Italy
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IPCC ( email )

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Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

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Munich, DE-81679
Germany

Centre for European Policy Studies, Brussels

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Belgium
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Green Growth Knowledge Platform ( email )

International Environment House
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Geneva, 1219
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HOME PAGE: http://www.greengrowthknowledge.org/

International Center for Climate Governance ( email )

Island of San Giorgio Maggiore 8
Venice, I-30124
Italy

HOME PAGE: http://www.iccgov.org/

Davide Raggi

University of Bologna - Department of Economics ( email )

Piazza Scaravilli 2
Bologna, 40126
Italy

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