There is tremendous excitement about Copenhagen Summit and the big question bothering everyone is – whether the summit will come out with an international agreement on greenhouse gas emissions? The suspense remains on the stand to be taken by China and India – two significant emitters and their readiness to undertake hard commitments to reduce emissions under clear targets and timeframe.

The problem of global warming is all about the rising global stocks of carbon in the atmosphere. Interestingly, no cost-effective technology has emerged so far to reduce accumulated stocks by significant amounts. So any emitter invariably adds to the global stock and adversely impacts the rest of the world. This effect will be quantitatively high in the case of large emitters.

On Copenhagen, the prospects of setting a timeframe for commitments by nations and converting them into legally binding dictums by all signatories under an international law and its monitoring are still under debate. This uncertainty is enhanced by reports that the world’s biggest 17 emitters and donors have not agreed on financial assistance to developing countries to meet their costs in implementing emission targets. It is reported that developed countries are no longer insisting on long-term (2050) commitments from developing countries and the latter have to limit emissions in the near-term of 2020. But it is unclear whether this apparent convergence of contending positions will brighten the chances of an agreement at Copenhagen.

Agreement Essential

In the absence of an international agreement on limiting the growth of emissions, the atmosphere, which is a ‘global commons’ would get overexploited. So, any agreement to contribute to the mitigation of global warming must include credible commitments by major emitting nations including China and India to limit emissions growth. However, the limits do not have to be the same for all. Therefore, the negotiators have to agree not just on the future date and target for global carbon stock, but also on the distribution of the associated limits on emissions growth across countries.

India’s View

Three issues are being debated in India and elsewhere. First, should any international agreement take into account the fact that some nations contributed to the initial global stock much more than others? Second, should the agreement define its national emissions commitments in the aggregate or per capita terms? Third, should the date of the target stock be for the long term or near-term?

From the perspective of efficiency the first issue falls flat. For the reason that the climate change effects arise from the global stock of carbon; its distribution across countries in terms of their contributions to that stock including the initial stock becomes totally irrelevant. By the same token, on the second, since only total emissions of each country and hence of all countries together add to the global stock of carbon, whether the same total emissions of a country is the result of low per capita emission multiplied by a large population or vice versa is again irrelevant from the perspective of efficiency as long as population growth in each country is exogenous and not subject to policy choice. But it is.

Population Policy

Population policy choices do affect the welfare of the current and future populations. Any trade-off between larger population and lower emissions or vice versa would naturally fall under considerations of intergenerational equity within nations and deep philosophical issues are involved in doing so. Regardless of how such choices are made by a nation, since only national welfare is relevant in global welfare comparisons, all national policy choices, including population policies, would be reflected through their effects on national welfare in any international agreement that reflects equity consideration across countries appropriately. Thus, from the perspective of international agreement, only aggregate and not per capita emissions are relevant.

Obviously the global society will not end at any realistic target date. So a major purpose of the agreement is to enhance the chances of societal survival beyond the target date. The target for the global stock of carbon at the target date has to be set by considering the implications of any particular stock target for future paths of stocks beyond the target date.

Global Welfare Important

In this context, two distinct issues naturally arise: the efficiency of any proposed distribution of the extent of emissions commitment across countries compared with alternative distributions that would meet the same future date and target stock, and the equity of the proposed distribution in some well-defined sense.

To reach a realistic global future target of carbon stock in the atmosphere, starting from a given and known initial stock may not violate any national economic, political, resource and technological constraints and international constraints on trade in goods, services, technology and financial and technology transfers. This will also keep a higher global welfare in view.

There would be many efficient paths that differ in the distribution of emissions and in their welfare consequences across countries. To compare them one needs a global welfare criterion that aggregates national welfares. As long as the chosen criterion is responsive to every country’s welfare in that global welfare increases whenever any country’s welfare increases one can incorporate the notion of equity among countries in some well-defined sense. With equity so incorporated, any feasible path that is inefficient would be dominated by another with as high or higher global welfare.