Sharing the Burden of Saving the Planet

This paper focuses on one question which is critical to reaching a global agreement on emissions reductions: how the burden of saving the planet should be shared,  between rich countries and poor. There is no question that there will have to be global reductions. That is not the question. The question is upon whom should the incidence of the cost of adjustment be imposed? Avoiding global warming is a global public good. Standard public finance theory provides clear guidance, both about how to achieve such reductions in the most efficient way, and how the burden should be shared. Clearly, the brunt of the burden (under virtually any welfare criterion) should lay with the advanced industrial countries. Indeed, these standard ideas suggest that even the approach often taken by developing countries—that there should be equal emissions permits per capita—puts an excessive burden on developing countries.