Can Equity Enhance Efficiency? Some Lessons from Climate Negotiations

Carlo Carraro (), Francesco Bosello, Barbara Buchner and Davide Raggi

No 3606, CEPR Discussion Papers from C.E.P.R. Discussion Papers

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; Tranfers (search for similar items in EconPapers)
JEL-codes: C70 H00 H30 Q38 (search for similar items in EconPapers)
Date: 2003-02
New Economics Papers: this item is included in nep-gth
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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