Why Not Allocate Carbon Rights on a Per Capita Basis?

So asks Minderbender. China makes just this argument, arguing that because it has four times the population of the United States, it should be able to emit four times the amount of greenhouse gases. Think of the atmosphere as a sponge that can absorb a limited amount of the world’s carbon. China wants the largest piece of the sponge because it has the largest number of people.

What is wrong with this argument? Initially, consider how this idea, if generalized as a principle of international law, would apply in other contexts. The sea contains various fish stocks. Currently, fish stocks that are located near a country’s coasts are “owned” entirely by that country. The rest of the world has no rights to it. Other fisheries are in the high seas. These stocks are for the most part not regulated: any country can authorize citizens to take them. Also consider mineral deposits in the sea bed under the high seas: these mineral deposits have traditionally been available to any country, though recent efforts have been made to regulate them under the Law of the Sea convention (to which the United States is not yet a party).

If China should have a per capita share of the atmosphere, then presumably it should have a per capita share of the fish stocks and mineral deposits beneath the high seas. We could go farther and ask, Why should any country have exclusive rights to resources in its territorial seas or, for that matter, on its own territory? Oil is oil: it is the same substance whether it exists under the oceans or under land. If China has a per-capita claim to oil under the ocean, why not to oil under the sands of sparsely populated Saudi Arabia? Or, to put this differently, why should China get carbon rights on a per capita basis if it is not willing to share (say) land rights on a per capita basis with (say) the Vietnamese?

The logic leads to a picture of the world as a basket of resources that should be distributed to countries on a per capita basis. Where the countries are actually located—how close they are to particular resources—is morally irrelevant.  Landlocked Lesotho should have a share of fisheries, whaleries, mineral deposits in Norway, and the atmospheric carbon sponge.  What matters is individuals, not countries, and individuals should have access to global resources on a per-capita basis. Who could object to this?

There are a few problems.

First, the per-capita principle would give governments incentives to expand (or not limit) their population. The bigger the population, the more of the world’s resources the government may claim. It would be better if governments were given incentives to limit their populations rather than expand them.

Second, do we really want the world’s resources divided up so that the biggest countries get the most? Is it relevant that some of the biggest countries have corrupt (Bangladesh), authoritarian (China, Russia), or otherwise less-than-efficient governments (India, Indonesia, Nigeria, Pakistan, Philippines), and therefore are unlikely to get most or even much or even any of the wealth to their people?

Third, the per-capita principle, whatever its attractiveness in the abstract, is in tension with the way that the world is organized and governments actually operate. Governments consider themselves responsible to their populations (or subsets thereof), and not to people living in other countries. Governments sometimes extend aid and resources to people in other countries who are suffering from a natural disaster or entrenched poverty, but never to people in other countries simply by virtue of their number. This leads to the final point.

Fourth, there is nothing ethically attractive about the per-capita principle. To see why, compare the United States (which has a population of 300 million) and Malawi (which has a population of 13 million). The United States has a per capita GDP of $40,000; Malawi’s is about $600. According to the per-capita principle, the United States (and, of course, China) should have greater carbon rights than Malawi, yet the United States (and China) are much richer than Malawi. If we are allocating the costs of greenhouse-gas abatement on an ethical basis, why give preference to states that happen to be big rather than states that are poor?

Comments

[DWAnderson]

In addition to the specific problems identified, there are opportunity costs associated with setting up a regime that we have no good reason to believe would achieve any goal other one specific conception of equity. Generally put, there this would not necessarily improve the lot of humanity. More specifically, there is no reason to believe it would increase per capita utility, personal autonomy or improve the chance of survival of the species in comparison with other potential systems for allocating rights. As the piece hints, there is a reason other resources are not allocated this way: there are better ways to do so.

See http://thunor.spaces.live.com/blog/cns!71C238B5E0E3724D!387.entry

[minderbender]

I think there are good reasons that things like fish and mineral deposits aren't owned equally by all the citizens of the world. Some of those reasons might not apply to something like the right to emit carbon, though, because it's not the sort of thing that you can cultivate or husband. It's not subject to a common pool problem (at least, not once it has been allocated in the contemplated treaty). We are essentially approaching the distribution problem from beforehand - we are setting up the rules of the game. They may be expensive to disrupt later, but for now we can set them up however we like.

Note, though, that we are speaking merely of an initial distribution of rights. I take it the whole point is to allow the market to allocate the carbon rights to their highest value use. In all likelihood, the rights will end up unequally distributed around the world. What we are really speaking of, then, is the distribution of the revenue from selling the rights. It's (nearly) a pure wealth-distribution question.

As for the problems Professor Posner raised:

1. It's hard to imagine that governments will change their fertility policies over carbon rights. Even if they do change their policies, though, it seems likely that, at least within the range of reasonable policies (i.e., no forced sterilization), the effect will be minor. The big drivers of family size are wealth, female earning opportunities, etc. Finally, while we might prefer not to grow too much more, it may be that before long global fertility falls to a sub-optimal level. This has arguably already happened in western Europe and Japan.

2. The United States may not prefer for substantial carbon rights to go to China, India, Russia, etc. (in fact, it's hard to see why the US would want anyone other than the US to have carbon rights, at least in the initial distribution). However, it seems as though the United States might find it difficult to persuade other countries that they should accept fewer carbon rights because we don't approve of their corrupt governments. It's not just that the US is unpopular - it's that there is no realistic way to get countries to agree to distribute carbon rights based on an index of democracy, good governance, and the rule of law.

3. It may be true that my critique in #2 above would also apply to per-capita distribution (governments might not accept it). Still, governments might prefer a per-capita distribution, in which meaningful caps can be maintained, to a policy of exempting China and India.

4. I don't really have the training to make an ethical argument, but note that this point cuts in the opposite direction of most mainstream proposals, in which the US and other industrialized nations get more than their per capita share of carbon rights. This, too, seems ethically unattractive - because of a historical accident, Americans enjoy a disproportionate share of carbon rights going forward.