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December 19, 2007


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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


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.

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