Zhang, ZhongXiang (2009): Encouraging developing country involvement in a post-2012 climate change regime: carrots, sticks or both?
Download (120kB) | Preview
The climate-trade nexus has become the focus of academic debate, and has gained increasing attention as governments are taking great efforts to forge a post-2012 climate change regime to succeed the Kyoto Protocol. With concerns about their own competitiveness and growing greenhouse gas emissions in developing countries, some industrialized countries, if not all, are considering whether to impose unilateral trade measures against developing country trading partners. While it is clear that greenhouse gas emissions targets of developed countries need to be tightened further in a post-2012 climate change regime, developing country involvement is also crucial for climate change mitigation and adaptation, given that climate change is a global problem requiring a global response. This raises the issue of which approach would be most likely to stimulate developing countries to take appropriate actions in the post-2012 climate regime. Would positive or negative incentives work best, in other words, do we need carrots, sticks or both?
This paper seeks to answer this question. By revisiting the six options for China that I envisioned a decade ago and examining a variety of factors, the paper first discusses how far developing country commitments can go in an immediate post-2012 climate regime. It argues that developing country commitments are most unlikely to go beyond defined policies and measures in this timeframe. The type of border adjustment provisions currently being discussed by most developed countries include more sticks than carrots for developing countries. Sticks can be incorporated, but only if they are credible and realistic and serve as a useful supplement to push developing countries to take actions or adopt policies and measures earlier than would otherwise have been the case. In order to encourage developing countries to do more to combat climate change, the paper suggests that developed countries should rather focus on carrots.
|Item Type:||MPRA Paper|
|Original Title:||Encouraging developing country involvement in a post-2012 climate change regime: carrots, sticks or both?|
|Keywords:||A post-2012 climate change regime; Developing country commitments; Climate-trade nexus; Climate change mitigation and adaptation; Border adjustment measures; WTO scrutiny; The Lieberman-Warner bill|
|Subjects:||F - International Economics > F1 - Trade > F18 - Trade and Environment
Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q48 - Government Policy
Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q56 - Environment and Development ; Environment and Trade ; Sustainability ; Environmental Accounts and Accounting ; Environmental Equity ; Population Growth
Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q54 - Climate ; Natural Disasters and Their Management ; Global Warming
Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q58 - Government Policy
|Depositing User:||ZhongXiang Zhang|
|Date Deposited:||05. Feb 2009 03:20|
|Last Modified:||16. Feb 2013 08:11|
Bovenberg, A.Lans and Goulder, Lawrence H. 2002. Addressing Industry-Distributional Concerns in U.S. Climate Change Policy, Unpublished manuscript, Department of Economics, Stanford University.
General Agreement on Tariffs and Trade (GATT) 1990. Thailand – Restrictions on Importations of and Internal Taxes on Cigarettes, Report of the Panel, DS10/R, 5 October.
Haverkamp, J. (2008), International Aspects of a Climate Change Cap and Trade Program, Testimony before the Committee on Finance, U.S. Senate, February 14, Available at: http://finance.senate.gov/hearings/testimony/2008test/021408jhtest.pdf.
Hoerner, J.A. 1998. ‘The Role of Border Tax Adjustments in Environmental Taxation: Theory and U.S. Experience’, Presented at the International Workshop on Market-based Instruments and Interna¬tional Trade, Amsterdam, 19-20 March.
McBroom, M. 2008. How the IBEW-UWM-Boilermakers-AEP International Proposal Operates within Climate Legislation, 17 June, Available at: http://www.wita.org/index.php?tg=fileman&idx=viewfile&idf=189&id=4&gr=Y&path=&file=WITA-+Climate+Change+-+Overview+of+IBEW-AEP+Proposal+(June+17%2C+2008).pdf.
Morris, Michael.G. and Hill, Edwin D. 2007. ‘Trade is the Key to Climate Change’, The Energy Daily 35 (33), 20 February.
Poterba, J.M. and J.J. Rotemberg 1995. ‘Environmental Taxes on Intermediate and Final Goods When Both Can Be Imported’, International Tax and Public Finance 2: 221-228.
Subcommittee on Energy and Air Quality of the U.S. House of Representatives 2008. Competitiveness Concerns/Engaging Developing Countries, Climate Change Legislation Design White Paper, Washington DC, January, Available at: http://energycommerce.house.gov/Climate_Change/White_Paper.competitiveness.013108.pdf.
The Economist 2008. ‘Pollution Law: Trading Dirt’, 7 June, pp. 42-44.
Zhang, ZhongXiang 1998. ‘Greenhouse Gas Emissions Trading and the World Trading System’, Journal of World Trade 32 (5): 219-239.
Zhang, ZhongXiang 2000. ‘Can China Afford to Commit itself an Emissions Cap? An Economic and Political Analysis’, Energy Economics 22 (6): 587-614.
Zhang, ZhongXiang 2004. ‘Open Trade with the U.S. without Compromising Canada’s Ability to Comply with its Kyoto Target’, Journal of World Trade 38 (1): 155-182.
Zhang, ZhongXiang 2007. ‘Why Has China not Embraced a Global Cap-and-Trade Regime?’, Climate Policy 7 (2): 166-170.
Zhang, ZhongXiang 2008. Multilateral Trade Measures in a Post-2012 Climate Change Regime?: What Can Be Taken from the Montreal Protocol and the WTO?, Social Science Research Network Working Paper Available at: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=1328548.
Zhang, ZhongXiang 2009. ‘How Far Can Developing Country Commitments Go in an Immediate Post-2012 Climate Regime?’, Energy Policy 37.
Zhang, ZhongXiang and Assunção, Lucas 2004. ‘Domestic Climate Policy and the WTO’, The World Economy 27 (3): 359-386.