Stiglitz on the Copenhagen failure

Joe Stiglitz argues that addressing climate change requires a new strategy.

Perhaps it is time to try another approach: a commitment by each country to raise the price of emissions (whether through a carbon tax or emissions caps) to an agreed level, say, $80 per ton. Countries could use the revenues as an alternative to other taxes - it makes much more sense to tax bad things than good things. Developed countries could use some of the revenues generated to fulfill their obligations to help the developing countries in terms of adaptation and to compensate them for maintaining forests, which provide a global public good through carbon sequestration.

I very much agree--as I argued in two articles for National Journal on the failure of the Kyoto approach, "Focus climate talks on carbon price" and "Make Copenhagen a success, not a circus".

We need a form of cooperation that economizes on momentous international treaties and cross-border obligations -- which are difficult to frame in the first place and impossible to enforce once they exist. Instead, we need policies that can be sold to voters country by country, and that conform to a broad international effort, instead of seeming to be dictated by multinational (i.e., other people's) goals.

Curbing global warming does need to be an international effort -- because it is the stock of global gases that drives the process. There is no point in one country cutting its emissions if others do not. But this does not mean that a Kyoto-type approach -- a global treaty specifying exact binding limits on emissions, regardless of the consequences -- is the way to go. The difficulties in that method are obvious and have been amply demonstrated.

For one thing, achieving equity across countries is difficult. In setting hard targets, allowance has to be made for the fact that poor countries such as India and China emit less per capita than the United States. But how? Putting the political focus on questions like that, and trying to answer them once and for all at events like the Copenhagen conference -- then holding the entire process hostage to the answers -- is not the way to get things done.

A big step forward would be to move the basis of international cooperation from hard country-by-country caps on emissions to targets for the price of carbon.

I've previously recommended an excellent paper on one way to make such a scheme practicable. Here is the link again: A Copenhagen Collar: Achieving Comparable Effort Through Carbon Price Agreements, by Warwick McKibbin, Adele Morris, and Peter Wilcoxen. Their scheme looked good to me before the Copenhagen fiasco, and all the better since.