Viable Responses to the equity-responsability dilemna : a consequentialist view.

This paper aims at clarifying some conceptual flaws blurring the equity-efficiency debates involved in the setting of objectives of GHGs emissions control beyond 2012. To this end, it carries out numerical experiments that test the viability of agreements grounded on two contrasting target allocation rules: a "Soft Landing" rule prolonging a Kyoto-type agreement; and a "Convergence" rule progressively re-directing Kyoto towards a per capita emissions endowment. The paper demonstrates the sensitivity of the impact to the metric used to assess it and to assumptions regarding the interaction between the cap and trade system and accompanying measures such as domestic policies (characterised as simple fiscal reforms) and international public funding. In a third step it derives some lessons about how to reconcile two political imperatives: (a) an ex-post or "consequentialist" approach to equity, which however cannot fully avoid relying on ex-ante rules, and (b) the necessity of an agreement on such stable ex-ante rules to set up emissions targets and efficient emissions trading. The latter step suggests a coming back to the environment/development "Gordian Knot", which underpins all global environmental affairs since the Stockholm Conference in 1972. We argue that the equity-efficiency dilemma has to be set in a broader sustainable development perspective whereby climate policies are integrated with development priorities of the poorest countries so as to create a leverage effect on development.