By definition, the global ETS would involve international trade in permits for carbon emissions. Typically, economically developed, high carbon (at least in per capita terms) countries would buy carbon emission permits from the economically poorer, low carbon (again at least in per capita terms) countries. This would involve a transfer of funds from the richer to the poorer countries and a concomitant commitment from the latter to restrict carbon emissions whereas the former would be able to emit more carbon than would have been possible in a world with firm quantitative restrictions on emissions but no global ETS.
The inflow of foreign exchange into the developing economies, while welcome, would not be an unmixed blessing as this would lead to an appreciation of their real exchange rates vis a vis the rich countries, thus lowering the export competitiveness of the poor countries. Concurrently, the relative export competitiveness of the richer countries will be enhanced. The impact of the global ETS on the poorer countries will thus be like a Dutch disease. The carbon emission permits which they will be allotted, and a good fraction of which they will sell to the rich countries, will lower the pace of their industrialisation, hurt their growth prospects and hamper their efforts at reducing mass poverty.
Concurrently, the less developed countries by selling their carbon permits to the richer countries would have signed away their opportunity to emit carbon and impede the pace of their industrialisation. Thus, the developing countries would be doubly disadvantaged.
Hence, the global ETS has an anti-development content. Even the developing economies that are growing much faster than OECD countries (even before the crisis) are afflicted with mass poverty. Surely, global carbon management, important as it is, should not slow efforts to reduce mass poverty in these countries. Given that higher economic growth is the most tried and trusted tool for poverty alleviation the global ETS needs to be finetuned to address these genuine concerns. Whereas the quantitative impact of the global ETS on the developing countries can be tempered by staggering their carbon reduction requirements over a longer time horizon and giving them a more generous initial allocation of carbon permits, these efforts need to be supplemented by a qualitative change in efforts to address the carbon issue. In particular, developing countries need to get accelerated access to new technology for carbon reduction as well as for generation of energy from non-traditional sources. The global ETS needs to be supplemented with a well thought out technology transfer policy to which even the emerging economies can be expected to make contributions in cash and human resources. Without such efforts, the global ETS is likely to have an adverse impact on developing economies.
The world has seen successful examples of such technology transfer in the past. For instance, the Green Revolution technologies led to sustained and significant reduction in mass hunger in many parts of the world .The time has come for similar action on the carbon front.
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written by dict, 2011-02-13 13:39:35
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written by karigar, 2009-11-01 13:21:16
Greed and/for Glory seems to be the downfall o so many successful civilizations...
On a related note, Dilip Chalraborty, Prof Emeritus in Archaeolgy at Cambridge, is making hte extremely cogent point that the one common thread thru ancient Indian civiliation, from the Sindu Sarasvati (yeah..'Indus'/Harappa) to the Vedic & later, the structures no doubt were dwarfed by the grandeur of the Egyptian & Inca Behemoths.......but this also shows a sociery roted in realism, 7 fairly egalitarian, since it did not 'invest' in Slave labor, without which, mosr experts aver, these Uber Huge structures could never have been made in the ancient world..
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written by P. Desikan, 2009-10-31 18:28:30
In the light of a minister in India trying to take credit for the way forests had been allowed to stay unspoiled in ancient India for thousands of years, it is interesting to find the coverage given to the research conducted by some US scientists to reveal fine forest-friendly practices of the Maya well over 3000 years ago.
http://www.eurekalert.org/pub_releases/2009-07/uoc-usd072209.php
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written by karigar, 2009-08-11 16:37:44
How strong/meaningful is this argument? (Other than the complete blank-out of the conservation history of traditional, pre-industrial India)
http://news.rediff.com/slide-show/2009/aug/11/slide-show-1-forests-are-indias-rescuer-says-jairam-ramesh.htm
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written by Raghbendra Jha , 2009-07-30 12:50:52
On the issue raised by Mita - your analysis is fine, except for one thing. Whereas the NCAER modelling and that of many other agencies talks of carbon entitlements and permits there has been very little discussion of the developmental impact of the ETS. This is the focus of my article. We do not have any reliable estimates of how India's industralialistion strategy will be affected by alternative ETS, how her real exchange rate will behave, how strong will be the Dutch disease effects. In this context the uncritical application of Intellectual Property Rights (IPRs) is going to hurt just as it has hurt in the fight against AIDS. I am not arguing with the carbon computations - at least not in this article - I am concerned about the developmental impact.
Thanks for your interest.
Raghbendra Jha
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written by Mita, 2009-07-30 09:40:22
For those not familiar with emissions trading, there are two main types of emissions allocation schemes presently - Grandfathered Emissions Allocation (GEA) scheme and Equal Per Capita Emissions Allocation (EPCEA) scheme. So far emission trading has been restricted to developed nations only but this is going to change soon. The developed nations are pushing for GEA as the scheme allows for permits allocated on the basis of the aggregate emissions level of a predetermined year, say, 2010. However, if India participates in this with a fixed quota of emission permits it will become a net buyer of tradeable permits soon as it’s population is expanding and it’s on a high growth mode. This will slow it’s GDP and increase poverty.
The EPCEA scheme, on the other hand, is more beneficial to India in which the aggregate emissions entitlements for India in different years are arrived at by multiplying the average global per capita emission (4.58 tonne per capita as estimated to be in 2010) with India’s population for the corresponding years. India, because of its increasing population, will have an ever-increasing quota of emission permits. A modeling analysis by NCAER (National Council of Applied Economic Research) of EPCEA for 30 years (from 2010-2040) shows that India will have surplus emission permits to sell in the global market till 2036. Till that time, the sale of permits results in flow of transfer payments from rest of the world to India enabling an expansion in investment in the domestic economy, which, in turn, induces large gains in GDP, consumption and poverty reduction. After that time, per capita emission surpasses the 2010 world average causing a cessation of the trading benefit to India as it turns from being a seller to a buyer of internationally tradable emission permits.
NCAER is also floating another idea of India’s participation in global emissions trade under EPCEA commingled with enhanced energy efficiency improvement (EEI) in the domestic economy. Under this scenario gains are now accompanied by a decline rather than a rise in cumulative and annual per capita emissions. India has ambitious plans to create the world’s first market for trading credits for energy savings.
As per the technology transfer, India would do well to develop it’s own clean technology. It has leap frogged development in telecom - to mobile over landlines and it can do it again rather than take the messy development path of the developed nations or wait for them to provide technology.
Mita
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written by P. Desikan, 2009-07-29 16:06:41
Your key proposals,-
In particular, developing countries need to get accelerated access to new technology for carbon reduction as well as for generation of energy from non-traditional sources. The global ETS needs to be supplemented with a well thought out technology transfer policy to which even the emerging economies can be expected to make contributions in cash and human resources. Without such efforts, the global ETS is likely to have an adverse impact on developing economies.
will ensure simultaneous benefits of continuing to address global concerns on carbon emission and the avoidance of slowing down of the progress of developing countries.
Warm regards. Partha.
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written by karigar, 2009-07-29 16:01:49
Indeed the populist as well as the elite pressure in the rich countries is pushing them to extract more & more concessions from the poor countries, especially India & China, and the exercise looks more & more like a game where the big boys pretend to be little boys & wants to be treated like one in the name of equality, etc...
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