I, in turn, excerpt Economist's View:
Larry Summers begins a series of two columns on approaches to solving the global warming problem. In this column, he looks at potential pitfalls with existing plans as embodied in the Kyoto protocol, and in the next he'll examine other approaches with more attractive features, but which presently have less political momentum:
[Summers] There is a very real danger that the global cap and trade approach ... enshrined in the Kyoto protocol – now favoured by most European governments – could be ineffective or even counterproductive by substituting for more realistic approaches to the problem. Kyoto is now the only game in town for those who do not want to be ostriches with respect to global climate change and so one has to hope for its ultimate success. But it is surely useful to try to be clear about the potential pitfalls...
...
First, the Kyoto approach depends on the questionable premise that nations will, in fact, be bound by binding targets or penalties for not meeting them. ......
Second, carbon markets are invitations to engage in pork-barrel corporate subsidy politics on a massive scale....
Third, the most serious problem with the Kyoto framework is that it is unlikely to generate substantial changes in developing country policies....
Perhaps these problems and others, like the difficulty of establishing emissions targets given the magnitude of economic uncertainties, can be overcome with goodwill and extensive thought. But next month I shall suggest approaches that, while less dramatic in their immediate claims for emissions reductions, may over time provide a more secure foundation for the progress that the world must have.
Quick reply to problem #1: Aren't all international agreements subject to this problem?
Quick reply to problem #2: To me, giving away permits vs auctioning is a second-order, distributional issue. Most of the permits in the acid rain program are given away, and we term this program a humongous success.
Quick reply to problem #3: Yes, we need participation from developing countries. And the only way to get developing countries to sacrifice is for rich countries to sacrifice first.
I'm looking forward to the solutions piece but, in a month?, that seems like a long time away to this blogger with the patience profile of a 2-year old.
