The Green Files > Harry Clarke » Trade & the environment

[Harry Clarke] This case is not diminished by the fact that some countries in the developing world might have low willingness-to-pay for environmental quality.  It still makes sense to internalize external costs globally by attaching a uniform global price on GGEs and by then addressing particular distributional concerns using compensatory transfers.  This isn’t just abstract economic theory. If one considers the forthcoming UN climate change negotiations in Copenhagen, the issues are as much about compensations, development assistance and finance to developing countries from developed countries as they are about mitigating GGEs.  This is as it should be.

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[Harry Clarke] Some economics of trade policy & the environment: This case is not diminished by the fact that some countries in the developing world might have low willingness-to-pay for environmental quality.  It still makes sense to internalize external costs globally by attaching a uniform global price on emissions - a non-uniform price implies inefficiencies if trades on this basis are possible - and by then addressing particular distributional concerns using compensatory transfers.  This isn’t only abstract economic theory. If one considers the forthcoming UN climate change negotiations in Copenhagen, the issues are as much about compensations, development assistance and finance to developing countries from developed countries as they are about greenhouse gas mitigation policies.  This is as it should be.

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