Will Global Convergence of Per Capita Emissions Lead the Way to Meeting the UNFCCC Goal?

Abstract

One of the contentious issues of the ongoing climate negotiations is the huge differences in per-capita CO2 emissions between Annex I and Non-Annex I countries. This paper analyzes the costs of reducing this gap using a global computable general equilibrium (CGE) model. A range of carbon taxes are considered for Annex I countries as policy instruments. Results show that the average per-capita CO2 emissions of Annex I countries would still remain almost twice as high as those of Non-Annex I countries in 2030 even if the CO2 emissions of the former are reduced by 57% from the baseline through a heavy carbon tax of $250/tCO2. The global reduction of CO2 emissions would be only 18% due to an increase in CO2 emissions in the Non-Annex I countries. This reduction would not be sufficient to stabilize atmospheric CO2 concentration at the level implied by UNFCCC to avoid dangerous climate change. The $250/tCO2 carbon tax, on the other hand, would reduce Annex I countries’ gross domestic product by 2.4%, and global trade volume by 2%. This paper concludes that a demand for the convergence of per capita emissions between industrialized and developing countries would not be fruitful in climate change negotiations.