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On GHG emissions from China and India

With COP26 having just ended, there remains the ever-present question of whether it is “fair” for countries like China and India to be told to emit less carbon dioxide than the Americas and Europe have done in the past hundred years. The argument goes something like this: from the mid-1800s until now, richer economies have benefited enormously from the burning of fossil fuels. Hence, the thinking goes, it’s hypocritical for these developed societies to object when poorer countries emit similar amounts. There are a few problems with this line of thinking.

It is true that the US has emitted far more per capita than the rest of the world. But in order to generate large amounts of electricity, at the time there was no alternative to emitting large amounts of CO2. The choice was either to emit CO2, or to not produce electricity at all. That doesn’t mean we should be forgiven for those emissions, but the point is that you cannot compare pre-2000 electricity generation with current electricity generation. It’s not an apples-to-apples comparison. In the 2020’s, there are now cheap alternatives to fossil fuels, with solar, wind, batteries, and perhaps some nuclear all being economical.

For this argument I’ll be calling a hypothetical developed country “Narnia” and a hypothetical developing country “Oz.”

So, what is a fair way to determine a country’s energy mix?

I’ll get the obvious one out of the way first: The only ethical course for Narnia (i.e. USA and EU) is to reduce Narnia-wide emissions by 80% to 90% within 10-15 years. Despite the screams of uninformed pundits, most of this transition can be done economically.

But this discussion was about developing countries–how should we think about their obligations? Here is a suggested framework.

First of all, we need a point of reference. We should be roughly comparing Narnia and Oz at similar points in their development. We could use GDP per capita as a proxy for this–for example, China’s current GDP per capita is $10,500, which was that of the US in 1978. So let’s say we roughly use the inflation-adjusted cost of dirty American electricity in 1978, perhaps corrected for things like how large China’s industrial sector is. (This probably isn’t actually a good metric--it’s just for illustrative purposes.)

Now here is the main point. We should consider the difference in cost burden between the two countries, at similar stages in development. Here is an example set of criteria to clarify the concept.

To simplify the example, let’s define the following energy mixes:

  • Energy mix 1 is the energy mix used at a similar stage of development by Narnia. C1 is its cost at the time it was used, adjusted for inflation.

  • Energy mix A is the cheapest possible energy mix available to Oz, likely including lots of fossil fuels. CA is its cost.

  • Energy mix B is a much lower-carbon energy mix in Oz and is consistent with staying under a 1.5C global temperature rise. CB is its cost, which at the moment higher than CA, i.e. CB > CA.

Basically, the relative costs of these three energy mixes should determine how much Narnia should be on the hook to compensate Oz. But none of the following scenarios allow for Oz to build energy mix A.

If CB < C1 then:

The equitable path for Oz is to simply use energy mix B. It’s already cheaper than what Narnia had to pay, so Oz has no right to complain.

If CA > C1 then:

The equitable path is for Narnia to pay Oz $(CB - CA)/2 in order to use energy mix B. In other words, they split the difference between the cheapest option and the climate-friendly option.

If CB > C1 > CA then:

The equitable path is for Oz to use energy mix B, and for Narnia to pay them $(CB - C1)/2.

(This leaves out all sorts of considerations, like price uncertainty, retirement rates of existing power plants, and integration over time. It’s just a zeroth approximation.)

In all of these scenarios, it is never assumed that a country has the right to emit just because another country did in the past. But it does assume that Narnia is responsible for ensuring that Oz does not bear an economic burden heavier than Narnia did.

This is mostly an academic ethical argument. Policy is never decided by the sort of accounting method described above. But even these idealized discussions can serve a purpose. First, they might dissuade influential Western intellectuals from thinking it’s appropriate to go easy on some countries’ emissions. Second, if a cost-difference metric is accepted as a part of the general discourse, it becomes harder for leaders of developing countries to claim the right to burn coal. We should be strictly against virtually all new fossil fuel infrastructure in all countries, including the developing ones–but if the above cost analysis shows that they are paying too much, then these countries have the right to demand payment from us.


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