Assessment of equity principles for international climate policy based on an integrated assessment model

Defining an internationally equitable distribution of the burdens of reducing greenhouse gases has been one of core concerns for as long as climate policies have been debated. This paper suggests the specific formulae and indicators for four equity principles for international climate policy including the ability to pay, egalitarianism, grandfathering, and historical responsibility. We introduce the carbon trading scheme into the integrated assessment model to assess and compare the global climate policies which are based on the four principles. To be specific, the regional emission caps are determined by the four equity principles, and all regions are allowed to buy and sell permits. Results show that none of the four equity principles creates a burden sharing arrangement that completely equalizes the benefits of each nation. To be specific, grandfathering is more beneficial to developed countries, while historical responsibility benefits developing countries more. From the global perspective, the global cumulative output of the grandfathering is 8% higher than that of the historical responsibility. In addition, international cooperation on climate change mitigation is necessary, because if individual nations undertake policies which are in their national self-interests, global cumulative CO2 emission will be over two times as much as that in cooperative scenarios.