A new approach at Copenhagen (1)

To classify a nation as “developing” or “developed” is insufficient to decide its climate-change responsibilities. In the first segment of a three-part essay for chinadialogue, leading economist Hu Angang explains the alternative.

[Produced in association with Rutgers Climate and Social Policy Initiative]

The current classification of nations as either developed or developing does not reflect reality and is preventing agreement on an emissions reduction scheme that is acceptable to all nations. This article, which will be published in three parts, proposes two new principles to be used for classification during emissions reduction processes. First, nations should be assigned to one of four categories according to their Human Development Index (HDI) ranking, rather than classed as simply developed or developing. Second, major greenhouse-gas producers should be made to bear greater responsibility for emissions reduction. These principles can help produce binding targets for emissions reductions worldwide. The paper then calculates the emissions reductions China should make, and proposes a “road map” for use within China, based on provincial net carbon sources and HDI figures. The paper holds that an emissions reduction commitment by China will help promote a global consensus on climate change.

A new classification

The future of humanity is at stake. The United Nations Climate Change Conference in Copenhagen in December is our last chance to save the planet, and there is the possibility of failure. If emissions targets and responsibilities are not set, we will all suffer the consequences — and China is no exception. The world’s most populous nation, and one of its geographically largest, is environmentally vulnerable. China could benefit most from global public goods, but it also has the most to lose from climate change.

Despite living in an ever-closer global village, international organisations and domestic politicians have failed to find a plan they can agree on. Differing national demands and interests mean consensus is elusive. But as the Copenhagen meeting approaches, the chances of failure rise – and failure there will be a failure for humanity.

Identifying a universally acceptable international climate-change policy and emissions reduction proposal before Copenhagen is essential. This scheme will need to redefine developing and developed nations and establish a dynamic framework within which future obligations will be set. The United Nations Framework Convention on Climate Change (UNFCCC) divides nations into two types, developed or developing, with different policies for each. But this is a very crude categorisation. Defining developed nations is relatively clear: for example, we can take the countries in the Organisation for Economic Cooperation and Development (OECD). But over 100 nations are described as “developing”. Emissions reduction obligations fall on the shoulders of a small number of developed nations; this is of no benefit for cutting global emissions. Meanwhile, the lack of action from developing nations gives some developed countries a pretext to refuse to reduce their own emissions.

Therefore, we must recategorise countries by taking into account average greenhouse-gas emissions per capita, total greenhouse-gas emissions, historical and current responsibilities. We can use efficient and equitable principles to place each of the roughly 200 countries of the world into new categories, replacing the binary distinction of developed or developing. This will determine the emissions reduction contribution of major polluters in terms of their contribution to global emissions. To this end, this article has two proposals.

First, the binary distinction should be replaced according to the HDI, an index between 0 and 1 that ranks countries by their levels of development. I propose dividing countries into High HDI (above 0.8), Medium-high HDI (0.65 to 0.8), Medium-low HDI (0.5 to 0.65) and Low HDI (less than 0.5). The planet is thus divided into four sections.

The High HDI group contains 70 countries, with a total population of 1.6 billion. These nations would make major, non-conditional emissions cuts, as specified by the UN. Over time this group will expand. According to the Human Development Report 2005, published by the United Nations Development Program (UNDP), there were 57 nations in this group in 2003, with a total population of 1.21 billion, 19.2% of the global population. An increasing number of nations will become non-conditional emissions reducers.

The Medium-high HDI group (of which China is now a member) has a population of 2.44 billion, 37.41% of the world total. These nations would be second-tier emissions reducers: conditional reducers. Targets would be set according to the gap between the nation’s HDI figure and the 0.8 threshold; the smaller the distance, the greater the obligation. When the country enters the High HDI group, they become non-conditional reducers. In the case of China, the country’s HDI in 2005 was 0.777. In 2010, it will reach 0.8, and China will then become a non-conditional reducer of greenhouse-gas emissions. A UN agency to monitor the actions and achievements of these two groups should be established.

The Medium-low and Low groups would not be obliged to reduce emissions, but voluntary reductions should be encouraged where possible.

Second, we must require greater emissions cuts from the biggest polluters. Currently the world’s 20 largest emitters account for 75% of total emissions. As the largest emitters, they should be the biggest reducers. And the greater their proportion of total emissions, the larger contribution they should make. Reduction quotas will be apportioned according to the negative externalities caused by global pollution: those with the highest emissions will bear a larger responsibility for reductions, and have higher targets to meet. Those 20 nations are headed by China and the United States, who account for 38.14% of global emissions. They are followed by Russia, India and Japan, each accounting for at least 4% of global emissions, and a total of 14.23%. A third group made up of the remaining 15 countries accounts for 22.89% of total emissions. Obligations will change in line with these proportions, and HDI figures will also be factored in. Fourteen of those countries are in the High HDI group, the non-conditional reducers of emissions. Five are in the Medium-high group, the conditional reducers. India alone falls into the Medium-low group, but as a major carbon polluter it should actively reduce its emissions. As it moves into the Medium-high group it will become one of the conditional reducers.

This HDI-based system could also be used to determine financing structures. High HDI nations would be major contributors of funds and technology; Low HDI countries would receive direct development assistance and free or low-cost technological assistance; Low-medium HDI nations would benefit from low-interest loans from international financial organisations and low-cost technological assistance; High-medium HDI countries would receive technological assistance. As the UNDP publishes HDI figures every year for all countries, they represent a simple and transparent basis for a global emissions reductions and the disbursement of economic aid.

These principles can be used to set binding targets. A nation’s emissions reduction targets will be determined by its stage of development, including its total emissions, average emissions per head and historical responsibilities. HDI is an excellent measure and should be used instead of GDP. Goals are also determined by contribution to overall historical and ongoing emissions. The 20 largest emitters have a direct impact on global targets and action, so their reduction targets and actual emissions will be linked. It is feasible to use these principles at the Copenhagen conference to determine a road map for emissions reductions by all nations until 2050, determining their obligations under a global emissions reduction agreement.

TOMORROW: Can China cut its greenhouse-gas emissions?

Hu Angang is one of China’s best-known economists. He is professor at the Chinese Academy of Sciences and Tsinghua University and the director of the Centre for China Study, a leading policy think-tank. Hu has worked as the chief editor for China Studies Report, a circulated reference for senior officials.

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