Geoscience Reference
In-Depth Information
mum price. Countries could set their price at a higher level if they
desired. Verifying the actual carbon prices would require transparent
reporting by countries.
The process of setting the international norm price would require a
framework treaty. Decisions might take the form of weighted voting,
but they would clearly be a major and contentious set of international
negotiations. A key point to recognize is that negotiating the minimum
price would be much simpler compared to negotiating a complete set of
individual national emissions caps. The simplicity of a single carbon
price compared to country-specifi c emissions caps is an important but
elusive point. It can be illustrated with the example of negotiations over
dues to a club. Suppose that several people want to set up a club—for
golf, cricket, or duck hunting. People differ in their enthusiasm, prox-
imity, family size, and income. One approach is to negotiate dues on a
member-by-member basis, where each member would have a certain
share of the total. This procedure would require a long and painful
negotiation over shares. There may be clubs that negotiate dues on a
member-by-member basis, but I have never seen one in operation. This
is the approach of the Kyoto model, and you can see why it is has proven
so diffi cult and eventually fruitless.
Negotiating a single minimum price would be much easier than
negotiating emissions quotas. Germans might argue for a high price,
while Canadians argue for a low price, and Saudi Arabia for a penny
price. But once the price is set, there is no need for any further negotia-
tions about the differentiated prices for each country. You can see from
the example of club dues why negotiating an international carbon price
is simpler and more likely to produce a constructive outcome than ne-
gotiating emissions reductions country by country.
The administration of the harmonized price would be different
from the cap-and-trade system. Countries could determine the price
using whatever mechanism they choose. Even though countries would
agree to meet the minimum international price, the agreement would
not dictate the mechanism by which countries meet their obligations.
Some countries might simply use carbon taxes. Others might implement
