TRADEABLE EMISSION PERMITS AND THE CONTROL OF GREENHOUSE GASES

This article reiterates the case for tradeable permits as a global policy option for limiting greenhouse gas emissions, and considers the detailed design of a global tradeable-permit regime, emphasising the importance of the initial assignment of property rights, and arguing that the relevant property rights in this case are the rights of every member of the world community to share in a sustainable global atmosphere and climate. The allocation of permits should therefore be done on a per capita basis across the world community, with the result that rents generated by the process of reducing carbon emissions would accrue to non-polluters, most of whom live in the 'South'. The international transfers of income and wealth implied by the proposed scheme are large but feasible. There is therefore a real prospect that an international convention on carbon dioxide emissions could end the debt crisis and finance sustainable development in the South..