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Green and fair economic growth with more expensive fossil fuels
Date:6/14/2010

Why are the international climate negotiations moving so slowly? Because countries have so far been unable to define what global fairness really is, says Thomas Sterner, Professor of Environmental Economics at the University of Gothenburg. Sterner and several other prominent economists including several recipients of the Nobel Prize in Economics spoke at the World Bank conference on development economics in Stockholm recently.

Sterner's research shows that it is indeed possible to achieve sustainable economic growth, reduced poverty and an improved climate if we make fossil fuels more expensive.

The European countries and USA have emitted more carbon dioxide to the atmosphere than anybody else. Yet, in recent years, fast growing economies such as China and India have been picking up the Western pollution habit. In fact, China has even surpassed the rest of the world and currently tops the not very flattering list of the world's leading greenhouse gas emitters. However, if we look at emissions per capita, then China is still far behind USA. And India's per-capita level is even much lower than China's.

'If there is such a thing as a right to emit greenhouse gases, then people and countries are valuing that right higher and higher. The question is whether some countries have more of a right than others', says Sterner.

Reducing emissions is very costly, and who is to pay? The answer to this question could be determined, says Sterner, by making all countries reduce their emissions by the same proportion, say by 50 percent. Another way would be to grant each individual in the world the exact same right to emit. If we were to implement the first alternative, so that all countries have to decrease their emission by the same percentage, then USA would get to emit 16 percent of the world's total greenhouse gas emissions, while India would have to make do with only 4 percent. If we instead were to implement the latter principle, that all i
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Contact: Thomas Sterner
thomas.sterner@economics.gu.se
University of Gothenburg
Source:Eurekalert

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