Overview. Oh, I think I get it now.
Xernon wrote:Reliance on fossil fuels is perhaps one of the biggest, if not the biggest issue, facing nations due to the negative effects of fossil fuel usage. So I don't think having specific milestones and strong mandates is unreasonable given the context of the problem that the resolution is trying to highlight.
Xernon wrote:I just think it ought to be complimented with other mandates to actually make it feasible for member nations to transition to clean energy reliance. And I don't see the issue/
conflict in having fossil-fuel usage reduction targets and simultaneously putting in place emission caps while fossil fuels continue to be burned.
Xernon wrote:GAR 445 does a good job of tackling the first point with how it structures and sets up gas emission caps and trades.
But it still puts many nations, the ones which are able to shoulder the punitive fees and buy emission credits, in a position where they may continue to rely on fossil fuels to meet their energy demands. In my opinion, it also puts significant pressure on
low resource member nations to meet their emission caps, even with the trade scheme present. That's part of the reason why I strongly believe that a more comprehensive framework that tackles the clean energy transition from all angles is needed.
It doesn't seem you understand what a cap-and-trade scheme does. See eg
explanation in Core-Econ,
The Economy ch 20.5; Lawrence Goulder,
Markets for Pollution Allowances: What Are the (New) Lessons?" (2013) 27 J Econ Persp 87. The point of the scheme is to balance the economic interest of productive activities with its costs to the environment. The point of the cap-and-trade programme is to set a binding cap on the total amount of pollution abatement (in this case carbon dioxide emissions from all sources). Under the GA 445 cap-and-trade programme, because the total cap is set on a global basis and is binding, there is little if any anthropogenic climate change.
Applying a blanket demand for reductions runs into the exact problem that cap-and-trade schemes are meant to solve. There is substantial variation in the cost of pollution abatement between different firms. Enforcing a haircut to emissions ignores that variation and imposes substantial costs on countries when cheaper emissions reductions could be found elsewhere.
A graphical illustration can be found here:
But more textually, let's explore this. Consider two firms, firms A and B. Firm A has a marginal economic cost (so inclusive of foregone benefits, eg foregone development,) of 30 credits for abatement of one unit of pollutant. Firm B however has a marginal cost of 60 credits for the same abatement. Because both are marginal costs, the total cost is the sum of their integrals.
Forcing both to abate 10 units would cost therefore `15A^2 + 30B^2`. Substituting 10 leads to a total cost of 4500. But the point of cap-and-trade is to do better than just telling everyone to cut back. Firms that can abate more inexpensively would shoulder less of a burden. They should be first to cut back. The minimum cost of 20 units of abatement is rather:
Yielding that A should abate 13.3 units while B should abate 6.7 units. The total cost in that situation would be 4000, meaning the first policy creates a deadweight loss of 500 credits.
Similar logic applies at the national level when considering national abatement costs.
While I would have preferred an integrated sub-national trading market, this doesn't seem feasible given different institutional environments; note also that the alternative, ie a tax, discussed in The Economy (see supra) is not feasible under GA 17. The point of the cap-and-trade programme is to trade the emissions permits (or previously quotas) such that the more efficient outcome emerges. (The proof that this actually occurs is basically the separating hyperplane theorem.)
The problem both with GA 357 "Promotion of Clean Energy" (and your replacement proposal) is that it tries to clamp back of national emissions generally without regard for differing costs and benefits. Nations which have small benefits to emissions shouldn't have the same burden as those which forego massive benefits. And nations which can abate easily should be rewarded (by sale of their emissions credits) while those which can't should shoulder the costs (by purchasing them). Achieving all these objectives while avoiding the disparate impact is what the WA cap-and-trade programme does.
This is exacerbated substantially when the reasons for imposing those reductions vanishes.
Because (not in spite of) GA 445 already imposes caps that stop anthropogenic climate change, this implies are few things. First, if a clean energy transition is necessary (in the real world it is), it is already happening due to market forces. Eg Chen et al,
"Renewable energy investment and carbon emissions under cap-and-trade mechanisms" (2021) 278 J Cleaner Prod 123; Du et al,
"Low-carbon production with low-carbon premium in cap-and-trade regulation" (2016) 134 J Cleaner Prod 652; Stuhlmacher et al,
Cap-and-trade and emissions clustering: a spatial-temporal analysis of the European Union Emissions Trading Scheme (2019) 249 J Environ Management 109. Second, from the overview, forcing abatement in a manner not proportional to the emerged equilibrium is allocatively inefficient.
Purposefully creating an allocatively inefficient mechanism to achieve a goal already achieved imposes costs for actually no benefits at all. Ergo there is no rationale for passing the replacement. Insofar as the arguments in this proposal deal mainly with the replacement's expected benefits, this proposal also gets undercut. That explains why I objected to Hulldom's statement which started this thread.
Now, to move beyond this tiresome exchange. What would I support? I would support repeal of this proposal, though not for these specific reasons. That said, insofar as it is already submitted the matter really only becomes one of the replacement.
What would I want to see in a replacement? I would want to see a technology sharing mechanism to make abatement less expensive. Such a programme also would help developing nations in developing without needing to buy scarce emissions permits (ie develop in a non-carbon-intensive way). That would have to take the form of a mechanism to subsidise or otherwise to arbitrate licencing fee disputes.
It would have to be something beyond the scope of what you describe here:
Xernon wrote:GAR 357 notes that the effects of fossil fuel reliance are an issue that extends beyond any one border. Yet, the resolution does little more than suggest that nations share technology. The replacement resolution creates an international organization whose purpose is to collaborate with member nations in researching and disseminating technologies that maximize energy extraction from clean energy sources.
Again, because your proposal does not violate GA 394's patent protections, it doesn't actually do anything. I already laid out why: GA 394 requires licencing fees to be paid unless literally no deal can be reached.
The idea that an international organisation would do the research and dissemination pretends that the patent rights would not exist, otherwise would enter the public domain, or would be granted to the GA. That is not how it works. The researchers who do the actual researching would be endowed with the patent rights if they are first to file. Otherwise, the person who is first to file has the rights. Reuse of the inventions would then require licencing fees. See GA 394 ss 3(a) (who can file), 3(d) (first to file), 3(e) (inventor rights protected by term).
What would not want to see? Targets for reductions. The entire purpose of the cap-and-trade mechanism is to get rid of the need for specific targets so nations can choose their own targets
within the cap framework. This is especially the case if those targets are assigned in a manner not consistent with the cap-and-trade scheme. The targets, if binding, would destroy the cap-and-trade mechanism and impose unnecessary economic costs on member nations.
Nor would I be interested in urging member nations to build power plants in places without power transmission infrastructure, which just requires them to construct that infrastructure at substantial cost both to the environment (steel and concrete manufacturing being large emission sources) and to taxpayers. Nor should the WA accept unexamined that certain specific pieces of infrastructure or development choices are in fact the "best" solution. It should first determine that to be the case before requiring or urging it. Or it should let member nations choose that for itself. Avoiding those quagmires is why the cap-and-trade mechanism sets broad strategic goals and then creates incentives to make them happen.
Just really broadly, at the 30-thousand foot level, the GA is not a blank slate on which you can build your proposal. Nor is it a direct reflection of the real world. We can be informed by what the real world does, but there are major differences: the GA does a lot of things which are far beyond what the UN (or RL international agreements generally) has accomplished. The difficulty with writing proposals nowadays is writing something that is harmonious with the existing body of law. That can be difficult.