Emerging Markets and Climate Change: Mexican Stand‐off or Low‐carbon Race?

David J. Frame and Cameron J. Hepburn

in Climate Change and Common Sense

Published in print February 2012 | ISBN: 9780199692873
Published online May 2012 | e-ISBN: 9780191738371 | DOI:
Emerging Markets and Climate Change: Mexican Stand‐off or Low‐carbon Race?

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Schelling (1995) stressed the importance of correctly disaggregating the impacts of climate change to understand how individual interests differ across space and time. This chapter considers equity implications at a level of disaggregation which we consider insightful, but which is non‐standard in the literature. We consider a ‘three‐agent’ model, comprising the G20 North, the G20 emerging markets (the GEMs), and the rest of the world (ROW), and consider their impact on emissions and temperature increases to 2100. Using the MAGICC and RICE models, we calculate that simply stabilizing emissions in GEMs would avoid about twice as much warming as an 80 per cent emissions reduction in the North. We further show that decisions regarding the carbon intensity of economic development in the developing world are first order determinants of the likelihood of dangerous climate change in the coming century, and that early GEM participation in mitigation initiatives is essential if we are to safeguard the interests of the world's most vulnerable. Finally we argue that though this three‐handed strategic structure may lead to impasse, it may also stimulate a low‐carbon race between nations.

Keywords: climate change; greenhouse gas emissions; equity

Chapter.  9854 words.  Illustrated.

Subjects: Economic Development and Growth

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