The United Nations Framework Convention on Climate Change (UNFCCC) divides countries into two groups. “Annex 1” includes the rich industrialized countries as well as economies in transition. “Non-Annex 1” members are the poorer and developing countries, but include China and India. In the negotiations on action to respond to global warming, the Non-Annex 1 countries assert that developed countries are the guilty party. They are guilty of causing climate change based on their historical cumulative CO2 emissions. The threat of global warming prevents Non-Annex 1 countries of similarly basing their development on cheap fossil fuel. Thus, they insist that they should be financially compensated by the rich Annex 1 countries that have been responsible for the bulk of cumulative CO2 emissions. For Non-Annex 1 countries, financial compensation is a prerequisite for discussing their own post-2020 emissions reduction plan. This brief, addressed to the negotiators, argues that care should be taken in any bid for compensation. Annual emissions from Non-Annex 1 countries have been larger than those of developed countries since 2003. Depending on the time period chosen for determining compensation and other contentious assumptions, Non-Annex 1 countries may end up owing money to the wealthy countries.
Hot Air, Guilt and Arbitration
CIGI Policy Brief No. 32