| Summary: | One of the contentious issues of the ongoing climate negotiations is the huge differences in per-capita CO2 emissions between Annex I and Non-Annex I countries. This paper analyzes the costs of reducing this gap using a global computable general equilibrium (CGE) model. A range of carbon taxes are considered for Annex I countries as policy instruments. Results show that the average per-capita CO2 emissions of Annex I countries would still remain almost twice as high as those of Non-Annex I countries in 2030 even if the CO2 emissions of the former are reduced by 57% from the baseline through a heavy carbon tax of $250/tCO2. The global reduction of CO2 emissions would be only 18% due to an increase in CO2 emissions in the Non-Annex I countries. This reduction would not be sufficient to stabilize atmospheric CO2 concentration at the level implied by UNFCCC to avoid dangerous climate change. The $250/tCO2 carbon tax, on the other hand, would reduce Annex I countries’ gross domestic product by 2.4%, and global trade volume by 2%. This paper concludes that a demand for the convergence of per capita emissions between industrialized and developing countries would not be fruitful in climate change negotiations.
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