North–south convergence and the allocation of CO2 emissions

Abstract

Mankind must cooperate to reduce GHG emissions to prevent a catastrophic rise in global temperature. How can the costs of reducing GHG emissions be allocated across regions of the world and simultaneously address growth? We postulate a two-region world and, based on sustainability and egalitarian criteria, calculate optimal paths in which a South, like China, and a North, like the United States, converge in welfare per capita to a path of sustained growth of 1 % per year by 2085, while global CO2 emissions are restricted to a conservative path, constructed from the Representative Concentration Pathway RCP3-PD scenario, that leads to the stabilization of concentrations around 450 ppm CO2, providing an expected temperature change not exceeding 2 °C. It follows from our analysis that growth expectations in the North and the South should be scaled back substantially, not only after 2085, but also in the transition period. Feasible growth paths with low levels of emissions would require heavy investments in education and knowledge. Northern and Southern growth should be restricted to about 1 % and 2.5 % per year, respectively, over the next 75 years. Politicians who wish to solve the global-warming problem should prepare their polities to accept this reality.