A modified GHG intensity indicator: Toward a sustainable global economy based on a carbon border tax and emissions trading

• Published in: Energy policy Vol. 57; pp. 363 - 380
• Main Authors: Farrahi Moghaddam, Reza, Farrahi Moghaddam, Fereydoun, Cheriet, Mohamed
• Format: Journal Article
• Language: English
• Published: Kidlington Elsevier Ltd 01.06.2013; Elsevier; Elsevier Science Ltd
• Subjects: Air pollution; Air pollution caused by fuel industries; Applied sciences; Carbon; Carbon border tax; carbon markets; Climate change; Cost; Cross border transactions; Emissions trading; Emissions trading system; Energy; Energy policy; Energy. Thermal use of fuels; Environmental tax; Exact sciences and technology; Fossil fuels; GDP; General. Regulations. Norms. Economy; GHG emissions intensity; Global warming; Greenhouse effect; greenhouse gas emissions; Greenhouse gases; Gross Domestic Product; human development; Indexes; Investment analysis; Metering. Control; Personal finance; Pollution control; Studies; Taxation; Emissions trading system; GHG emissions intensity; Carbon border tax; Measurement indicator; Greenhouse gas; Pollution control; Pollution prevention; Air pollution; Taxation; Emission intensity; Pollutant emission
• ISSN: 0301-4215; 1873-6777
• DOI: 10.1016/j.enpol.2013.02.012

It will be difficult to gain the agreement of all the actors on any proposal for climate change management, if universality and fairness are not considered. In this work, a universal measure of emissions to be applied at the international level is proposed, based on a modification of the Greenhouse Gas Intensity (GHG-INT) measure. It is hoped that the generality and low administrative cost of this measure, which we call the Modified Greenhouse Gas Intensity measure (MGHG-INT), will eliminate any need to classify nations. The core of the MGHG-INT is what we call the IHDI-adjusted Gross Domestic Product (IDHIGDP), based on the Inequality-adjusted Human Development Index (IHDI). The IDHIGDP makes it possible to propose universal measures, such as MGHG-INT. We also propose a carbon border tax applicable at national borders, based on MGHG-INT and IDHIGDP. This carbon tax is supported by a proposed global Emissions Trading System (ETS). The proposed carbon tax is analyzed in a short-term scenario, where it is shown that it can result in a significant reduction in global emissions while keeping the economy growing at a positive rate. In addition to annual GHG emissions, cumulative GHG emissions over two decades are considered with almost the same results. ► An IHDI-adjusted GDP (IHDIGDP) is introduced to universally account the activities of nations. ► A modified GHG emission intensity (MGHG-INT) is introduced based on the IHDIGDP. ► Based on green and red scenarios, admissible emissions and RED percentage are introduced. ► The RED percentage is used to define a border carbon tax (BCT) and emission trading system. ► The MGHG-INT can provide a universal control on emissions while allowing high economical growth.