There are obvious and (to some
people) surprising similarities between global climate change and global inequality.
Both are obviously global problems. Neither can be solved by a single country,
group or individual. In both cases, there are significant externalities and
consequently coordination problems. Both issues are even formally linked (that
is, not only conceptually): elasticity of carbon emissions with respect to real
income is around 1. This means not only that if person’s (or country’s) income
increases by 10%, emissions tend to increase at the same rate, but that the
distribution of emitters mimics the distribution of income. Since in the global
income distribution the top decile receives at least 50% of global income, it
is also responsible for at least one-half of all emissions.
But there are also significant
differences. The effects of global inequality are in part the product of high within-country inequalities
that obviously have to be dealt with at the level of nation-states. There are only
two parts that are truly global. The first is that high global inequality also
means high global poverty; the second is that high global inequality is due to a
significant extent to high inequality between countries’ incomes which in turn fuels
migration.
The issue of global poverty is an
ethical issue for all those who are not poor. It is not otherwise an issue
that affects the non-poor in their daily lives. Moreover since they do not share
space with the global poor, they, in their daily lives, tend to ignore them.
Migration is the only concrete
manifestation of global inequality that affects people in rich countries. If some
of them want to reduce migration, it is in their self-interest to help growth
of poor countries. But the benefits and costs of migration are unevenly
distributed within rich countries’ populations. Some groups like employers,
users of many services, and workers with complementary skills gain from
migration while others who compete with migrants, or those who are afraid that
their culture would be “diluted”, lose.
Thus the overall effect of global inequality on the lives of most people in rich
countries boils down to the effect of migration.
The effect of global climate change
is different in the sense that it is more remote in time and is uncertain. The
winners and losers are not clear. To combat climate change requires adjustment of
behavior by individuals and countries in order to forestall effects which lie in the future
and whose benefits are unclear, while costs of adjustment are obvious and
present. Individual adjustment, while entailing often significant monetary or
convenience cost for that individual, has close to zero effect on climate change
and is therefore not rational to undertake from a purely personal perspective. Change in the behavior of larger groups, induced by taxation of especially “bad” activities,
can produce effects but the distribution of benefits from these adjustments is unknown.
Even if the benefits were somehow equally distributed, a group that adjusted
its behavior would receive a very small share of all benefits. It is a typical externality
problem.
This implies that no group of people
and no individual country has an incentive to do anything by itself: they have to
be roped into an international framework where everyone is compelled to reduce emissions
and where, in the case of success, net benefits would be, most likely, unequally
distributed. (Note the similarity with social insurance schemes.) This is indeed
what has happened with Kyoto and Paris accords. To complicate the matters
further, however, nation-states are not really the best units to do this, although
they are the only ones through which, given the current global governance structure,
such policies can be conducted. This is because the man emitters who should be
targeted are the rich, regardless of where they live. Thus, a much more
appropriate approach would be an international (global) taxation of goods and services
consumed by the rich. But for that one would need to have an international
authority that would be allowed to tax citizens of different countries and to
collect revenues globally.
As I mentioned above, there is a
formal equivalence between global inequality and climate change. Migration,
which is the strongest “negative” (from the point of view of some) effect of global inequality, also requires
international coordination. The increased migration of Africans into Europe
cannot be solved by any individual country alone. It can be “solved” or rather
managed only by a joint action (distribution of quotas) involving both the emitting
and receiving countries. But unlike climate change which is basically considered
an overall “bad”, migration is not an
overall “bad”, but rather an overall “good”. Therefore targeting for more action
countries that are likely to be the largest emitters of migrants does not make
sense.
In fact, in the case of migration, we
deal with a “global good” that reduces global inequality and global poverty even
if it may in some cases produce negative effects. Because of these real or putative negative effects
(economic and social) we need rules that
would assuage some people’s fears lest
these people wreck and stop the whole process of migration. This is where the idea of “circular migration”
and differentiation between job-related rights (equal for all) and civic rights
(not available to migrants) comes from
(in my “Global Inequality” as well as in the forthcoming “Capitalism, Alone”). In the case of climate change, we are dealing with something that is essentially
a “bad”, but we have trouble making those who are generating the bulk of this “bad” pay for it and forcing them to change their behavior.
Thus in one case we try to keep what
is globally good (migration) by reducing fears of those who may, locally, be affected
negatively. In the case of climate change, we try to avoid something that is globally
bad by using the only instrument that we have (nation-state) which is clearly
suboptimal for that purpose. We are thus in both cases trying to devise what may be called “second-best”
solutions, mostly because of a political limitation called the nation-state.
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