Will a Carbon Tax Reduce Developing-Country Emissions?


Mankiw reckons he knows what Larry

Summers’s Big Idea is: a carbon tax. The two of them are old Harvard buddies,

so I daresay Mankiw is right. I am a bit puzzled, though, given this, from Summers’s


The most serious problem with the Kyoto framework is that it is unlikely

to generate substantial changes in developing country policies. As my Indian

hosts explained on a recent visit, developing country policymakers are not

likely to accept binding targets on their energy use or greenhouse gas emissions

that fall way short on a per-capita basis of emissions levels in the industrial


Nor is it reasonable to expect them on the basis of dubious projections of

economic trends and future technological developments to commit to energy

use goals that fall short of patterns observed in the rich countries.

The truth about climate change policy is that developing countries are where

most of the future action has to be. They will account for 75 per cent of

the increase in emissions over the next quarter century and are now making

the infrastructure investments that will shape their future economies.

A carbon tax is a hard enough sell when it’s one country implementing it; an

international carbon tax would be a political non-starter. So how does Summers

reckon that a carbon tax would "generate substantial changes in developing

country policies"? I guess we’ll just have to wait and see.

This entry was posted in climate change. Bookmark the permalink.