Cancun and global cap and trade
Just as we move onto the topic of international public goods and multilateral negotiations on trade and climate, a significant negotiating meeting is happening in Cancun Mexico (this follows on the heels of a meeting in Copenhagen a few years ago). What's being discussed and negotiated is how to put in place a global cap and trade agreement to limit global emissions that are believed to contribute to global warming. Under a cap and trade system a global cap on the amount of emissions (measured say in billions of tons of CO2 gases) is set and tradable emission permits are set equal to that amount. Loosely, if you want no more than say X billion tons of CO2 gas emissions in a year only X billion permits are issued. Each country is allocated a quota of permits, and these are allocated within each country and are made tradable on international markets. Then if say a coal-fired electricity generator has only enough permits for 1000 tons of CO2 gas but it wants to emit 1500 it would h...