The NYT has a column this morning that makes the true point that the cheapest way to reduce greenhouse gas emissions is to pay developing countries not to pollute. The problem is that basic argument is not right and the proposed solution is inadequate. The problem with the basic argument is that China's economy is not hugely inefficient in energy terms as the article claims. China's GDP is almost 80 prercent of the size of the U.S. economy, not one third the size, as the column claims. This means that it should not be surprising that China may soon pass the U.S. in greenhouse gas emissions. The other problem is that the mechanism for paying for reductions he proposes is not likely to accomplish much. As has already been shown with other projects, it is easy to game single project reductions and very expensive to monitor the process in any case. It would make far more sense to provide China a generous emissions target (comparable to its baseline growth) along the lines of the Kyoto agreement, and the allow it to see permits to other countries (who would get more stringent targets than they have at present). This would make a more efficient and enforceable system.
--Dean Baker
