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Climate Change Ethics Get A Closer Look

March 22, 2021
Study suggests financial transfers to compensate climate winners and losers

Should polluters responsible for climate change be rewarded by sectors of the economy that may end up benefiting from it? A new economical and philosophical study — carried out by researchers at Princeton University, N.J.; University College Cork (UCC), Cork, Ireland; and HEC Montréal, Quebec — proposes this novel and probably unique approach to climate ethics.

Published in a recent issue of Economics & Philosophy, the study argues that policymakers must consider both the beneficial effects of climate change to “climate winners,” as well as its costs in order to appropriately incentivize actions that are best for society and the environment.

Authors Kian Mintz-Woo, formerly of Princeton and now with the department of Philosophy and the Environmental Research Institute at UCC, and Justin Leroux, professor of applied economics at HEC Montréal and Center for Interuniversity Research and Analysis of Organizations (CIRANO) research fellow, note their work appears to be the first to develop a systematic, ethical framework for addressing climate winners — as well as those harmed — using financial transfers.

The authors start from the premise that human activity is responsible for climate change and the global rise in temperature — along with its increasing variability —already is disrupting the living conditions of the world’s population. Examples here include reduced health because of a rise in respiratory illnesses and infectious diseases, and decreased safety brought about by extreme weather conditions.

Alongside this anthropocentric view, they add, the impacts on non-human animals and potential intrinsic natural value would have to be added to the list.

In addition, research suggests the worst is yet to come.

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At the same time, they argue, climate harm is unevenly distributed. However, what makes the climate problem even worse from the perspective of justice is this disparate impact is all but unrelated to the distribution of greenhouse gas (GHG) emissions responsible for it.

This in turn, they point out, has in recent times spurred a large literature on climate justice. So while determining how to handle the plight of victims of climate change is definitely a crucial issue, a complete treatment of the matter of climate justice must also explicitly account for the growing evidence that some end up benefiting overall from the changing climate. Nevertheless, the two emphasize that, globally, the negative consequences of climate change are expected to dominate.

Mintz-Woo and Leroux call their approach “polluter pays, then receives.” This involves a more traditional start, with polluters first compensating those most harmed by climate change. Subsequently, polluters would be eligible to receive compensation from those who benefit passively from climate change.

For example, countries at far northern latitudes such as Greenland could have more cod and mackerel resources in a warming world. Crop production in high latitude locations such as the U.K. and northeast China could benefit, too.

Gains also could accrue outside of agriculture and wildlife, with lower heating costs in areas where temperatures rise and opportunities to extend valuable tourism seasons. Cheaper trade could also occur as an ice-free North West passage would provide an easier and more lucrative route between the Atlantic and Pacific oceans.

Another potential benefit of this approach, notes Leroux, is that by considering both the positives and negatives of climate change together, sceptics would find it harder to claim discussions on the subject are alarmist or oversimplified.

To put their idea into perspective, the authors looked at Canada as an example of how this compensation approach could work in practice.

A country with high emissions per capita, the first step for Canada would be to implement a national carbon tax to collect funds from GHG emitters. These funds would in turn mainly compensate victims of their emissions. However, in parallel with this taxation, a corporate tax would be levied on sectors of the economy that gain passively from climate change.

Tourism, which could be boosted by longer summer seasons in Arctic regions, is one such example. There would then be a mechanism to share these new corporate tax revenues back with the GHG emitters.

“Payments from passive winners to polluters could either help the polluters more fully compensate the groups that have been harmed by their actions or help fund the polluters’ own climate adaptation responses,” concludes Mintz-Woo.

Seán Ottewell is Chemical Processing's editor at large. You can email him at [email protected].

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