Climate Responsibility as a Distributional Issue

It is evident that the problem of global climate change is closely bound up with questions of distributional justice, both intra- and intergenerational. Questions of justice are raised by two kinds of burdens: reductions in the emission of greenhouse gases, and the financial and knowledge transfers necessary to enable the poorest countries to compensate the harms suffered by the ongoing process. Both burdens involve considerable costs and opportunity costs. On the backdrop of a prioritarian version of utilitarianism, it is argued that the answer should be a split strategy. While reduction of emissions should be based on the polluter-pays principle, obligations of compensation should be based on the criteria of overall economic strength.

Distribution in Benefit-Cost Analysis: A Review of Theoretical Issues

The paper investigates the distributional basis for benefit-cost analysis when utility functions are independent. The change in utility for any individual caused by a given project can be written as the product of the marginal utility of income (Λ) and the income equivalent (measured by the appropriate area under the demand curve). Three theoretical positions are possible to deal with the distributional issue. First, one may assume Λ to be the same for all those affected by the project. A second position admits that Λ is dependent on income and tries to determine how different people view their own marginal utilities of income. Finally, it is possible to define the marginal utility of income in terms of social value judgments. This requires a social welfare function which reflects either the collectivity's expressed consensus or the decision maker's own set of judgments. The first approach is most commonly adopted and most convenient for actual analysis. The paper advocates more explicit analysis of distributional effects than is commonly undertaken and disputes the claim that such analysis is outside the professional realm of the economist.