Reduce Global Warming at Lowest Economic Cost : Environment: The countries most willing to reduce carbon dioxide emissions should be compensated in cash and goods.

The problem of global warming is sure to be on the agenda of the economic summit next week in Houston.

Although there are scientific doubts about the extent of the problem, there is no question that whatever is to be done must be accomplished on a global basis. The solution is not to ask individual countries to stabilize their emissions of carbon dioxide, as many environmentalists urge. What’s really needed, contrary to recent statements by some Bush Administration officials, is a global fund to compensate those countries that do more than their fair share of cutting carbon dioxide emissions.

Carbon dioxide is a primary cause of global warming. Emissions accompany the burning of carbon fuels such as gasoline and home-heating oil, and through industrial processes that use coal, oil or gas.

The key scientific fact that makes international cooperation necessary is that while carbon dioxide can enter the atmosphere from any point, it is distributed equally around the globe within 12 months. There is nothing to ensure that those countries that heavily rely on the burning of carbon fuels will bear the burden of the global warming that may result.

Reducing emissions of carbon dioxide is a more appropriate subject for international negotiations and coordination than the problems of monetary and budget policy that have been the standard subject of economic summits in the past. Although a change in American monetary or budget policy does affect the other key industrial countries, the primary impact is on the United States. Foreign governments can rather easily offset the effects of policies that spill over from the United States to their economies. But when it comes to carbon dioxide pollution, emissions produced in the United States have the same impact abroad as they do at home.

The global nature of much of the environmental problem was clearly recognized in the 1987 Montreal Protocol, in which the industrial nations agreed to cut in half their emissions of the chemicals (chlorofluorocarbons, or CFCs) that are destroying the Earth’s ozone layer. Many participants saw this as just the first step toward eliminating CFCs completely.

It would be a serious mistake, however, if the economic summit were to take the Montreal approach as the way to deal with the much larger problem of global warming and carbon dioxide emissions. The critical difference between CFCs and carbon dioxide is that it is feasible to eliminate CFCs altogether from the environment. In contrast, carbon dioxide can never be completely eliminated since emissions accompany not only virtually all industrial activity, but also are a biological byproduct of animal life itself.

Reducing carbon dioxide emissions involves economic costs. A country can reduce its emissions only by investing in more fuel-efficient technologies, by using more expensive fuels or by reducing its rate of economic growth. The economic cost of reducing carbon dioxide emissions differs among countries according to their current industrial technologies and agricultural practices.

Because global warming depends only on the total amount of carbon dioxide in the atmosphere and not on the country of origin, the goal of policy should be to reduce emissions in a way that has the lowest total economic cost, then distribute that cost among the countries of the world in a fair and acceptable way. Countries that can reduce emissions at lowest cost should take on a larger burden of reductions and receive compensation from the other countries in the form of cash and goods.

It would be wrong, therefore, if international negotiations to deal with global warming called for each country to stabilize carbon dioxide emissions at the current level or to reduce emissions by the same proportion. The United States is the largest contributor of carbon dioxide to the Earth’s atmosphere. But it would be inappropriate for America to make any reduction in its emissions if the economic cost per ton were lower elsewhere. A better approach would be for the United States to achieve its fair share of total global reduction by contributing to a fund that compensates other countries with lower cost opportunities.

The less-developed countries have some of the lowest cost opportunities to reduce carbon dioxide emissions. Those countries would rightly complain if they were simply told to reduce their emissions in order to improve the global atmosphere. But sufficient cash compensation from the rest of the world could make the request very welcome.

The economic summit is obviously not the time to work out the difficult issues of just how much global carbon dioxide reduction is desirable, nor how the total world cost of achieving that reduction should be divided. Those are problems to be assigned to the economic and environment officials and their staffs. But President Bush and the other leaders of the industrial democracies can take a big step toward an appropriate policy on global warming by declaring the correct principal: carbon dioxide emissions should be reduced in those countries where the costs of doing so are least, and the countries that bear that burden should be compensated by the rest of the world.