Efficiency, Equity and Burden—Sharing

This chapter focuses on the three inter-related issues of efficiency, equity and burden-sharing. There is a growing recognition that for international environmental problems1 — where the achievement of an environmental goal requires the co-ordination of actions among separate sovereign states — it is important that any policy initiative2 should not only be efficient (i.e. that the goal is achieved at least cost) but also that it must be equitable (i.e. that the burdens associated with achieving the goal are distributed fairly). As Rose (1992) observes in relation to global warming, “[While] equity considerations are usually accorded a secondary role in most economic policy-making, in the case of global warming, there are reasons why they may be paramount”. This view is reinforced by Banuri et al (1996) who postulate that, in order to gain widespread participation, international agreements on reducing pollution must be perceived as being equitable — particularly among regions and countries.