Polluters, Beneficiaries and the Fair Division of Mitigation Duties in a Globalized World

Abstract: We live in an increasingly globalized world, where economic activities transgress national borders. The activities of production and consumption are no longer restricted by geographical boundaries. This free flow of labour and capital is accompanied by increased emissions in the producing nations. Thus, any attempt to address the issue of carbon emissions needs to take this trans-national nature of trade, where production tends to be centred in the Global South. This implies putting the onus of reducing carbon emissions on developing or

underdeveloped countries, citing the polluter pays principle, while most of the produced commodities are exported. This has been seen as hampering development, making many developing countries averse to the idea of emission reduction. This paper attempts to integrate

the PPP with the Beneficiary Pays Principle, and the Ability to Pay Principle to address this issue, utilizing the concept of embedded emissions to facilitate burden sharing to reduce the impact of carbon leakage as a negative externality of economic transactions.