ECOFIN

UNITED NATIONS ECONOMIC AND FINANCIAL AFFAIRS COUNCIL

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United Nations Economic and Financial Affairs Council Yale Model United Nations Korea May 17 - 19, 2013

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Table of Contents How to Use This Topic Guide

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Topic I: European Economic Crisis Topic History 4

The Journey Towards Creating the EU

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Current Situation 10 In Actuality 14 Future Possibilities 16 Questions to Consider 18 Topic II: Environmentally Sustainable Development

in Emerging Markets

Topic History 19 Current Situation 22 Case Study: Air Conditioning 26 Questions to Consider 31 Glossary 32 Notes 34

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How To Use This Topic Guide

zThe information in this topic guide is designed to help delegates become acquainted with and knowledgeable about the issues at hand, and then to guide them in their own independent and more in depth research. To these ends, this guide lays out the general history and facts surrounding each topic, including outlines of some proposed solutions and stances regarding current problems. It also contains intext citations and lists of sources that can be used to investigate further the issues described here.

Delegates, please read this guide to understand what issues are key in these debates, what issues merit deeper research, and what your country might advocate in committee.

See the glossary at the end of the guide as well if you encounter terminology with which you are not familiar. And finally, if you have any questions or are seeking more guidance for your own research, please don’t hesitate to send me an email at benjamin.dellarocca@ yale.edu. I’ll do my best to respond to you promptly!

Also take advantage of the links and sources provided for you; they should give you access to useful information and arguments to help you arrive at solutions to these problems.

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Topic I: European Economic Crisis Topic History In today’s global economy, economic wellbeing in one country can greatly affect the fiscal state of other nations as well, and this proves especially true among nations so closely interwoven in a monetary union as the Eurozone nations. Throughout history, economic crises have posed major challenges to nearly all parts of the world, and recent years have shown how these times of trouble can spread very quickly across international lines. The modern day European Debt Crisis provides a very interesting--and very critical--example of the impacts that one nation can have on many others and of how different parts of the world respond very differently to such situations. But before we delve into the nature of the European Crisis specifically, it is important to first understand the history of the European union and how conditions conducive to economic crises might have been created, as well how economic crises in general have historically been addressed.

This section should help provide a small glimpse into how the

European Union formed in such a way that might have made it especially susceptible to the type of economic crisis that it is experiencing now and, generally, what makes its economic situation different from that of other regions or individual nations. Understanding these characteristics of the European Union will be key for addressing the situation it is currently in as well as prescribing any reforms intended to prevent future crises.

Before the Great Depression A long time ago, there was a lot less organized trade between nations.

With trade being a more localized feature, currency issues and the related monetary policies were not prevalent. As time passed, and more structured governments arose, mercantilism became the tool of choice for economic prosperity. As time went on the gold standard came into play in the 19th century, the stage was set for balanced trade between nations and the creation of precise exchange rates. As time progressed, of course, currencies changed in different ways, and, as detailed next, the gold standard became repealed in various countries, but the intricacies of global trade never only grew.

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As time progressed, nations began toying with monetary policy in order to try and benefit their own nation, sometimes at the cost of harming others.

The Journey Towards Creating the European Union Competitive Devaluation and the Call for Economic Unity As much of the world fell into hard economic times during the 1930s, nations began to turn away from the gold standard, causing significant changes in the global economy. Countries abandoned the gold standard to obtain flexibility in monetary policy. As a result of no longer needing to back their currency with gold, countries began engaging in competitive devaluation to lower the exchange rates for their currency, incentivizing foreigners to purchase their exports. When Franklin Roosevelt came into the Presidency of the United States, he made it clear that his responsibility was first to the US economy, and then to the world, and followed much of Europe in leaving the gold standard; at this point, the global economy’s shift away from gold-backed currency was nearly certain.1 “Beggar thy neighbor” policies took root as countries manipulated currency and used tariffs to boost

their productivity and employment at their neighbors’ direct expenses.2 Europe and the rest of the global economy was anything but united.

Ultimately, evidence indicates that abolishing the gold standard lifted the United States and other nations out of the Great Depression by giving them a flexible monetary policy; however, many believe that nations’ “beggar thy neighbor” zero-sum policy decisions greatly exacerbated the harms of the great depression, as they minimized trade and made markets inefficient. United States Consumer Price Index data from the 1930s demonstrates how with the abandonment of the gold standard, the value immediately began to decline, and deflation stopped, a healthier trend for the US economy.3 Still, in the long run, many maintain that the extended currency wars of the Great Depression era took significant tolls on nations’ economies.

In 1936, there was finally a ceasefire to currency wars, when the United States, France, and Great Britain signed the Tripartite Agreement as they recognized the harms of such disunity and competitive behavior.

This agreement called for currency values to be stabilized in each of the countries and brought equilibrium to the international exchange rate.4 This agreement also marks one of the first

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First Steps toward Economic Integration: The ECSC In the 1951 Treaty of Paris, six European nations made the first jump toward European economic integration by forming a common market, a free trade area in which nations have harmonized regulations and policies regarding certain traded goods or services. This treaty, signed by France, West Germany, Italy, Belgium, The Netherlands, and Luxembourg, provided for the European Coal and Steel Community (ECSC), Europe’s first supranational organization. First advocated by French Foreign Minister Robert Schuman, the ECSC’s primary purpose was to make further war between European nations not only “unthinkable,” but also “impossible,” insofar as European nations would have more economic ties with each other, making war bare drastic economic consequences for all nations.

Proponents of the ECSC purported to achieve this end by facilitating the trade of coal and steel products as well as by revitalizing the suffering coal and steel industries. Towards this end,

the six nations in the ECSC abolished border tariffs on coal and steel and conferred on the ECSC the power to make certain loans and investment decisions for the betterment of the member states and their industries.5

Ultimately, the ECSC was unsuccessful in reversing the long-term downward trends in coal and steel industries; however, the real long term impacts of the ECSC lies in the precedent it set as a European supranational organization, with institutions onto which member nations conferred significant powers.6 The ECSC’s decision making and policies were the result of the actions of a few institutions, but the most important and innovative of these institutions was the High Authority. The High Authority was an executive council with the power to issue opinions, which had no legal impetus, recommendations, which had binding aims but without specific means prescribed for attaining those aims, and decisions, which possessed the force of law. Those who served on the High Authority also pledged to act not in their own national interest, but in the interest of the common market as a whole. This framework reflects the start of the evolution of European efforts to create a more united Europe, as the first instance of European nations sacrificing some degree of their United Nations Economic and Financial Affairs Council 6

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own authority to an international organization deriving its power from member states and with binding authority over member states. (Here is a link that discusses why unity is so important for Europe, highlighting the importance of this and future steps toward unity).

Transition to a Customs Union: The European Communities European nations integrated further in 1957 with the establishment of the European Three Communities, a term that refers to three distinct yet interrelated institutions: the already existing ECSC, the European Economic Community (EEC) and the European Atomic Energy Community (Euratom). From an economic standpoint, the EEC represented a trend towards more economic unity, as it entailed harmony in tariffs on a wide variety of member nations’ marketable goods and services, as well as in tariffs placed upon nations external to the customs union. Facilitated trade among the six EEC nations accrued those nations economic

Eight years later in 1965, the six member nations decided to cement more strongly their union by formally merging the ECSC, EEC, and Euratom. With the passage of Merger

Treaty, the executive institutions of each of these bodies became merged effective 1967. The two decades from 1973 to 1993 saw increased growth for the European Communities.

The Eurozone: Becoming a Monetary Union As membership in the European Union increased, Europeans began to advocate more strongly a more unified Europe; to this end, on January 1st, 2002, the first Euro currency coins and notes were issued for nations who had agreed to join the Eurozone area of nations with a common Euro currency. This marks the final step of the Eurozone’s transition into a currency union--a step that is very important to understand in order to understand the circumstances of this crisis.

With the introduction of the Euro, financial transactions among different Eurozone nations became much easier and less costly, given that the Euro renders currency exchange unnecessary.

However, what is noteworthy about the formation of the Eurozone is that this choice to adopt once currency--and thus to vest the power to print that currency into one international institution, the European Central Bank--was made before any significant fiscal integration had occurred. The ECB is the first institution of its kind in European history: it is an United Nations Economic and Financial Affairs Council 7

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institution with the power to regulate the money supply of an entire group of nations, not just one sole nation with its own currency. Furthermore, all nations unify their own fiscal policy--spending and taxation--as well as their own monetary policy; basic governmental spending and taxing decisions always exist in any government, and thus always necessarily precede the creation of monetary policy and of a central bank. However, this is not the case for the Eurozone, which is a region that has one unified monetary policy, though no centralized fiscal policies, as each nation retained essentially all its autonomy for making spending and taxation decisions. This decision to integrate monetary policy before fiscal policy tie the economies of the Eurozone nations together in such a way that they do not have all the tools nations usually have to fix their economies when necessary.

Eurozone nations’ economies remain uncoordinated in terms of their economic cycles, but cannot individually use monetary policy to correct their cycles when they see fit, and all nations suffer appreciation and depreciation of their common currency the Euro in the same capacity at the same time. This unusual and unprecedented state of interconnectedness seen in the

Eurozone must be carefully considered and addressed before implementing any resolution to combat the current crisis.

The Global Depression and Recovery Many of the problems visible in today’s global market are similar to many of the same issues faced during the time of the Great Depression.

World trade declined sharply, workers faced a period of decreasing wages and increasing employment, currency values fell, and due to the collapse of many banks, the investment sectors in North American and European economies were in a state of disrepair.

These problems brought about political and social changes in the world, and may very well have fueled the fires for a Second World War. It is interesting to note that a lot of the same effects felt by the Great Depression, are ones that are being felt today from the Great Depression, although much of the global landscape has changed since then.

It seemed clear at the time that a lack of regulation and a lack of social safety net were two factors that exacerbated the Great Depression. Much new legislation, including the Social Security Act, came into play in order to help remedy many Depression era United Nations Economic and Financial Affairs Council 8

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troubles. Strangely enough, the new world war was a huge factor in recovery from the Great Depression for many nations.

The conflict forced many nations to build up their military infrastructure and bring many new jobs and industries to their employees.

Hopefully, war will not be used in order to help solve the European Economic Crisis, but it is evident how lack of regulation can be a huge contributing factor to financial strife, which ties in greatly to the current problems faced in Europe and throughout the world.

The Piazza Accord Another interesting economic development came in 1985, when the G-5 nations, West Germany, France, the United States, Japan, and the United Kingdom, met in New York’s plaza hotel to solve a major problem. During this time period, the United States was faced with a large current account deficit, nearly 3% of GDP, when at the same time European nations were faced with negative GDP growth and large trade deficit.6 Though the United States held steady growth, Japan and many European nations were in trouble, and trade imbalances rampant

throughout the world. The Plaza Accord led to overhauls of G-5 nation trade policies, as well as new global exchange rates. “The United States experienced about a 50% decline in their currency while West Germany, France, the U.K. and Japan saw 50% appreciations.

The Japanese yen in September 1985 went from 242 USD/JPY to 153 in 1986, a doubling in value for the yen. By 1988, USD/JPY exchange rate was 120.”7 Looking to the Future

When we look to the crisis in Europe today, it is a bit alarming to see that history is in many ways repeating itself.

It is widely believed that a lack of market regulation and poor spending practices have been some of the integral factors in causing the troubles that are so visible today. Of course, we can also use to history to understand the ways in which we can work together as a world in order to solve these problems for the global good.

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MUN Korea Current Situation When analyzing economic trends, economists rarely agree unanimously on those trends’ key underlying causes. In order to prescribe solutions to this crisis, however, ECOFIN will have to work to understand how this crisis got started so it can gain some idea of how to address the immediate problems. The purpose of this section is to outline the theories on multiple sides of the debate about how the crisis originated and how to address it, as well as to give facts about the crisis’ origins so that delegates may form their own opinions and synthesize those with commonly accepted perspectives to arrive at their own solutions.

The First Signs of Trouble With global financial troubles already underway, the Eurozone began to see the first indications of trouble with the announcement by Greece in late that it has been concealing debts of over $300 billion Euros, almost 113% of its GDP.8 Although Greece insists that it will not default on any of its loans, further information of accounting errors begin surfacing, and Greece deficit figures are revealed to be nearly 13.6% of its GDP, more than 4 times the maximum allowed by

Eurozone regulations.1 Rating agencies begin to downgrade Greek debt and the first signs of falling investment begin showing up throughout the euro member nations.

Greece’s announcement is seen by many as that which triggered the chain of events that formed the European crisis. Once Greece announced that its debt exceeded the value of its entire economy, investors rapidly lost confidence that the Greeks would be able to repay Greek bonds. Investors started demanding much higher returns on Greek bonds, raising Greece’s debt burden. Lack of investor confidence stalled hiring in Greece, causing even more economic stagnation. (One great source that further discusses specific ways in which confidence in the EU was shaken and ways that the problem can be addressed is this report from the European Investors Working Group, released in 2010.)

European Financial Stability Facility One response to these problems observed in the Eurozone was the European Financial Stability Facility. In early 2010, many of the EU member states saw the necessity of creating an organization to try to handle the growing economic tensions in the

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Eurozone, and the European Financial Stability Facility (EFSF) was born.

Armed with a lending capacity of almost 750 billion euros, the Facility began its initial efforts to quell some of the growing unrest in Greece with a 110 billion euro bailout to help prevent Greece from defaulting on its debt and to help boost investor confidence throughout the area.9 The relief measures come with austerity stipulations in the Greek economy, and social unrest begins to build on the streets of Greece.

How effective have these measures been, though? Lately, these and other such bailouts have, in fact, had significant effects on consumer confidence, given that as a result of bailout measures the Stoxx Europe 600 measure has rallied 8.1% since early 2012, while surveys indicate that consumer sentiment in February has reached its highest point of 12 months.10 Establishing Europe’s unity has in the longer term improved confidence in the Eurozone’s ability to remain together.

However, major Greek debt still remains, as even with these bailouts Greece will be unable to pay an as of yet indeterminately large portion of its debt, the amount of which it can repay depending on the productivity of the Greek economy in light of austerity

measures.11 Bailouts have been essential to prevent Greece from defaulting, but bailouts are impossible to continue forever: this committee must figure out a way to balance ability to deliver bailouts with the need not to rely on such methods.

Rising Deficits in Ireland With Irish banks facing huge losses during the financial crisis, Ireland was already setting into a heavy economic predicament. Unemployment rates had shot up almost 10% between 2006 and 2010, and much of the country’s debts were burdened onto the population.12 In late 2010, Ireland received a 85 billion euro bailout from the EU and the IMF. Although the bailout is geared toward slowing down Ireland’s quickening economic decline, many major investment groups remain unconvinced that Ireland will be able to bounce back from its troubles without further assistance.

In July 2011, the major credit union Moody’s cut Ireland’s rating to junk status.13 Uncertainty began rising over whether or not Ireland would be able to pay back its debts as well. The Irish government has complied to a large degree with the European Central Government stipulations and because of this the European Central Bank has declared that it will begin buying up some faulty

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Irish bonds.14 This process demonstrates the possibility for further action on the part of the European Central Bank in helping buy up the faulty bonds in the European Union and allow for further recovery to begin.

Experts certainly accept that economic downturn triggers further economic downturn, though few say that if there is link between the original trouble occurring in Ireland and the original trouble occurring in Greece, we know so definitively.

However, one of the questions that this committee must answer is how these two situations interrelate with each other--and if one did not cause the other, then to what extent the two crises affect each other once already developed. Such a relationship likely exists insofar as these two countries share the same currency, and a loss of confidence in that currency could affect them both. These same questions apply when analyzing any of the other concurrent economic crises in nations described below.

Overspending in Portugal Facing expiring debts, Portugal began to realize its urgent need for cash assistance from the European Union.

In early 2011, the Iberian nation put in a request for a bailout of

around 80 billion euros in order to help insure stability in its financial markets.15 After a month, Eurozone leaders officially approved the bailout, making Portugal the third EU country to receive emergency funds.

All in all it seems that the Portuguese economy has shrunk around 1.2%, which is not good for future recovery prospects. Although the Portuguese government was able to make progress in cutting some of Portugal’s exorbitant deficits, Portugal, like Ireland, still received a downgrade to junk credit status, amidst speculations that Portugal may seek to ask for further bailout assistance.

Unemployment in Spain Near the end of Prime Minister Zapatero’s term in office, it was already quite apparent that the Spanish economy was in trouble. Austerity measures and retirement benefit reforms were already underway when Zapatero decided to prepone the Spanish national elections by 4 months. Mariano Rajoy, of the right People’s Party, continues with harsher austerity measures. Spanish unemployment climbs to almost 23% by the end of 2011, the highest in all of the European Union.16 Stuck with failing banks and civil unrest, Rajoy remained resistant to any

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sort of financial intervention by the Eurozone economy. However, Spain finally conceded in June 2012 that it would probably need some sort of economic help and plans for a 100 billion euro bailout package were set into motion.

An interesting trend has resulted from the problems occurring in the Spanish economy. Many types of small barter economies have sprung up throughout the country. For example, a system of time banks has arisen throughout Barcelona in which people are given compensation for time put into certain services.17 These types of barter economies have arisen in order to help with troubles arising from currency. Perhaps these types of closed economic systems may start to continue as time goes on during the crisis.

Bond Yield Hardship in Cyprus Like many other European nations, Cyprus started out strong, but fell victim to the same economic woes plaguing much of the Eurozone. As debts accumulated in Cyprus, its credit ratings fell sharply, and its bond yields crossed 14%.18 Investment fell sharply and talks of a Cyprus bailout surfaced throughout the European Union.

Though one of the smaller

nations involved in the Eurozone, Cyprus served as an indicator that the economic strife may be spreading throughout more of the region.

Even the religious sector of the economy is having troubles in various European economies. In Cyprus, the Church is the second biggest landowner next to the government.19 Due to the recent economic strife, however, clergy members have begun to receive pay cuts in their salaries. This is an indicator that no part of the economy is safe from the crisis that is sweeping throughout the whole of Europe. It provides indication that any sort of solution to the debt crisis will have to involve reforms on many angles in order to cover every aspect of the troubles sweeping through Europe.

Brussels Agreement In October 2011, many EU countries met in order to create a plan of action to handle Greece’s debt. An agreement was made to cut Greek debt by 50% and also to raise the monetary reserves of the EFSF to about 1 trillion euros.20 These measures represent a strong effort to paint the Eurozone as a safe and desirable place for investors.

Unfortunately the funds also foreshadow possible needs for

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future bailouts in various European nations and serve as an indicator that the problem in Europe is far from resolved.

In Actuality

European Central Bank The European Central Bank (ECB) has played, and will surely continue to play, a very important role in the European Crisis. The Bank, established in 1998, is in charge of maintaining price stability throughout the Eurozone. The ECB, similar to the Federal Reserve Bank in the United States, and reserve banks throughout the world, is in charge of regulating monetary policy with the euro. Because of this, the ECB is involved heavily with open market operations, general money supply controls, and of course regulating bank policies throughout the Eurozone.

The ECB is a unique entity, however, insofar as it does not conduct the monetary policy of a single nation, but rather the collective monetary policy of many nations in an entire region.

The nature of the ECB should be one of the key issues discussed in this committee. By extension of the fact that Eurozone nations cede the majority of their monetary policy to

the ECB, they cannot for the most part conduct their own monetary policies.

This can prove especially problematic because monetary policy is a very important counterpart to fiscal policy in correcting the economy. However, if all Eurozone nations share the same monetary policy as shared by the ECB, then some countries will inevitably operate with a monetary policy that is not conducive to fixing their economies; the ECB cannot set expansionary policy for nations in recession while simultaneously conducting contractionary policy for nations in economic booms. Given that this is the case, this committee must consider: how can the ECB and other authorities compensate for countries’ not having monetary policy as a tool to use at their disposal? How much freedom should nations be allowed to freely conduct fiscal policy and potentially bring their respective economic cycles out of synchrony?

European Stability Mechanism Although the EFSF and the European Financial Stabilization Mechanism (EFSM) have been the primary distributors of assistance funds, there are plans for a future permanent entity, the European Stability Mechanism (ESM), which will hold much

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authority over rescue funding efforts.

Primarily, the stability mechanism would be in place to insure that financial troubles in one nation do not spread to another and that one country’s economy does not have the power to severely damper the euro as a whole. The EFSF came into effect in October 8, 2012, and as the EFSF is such a recent measure, determining its effect is difficult. This committee must consider the role that these types of lending organizations can play in the short and long term.

European Fiscal Compact Signed on March 2012 by most of the EU, the European Fiscal Compact is an agreement that requires national budgets of the signing nations to be in balance or in surplus.21 The treaty, in effect January 2013, includes steep penalties for those nations which do not comply with the budget regulations outlined in the fiscal compact. There is much speculation as to whether these budget cuts will actually be able to help solve many of the economic problems of Europe, or whether the measures may actually further exacerbate financial difficulties. This measure will work in synchrony with the European Stability Mechanism in order to help preserve

future Eurozone stability and to create a series of tools to help improve financial policies throughout the European Union as a whole.

Regarding this issue, the delegates in this committee must come up with answers to the questions of (first) how conducive this form of fiscal unity is towards economic recovery in Europe, and (second) if it is effective, how will should nations be to sacrifice some degree of sovereignty in order to work towards the ends of unity and economic security? Is the Eurozone willing and ready to coordinate its fiscal policies as well as monetary policies now, even if it does so in just this limited way?

Credit Agencies The American credit rating agencies Moody’s, Standard and Poor’s, and Fitch, have been under much fire for their credit downgrades throughout the time of the crisis. Analysts have claimed that some of the actions be these companies have been unfair, such as not downgrading the status of England, which holds more debt than many of the affected Eurozone economies.22 Germany is left as the only major economy in the Eurozone maintaining an AAA rating. The downgrades also come at a time

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of already falling investments, and may only continue to hamper efforts to boost investment in the Eurozone economies. Certainly these agencies influence public perception of European countries, and hence they influence market sentiment. Although credit agencies’ purpose is to accurately reflect the risk that they perceive to be present in markets, their statements in turn end up subsequently influencing the very markets that they are describing.

Future Possibilities

In addition to leveraging the institutions and tools described in the above section—or institutions and tools similar to them--experts have discussed potentially implementing some more drastic reforms to address this crisis.

Some of these that this committee will likely want to debate about are listed below: Breakup of the Eurozone?

During these times of economic predicament, the ever-relevant question is whether or not the euro will survive as a currency. It is widely believed that without a Euro-wide fiscal authority, it is extremely difficult to mount any sort of effective policy response to combat the troubles sweep-

ing the region.23 Thus, it remains to be seen what sort of policy measures will continue to be developed to help the Eurozone as a whole. The euro, for better or worse, will most likely play a huge role in shaping the future of its member nations and decide the fate of their economic well-being. In 1961, Robert Mundell came up with the theory of Optimum Currency Area, which outlined the basic criteria for an effective monetary union. Essentially, in accordance with the theory, these unions should be formed when the costs are less than the benefits, which occurs, for example, in circumstances where transfer of labor and capital are high. Of course, this theory is merely a single guideline, and the debate on whether or not the euro is a good idea in its current form, continues on.

Fiscal Union As a destruction of the Eurozone may not be the ideal situation, many other ideas exist regarding possible future alternatives for the economic system of the region. These ideas include creating some sort of central fiscal authority in the Eurozone, to help remedy the lack of a Euro-wide policy maker, and/or a monetary fund to help issue centralized Eurobonds. Of course, there are

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surely many other possible solutions to the economic problems in Europe, and none of them are without their drawbacks. The responsibility of the ECOFIN committee is to work cooperatively as a group of nations to understand and propose measures to help bring relief to an ailing Eurozone economy.

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MUN Korea Questions to Consider The Economic and Financial Committee (ECOFIN) holds a significant deal of relevance to the issues at hand. When it comes down to devising a solution to the European Sovereign Debt Crisis, there are some key ideas that need to be debated, and some very important questions that need to be asked: • What types of monetary and fiscal policy measures could the various European

economies implement in order to try to remedy the crisis? To what degree should the European Union rely on the actions of individual member states to correct the economy? (See section on the ECB) • How can the European Union as a whole use monetary policy to help remedy the

problems of the Eurozone?

• Are there measures that the international community can take in order to help

alleviate financial troubles?

• What role does consumer and investor sentiment play in the European crisis and

Europe’s recovery? How can international bodies work to lever market sentiment to the EU’s benefit?

Even beyond the debate on how to solve the European debt woes, there are more questions that need to be asked about the future of the European economies: • Can the Euro survive in its current form? Are there other ways that a centralized

European currency could be organized?

• What types of preventative measures can be put into place in order to prevent

such problems from occurring in both Europe and the rest of the world? Should Europe pursue more economic unity, or less?

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Topic II: Environmentally Sustainable Development in Emerging Markets Topic History The Industrial Revolution, which began in the mid-18th century, marked the beginning of the trend of economic development engendering environmental consequences. In this period, new technologies enabled the mechanization of numerous industries, while new modes of transport allowed for unprecedented levels of communication and economic exchange. These new technologies led to a sustained increase in the living standards of the general population. Where agriculturally oriented societies of subsistence farmers existed before, economies based on factories and mechanized labor emerged. The new technologies enabled a much higher level of economic exchange, which in turn lifted the quality of life for large swaths of the population to levels that were unthinkable only decades prior.

However, the Industrial Revolution did not come without heavy costs – not all of which were apparent at the time. The Industrial Revolution – whose new technologies like the steam engine were based on dirty-burning coal – marked the beginning of a long

rise in the level of greenhouse gases in Earth’s atmosphere.

Greenhouse gases, most prominently carbon dioxide, prevent heat from escaping Earth’s atmosphere, which warms the planet.

Scientists have predicted drastic effects that will result from the continuing rise in temperature, such as rising sea levels and an increase in the number of extreme weather events. To give a sense of the magnitude of the changes brought on by the Industrial Revolution, before the Industrial Revolution, the concentration of carbon dioxide in the atmosphere had not changed meaningfully for 850 years; in the period between the Industrial Revolution and today, it has increased by almost 40%.25, 26 Although some of the environmental consequences of vastly increased fossil fuel usage were apparent at the time – the darkening in color of England’s moths as an adaptation to their newly sooty surroundings is a well-known example – understanding of the effects of greenhouse gases and climate change did not emerge until hundreds of years later.

Another consequence of the Industrial Revolution was a large rise in global inequality. The advances in technology and quality of life that characterized the Industrial Revolu-

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tion were largely confined to specific geographic areas, notably Western Europe and the United States. Many areas in Asia, Africa and elsewhere were left behind as the rate of technological advancement accelerated in the West.

It is the confluence of the Industrial Revolution’s environmental effects and the legacy of inequality that it left behind that leads to the problem facing ECOFIN today: how to expand the benefits of technology, which are largely powered by dirty fossil fuels, in an equitable manner while also preventing widespread degradation of the global environment.

The close of the 20th century and the start of the 21st have witnessed an unprecedentedly rapid expansion of emerging economies – most notably in China and India.

Due to their sheer size – each country has a population in excess of one billion people – their fossil fuel-driven growth has enormous consequences.

For instance, China overtook the United States as the top emitter of carbon dioxide in 2006.27 China is also the world’s largest user of coal, the dirtiest fossil fuel, while India ranks third (the United States holds the second position).28 However, these numbers do not grasp the enormity of the problem: the emission of carbon dioxide per capita

in the United States is still three times as high as in China and more than ten times as high than in India, according to the World Bank.29 If developing countries like China and India were to see their levels of carbon dioxide emissions per capita rise to those of the United States, there would be dramatic consequences for the global climate.

Theswash.com

This problem is not confined to carbon dioxide. Another precious resource is petroleum, used in the manufacture of gasoline for motor vehicles and for heating homes, in addition to numerous industrial applications. According to the CIA World Factbook, the United States is the world’s largest consumer of crude oil, using about 19 million barrels per day. China, meanwhile, consumes about 9.5 million barrels per day.30 If per capita consumption in China were to rise to the level of the United States, China would

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consume a stratospheric 82 million barrels of oil per day, which is roughly equal to the entire world’s daily oil production today.31

In spite of their negative effects on the climate, the increase in consumption of fossil fuels and the attendant increase in greenhouse gas emissions in developing countries have had enormously beneficial consequences.

For example, between 1981 and 2005, the rate of Chinese citizens living in poverty decreased from 85% to 16%.32 India and other developing countries saw similar decreases in poverty as a result of new economic activity driven by fossil fuel consumption.

These countries have experienced an accelerated version of what took place in Western Europe during the Industrial Revolution. As new technologies raised productivity, emerging economies expanded rapidly, encouraged by changes in policy such as the liberalization of the economy in China in the 1980s under Deng Xiaoping. This economic growth in turn raised living standards for millions, lifting vast swaths of the global population out of poverty. The process took place even faster in these developing countries than it did in Western Europe because the rate of technological innovation was not a

constraint. That is, the new technologies driving economic growth had already been invented – spurring growth was a matter of putting these technologies into place, not inventing new ones.

The rapid increase in usage of fossil fuels and the concomitant negative effects on the climate have led to a global debate over how best to address the problem. The Kyoto Protocol, negotiated in 1997, was the first major step towards addressing global greenhouse gas emissions. However, that agreement was greatly hampered by the refusal of the world’s biggest emitter of greenhouse gases at the time, the United States, to ratify the protocol.

As of today, 191 countries have signed and ratified the Kyoto Protocol; the United States remains a signatory that has not ratified the treaty, and is therefore not bound by its provisions. The Kyoto Protocol addressed the gap in emissions between developed and developing countries by acknowledging that developed countries were responsible for the majority of greenhouse gases currently in the climate, that per capita emissions in developing countries remained relatively low, and that growth of emissions in developing countries would be a natural result of the continuing increase in living stan

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dards and economic activity in those countries.33

Although this agreement ostensibly established a framework for determining who was most responsible for climate change and who would be responsible for reducing emissions, disagreements among the signatories quickly doomed the Kyoto Protocol.

The United States Senate never ratified the treaty, and President George W. Bush refused to acquiesce to the treaty’s conditions, noting that other large polluters, such as China and India, were not required to reduce emissions under the terms of the treaty and that the treaty would have negative effects on the American economy.34

Since the failure of the Kyoto Protocol, the international community has remained deadlocked over how to address the question of greenhouse gas emissions and who should bear the brunt of efforts to reduce them.

Negotiators have not been able to agree on a meaningful new climate treaty, and global greenhouse gas emissions continue to rise. Without steps to reduce emissions, the climate will surely fall victim to the numerous negative effects predicted by scientists.

Current Situation As noted earlier, recent years have seen developing countries overtake industrialized ones as the foremost emitters of carbon dioxide and other greenhouse gases in nominal terms (in per capita terms, industrialized countries continue to emit far more than developing ones). This has led to widespread disagreement over how to equitably handle the problem of the continued rise in climate-warming emissions. Developing countries, noting that industrialized countries are responsible for a much greater share of historical greenhouse gas emissions, contend that restrictions on their ability to emit greenhouse gases are unfair and favor industrialized countries. Meanwhile, industrialized countries argue that the problem cannot be fixed without containing or reducing the growing emissions originating in developing countries.

Because of the failure of the Kyoto Protocol, global leaders have long searched for an agreement on a new treaty to address climate change.

The most recent efforts to this end took place in Rio de Janeiro, Brazil, in June 2012.

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These negotiations concluded with a nonbinding document called “The Future We Want.”35 Although that document contains some promising proposals – a commitment to phase out fossil fuel subsidies and the adoption of “Sustainable Development Goals” are two examples – its nonbinding nature reduces its authority. Indeed, there were some indications at the Rio summit, which were disheartening for advocates of strong action to combat climate change. Most notably, the absence of important world leaders such as US President Barack Obama, British Prime Minister David Cameron, and German Chancellor Angela Merkel suggested to some that those important countries do not consider combating climate change to be a high priority.

Rio conference. Banglawire.com

What Should We Give Up to Stop Climate Change?

This notion – that climate change should take a backseat to other priorities – is among the greatest challenges that the international community faces in developing a comprehensive and effective plan to combat climate change. Among the many important problems addressed at the upcoming meetings of ECOFIN is how to properly balance climate change with other concerns. Should climate change always be less important than economic growth? Is the answer to this question different in developing and developed countries? ECOFIN will be responsible for developing a compromise that suits all members of the international community and ensures that none of its citizens are unfairly deprived of the quality of life afforded by modern technology.

Delegates must consider the arguments on all side of this issue before determining for themselves where exactly their country falls with regards to prioritizing the issues of climate change. Despite the fact that experts generally accept that major harms are associated with climate change and greenhouse gas emissions, some ar-

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gue that climate change should not be prioritized so highly. Those that hold this opinion generally maintain that the harms of sacrificing development for the sake of slowing climate change will create worse conditions and more harms overall than will simply allowing climate change to occur.36 Ultimately, by developing our economies and technology now, advocates of this position argue, we generate more wealth for ourselves in the long term: this both improves our societies generally as well as makes more resources available to be devoted to determining a solution to climate change in the first place, thus effectively creating conditions for the problem of climate change to go away more quickly. The other side of the debate disagrees with the argument that climate change poses less harm to individuals--especially in the developing world--than slower economic growth, even assuming that both goals represent a trade-off at all.

Many major environmental authorities (like the Environmental Protection Agency) maintain that climate change would cause unprecedented harm to developing communities in terms of water corruption, land destruction, and reduced access to other resources, to name a few factors.37

An indication that collective action, in the form of collective international commitment to the cause of sustainable development, is critical to the issue of climate change lies in the fact that when nations such as the US have treated climate change as though it is a backseat issue, many groups in the international community follow suit.

Canada’s decision to withdraw from the Kyoto Protocol in 2011, for instance, affected the decision making calculus of nations like Japan and Russia and likely contributed to the Protocol’s lack of success; the US’ notable absence from the program certainly had similar effect.38, 39 ECOFIN should work towards finding ways to establish commitment from a substantial bloc of nations on the issue of climate change just as much as it tries to find ways to solve the issues themselves.

Creating the conditions that allow global solutions to arise is key.

ECOFIN must also consider, though, to whom the responsibility for action falls, when it decides what measures ought be taken to address the issues of sustainable development.

ECOFIN is certainly an organization that represents all nations and is the manifestation of an international effort for mutual cooperation; however,

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it is worth noting that approximately 75% of pollution comes from the top 15 polluting countries.40 While this body must stress the need for international cooperation on these issues, it must also consider what aspects of the factors contributing to climate change must be prioritized for being addressed, and how those issues are best tackled. Additionally, this body must also look to the future: ECOFIN needs to look to patterns of development that have occurred in the past to gain some understanding of how less developed countries might develop themselves in years to come. With this in mind, ECOFIN should consider ways by which it might regulate and incentivize countries who are not major emitters of pollutants yet but have a trajectory to become so.

As it currently stands, the international community can ill afford to take no action on this topic. Left unchecked, climate change will wreak havoc on the planet and its inhabitants, both human and animal. Melting glaciers will lead to a rise in sea levels. Although scientists’ estimates for the exact rise differ, even optimistic projections foresee great changes in the nature of coastlines around the world.41 Millions of people who live

areas are likely to be affected by, or even erased from the map by rising sea levels.

Climate change will also increase the frequency of extreme weather events – hurricanes, droughts, heat waves and the like.42 Even minor changes in the character or frequency of natural events like these could be enormously costly, both in terms of the lives they may claim and the financial means required to build infrastructure to deal with them. Climate change is also likely to decrease the amount of water available in semi-arid areas, such as the Mediterranean or the Western US.43 These are just some of the effects that climate change will have on the planet, and indicate the dire importance of addressing the ever-rising emissions that are causing climate change.

Creative Loafing Charlotte/ clclt.com

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CASE STUDY: Air Conditioning

The basic disagreement between industrialized and developing nations is whether it is fair for developing countries to adhere to limits on greenhouse gas emissions while trying to raise standards of living for their citizens.

Since nations that industrialized many years ago faced no such constraints, such limits seem to them like arbitrary and unfair restrictions on the quality of life for their populations. Without allowing unconstrained emissions growth, it will be difficult for developing countries to match the standard of living in developed countries.

An illuminating case study is the use of air conditioning. Air conditioning is considered a luxury in most of the developing world, while the citizens of industrialized nations are voracious consumers of air conditioning. The problem lies in the fact that air conditioning contributes twofold to the warming of the climate: both through the vast amounts of electricity used to power air conditioners and through the gases used for coolants in air conditioners. In fact, these cooling gases have a far greater effect on the atmosphere than carbon dioxide. Even those gases used in air conditioners

Kuni Takahashi for the New York Times

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which are sometimes considered “environmentally friendly” only receive that designation because they do not harm the ozone layer; these gases can have up to 2,100 times the warming effect of carbon dioxide.44 According to the New York Times, “The leading scientists in the field have just calculated that if all the equipment entering the world market uses the newest gases currently employed in air-conditioners, up to 27 percent of all global warming will be attributable to those gases by 2050.”45

It is clear that air conditioning has a tremendous negative effect on the climate. However, air conditioning also contributes to a higher quality of life. In fact, in addition to simply making a room more comfortable, “Scientific studies increasingly show that health and productivity rise significantly if indoor temperature is cooled in hot weather.”46 Despite its climate warming effects, it seems unfair for air conditioning to remain the province only of the wealthy and privileged. However, the developing world is poised to increase its consumption of air conditioning by an enormous margin. There is much greater latent capacity in developing countries for the use of air conditioning: “In 2007, only 11 percent of households in Bra-

zil and 2 percent in India had air-conditioning, compared with 87 percent in the United States, which has a more temperate climate.”47 Of the top 30 cities with the highest “cooling degree days” – a measure of how many days a given area will need air conditioning – 28 are in developing countries.48

Air conditioning is a microcosm of the issues of fairness and responsible environmental stewardship facing the international community today. Restricting the use of air conditioning now might allow future generations to use it, but deprives many who inhabit the world today of that comfort. Conversely, to allow air conditioning to spread unharnessed across the globe today would contribute to the ill effects that climate change will wreak on the future generations.

Other Types of Efforts Although the international community has attempted varying types of international agreements to solve climate change in the past, such agreements between governments are not the only alternative to inaction available to the international community.

Other initiatives, such as UN-REDD, have had very beneficial impacts on reducing climate change

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by providing incentives for countries to find alternatives to deforestation and other such activities. Deforestation accounts for up to 15% of annual carbon dioxide emission, according to some estimates; regardless of which estimate exactly one uses in calculations, though, deforestation certainly plays a major role in greenhouse gas emissions.49 UN-REDD attempts to tackle deforestation through financial incentives. As of July 2012, UN-REDD has devoted over US$117 billion either to sponsored programs that minimize or eliminate deforestation, or to research and development programs that work to create more efficient and sustainable practices to replace deforestation.50

Initiatives such as these--that rely upon some support and some minimal commitment from governments, but do engender major policy changes on their behalves--definitely have a place in the discussion of sustainable development. Climate change is a major issue that almost certainly merits substantial policy changes; however, the effectiveness of other initiatives should not be denied. ECOFIN should endeavor to make use of a variety of approaches towards ensuring sustainable development. Methods that change behavior by creating

incentives have proven effective in recent history, and they also have the potential to ensure that the “development” aspect of sustainable development is not sacrificed.51 ECOFIN should look towards these methods as well as major international policy changes.

How to Proceed: Patchwork or Comprehensive Framework?

Although the international community has been unable to agree upon a comprehensive climate or environmental treaty, there have been smaller successes in terms of international agreements in addressing environmental issues. For instance, the Montreal Protocol, which restricted the use of ozone layer-depleting chlorofluorocarbons (CFCs), is often cited as an example of successful, coordinated international action on an environmental problem. In the words of the former United Nations Secretary-General Kofi Annan, “Perhaps the single most successful international agreement to date has been the Montreal Protocol.”52 What worked about the Montreal Protocol Signed in 1987, the Montreal Protocol is a major multinational

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agreement that limits the emission of many CFCs harmful to the ozone layer.

It’s difficult to say exactly why the Montreal Protocol has been as successful as it has been, while other efforts for international coordination to combat the issues of climate change have not. The fact that the United States supported the Protocol definitely helped the Protocol be successful; many believe that what may have made the US and other nations open to the idea of the Protocol in the first place is the funding mechanisms employed by the Protocol. The Montreal Protocol makes use of a Multilateral Fund (MLF), which is a fund that can be drawn upon to actually implement the phasing out of CFCs as called for by the Protocol. The Montreal Protocol is the first agreement of its kind to make use of such a mechanism.53 The MLF mechanism is very important to note. ECOFIN should strongly consider employing mechanisms like the MLF and adopting other elements found to have worked in the Montreal Protocol, given that such tactics have proven successful in motivating countries to commit to long term sustainable development already: ECOFIN should try to determine what specific

elements worked and incorporate those into its solutions, regardless of the scope of the international solutions it pursues.

One of the issues facing the delegates at the upcoming meetings of ECOFIN is determining the best way to proceed on developing international agreements for the purpose of tackling climate change. If reaching a comprehensive agreement is too daunting, would it be simpler and easier to negotiate individual agreements tackling individual components of the problem, in the mold of the Montreal Protocol? For instance, countries might find it easier to reach common ground on standards for power plants, and then move on to, say, the transportation sector. A piecemeal approach such as this could help in building trust as successive agreements are implemented and could help “get the ball rolling,� instead of allowing a comprehensive treaty to languish unsigned. However, developing a patchwork of agreements might be the wrong approach, as it might cause the international community to lose sight of the bigger picture, and limits the possibilities of compromise by taking up only one issue at a time.

ECOFIN must establish what is the

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best framework for addressing the issues of climate change and sustainable development.

This is an issue that has no direct scientific answer. It is up to the international community to negotiate a fair and equitable answer to this question.

BikyaMasr.com

Responsibility of Industrialized Countries vs. Responsibility of Developing Countries As discussed above, there is a sharp divide between developed and developing countries on the issue of greenhouse gas emissions. ECOFIN must determine a fair way for countries to share responsibility. Since industrialized countries have been emitting greenhouse gases for far longer, should they bear the majority of the responsibility for reducing emissions? Or should developing countries have to pitch in as well, given that countries such as China are now responsible for the greatest share of annual emissions?

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MUN Korea Questions to Consider Keep in mind these questions.

• How can the international community balance growth and sustainability? This is

perhaps the most important question before ECOFIN. The international community must find a way to ensure that developing countries reap the benefits of modern technology without causing too much stress on the planet and its resources.

• Who should bear the primary responsibility for greenhouse gas emissions? Indus-

trialized countries have historically been greater emitters, but developing countries like China now account for an ever-greater share of greenhouse gas emissions.

• How can we balance the need for efficient development with that for protecting

the environment? (One interesting article that frames this issue and indicates that such a balance might be possible can be found here) • What kind of measurement of emission level by a country is more important-

nominal or per-capita?

• Can a comprehensive agreement be reached, or should the international commu-

nity opt for a piecemeal approach?

• Are there creative ways to bridge the gap between developed and developing

countries? For instance, can a system where developed countries pay for the technology to reduce emissions in developing countries be used?

• Once agreements on reductions in greenhouse gases are reached, how can they be

enforced? Should there be a system of incentives or punishments (or both)?

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Glossary “Beggar the neighbor”- a term applied to policies employed by one country to better its own economic situations that have tendencies to cause economic problems in other countries. Examples of such policies include competitive devaluation, or other policies that aim to affect exchange rates to give a nation’s own products a price advantage over other nations’.

Consumer Price Index - a measure that enables us to compare prices of goods and services across different time periods while accounting for currency inflation.

CPI data for inflation is recorded annually, and all years receive an index value that measures the value of a unit of currency that year in relation to the value of one unit in a base year. This data is collected by tracking price changes that occur over time through a wide variety of commonly purchased goods and services, generally excluding goods with particularly volatile prices such as good and energy.

Credit Agency - an independent company that assigns ratings to debt-issuing institutions (such as any type of private or governmental lender) denoting the institution’s credit-worthiness. Credit-worthiness refers to an institution’s ability to successfully repay loans. Some agencies additionally rate the actual instruments themselves by which debt is issued.

Credit Rating - a rating that an institution or a debt mechanism receives from a credit agency, based on that institution or mechanism’s assessed credit-worthiness.

Many major credit agencies, such as Moody’s, Standard and Poor’s, and Fitch Ratings, use letter denominations to communicate credit-worthiness, with AAA being the highest rating an institution can receive. Though the use of credit ratings has been questioned in the wake of the economic crises at the end of the last decade, these ratings play a significant role in market sentiment trends.

Currency Union - a currency union is a group of nations who all share a common currency, in that one type of currency is accepted as legal tender throughout all nations in the union. An individual nation within the union may also accept a second currency separately as legal tender. That nations are in a currency union typically implies that they are in a monetary union as well.

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MUN Korea Eurozone - the monetary union of 17 nations in Europe that currently accept the Euro currency as their sole currency of legal tender. These nations are Austria, Belgium, Cyprus, Estonia, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, the Netherlands, Portugal, Slovakia, Slovenia, and Spain. These nations are in both a currency union and a monetary union.

European Central Bank - the central bank that makes nearly all monetary policy decision for the member nations of the Eurozone. The ECB’s power derives from the member nations of the Eurozone, and it is responsible for printing Euros to bring about changes in the Euro money supply Fiscal Union - a group of nations that have some significant coordination of their individual fiscal policies amongst themselves. Many believe that steps must be taken towards fiscal integration before monetary integration can occur successfully.

Greenhouse Gas - a gas released into the atmosphere that absorbs and emits types of radiation. Under this scientific definition, greenhouse gases are gases that play crucial roles in dictating the temperatures of the Earth. In general common usage, this term is used specifically to refer to types of gases such as carbon dioxide that act in ways that alter climate and temperature, typically by raising temperatures.

Gold Standard - a monetary system where the standard economic unit is correspond in a fixed ratio to a specific weight of gold. In some societies that have historically used a gold standard, one could exchange an amount of legal tender to receive from the government the corresponding mass of gold.

Market Sentiment - a general perception held by the public regarding some aspect of the public regarding markets for goods, services, raw materials, commodities, debt, or markets for anything else. Market sentiment is typically measured scientifically by institutions that conduct surveys on portions of populations to assess groups’ opinions about trends and other features of markets.

Monetary Union - a group of nations who are all subject to one uniform monetary policy, generally as dictated by one central bank or other comparable institution.

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Notes 1. http://www.foreignaffairs.com/articles/67472/liaquat-ahamed/currency-wars-then-and-now 2. http://drezner.foreignpolicy.com/posts/2008/10/20/beggar_thy_neighbor_take_one 3. http://www.gold-eagle.com/editorials_08/amerman021209.html 4. http://fraser.stlouisfed.org/docs/historical/brookings/17628_03_0006.pdf 5. “The History of the European Union.� http://europa.eu/about-eu/eu-history/index_en.htm 6. Ibid.

7. http://www.investopedia.com/articles/forex/09/plaza-accord.asp#axzz1xcsS28CR 8. http://www.bbc.co.uk/news/business-13856580 9. http://news.bbc.co.uk/2/hi/business/8656649.stm 10. http://www.bloomberg.com/news/2012-02-28/european-stock-futures-rise-as-germany-votes-for-bailout-bayer-may-slide.html 11. http://www.bbc.co.uk/news/business-13798000 12. http://www.irishtimes.com/newspaper/supplement/2010/1129/1224284371909.html 13. http://www.rte.ie/news/2011/0712/economy1.html 14. http://www.independent.ie/business/irish/debt-crisis-ireland-to-benefit-from-ecbs-latest-bigbazooka-bond-plan-3222083.htmlhttp://www.independent.ie/business/irish/debt-crisis-ireland-tobenefit-from-ecbs-latest-big-bazooka-bond-plan-3222083.html 15. http://www.csmonitor.com/World/Europe/2011/0407/Portugal-requests-bailout.-Will-Europe-s-debt-crisis-stop-there 16. http://www.telegraph.co.uk/finance/financialcrisis/9319175/Spains-economic-crisis-a-timeline.htmlhttp://www.telegraph.co.uk/finance/financialcrisis/9319175/Spains-economic-crisis-a-timeline.html 17. http://www.guardian.co.uk/world/2012/sep/04/spain-euro-free-economyhttp://www.guardian.co.uk/world/2012/sep/04/spain-euro-free-economy 18. http://investment-income.net/15231526cyprus-government-bonds-yielding-14-in-eurosmatures-nov-2015.htmlhttp://investment-income.net/15231526cyprus-government-bonds-yielding-14-in-euros-matures-nov-2015.html 19. http://www.dailymail.co.uk/news/article-2191547/Eurozone-crisis-Cypriot-priests-warnedface-pay-cuts.htmlhttp://www.dailymail.co.uk/news/article-2191547/Eurozone-crisis-Cypriot-priests-warned-face-pay-cuts.html 20. http://www.spiegel.de/international/europe/agreement-in-brussels-europe-slashes-greekdebt-by-50-percent-a-794278.htmlhttp://www.spiegel.de/international/europe/agreement-in-brussels-europe-slashes-greek-debt-by-50-percent-a-794278.html 21. http://european-council.europa.eu/home-page/highlights/the-fiscal-compact-ready-to-besigned-(2)?lang=en

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22. http://www.guardian.co.uk/business/2012/jan/13/eurozone-crisis-france-credit-rating-aaahttp://www.guardian.co.uk/business/2012/jan/13/eurozone-crisis-france-credit-rating-aaa 23. http://neweconomicperspectives.org/2011/06/can-greece-survive.htmlhttp://neweconomicperspectives.org/2011/06/can-greece-survive.html 24. http://lexicon.ft.com/Term?term=optimum-currency-areahttp://lexicon.ft.com/Term?term=optimum-currency-area 25.

“Frequently Asked Global Change Questions.” Carbon Dioxide Information Analysis Center.

Retrieved 7 September 2012. <http://cdiac.ornl.gov/pns/faq.html> 26.

“Trends in Atmospheric Carbon Dioxide.” National Oceanic & Atmospheric Administration.

Retrieved 7 September 2012. <http://www.esrl.noaa.gov/gmd/ccgg/trends/> 27.

“China overtakes U.S. in greenhouse gas emissions.” New York Times. 20 June 2007. <http:// www.nytimes.com/2007/06/20/business/worldbusiness/20iht-emit.1.6227564.html> 28.

“Uses of Coal.” World Coal Association. Retrieved 7 September 2012. <http://www.worldcoal.org/coal/uses-of-coal/> 29.

“CO2 Emissions (metric tons per capita).” The World Bank. Retrieved 7 September 2012. <http://data.worldbank.org/indicator/en.atm.co2e.pc> 30.

“Country Comparison: Oil Consumption.” Central Intelligence Agency World Factbook.

Retrieved 7 September 2012. <https://www.cia.gov/library/publications/the-world-factbook/rankorder/2174rank.html> 31.

“World Oil Supply and Demand.” International Energy Agency. Retrieved 7 September 2012. <http://omrpublic.iea.org/omrarchive/18jan07tab.pdf> 32.

Poverty is defined as living on less than $1.25 per day. Shah, Anup. “Poverty Around The World.” GlobalIssues.org. 12 November 2011. <http://www.globalissues.org/article/4/poverty-around-the-world#WorldBanksPovertyEstimatesRevised> 33.

“Full Text of the Convention.” United Nations Framework Convention on Climate Change.

Retrieved 7 September 2012. <http://unfccc.int/essential_background/convention/background/ items/1353.php> 34.

“Bush: Kyoto treaty would have hurt economy.” Associated press. 30 June 2005. <http://www. msnbc.msn.com/id/8422343/ns/politics/t/bush-kyoto-treaty-would-have-hurt-economy/#.UBW19kLtEyM> 35.

“The Future We Want.” United Nations Conference on Sustainable Development. 22 June 2012. <http://www.uncsd2012.org/content/documents/727The%20Future%20We%20Want%20 19%20June%201230pm.pdf> 36.

“Poverty: The Real Threat to Health.” http://www.africanliberty.org/content/poverty-real-threat-health

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37.

“International Impacts & Adaptation.” http://www.epa.gov/climatechange/impacts-adaptation/international.html 38.

“Canada to withdraw from Kyoto Protocol.” http://www.bbc.co.uk/news/world-us-canada-16151310 39.

“The Global Climate Change Regime.” http://www.cfr.org/climate-change/global-climate-change-regime/p21831 40. Ibid.

41.

“The current and future consequences of global change.” National Aeronautics and Space Administration. Retrieved 7 September 2012. <http://climate.nasa.gov/effects/> 42. Ibid.

43. Ibid.

44.

Lehren, Andrew W. and Elizabeth Rosenthal. “Relief in Every Window, but Global Worry Too.” The New York Times. 20 June 2012. A1. <http://www.nytimes.com/2012/06/21/world/asia/ global-demand-for-air-conditioning-forces-tough-environmental-choices.html?pagewanted=all> 45. Ibid.

46. Ibid.

47. Ibid.

48. Ibid.

49.

“The Global Climate Change Regime.” http://www.cfr.org/climate-change/global-climate-change-regime/p21831 50.

UN-REDD. “http://www.un-redd.org/AboutUN-REDDProgramme/tabid/102613/Default. aspx” 51. Ibid.

52.

“International Day for the Preservation of the Ozone Layer.” United Nations. Retrieved 7 September 2012. <http://www.un.org/en/events/ozoneday/background.shtml> 53.

“Montreal Protocol.” web.worldbank.org/WBSITE/EXTERNAL/TOPICS/ENVIRONMENT/ EXTTMP/0,,menuPK:408237~pagePK:149018~piPK:149093~theSitePK:408230,00.html

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