Carbon per capita system
This is a proposal for a global framework for solving the climate change crisis. It starts from the basic conviction that we are dealing with a global common good which is a fairly stable climate. Every human being has equal rights and responsibilities towards this good, resulting in an equal right to emit greenhouse gases. This excludes the notion that reduction targets would somehow have to be shared equally. Only net emissions are taken into account.
The Goal: Avoiding dangerous climate change
The maximum level of emissions will be established by the IPCC, following an ambitious contraction plan. According to their estimates, the ceiling will be raised or lowered - translating into the per capita allowance to be raised or lowered accordingly. Since the climate is so complex it makes sense to devise a system that will easily be able to react to new findings. This system is able to react quickly in case the 550 ppm or even the 450ppm targets turn out to be too heavy on the ecosystems and we need to lower emissions further. Since everybody is carrying the same on this target, it will be easy to implement the IPCC suggestions.
This system must be based on broad consensus. The basic assumptions must be shared: climate change should be tackled and every human on earth has equal rights to use the carrying capacity of the world as far as ghg emissions are concerned. What will have to be negotiated is the timeline of those principles entering into force with legally binding mechanisms to enforce them.
My recommendation is to start Phase One in 2010 and Phase Two in 2015. Another option is to start Phase One in 2012 as Kyoto expires and Phase Two a few years thereafter.
An IPCC recommendation for total global ghg emissions to prevent dangerous climate change is established. The according per capita allowance is calculated. A voluntary fund for the compensation of climate change victims is established. All countries are asked to pay into this fund a previously established amount of money per ton CO2 equivalent that exceeds their quota. An official recommendation for the amount of these contributions is established, based on economic projections of the costs climate change (Stern Review or other assessments). The fund will be used for the indemnization of recognized climate change victims (to be defined!) in the years to come, but only in those countries that stayed below their recommended quota during Phase One.
Equal per capita allowances for each global citizen apply. They are tradable. The total sum of ghg emissions is established by IPCC in a scenario that follows the precautionary principle. Countries that fail to present allowances for their emissions in a given year are fined with an amount that doubles top allowance prices during the period in question. These fines go into the Fund for the Compensation of Climate Victims (which is now not voluntary any more).
Trading the allowances
Allowances are tradable internationally. The price for allowances can simply raise and fall according to the severity of the problem and the efficiency of solving it. (My estimate is that in the beginning the price will be very high and as soon as we discover how easy it is to reach a high standard of living through intelligent design without burning fossil fuels, prices will fall a lot. Within a few decades nobody will think about this anymore, because we will have solved the problem. Much earlier than 2050!)
Fund for Climate Change Victims
A Fund for the Compensation of Climate Change Victims is proposed. This fund will be fed with voluntary contributions in Phase One. In Phase Two those countries that fail to buy enough allowances will contribute with their fines.
Another contribution could be a substantial and symbolic amount of industrialized countries that have contributed to atmospheric ghg concentrations throughout their history. Such a symbolic contribution could be a trade-off for non-industrialized countries to consider as dealt-with the issue of historical debt.
Issues to consider
The money in the system
By adopting an equal per capita allowance from the very beginning, huge money transfers from industrialized contries will take place, unless they find technological ways of capturing and storing carbon. These money transactions should be channeled into sustainable initiatives, meaning to be controlled by social and ecological standards. Those standards could be linked to Human Rights or the Earth Charter and should be enforced over national sovereignty. They should ensure the use of the funds to the highest standards of sustainability, transparency and participatory decision-making, so that they will not be invested into questionable things (especially militarization and war).
Since this will be the criterion for giving out the allowances to each country, international standards for assessing populations shall be established. What exists already in that field?
Land use is one of the big factors that can provoke GHG emissions. Land use could be integrated into this system, so as to protect forests from being converted (as one example).
There is a historical debt of industrialized countries who have contributed disproportionately to current atmospheric carbon levels. This must be taken into account. Europe has deforested much of its land (and emitted a lot of CO2) and we certainly don't want those areas that are covered with forests today to be deforested. But we are not in a position to impose that on poor nations. Maybe the commitment of the industrialized countries to implement this system can be such a big success for southern governments that as a trade-off they would be willing to accept the status quo of land use as the reference of the system. Another option is to deal with historical debt in the framework of the fund for climate change victims. (see above)
What happens, if a country emits more than it is allowed?
There could be a fine that is twice as high as the market price. If a country's emissions are established at a level that differs from the number of allowances it has bought, it could be given a time to buy the necessary allowances. If at the end of that period it is not able to show, it would be fined. I guess then it would never happen.
In this system, incentives to reduce GHG emissions are there for everyone. In Phase 1 emitting more will lead to higher voluntary contributions, so emitting more means paying more. Everyone has incentives, even non-industrialized countries. They have an incentive to prepare their countries for Phase 2, where they will be able to sell their emissions rights, if they stay under the "line". The preparations need time, so who starts early will be carbon efficient and reap the financial benefits of acting early on.
Advantages over "traditional" Contraction&Convergence
- In the traditional C&C model, emission allowances are adapted to current emission levels. That is not fair. It tries to slowly abolish an unjust system until reaching justice at some point in the far future. In the proposed system equity is adopted as a standard from the very beginning.
- C&C allows non-industrialized countries to raise their emissions. They have no incentive not to do so. Of course the aim can not be to bring Africa's per capita emissions up. If they find a lifestyle that is carbon neutral - perfect. They can then sell all their credits. If some countries prefer to continue buying carbon allowances, that is their own decision which depends on their lifestyle.
In the proposed system every ton of CO2 has a price from the start, except in countries that have a climate compatible lifestyle today. But all the major emitting countries are over the line and the price applies to them from the very beginning. In Phase One the price is voluntarily established. In Phase Two it is determined by demand and offer on a world market. The incentive for non-industrialized countries to find non-fossil energy solutions - even in Phase One - will be strong, because (especially in the beginning) the price for carbon allowances will be very high, so going for light carbon development (e.g. with renewable energies) will be very attractive, because it allows to sell additional allowances.
How to implement this system?
We first need to create support for this system. Especially in the industrialized world. Now we have 2007. If we aim at implementing the system in 2015 that would give us 8 years to work it out. Young people could be one of the big driving forces, because we have the biggest interest in solving the climate change problem and creating a stable and just framework that can hold for a long time.
It is crucial to get the system supported by the European Union and a considerable percentage of the public in North America. The support should grow with time.
Bali in December 2007 should be a milestone where this model is discussed and first steps are taken towards its technical implementation.
Continuing Kyoto Commitments or GCCS for a Sustainable Climate Policy? Prof. Dr. Lutz Wicke
- If we assume that sooner or later a per-capita regime will be put in place on an international level, then action today to bring emissions down in a country already make sense and bring us into a more favourable position later on.