GLOBAL SUSTAINABILITY . . . CLIMATE JUSTICE1
Summary
In 1992 at Rio, the world agreed to tackle climate change (Global Warming) and “to stabilise
greenhouse gas (GHG) concentrations in the atmosphere at a level that would prevent dangerous
anthropogenic interference with the climate system” (under the United Nations Framework
Convention on Climate Change, UNFCCC).
Each year country representatives meet as the Conference of Parties (COP) to the UNFCCC, striving
to reduce emissions and avoid dangerous climate change.
The COP recently determined that global emissions need to be zero by 2050 if we are to avoid
dangerous climate change. Yet more than 25 years after the Rio Convention there is no clear
strategy to achieve this target.
The UN has determined the Carbon Budgets, which when emitted to the atmosphere, will increase
the global temperature by a specified amount. The UN data shows that the carbon budget for a
2.0°C temperature rise is around 640 Gt CO2 from 2020. Global emissions have been roughly steady
for ca 5 years at around 36 Gt CO2/year, which at this rate leaves only 18 years to reach and exceed
the 2°C temperature limit - dangerous climate change. The UN is pleading for stronger action from
all emitters. Current commitments mean we face temperature increases of 3° to 4°C this century
and continuing therafter The longer we delay reducing our emissions the harder it becomes to limit
emissions to the 640 Gt carbon budget, let alone the target of 207 Gt CO2 for the desirable target of
1.5°C.
This paper proposes a fair method to meet the 2.0°C limit (ca 640 Gt CO2). We must move fast!
Contraction and Convergence was proposed in the mid 1990s. It showed how countries can reduce
emissions, depending on their emissions at the start. High-carbon countries decrease their
emissions while low-countries can increase emissions above their low starting levels. Notably, at
Kyoto in 1997, 37 high-carbon countries committed to limit their emissions by over 5% in 5 years,
which fostered international trading in emission entitlements. This was a model to show the lowcarbon
countries how they could participate in the future. Unfortunately, this never evolved further.
The BASIC countries – Brazil, South Africa, India and China – suggested that each country’s “historic
emissions“ need to be added to future emissions in determining the allocation of emission
entitlements. This was understandably not favoured by the USA which had the greatest legacy of
historic emissions. This approach has not been promoted in recent years.
The present proposal assumes most large emitters signup. Each country is allocated equal per
capita emissions entitlements, scaled to its population, such that global emissions in the long term,
do not exceed the global carbon budget. High-carbon countries like Australia do not receive
sufficient entitlements for what they need to emit. And low-carbon countries have more
entitlements
than they can comfortably use. International trade in entitlements between high–carbon countries
and low-carbon countries enables compliance with an agreed emissions trajectory,
so global aggregate emissions match the agreed carbon budget.
The model used here commences trading in 2021 with global allowed emissions 4.0% lower than the
estimated emissions in the base year, 2020 (ignoring the lower emissions in 2020 due to the covid
pandemic). A steady rate of emissions reductions, year on year, is used to ensure a uniform
challenge during the 30 year decarbonisation. By trial and error a 4% year on year reduction
produced aggregate emissions of 621 Gt CO2 by 2050, marginally below the ca 640 Gt CO2 limit for
all time.
Table A shows each country’s costs or income for a politically realistic model of 49 countries of
which six abstain from the commitment to meet the continuing 4% reduction model. The six
abstainers are USA, Russia, Iran, Kazakhstan, United Arab Republic and Venezuela. It is important
that China participates. It has higher than average per capita emissions and would need to buy
entitlements from others.
At an assumed price of $20 per tonne, countries buying entitlements would spend up to 0.5% of
GDP but a few higher. Some low carbon countries like India and Pakistan would reap significant
benefits, 3.9% and 6.6% GDP respectively.
This scheme is a quantitative and fair way that developed countries pay developing countries
substantial funds that could rapidly fulfil their sustainable development goals.
It is most surprising that developing countries have not been more active promoting the equal per
capita policy.
Implementing this model in 2021 can ensure we do not exceed a temperature rise of 2.0°C.
Contents
Global Sustainability ................................................................................................................ 1
Background 3
Global Sustainability Overview 4
Urgency – Paris not sufficient 5
Options to reduce emissions 5
Equal per capita emissions entitlements 6
No time for Convergence – equal per capita entitlements at the start ............................................ 9
Value of international trade in emissions permits – implications for countries 9
International trade – winners and supporters - see Attachment A 10
Environmental Marshall Plan [Kofi Annan Plan?]– exchange cash for development 12
Emissions trading overcomes arbitrary nature and uncertainties of the Green Climate Fund. 12
Free-Loaders – seem inevitable in initial efforts 12
Emissions trade – potentially cannibalises other aid 13
Virtues of rapid, global development and SDGs 13
Future Legal Liabilities and public standing – governments and firms 13
GLOSSARY 15
A. Value of trade in emissions permits in 2021 ......................................................................... 16
* About the Author; 19
Personal Plea 19
Background
The 1992 Rio United Nations Framework Convention on Climate Change was inspiring. The world as
a whole agreed “to stabilize greenhouse gas (GHG) concentrations in the atmosphere at a level that
would prevent dangerous anthropogenic interference with the climate system.” The atmospheric
concentration was 300 ppm CO2 at that time, already a slight increase from around 280 ppm
prevailing from the last ice age to the start of the industrial era. The Framework Convention
contains no enforcement mechanisms.
Consequently 28 years later, annual global emissions are still increasing – from 24 Gt CO2 in 1992 to
~35 Gt CO2 in 2017. And so are atmospheric concentrations from around 280 ppm CO2
preindustrial level to over 400 ppm CO2 since ca 2015, a rise of over 42% in this critical GHG.
Despite continuing efforts over 28 years we have failed seriously to reduce GHG emissions,
atmospheric concentrations and avoid dangerous climate change in the future.
The ‘carbon budget’ is a measure of aggregate CO2 emissions, from eg, 2010 to 2100, that specifies
the temperature increase that results with this CO2 addition to the atmosphere. The Emissions Gap
Report 2017 by the UN Environment Panel shows the correlation of carbon budgets with associated
temperature increases.
Under the 2015 Paris Agreement countries submit Nationally Determined Contributions (NDCs) with
plans to reduce their emissions. The 2018 UNEP Gap Report estimates a global mean temperature
rise of 3.2℃ this century2, with increases continuing thereafter, with all of the conditional NDCs and
existing climate action. Current commitments are seriously inadequate.
Global Sustainability Overview
The basic concept is to introduce ‘equal per capita carbon emissions entitlements’ with international
trading in the entitlements/credits/permits. This is cap and trade with a contracting cap. Periodic
emission caps contract over time so the aggregate emissions do not exceed a carbon budget. This
requires formal agreements to manage the allocations, actual emissions, reconciliation with trade
and verification. This is an enormous challenge – but it can meet targets to avert dangerous climate
change.
High-carbon countries will continue to have real emissions in excess of their allocated credits, eg
Australia emits around 18 t CO2 annually per person (a very high-carbon country). In the first year
of operation, credits issued would be a little less than the current world average per capita rate,
around 5 t CO2 per year. So Australia would need to buy around 13 t CO2 credits per person in
trading year one (18 t – 5 t).
And low carbon countries like India would be issued the same 5 t CO2 credits per person. As India
emits less than 2 t CO2 per person annually it could sell 3 t CO2 credits per person (no compulsion
but a sovereign choice). The price for these credits would be set by free trade in international
markets.
At a hypothetical price of $20/t CO2 Australia would pay $260 per person annually (say around
0.4% of GDP) while India would earn around $60 per person annually (around 3.9% GDP)3
The scheme relies on an equal sharing of the limited amount of carbon credits – set scientifically to
avoid dangerous global warming. The allocated quotas to countries are unambiguous and avoid the
arbitrary and contentious nature of grants to the Green Climate Fund. This Fund is currently
mooted to raise $100 billion from developed countries to give to developing countries, annually
from 2020 - but the rules or criteria for raising funds from developed countries and allocating them
to developing countries are subjective and contestable.
With ‘Global Sustainability’ international trade in the rationed issue of carbon credits likely creates
significant trade flows with repercussions for balance of payments and exchange rates. The high
income to developing countries would dramatically boost the speed and extent of achieving
sustainable development. But there could be a significant cost to some developed countries and a
likely basis for opposition within them.
Whatever we do, now or later, there will be some costs and changes to how all countries, ‘do
things’. The aim should be to reduce GHG emissions fast, fairly, efficiently and accepting necessary
changes to achieve a low-carbon and sustainable climate and associated economies. The longer we
defer difficult action now the greater and less controllable the problems become for future
generations. Changes made now will foster innovation, opportunities and growth.
Global Sustainability is essentially a return to the Cap and Trade model which started with Kyoto in
1997 – plus reliable and accelerated funding for Sustainable Development. Regrettably, cap and
trade has waned over 20 years. But with politically astute promotion in developing and developed
countries it can restart and meet agreed targets. What other effective alternative is there than to
agree on, and commit to, distribution of the limited and shrinking carbon budget?
2 UNEP Gap Report 2018, p21
3 Table in Appendix A
Urgency – Paris not sufficient
Notwithstanding the best outcome, the Paris agreement is most unlikely to achieve the agreed
targets of +2°C let alone +1.5°C.4 Much more needs to be done now to avoid dangerous climate
change.
The UN “Emissions Gap Report, 2017” 5 soberingly showed, pp 16 - 18:
The global emissions CO2 budget, starting from 2010, is 1,000 GtCO2 (range: 770-
1,380) for limiting global warming to below 2.0°C with more than 66 percent
probability; and less than 565 GtCO2 (range: 550-580) global carbon budget for 1.5°C warming with
around 50-66 percent probability6.
Alarmingly, the Gap Report shows we emitted around 156 Gt CO2 in 5 years from 2010 to 2015.
In just 5 years we emitted 16% of the 2.0°C maximum global budget and 28% of the 1.5°C budget –
for all time – to avoid dangerous climate change!
These global carbon budgets are the estimated maximum CO2 emissions the world can emit from
2010 without exceeding the respective temperature limits; 1.5°C desirably and 2°C unreservedly.
Above these limits, the world faces further increasing frequency and severity of climate events:
hurricanes and damaging storms, floods, droughts and wildfires. Rising ocean levels will displace
millions from their traditional homes. Increasing ocean temperatures and increasing acidity (lower
pH values) will likely cause profound ecological changes. We are messing with the world’s total
ecological fabric with little idea of the changes. Frequent coral bleaching events, with death of
much of it, on Australia’s Great Barrier Reef are serious – but greater damage is virtually certain.
The ocean holds most of the extra heat absorbed by the higher GHG concentrations. The ocean is a
giant heat buffer that drives the climate.
The climate changes are irreversible in centuries. Non-linear ‘tipping points’ become increasingly
likely, ie, major and abrupt changes to climate like methane releases or large ice melts in Greenland
and Antarctica, which cannot be reversed.
But we can achieve the temperature targets if we agree now how to share a
limited carbon budget.
Options to reduce emissions
There are various proposals of how abatement could be effected. Like this submission itself,
proposals are commonly of a single approach. In contrast, Prof Ross Garnaut wrote a Review for
the Australian Government in 20087. Chapter 9, “Towards global agreement”, provides an excellent
review of various options and methods which the world could use to reduce emissions. Methods
reviewed include carbon taxes and tradeable emissions entitlements.
From this insightful analysis of alternatives Garnaut concludes:
“The only realistic chance of achieving the depth, speed and breadth of action
now required from all major emitters is allocation of internationally tradable
emissions rights across countries."
He notes also:
“The contraction and convergence approach addresses the central international
equity issue simply and transparently.”
I know of no better appraisal of of abatement which has the breadth and depth of Garnaut's
Chapter 9, His careful analysis confirmed my own intuitive view of our best option. Hence this
submission is based on equal per capita emissions. What plan or methodology is COP following?
Equal per capita emissions entitlements
4 Note that the Paris Agreement, 2015 required countries to “put their best efforts” and commit to
“Nationally Determined Contributions (NDCs)”
5 Fig 3.2 from UN Emissions Gap Report, 2017, p17
6 Personal communication from authors of Emissions Gap Report, 2017
Equal per capita emissions entitlements
“Isn’t that politically impossible?”
“Mm. If you reject this workable solution, what effective alternative do you propose?”
The world agreed in 1992 in the United Nations Framework Convention on Climate Change to avoid
dangerous climate change. At Kyoto in 1997, ~37 countries in Annex B agreed to constrain their
emissions to specified targets. They accepted a small challenge to their economies for the
necessary global benefit to limit emissions. Each country’s target was set at a fraction of its recent
(historic) emissions, but not a formally shared part of an overall emissions budget.
The 37 Annex B countries have high per capita emissions. Targets represented small changes from
their 1990 emissions and were politically acceptable – it was not a scientific basis. Article 17 of the
Kyoto Protocol set up a framework for emissions trading, which could supplement domestic actions
to allow countries to meet “quantified emission limitation and reduction commitments”.
Importantly, countries not in Annex B, with low per capita emissions, did not agree at Kyoto to
quantitative emissions constraints but wished to observe international trading schemes developed
by the Annex B participants – before they would later join the intended international cap and trade
scheme.
Unfortunately, subsequent international emissions trading under Kyoto’s first commitment period
was weakened by an excess of permits and the collapse of the USSR, which resulted in a surfeit of
permits8 because of high emissions in the Soviet era. The resultant permit price did not reflect the
realistic constraint needed - it was too low.
In 2009, at Copenhagen it was hoped that the second commitment period of the Kyoto Protocol
would include many other countries, potentially low-carbon countries that would sell excess carbon
credits (emissions entitlements) to the high-carbon Annex B countries. This would allow strong
participation in an international cap and trade scheme. The Guardian reported that9, “developed
countries tried to inject long-term emission-reduction goals of 50% for the world and 80% for
themselves, by 2050 compared to 1990.” This may sound good but it meant that,’ ”by 2050
developed countries with high per capita emissions such as the USA – would be allowed to have two
to five times higher per capita emission levels than the developing countries. The latter would have
to severly curb not only their emissions but also their economic growth”. “The developed countries
were attempting to fix a global carbon budget distribution that enables them to get away with the
hijacking of atmospheric space, a resource worth many trillions of dollars”.
Understandably, low-carbon countries rejected this proposal and Copenhagen failed because of the
unfair 50 year convergence period being proposed – and the international cap and trade model
subsequently waned.
8 http://ceag.org/marrakech-slow-train/
9 https://www.theguardian.com/commentisfree/cif-green/2009/dec/28/copenhagen-denmarkchina
An equal-per-capita allocation of the limited carbon budget is clearly fair.
If implemented immediately, the subsequent trading in emission credits would provide large incomes
to sellers of
emissions credits/permits and incur high costs for high-carbon countries.
Aubrey Meyer proposed Contraction and Convergence (C&C, Global Commons Institute), ca 1990,
which allows high-carbon countries time to reduce emissions to the global norm. This reduces the
high costs of permits if equal shares had been issued initially. C&C was supported over the years
and was a key focus at Copenhagen in 2009. However global abatement policies at the COPs have
now moved to less definite and less reliable abatement processes.
The world now, more than ever, has an urgent need for strong and reliable emission reductions. It is
20 years since the principle of quantitative emissions constraints with international trading was
accepted at Kyoto in 1997. The developed world has had 20 years to reduce emissions. Current
global emissions may have stabilised but no significant reduction seems apparent or likely. The
Emissions Gap Report 2017 Fig 3.2 shows that starting from end 2020 the world can emit:
• only 207 Gt CO2 before the 1.5℃ threshold, or
• 642 Gt before the 2.0 ℃ threshold.
At current world emissions rates of ~36 Gt/year the world has only 6 years before the 1.5℃ budget
is met or 18 years for the 2.0℃ budget. The remaining global carbon budget is too small to allow
emissions quotas to high carbon countries to converge to the global average. Swift action is needed.
Immediate per capita allocations of the carbon budget can speed up reductions, avoid exceeding a
budget for 2.0℃ and possibly reduce global warming from more severe damage.
When an equal per capita allocation occurs there would be an immediate realisation amongst highcarbon
countries of the seriousness of the situation. With a price on emission they can estimate
future costs, hence the incentive to reduce carbon emissions. All countries would benefit from
reductions in CO2 emissons but process changes and reductions in other greenhouse gases would
become apparent as other means of reducing their permit-buying costs.
If a group with international financial standing could develop and promote a suitable scheme it
might be agreed to by the COP in 2020. If the scheme was clear and popular, COP, or some other
suitable international body, eg, the World Bank Group, might allocate emission
entitlements/permits in 2021 and manage international trade. This is the basis for calculations
provided here, assuming trade commences in 2021.
The global carbon budget would be shared on an equal per capita basis, allocated to each country
according to their present population level. This budget could be a whole of life value, e.g. the
budget to 2100 years. Or the budget for shorter, fixed time frames, e.g. five years used for the Kyoto
Protocol, could be suitable, or one year as used here for convenience. These mini-budgets would be
reviewed and reissued at the frequency of the budget period. Garnaut in 2008, 201111 supports per
capita allocations of emissions, including Contraction and Convergence, which has all countries’ per
capita quotas converge in an agreed period. In my Global Sustainability framework there is no
Convergence period (it is zero) because of the current urgency for reductions.
Monitoring and verification of emissions is relatively straightforward, noting the value of the
Marrakesh Accords, which resolved many technical issues. However, the question of enforcement is
vexed.
Participation: There are likely to be abstentions from such a scheme initially and the means of
coercion or penalties would be strained, some may think insurmountable. But this model is the
most basic and simple in concept with a likely high level of acceptance in principle.
Sadly the USA is an unlikely participant at present. China is an indispensable participant. It is the
world’s largest CO2 emitter. The data in Attachment A show that China’s estimated CO2 per capita
emissions would be above the world target in 2021, the first trading year. China is estimated to pay
0.35% of its GDP for emissions permits. This could create a quandary. China would be encouraged
to participate even though the USA maintains its opposition to Paris. And if China participates the
USA may feel obligated to join.
It would seem that some critical mass of participation will be required to ensure its success. This
model provides a quantitative way of achieving suitable abatement with, arguably, a low level of
contestability. When this option is proposed, any who doubt it can be asked for a better proposal to
which countries will agree and which assures suitable emission targets are met to avoid dangerous
climate change. Doubters can also be asked for their response to their descendants, who will
question their ancestors’ opposition, “Why didn’t you take proven action to avoid the warnings of
deleterious and dangerous climate events and costs?” In 2019, Greta Thunberg told the UN,
“For more than 30 years, the science has been crystal clear. How dare you come here saying that you’re
Using old data, calculating indicative results, not forecasts
I made the calculation’s in 2018 using data from 2015 to 2017. The results from those early
calculations are presented now with a hope for discussion to promote international trading in 2021.
I may update the model later with up to-date emissions data.
Rates of contraction, starting from 2021
The calculations determine the rate of reduction required starting in 2011 to meet the respective
carbon budgets of 207 Gt CO2 for 1.5°C temperature increase or 642 Gt CO2 for 2.0°C temperature
increase. Figure 3.2 of the Emissions Gap Report, 2017 uses its estimates for projections from 2011.
For the present calculations, an aggregate emission of 358 Gt CO2 from 2010 to end 2020 was used
based on actual emissions to end 2015 and extrapolations to end 202012.
11 The Garnaut Climate Change Review, 2008; The Garnaut Review 2011, Commonwealth of Australia
EDGARv4.3.2
Actual global emisions after the 2017 Emissions Gap report, make the 358 Gt CO2 value too low. So
the results shown probably overestimate the time to reach the temperature targets and
underestimate the necessary speeds of reduction.
Calculations here assume that the global emissions budgets remaining at start 2021 are met (‘filled’)
by 2050. This seems a suitable target as emissions have to be close to the budget by 2050 if we
wish to limit dangerous temperatures and risks. The most natural contraction path is a constant
rate of contraction. Ie, each year’s contraction rate is the same as the previous year’s rate of
contraction. The relative change and difficulty of adaptation remains constant year to year.
The contraction rates, year-on-year, that achive a suitable cumulative total to meet the threshholds,
were 14% for 1.5°C and 4% for 2.0°C. The key parameters are;
Table 1 Constant rates of contraction,
year-on-year model estimates
The 14% year-on-year reductions needed to keep the temperature increase to 1.5°C is unrealistic
and sadly unachievable in my view. This is an alarming indication of how ineffective current
emissions abatement is. Rather than drift for years more, urgent, strong and effective reductions
are needed now.
No time for Convergence – equal per capita entitlements at the start
The need for strong and quantitative reductions means there is no time left for high-carbon emitters
to converge to the global target in later years under the Global Sustainability proposal here. The
model uses an equal population-based allocation of entitlements for the defined period. The
organising authority would need to post potential longterm contraction trajectories for guidance
and to aid market pricing.
Trading demonstrated in a trial
As a prelude to the ‘real thing’ the scheme could run on a trial basis, eg, in 2020. A managing
organisation, the ‘carbon permit banker’, could issue on paper hypothetical emissions permits on a
time trajectory to satisfy a global carbon budget. The banker could make trades to balance these
against countries’ actual emissions. Without real sales of permits, the shadow market would likely
need to issue more permits than meets the global budget and it would generate an accumulating
carbon debt. The banker would post the annual permit trade. The trade in permits by buyers and
sellers could be valued using a current, plausible carbon price.
Value of international trade in emissions permits – implications for countries
The limited range of values still provide a semi-quantitative and illustrative picture. The greatest
variation in the models comes from key parameters; eg, carbon price, rate of contraction, is the
contraction linear or proportional? Etc. So the particular model is less important than the exact
historical emissions being used for a reasonable representation.
I believe people shy away from the concept of equal per capita emissions because they are afraid of
the perceived costs and lifestyle changes in western, high-carbon countries – which they assume are
high. Accordingly, I have estimated some quantitative costs of emissions trading using the
following assumptions. If readers prefer other assumptions the results here might be adjusted
appropriately for a semi-quantitative appraisal:
• The base year for calculation is 2020
• Trading commences in 2021
• The maximum budgets for emissions is;
o 207 Gt CO2 from 2020 for 1.5°C to 2050 and
o 642 Gt CO2 from 2020 for 2.0°C to 2050
• The annual emissions rate reduces at 14%/year– so that by 2050 the carbon budget of 207
Gt CO2 for 1.5°C is fully emitted: and 4%/year for a budget of 642 Gt CO2.
• $20/t CO2 is the (assumed) market price of emissions permits
• Low carbon countries, i.e. below the global average per capita level (5.4 t CO2/year), do
not increase their emissions in the early years and sell their excess permits on the market
to high carbon countries.
• High carbon countries will emit more than their per capita allocations. They purchase
permits on the open market for balance and reconciliation.
• The model applies to the top 49 emitting countries and excludes international air and sea
transport. By end 2020 the annual carbon emissions of 49 countries is estimated to be 30.2
Gt CO2
• In 2021 with 4% annual reduction the annual carbon quota is 29.0 GtCO2, which the model
allocates to the 49 countries as follows:
• Low-carbon countries, with emissions in 2020 below the global average, emit the same
amount as 2020 and are allocated the same quantity in permits in 2021 (6.5 Gt CO2).
• The abstaining countries also are issued with the same number of permits as they emitted
in 2020 (6.1 Gt CO2).
• This leaves 16.5 Gt CO2 of permits which are distributed to the leaders in proportion to
their emissions the previous year.This represents a drop of 6.9% from their actual
emissions the previous year.
• There are infinite combinations to reconcile actual emissions (physical) with the fixed
number of tradeable permits. The model assumes that the leaders buy permits for the the
6.9% shortfall. The carbon price is assumed to be $20/t CO2. This is an estimate and would
very depending how effectively the countries could reduce their emissions – both buyers
and sellers.
International trade – winners and supporters1314 - see Attachment A
Attachment A shows the first year of international trade by the top 21 emitting countries with a
permit price of $20/t CO2 and annual global emissions reducing so the sum of emissions to 2050
meets the threshold global budget, for 1.5°C and 2.0°C
The trade in permits is expressed as a percentage of each country’s GDP. The results would vary
with the prevailing carbon price that would probably be set by a free, international market. Note
Global Sustainability 20200716 11
that the total annual trade in 2021 would be ca $160 billion for 91% of global emissions at an
assumed cost of $20/t CO2.
Scalable: These order of magnitude costs and benefits in different countries can be scaled for
different base assumptions of 1) carbon permit prices and 2) global emissions budgets.
The results show that low-carbon countries would gain significant trade income from the sale of
the emission permits, values given as percentage of GDP:
India 3.9%, Indonesia 2.0%, Mexico 0.35%, Brazil 0.7%, Pakistan 6.6%, Philippines 1.9%,
Egypt 1.9%
Conversely, countries with above average carbon emissions would pay significant amounts for their
permits. The table shows:
China 0.4%, USA 0.3%, Russia 1.3%, Japan 0.16%, Germany 0.18%, Iran 1.11%, South Korea
0.44%, Saudi Arabia 0.86%, South Africa 0.49%, Australia and Canada,0.43 & 0.45%
respectively and Poland 0.25%.
These 49 countries account for 91% of global emissions (EDGAR CO2 2015).
The high carbon countries who buy permits might see themselves as ‘losers’ in this scheme. This is
a narrow view whereas it can be seen as necessary to avoid catastrophic global heating. In many
countries, their real GDP increases at an average rate of 2% to 3% annually, but can be higher in
many other countries15. This gives a small improvement in living standards which people expect.
So reductions in GDP of more than 1% would be obvious and discomforting for many – both the
citizens but also countries’ ruling bodies applying these carbon costs to their populace to pay for
their above average emissions. Of course such costs will drive innovation to lower the carbon
footprint.
There are obviously serious difficulties in getting agreement to equal per capita allocations from
countries with high estimated costs of emissions permit trade., E.g. China, Russia, Iran, Saudi Arabia
and South Africa. And yes, the USA is problematic politically.
China, could be problematic with the estimated cost of their purchase of emissions permits at 0.35%
of the GDP is large and it might be chary of signing now. China has to be involved as they are the
world’s largest emitter, ~30% of global emissions. It is working hard to rein in emissions and is
implementing cap and trade schemes. Perhaps the Learned Leaders group [Kofi Annan et al] have a
view on how China might be approached on this?
South Africa, requiring 0.5% of GDP in its first year of permit purchases, might also be problematic.
Professor Harald Winkler from South Africa has played a leading role in the BASIC countries and
writing on this issue. (“Equitable access to sustainable development” 16) and might provide a view on
the South African position.
It is surprising that low-carbon countries have not pushed for equal per capita allocations.
Contraction and Convergence (C&C)17 had long been supported at the COPs. Apparently at
Copenhagen some high-carbon countries promoted C&C with a 50 year convergence period. The 50
year convergence period is seriously unfavourable to low-carbon countries and likely why they have
not pursued ‘equal per capita’ permits more generally, conflating it with convergence in 2050.
15 https://en.wikipedia.org/wiki/List_of_countries_by_real_GDP_growth_rate
16 http://gdrights.org/wp-content/uploads/2011/12/EASD-final.pdf
17 Contraction and Convergence proposed by Aubrey Meyer at www.gci.org.uk
Surely if the equal per capita model is explained well to low-carbon countries now – it is a zero
convergence period! - they would leap at it?
Environmental Marshall Plan [Kofi Annan Plan?]– exchange cash for development
Note the estimated emissions permit trade [at $20/t] involves annual trade of ca $160 billion! for
91% of global emissions if all 49 countries joined the scheme. The Green Climate Fund aims to
provide $100 billion per year. Its contributions and allocations are poorly defined, certainly not
formulaic or market based like equal per capita. Serious uncertainties abound around its eventual
success.
The quantitative trade in carbon emission permits under equal per capita could be partlly
substituted by agreements to exchange emission permits for specified aid. Note that the Marshall
Plan, paid by the USA, provided ca $130 billion in today’s values (less than 3% combined national
income of the recipient countries between 1948 and 1951) to aid development after WW II.
Emissions trading overcomes arbitrary nature and uncertainties of the Green Climate Fund.
The unusually high income going to low-carbon countries from emissions trading
would create major structural changes and likely consumption of more goods and services from
developing countries. There would be a major increase in international trade. The trade in
emission permits can be seen as a virtuous process – the developing countries develop rapidly in
ways to meet the Sustainable Development Goals (SDG) and the developed countries have greater
trade with the developing countries, stimulating their economies and helping compensate for the
large trade expense of permits.
The benefits of development projects in developing countries [think education, health, water,
power, communications and IT and infrastructure] could be strongly supported by exports of
technological expertise and specialist hardware from the rich countries. This production boost in
high-carbon countries can reduce concerns at hefty carbon expenses.
Free-Loaders – seem inevitable in initial efforts
At present the US seems unlikely to join such a scheme and being a major emitter could create a
startup problem. More generally, Garnaut said, “Deep trade among a set of countries which
includes major sellers and buyers of entitlements is enough to secure these benefits, not all countries
need to participate in trade“18. The top twenty one emitters account for three quarters of global
emissions, see attached table; and three of these would be major sellers of entitlements, India,
Pakistan and Indonesia while Brazil and Mexico would also participate initially. With a suitable
critical mass in the start up, there can be many pressures applied to major free-loaders to join.
These include trade barriers (eg, Border Adjustment Measures) and legal challenges to nations and
carbon supplying corporations. There is also public and diplomatic pressure about the ethics of
neglected responsibilities. This may not affect recalcitrant leaders but it can affect the general
public with potential political pressures and outcomes. This would be strengthened by a strong,
concordant global voice noting this equitable and necessary action can avert the otherwise
inevitable dangerous climate change. There are no other alternative, likely means to avert this.
This is a fair and equitable process. With reasonable support this cap and trade scheme can meet
the tough challenge we now have due to insufficient commitment over 20 years. If this fails, the
longer term view is really frightening. Lord Stern’s Review19, estimated that without action, the
overall costs of climate change will be equivalent to losing at least 5% of global gross domestic
product (GDP) each year, now and forever. Including a wider range of risks and impacts could
increase this to 20% of GDP or more, also indefinitely. These are frightening costs and would be a
dreadful legacy to leave later generations.
18 Ross Garnaut, The Garnaut Review 2011, page 45
Emissions trade – potentially cannibalises other aid
Developed countries already provide support to developing countries facilitated by the SDG and
other aid schemes. Scandinavian countries stand out (around 1% of GNI) followed by the UK and
other European countries20. It would be important for developing countries that emissions trade did
not totally supplant other aid programs.
The basis of contributions to, and sharing from, the Green Climate Fund appear arbitrary.
Conversely, an agreed framework for trade in emissions permits provides a robust and quantitative
basis for funding development projects. The Green Climate Fund could be supplanted with grace –
with equitable, defined and larger development support.
Virtues of rapid, global development and SDGs
Emissions trade would be a significant change to trade dynamics. The overall ‘cost’ to high-carbon
countries can be viewed as other aid programs, a major altruistic measure. The USA is
acknowledged as the most generous in internal charitable contributions21, though low in
international aid. The US might be encouraged to join emissions trade to lift its international aid.
Overall, countries in the developed world should seem able to forego some small percentage of GDP
growth (probably less than 1%/year) to achieve two worthy goals; 1) emissions abatement likely to
avoid dangerous climate change and 2) an economic impetus, likely to readily achieve the
Sustainable Development Goals.
We could dream that in a few decades most countries would be at a reasonable level of
development. Importantly too, this would likely lead to population stabilisation. Development
brings the demographic transition – population stability – through education, health and women’s
fertility management.
Future Legal Liabilities and public standing – governments and firms
James Hansen is involved in suing the US President for lack of environmental care – due to climate
change. In the UK, the Plan B group is similarly suing the UK government for similar dereliction of
duty, which I think may include false or misleading information on the UK’s proposed abatement
and effects on mitigating global warming. I expect the book by Dr Peter Carter, Unprecedented
Crime: Climate Science Denial and Game Changers for Survival (2018) will heighten awareness of the
risks to all those involved in decisions involving carbon emissions, eg, promoters of Australia’s huge
Ardani coal mine. While parliamentary law makers may have some ex officio protection against
negligence by parliamentary decisions they still have to face family, friends and the public for their
roles in climate crime. This could be a useful argument to present to waverers to encourage
stronger mitigation.
19 Nicholas Stern, ”Stern Review on the Economics of Climate Change”,
https://en.wikipedia.org/wiki/Stern_Review, Oct 2006
20 https://en.wikipedia.org/wiki/List_of_development_aid_country_donors
21 http://www.independent.co.uk/news/world/americas/america-new-zealand-and-canada-top-listof-
world-s-most-generous-nations-a6849221.html
Global Sustainability 20200716 14
May 2020 Harley Wright, Roseville NSW 2069 Australia, mob +61(0)428 976 450 , email:
harleyjwright@gmail.com
*About the author, see end pages
GLOSSARY
C & C Contraction and Convergence
CO2, CO2e, Carbon carbon dioxide, carbon dioxide equivalent,
carbon
COP Conference of Parties (to the UNFCCC)
Copenhagen COP 11 2009 in Copenhagen
Emissions Entitlements, Carbon Credits,
Permits Allocations of a right to emit 1 tonne CO2, eg,
ERU and CER
Emissions Trading Trade in emissions entitlements / carbon credits
GDP Gross Domestic Product
Greenhouse Gases, GHGs Any of the 6 gases in Annex A, Kyoto Protocol
Paris COP 21 2015 in Paris
SDG UN Sustainable Development Goals
UNFCCC United Nations Framework Convention on
Climate
Change
A. Value of trade in emissions permits in 2021,
Equal per capita emissions allocations – decrease 4% y/y
Income from sale of, or cost to buy, emissions permits as a percentage of each country’s GDP
first trading year, 2021.
Ideal model: 48 countries alll of which agree to work with the ideal model, viz, ie, accept equal per capita emissions
permits (entitlements) and to trade.
Politically realistic model: 49 countries (includes the Philippines a larger market), has same conditions as in ideal
model except 6 countries abstain but maintain Paris commitment. The six abstainers are; USA, Russia, Iran,
Kazakhastan, United Arab Republic and Venezuala.
Key to table Kyoto countries Abstaining countries
CREDITORS: Low carbon countries can maintain static emissions and sell excess entitlements to high emitters
W49 incl Kyoto 89.4% 0.27% 166,647 0.23% 163,749
Global Sustainability 20200716 18
• IPCC gives global Carbon Budget from 2010. Hence need to estimate here the emissions total to 2020 for
model estimates commencing in 2021. The estimate for 2010 through 2020 is 358 Gt.
• Carbon Price = $20/t CO2
• Annual per capita emissions drop 4% from 5.42 t in 2020 to 5.20 t CO2 in 2021
• Annual per capita emissions continue to decrease by 4% each year
Basic Model Assumptions – Trade emissions permits in first year, 2021
These estimates were developed before the 2020 corona virus pandemic and subsequent economic disruption.
Although GHG emissions, particularly CO2, will be lower in 2020 than I had estimated before the disruption, this is
not significant for the purpose of modelling the exchange of funds, or possibly SDG benefits.
Base year data for 2020
The Carbon Budgets are estimated from the UNs values for 2010
* About the Author;
Dr Harley J Wright, November 2019 Roseville NSW 2069 Australia, mob 0428 976 450, email:
harleyjwright@gmail.com
I have been an environmental scientist and manager for 30 years, coming from a training in physical
chemistry. I have had frequent, detailed engagements on climate change policy from national and
corporate perspectives. I provided detailed expert commentary on the penultimate draft of the IPCC’s
Synthesis Report and Summary for Policy Makers 3AR. Now retired, I work on policy aspects of climate
change and having no commercial or government affiliations, I act on my own account. I am an Australian
citizen who is deeply concerned that the world is not acting firmly enough to deal with the increasing
threats from global warming. I hope this helps.
Following the COP's Durban Platform request for “views on options and ways for further increasing the
level of ambition …” I submitted my Sydney Bridge “Framework to share carbon space to ‘increase
ambition’ and ‘ensure highest possible mitigation” to the UNFCCC/COP in 2012; see;
http://www.gci.org.uk/Documents/Sydney_Bridge.pdf
Personal Plea
Do you know anyone who thinks the world will reduce emissions sufficiently -
under Paris or other measure - to leave a chance of avoiding +2°C? I don’t, and
I’ve discussed this with many informed people.
• What do you think about this?
• Are you comfortable leaving a dangerous climate and tipping points to our
descendants?
What is the best time to commence strong and effective reductions?
1997 at Kyoto? This would have been ideal. If all countries had accepted Contraction and
Convergence then we would have had time for a measured response with minimal stranded assets.
2020? Measures we adopt now must give fast emissions reduction and will leave some
stranded assets and costs, more than in 1997.
Later, say 2027? Warming impacts will be worse and more disruptive. The increased efforts in
costs managing more catastrophic climate damage will compete with the many major and often drastic,
changes needed to reduce emissions and even try to remove CO2 from the atmosphere.
Now is undoubtedly the best time to commit to an immediate, strong and effective quantitative
emissions trajectory. This is a climate emergency!
Equal per capita emissions entitlements can avoid dangerous climate change if commenced now.
Unbridled emissions of greenhouse gases (GHGs) is now established beyond all reasonable doubt to have
warmed the earth by around 1°C above preindustrial temperatures and is already heading to dangerous
climate change. Our GHG emissions are now beyond the assimilable capacity of the environment.
Equal per capita emissions entitlements is equitable. Every person on the planet gets an equal
entitlement to the limited amount of GHG that can be emitted to avoid dangerous climate change.
People in high carbon countries can no longer emit GHGs without constraint as they have done
historically. The limited carbon budget remaining is now distributed equally amongst all. International
trade in carbon entitlements (= permits) allows high emitters to pay for their emissions. Low emitters
earn income from selling their excess permits. Everyone is subject to the same cost pressures to reduce
their emissions.
It requires small economic concessions by the high-carbon, generally well off, countries.
How many developed countries would be too selfish to not participate?
• To limit further global warming, and
• Decisively provide transformative, sustainable development to developing countries?
It is surely unconscionable to further delay the current challenge only to leave rapid global warming and
ever rising costs to later generations? At Kyoto, 20 years ago, we had an agreed commitment to
international trading with cap and trade. So far, we have failed. With strong responsibility and
commitment now we can – we must – make it work. Should we fail now, history will judge us harshly.
