Global Trends by Martin Khor

Monday 3 August 2009

Towards a global climate deal   

High-polluting developed countries have already used up much of the world’s “carbon space”, and should pay up their carbon debt to facilitate a fair global deal on climate change.

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Next week, climate negotiations resume in Bonn in an attempt to reach a “global deal” in Copenhagen in December.

There are intense pressures to get developing nations like China, India, Brazil and Asean countries to commit to reduce Greenhouse Gas emissions. But the promised financial and technology transfers to help them move are still nowhere in sight.

The western media seems to blame developing countries for holding up a deal.  “India rejects green agenda with refusal to cut emissions for decade,” is the headline of a front-page article in the Financial Times on 1 August.

But it is unfair to expect developing countries to commit themselves to emission reduction before they are assured of the massive funds and technology they need to change from one production system to another.

Developed countries have a historical responsibility to help the developing countries because they have already taken up most of the “atmospheric space” available.  The atmosphere can only absorb only so much carbon dioxide and other climate-dangerous gases. 

Above the danger level, the average global temperature will rise by more than 2 degrees Celsius, with disastrous consequences.

Greenhouse gas (GHG) concentrations in the atmosphere have to be limited to 450 parts per million (ppm) or even 350ppm, and global emissions must be cut by 50 to 85 by 2050 compared to 1990 levels.

The key question for the Copenhagen “global deal” is how to assign the emission-reduction task fairly between developed and developing countries.

Developed countries are now proposing that there be a 50% global GHG emission cut by 2050 (from 38 billion tones in 1990 to 19.3 billion tonnes in 2050). They are willing to take a 80% cut themselves, from 18.3 to 3.6 billion tonnes. 

This implies that developing countries would have to accept a 20% cut, from 20 billion tones to 15.7 billion tones.  As their population is expected to double in that period, they will have a 60%cut per-capita.  Since population size is projected to remain the same in developed countries, their per capita reduction will be the same as their overall reduction, i.e. 80%.

It is simply unfair to ask developing countries to undertake a per capita emission cut just slightly below the cut that the developed countries are prepared to make.

If developed countries were to make a 100% cut, the developing countries would still be required to make a 52% cut per capita.

Developed countries would need to reduce their emissions by 213% by 2050, for developing countries to maintain their current per capita emission level (i.e. a 0% cut per capita by 2050). Developed countries would, in other words, need to cut emissions to 0% and create sinks to absorb greenhouse gases equivalent to another 113% of their 1990 emissions.

To both developed and developing countries this may seem impossible. For developing countries it may seem impossible to achieve economic development while maintaining (instead of increasing) their current, low per-capita level of emissions. For developed countries it may seem impossible to go beyond a 100% emission cut. But it may need two impossibles to make a possible deal. 

In a fair deal, the developed have to be assigned the task of going into “negative emissions” or cutting emissions by more than 100%.  For example, they could be assigned a 213% cut (from 18.2Gt to minus 20.5Gt), which they can achieve through the net creation of carbon sinks or transfer additional funds to developing countries to reduce their emissions and thus help the developed countries fulfill their  assigned task.

Underlying this approach is the idea that there can be a difference between the task assigned and the task actually done, with financing and technology helping to close the gap.

A complementary approach to a fair global deal involves establishing a global “carbon budget”, and then allocating fair shares of this budget or carbon space to developed and developing countries.

So as not to exceed the danger level, the world has around 600 billion tonnes of emission of carbon (equivalent to around 2,200 billion tonnes of carbon dioxide) to budget between 1800 and 2050.

Given their ratio of world population, the equitable share of the carbon budget for developed countries is 125 billion tonnes of carbon emissions of the total 600 billion tonnes. Developing countries would be allocated 475 billion tonnes.

The developed countries, however, have already emitted 240 billion tonnes of carbon between 1800 and 2008.  This is far above their “fair share” of 81 billion tonnes in that period. And, given the scenario of a 50% global cut and an 85% developed-country cut by 2050, they will emit another 85 billion tonnes of carbon between 2009 and 2050.

Thus, their total emission would be 325 billion tonnes of carbon in all from 1800 to 2050.  Since their fair share is 125 billion tonnes, they have a “carbon debt” of 200 billion tonnes of carbon, which they owe to developing countries.

On the other hand, if carbon space were allocated fairly, developing countries would have a share of 475 billion tonnes of carbon emissions between 1800 and 2050. However, the situation till now, plus the scenarios proposed by developed countries for now to 2050, would mean that developing countries in actual fact would only emit 275 billion tonnes of carbon. They would thus be emitting 200 billion tonnes of carbon less than their fair share.

In a fair climate deal, developed countries would compensate developing countries the equivalent of 200 billion tonnes of carbon.  This is equivalent to 733 billion tonnes of carbon dioxide.

In his book The Global Deal, the economist Nicholas Stern gives an assumption of the value of carbon dioxide of US$40 per tonne in the carbon trade.

From 1800 to 2008, the developed countries emitted 240 billion tonnes of carbon, when their fair share is 81 billion tonnes.  Their carbon debt is therefore currently 159 billion tonnes of carbon, or 583 billion tonnes of carbon dioxide.  Assuming a price of $40 per tonne, the value of this carbon debt would be US$23 trillion, as of 2008.

The carbon debt till now can be put in a global climate fund to help developing countries take action to cut their emissions.  Extra contributions can be added to the fund for each year where there is additional carbon debt (i.e. where emissions are above the fair carbon budget for that year).

Though $23 trillion may seem like a lot of money, it is only a little above the US$18 trillion that the developed countries are reported to have set aside for bailouts and provisions for banks and companies in trouble in the present financial crisis.  Though saving the banks may be important, saving the world from climate catastrophe is even more important and necessary.

If this approach and the fund can be agreed to, we would be well on the road to a global deal in Copenhagen.