Towards a global climate regime

How much carbon developed and developing nations will be allowed to emit in the coming years is a hotly contended issue. Pan Jiahua and Chen Ying discuss one possible solution.

The key to negotiations on a post-2012 international climate regime is the equitable allocation of emissions-reduction obligations with respect to the circumstances of individual nations. To date, a number of proposals have been made to achieve this model, but very few of these have taken into account the situation and requirements of developing nations.

To better embody equitable principles and protect the interests of developing nations, a research group at the Chinese Academy of Social Sciences led by Pan Jiahua set forth in 2002 a set of aims based on human development principles. These principles included the allocation of emissions rights giving priority to basic human needs; promoting low-carbon development; and restricting excessive and wasteful consumption. The group’s report was distributed at the United Nations Framework Convention on Climate Change’s (UNFCCC) eighth meeting of the Conference of Parties (COP8) in New Delhi. Since then, improvements have been made to the concepts, methodology and quantitative analysis of the proposal’s structural framework. The latest advances were presented in the side events at the COP9 in 2003 and the COP12 in 2006, and received a positive response internationally.

Recently, attempts have been made to develop a new proposal for the equitable and quantitative allocation of carbon entitlements and to discuss key features of the international climate regime, such as financial institutions. Taken together, these efforts will allow the building of a complete international climate regime – the Carbon Budget Proposal (CBP) – for the post-2012 era.

There are several aspects included in the equitable principles of the Carbon Budget Project:

*Greenhouse-gas emission rights are a human right that ensures survival and development. Equality means ensuring equality between individuals, not between nations.

*The crux of promoting equality between individuals is to ensure the rights of the current generation. Controlling population growth is a policy option to promote sustainable development and slow climate change.

*Given the wealth accumulated during development, which was accompanied by greenhouse-gas emissions, equality today includes equity acquired in historical, current and future development.

*Giving priority to basic needs means that the allocation of emission entitlements should reflect differences in natural environments. 

CBP research shows that if only carbon dioxide (CO2) emissions from fossil fuel are considered and emissions peak in 2015 and fall to 50% of 2005 levels by 2050, the annual per-capita carbon budget for 1900 to 2050 will be 2.33 tonnes of CO2. Initial carbon budget allocations for each country are made in direct proportion to its base-year population, with adjustments made for natural factors such as climate, geography and natural resources. For example, Russia and Canada have cold climates, Australia and Canada are sparsely populated and South Africa and China have relatively high carbon emissions from energy consumption.

However, if all these countries are taken together, the changes to the initial carbon budget are limited – between -20% and 78%. But the historical emissions of developed nations have not only left their own budgets massively overdrawn, but have infringed on the rights of other nations to produce emissions. Developing nations, despite often being historically under budget and therefore having the right to grow and to create emissions, have no choice but to transfer their carbon budgets to developed nations in order to cover the historical excesses of developed nations and ensure basic future needs.

Budget transfers are expected to be in the region of 455.7 gigatonnes of CO2. At the current cost of US$13 per tonne, this trade will be worth US$59 trillion– far beyond the amount already provided to developing countries in financial assistance to combat climate change. 

Even if there are carbon budget transfers to ensure the basic needs of developed nations, high per-capita emissions mean that regardless of strict measures and targets, future accumulative emissions will still be over budget. Approximately 60% of the excess can be offset via the carbon market or overseas emission reductions. However, the budget will still be overshot and punishment via progressive carbon taxes will be necessary, with the excess being carried over to the next round of commitments.

The CBP has no special advantages for China. In fact, it will be a constraint on the country’s development. China’s initial carbon budget will be 458.8 gigatonnes of CO2. The combination of natural elements such as climate and natural resources will result in a slight increase in the carbon budget, while geographical elements will result in a decrease in the budget.

Overall, the impact of these adjustments will be small and China will be left with a final carbon budget of 452.2 gigatonnes of CO2. With historical emissions amounting to 88.7 gigatonnes, the country will be left with 365.5 gigatonnes for the future. If China strives for low-carbon development and its emissions peak at 55% over 2005 levels in 2030, and are then reduced to 45% of 2005 levels by 2050, the entire carbon budget will be consumed. Only if further cuts are made will China have surplus emissions entitlements to sell and will not need to purchase any.

Given China’s status as the world’s factory, the energy used in the production of exports gives rise to 30% of total emissions, and this is unlikely to change before 2030. China therefore faces a long struggle to reduce emissions. 

The Carbon Budget Project has a sound scientific basis and combines basic needs with the achievement of global sustainable development. The project also provides a comprehensive proposal for a post-2012 international climate regime that will be of great value in the breaking of the current deadlock in climate negotiations.

Professor Pan Jiahua is director of the Centre for Urban Development and Environment at the Chinese Academy of Social Sciences. His global
research interests include environmental economics and development, urban sustainable development and sustainable economics.

Chen Ying is affiliated with the Centre for Urban Development and Environment at the Chinese Academy of Social Sciences. Her research interests include sustainable development, environmental economics and global environmental issues.

Other scientists also assisted in the preparation of this article.

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