Climate Change: Economics and Politics

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Climate Change Economics and Politics

• Introduction
• The current global climate architecture
• Architectures for Agreement
• Kyoto Lite
• Kyoto Plus
• Contraction and Convergence
• Greenhouse Development Rights

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1. Introduction

• Wk 4 Do we have obligations to posterity and if
  so what do they entail?
• Wk 5 Is (intergenerational) justice about
  protecting interests of particular (future)
  people or promoting impersonal values?
• Wk 8 Given the reality of climate change, how
  should the duties of climate justice be
  distributed?
• Wk 9 given future persons distant strangers
  are bone fide subjects of justice, which set of
  climate policies would be just, achievable
  cost-effective?

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2. The current architecture

• UN Framework Convention on Climate Change (1992)
• Kyoto Protocol to the UNFCCC (1997)
• National and supra-national policies EU
  20/20/20 plan

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UN Framework Convention on Climate Change

• Ratified by 189 countries (inc US, EU and China)
• Ultimate aim stabilize atmospheric GHG at
  safe level
• Specifies general ethical principles
• Commitments for assistancetechnology transfer to
  developing countries
• Reporting of GHG emissions national initiatives
• Promote research on climate science impacts

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The Kyoto Protocol to the UNFCC (1997)

• Ratified by 160 countries - into force Feb 2005
• Valid for 5-year commitment period (2008-12)
• Binding, but variable, GHG targets for 38
  developed nations (overall reduction 5.2)
• Mixture of regulatory market mechanisms
• 30 rise in 2012-16 allowance for non-compliers
• GHG targets based on 1990 emissions

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Kyotos Flexibility mechanisms

• Emissions Trading developed countries purchase
  carbon credits from countries with spare capacity
  to help meet their commitments
• Joint Implementation emissions credits for
  developed countries that implement cooperative
  emissions reductions projects
• Clean Development Mechanism developed countries
  receive credits for implementing projects that
  reduce emissions in developing countries

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National, regional, nongovernmental initiatives

• National government
• 2008 UK Climate Change Bill
• Local government
• 2008 US Regional Greenhouse Gas Initiative (RGGI)
• 2007 California Assembly Bill 32
• 2006 US Mayors Climate Protection Agreement
• Non-Governmental
• Business 20C German Entrepreneur Initiative
• Education Warwick University (eg)
• Community Network for Climate Action

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Problems with the Kyoto Protocol

• Short-term remedy
• Inadequate adaptation funds
• Comparatively little RD funding
• Complexity of KP threatens compliance
• Nothing on sequestration or geo-engineering
• Limited efficacy max cut in GHGs of 2 by 2012
• Too little, too soon?

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3. Architectures for Agreement

• Diversity 40 competing models
• Time-frame
• Level and form of architecture
• Continuity Tear up Kyoto or make it tougher?
• Stringency
• Compliance

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Six principles of climate equity

• P1 A Safe Atmosphere
• P2 Effective equitable adaptation
• P3 Affordability
• P4 Fair Burden Sharing
• P5 Congruence with general justice
• P6 Universal and equitable participation

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4. Kyoto Lite (Bush)

• AKA The Asia Pacific Partnership on Clean
  Development and Climate
• reduce the Carbon Intensity of participating
  states through voluntary measures
• Carbon intensity GHGs / GDP
• Involved US, Aus, China, India, S.Korea and
  Japan
• incentives to businesses to embrace clean
  technologies
• Global fund to channel clean technology to
  developing world

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Problems with Kyoto Lite

• Consortium members could achieve lower carbon
  intensity indices while still emitting more GHGs.
  
• Bush (eg) pledged to reduce US carbon intensity
  by 18 by 2012, but this could be achieved while
  emissions rise.
• Modest aims mean KL will not prevent dangerous
  climate change (P1) and there is no adaptation
  fund (P2).
• Narrow consortium lack of consultation with
  developing world means that KL is procedurally
  unjust (P6).
• The measures to be undertaken are not determined
  in line with a principle of fair burden sharing
  (P4).

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5. Kyoto Plus (EU)

• Proponents EU, Switzerland, a range of NGOs
• Strengthens extends the existing Kyoto
  architecture
• Combined unilateral multilateral approach
• Deeper cuts required of developed country parties
  (20 by 2020 30 by 2030 80 by 2050)
• New system of first-time targets for developing
  countries
• Technology financial resource transfer to
  developing world

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Problems with Kyoto Plus

• Limited timeframe targets mean it will not
  prevent dangerous climate change (P1)
• No systematic, global, adaptation fund (P2)
• Retains controversial grandfathering principle
  (P4)
• Ethical basis of multilateral component unclear
  (P4)
• Focus on inter-state responsibility ignores the
  way climate change influences intra-state
  inequity (P5)
• emissions allocation process is open to
  adjustment by parties with unequal negotiating
  positions (P6)

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6. Contraction and Convergence (GCI)

• Each person has an equal right to emit GHGs by
  virtue of their equal right to the absorptive
  capacity of the atmosphere.
• A global ceiling for GHGs is set based on how
  much the atmosphere can withstand without
  dangerous climate changes emerging.
• Each country is allocated a 100-year emissions
  plan consistent with ceiling of 450 ppm CO2e

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Contraction and Convergence (cont.)

• Aim 1 create a stabilisation and later a
  contraction in global GHG so levels remain safe.
• Aim 2 national emissions will converge around
  2050 on a common per capita level.
• Global Emissions Trading a country emitting more
  than its quota must purchase credits.
• Poor countries not required to cut emissions to
  same extent as rich, but there will be limits.

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Problems with Contraction Convergence

• US and some other climate laggards remain
  sceptical, and propose instead contraction
  without convergence (P1)
• Meaningless of the equal per capita emissions
  right given the safe global GHG budget is
  almost exhausted
• Per capita emissions convergence ignores north
  in the south and south in the north
  distributive inequities (P4)
• No systematic link to responsibility or capacity
  too harsh on developing world, too easy on
  developed world (P4/P5)
• The South, who may starve even if their per
  capita emissions rights are respected, have
  little incentive to endorse contraction (P4/5/6)

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7. Greenhouse development rights (EcoEquity)

• Emergency climate program (ECP) to limit
  warming to 2oC
• GHGs must peak in 2013 (CO2425 ppm CO2e
  470ppm)
• 80 cut in global GHGs by 2050 at annual cost of
  1 GWP
• Step 1 Global mitigation budget required to meet
  2oC goal
• Step 2 Assign proportion of global budget to
  each nation based on historical responsibility
  and ability to pay
• Step 3 Detailed national emissions budget
  reflecting 12

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Greenhouse development rights (cont.)

• Include global development goals within climate
  architecture
• Recognize global development rights right of
  all to dignified level of sustainable development
• Dignified level 7500 year (in 2005 US PPP)
  compared with current global average of 8500
• Roughly based on 1.5 global poverty income of
  5000 to model global middle class level
• GDRs are possessed by individuals not states -
  states are merely collections of unequal
  individuals

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Greenhouse development rights (cont.)

• Those below decent level (who rely on survival
  emissions) have no duty to finance climate
  architecture.
• Those above decent level (wherever they live)
  must protect the GDRs of others by funding global
  climate architecture
• We calculate these duties in terms of a new
  national Responsibility and Capacity Indicator
  (RCI), which weighs responsibility capacity
  equally.
• Current RCIs of key parties are US (33.1), EU 27
  (25.7), Russia (2.3), China (5.5), India (0.5).
• Total annual bills in 2020 will be 275b (US),
  216b (EU), 98b, China (43b), LDCs (0.3b)

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Problems with Global Development Rights

• ECP unrealistically ambitious /or unaffordable
  P1, P3
• Largely silent on adaptation compensation
• Calculation use of RCI why weight
  responsibility capacity equally? Why view
  capability as income? (P4)
• Only counts 1990-emissions (concedes too much to
  transition economies, penalises unfairly recently
  industrialised countries) P4
• Under-theorised mix of general local justice
  (P5)
• Political feasibility of uniting global poverty
  environment goals (P6)