An EcoEquity Paper for the CAN Equity Summit (Bali, May, 2002)

Friends

This paper assumes the necessity of trading, so the first thing we want to say is that we sincerely hope this assumption doesn't offend anyone. Nevertheless, we take it as self-evident that, without trading, the Kyoto Protocol would now be dead. And as we also believe that trading is going to be needed to maximize our collective "adaptive capacity," we see the larger equity/adequacy project as inseparable from the challenge of making trading fair.

We don't think it's going to be easy, but this is the way we see it. Just to put our cards on the table…

• Some people see the overriding imperative as being early US reentry into the climate regime. (Under a future administration, of course.) They speak for pragmatism above all other considerations. They cite the fragility of the European green bloc, the lack of capacity in the LDCs, and the power of US diplomacy, and they appeal to the "radicals" to put aside their utopian longings and accept a strategy of "sequential decision making" (incrementalism) as the best way forward. This is taken to imply rapid graduation to trading for at least some large developing countries, by whatever means necessary.

• Others among us think it's time for the climate protection coalition to fall back to consider the big questions: adequacy, environmental rights, ecological debt, a reckoning with the North's historical responsibility for climate change. They want to start fighting for a regime that's structured to be both adequate and fair, and they want to do it now, with or without the US.

• Others want, just now, to stress differential impacts and vulnerability, as steps towards equity, but also as a new strategic direction and a way to extend and strengthen the climate protection coalition. They stress that rights-based allocation is by no means the whole of equity agenda, or even a substitute for "sustainable development."

• We, for our part, willingly grant both the complexity of the situation and the case for early action. Nevertheless, we think that, one way or another, a historic choice will be made during the second commitment period debate, and that appeals to incrementalism do nothing to alter this fact. More particularly, we focus on allocation, and insist that the problem of planning a phased transition to tradable per capita allocations is on the table, and that there is no reason to believe that it can be pushed off. The issue of developing country commitments is simply too pressing. Explosive as the per capita issue is, we do not believe that it can be finessed.

• First of all, it now appears that the risks of climate change are so great that we need to strain for a realistic plan for hitting a low concentration target, which we believe must be set at the politically inconvenient level of 450 CO2 equivalent or lower. We draw this from the goal of a maximum change of 2º C (already dangerous) and the following chart of temperature vs. CO2 concentration.

• Take a look, first, at the three solid lines, each of which represents one of the IPCC's low (1.5º C), "best" (2.5º C), and high (4.5º C) estimates for the Earth's overall climate sensitivity (equilibrium response to a doubling of CO2 equivalent concentrations).(1) The 2.5º C climate sensitivity line, as you can see, crosses the 2º C line at about the point where the projected CO2 concentration reaches 500 ppm; if the temperature sensitivity were 4.5ºC, the 2º threshold would be reached at 400 ppm (versus today's 370 ppm).

• Now consider the additional radiative forcing from non-CO2 gases. The IPCC's scenarios put the net non-CO2 forcing in 2050 (including the cooling from sulfate aerosols) at between 0.3 and 1.2 watts per square meter, equivalent to about 20 and 75 ppm of CO2. Taking a midrange value of 50 ppm and shifting the climate sensitivity lines to the left by that amount, we can see where they cross the 2.0º C line. The result (shown in the two dotted lines) is rough, but good enough, and quite frightening. If the climate sensitivity is 2.5º C, we get a 2º C temperature increase at a CO2-only concentration of about 450 ppm; if it's 4.5º C, we're already over the line, because we locked in a 2º C warming back when the CO2 concentration hit 350 ppm CO2, though, for a variety of reasons, we don't know it yet.

• We've all seen graphs of the trajectory needed to hit even 450 ppm CO2, which, following the argument above, is dangerously high. Still, since everyone uses 450 when they draw a soft landing path, we'll do the same. Take a look at the following graph, which we stole from RIVM. It compares a 450 path (the dotted line at the bottom) to three of the IPCC's SRES scenarios, most notably the "A1 Balanced" which, while "not any more likely than any other scenario" is the de facto BAU vision of the future, in which development in the South follows the gradually improving path of the North.

• "A1 Balanced," like all the SRES scenarios, models a "non-intervention" future in which there is no effective climate policy. This, we hope, is not our fate. The point here is that, whatever happens, it's going to have to have real force behind it if it's to bend the A1B curve down to the 450 path, let alone to something below it. More particularly, the next decades are going to be decisive, for as you can see, the 450 path diverges from the A1 paths almost immediately, and peaks shortly after 2020. That's not much time, and if emissions rise higher, they have to fall farther and faster to make it to 450.

• All of which, we think, shows why the politics of a precautionary cap are so important, and why a strategy that promises, at best, the begrudging support of the South will simply not do. Curves like this are becoming more and more well known, and as they do, incrementalism alone is becoming manifestly implausible as a means of making it to a soft-landing corridor. The bottom line is that we have to start talking about the long-term curves, and explaining how we plan to meet them.

• This is not to say that "pragmatism" is the problem; frankly, we're nowhere without it. But pragmatism has to be guided by the strategic logic of the soft landing path, and by analysis of the political coalition that will be necessary to achieve it. The problem, in a nutshell, is that an adequate regime will have to keep us under a low and perhaps declining cap, rather than being built up from the North's inadequate "willingness to pay."

• One other thing: Energy efficiency will not be enough to make it to the soft-landing corridor. In fact, as CSE has convincingly argued, efficiency alone could easily have the effect of locking out the "leapfrogging" to rapid low- and zero-carbon development that we're going to need, particularly in the South, if we're going to make it.

Here, in the hope that less is more, we will be very brief:

• The costs of mitigation are largely functions of the cap. In fact, the lower the concentration or impact target we chose, the more likely it is that the costs of a "fair" soft landing will be high.

• Even assuming that there are many "no regrets" and low cost options, costs will certainly be high for some nations, and some sectors. In fact, the need for rapid leapfrogging in the South will probably insure high aggregate costs.

• The costs issue is unavoidable.

• Historical responsibility implies debts. In fact, if "the North is responsible," it is no less responsible if the costs of adaptation and mitigation turn out to be high. Just the opposite, in fact.

• Contrary to the logic of "burden sharing," it is the very extremity of the North's atmospheric grab that forces us to move quickly, and thus to suffer a high-cost transition: the higher the costs turn out to be, the greater the North's responsibility to help pay them.

• Any focus on historical responsibility, ecological debt, or emission rights would make the costs issue more visible, but the precautionary cap is going to do this in any case. The linkage between the "rights" issue and the "costs" issue should not be overplayed.

• Consider why countries care about emissions rights. Once a global cap is in place-and we believe a cap is inevitable, if climate change is to be kept to plausibly tolerable levels-emissions rights will become an economic resource. And the lower the cap, the more valuable they will be. In fact, until carbon-free energy is just flat-out cheaper than carbon-emitting energy, a country's cost of energy production will be directly tied to the size of its permit allocation. And the measure that matters is the per capita allocation.

• If we may for a moment be crassly economic, a country's per capita permit allocation determines its permissible per capita withdrawal from the atmosphere, considered as a global fund. Countries that receive lower per capita allocations (and this is true regardless of their actual emissions) receive less per capita income from what should, clearly, be a global common resource. And for developing countries to receive a lower per capita share of this income than the rich countries is not only insulting; it is injurious as well.

• Further, it should be noted that even an immediate shift to per capita rights (and no one is proposing one an immediate shift; the talk here is about a phased transition) would be a important compromise on the South's part. After all, the vastly disproportionate share of the atmosphere's limited sink capacity that has already been converted into wealth and infrastructure in the North would simply be ignored.

• For these reasons and others, key Southern voices have long insisted on rights-based (per capita) allocations. Examples are many, but the declaration of the 1998 meeting of the Non-aligned Movement can perhaps stand for them all:

  "Emissions trading for implementation of (GHG reduction/limitation) commitments can only commence after issues relating to the principles, modalities etc of such trading, including the initial allocations of emissions entitlements on an equitable basis to all countries, has been agreed upon by the Parties to the FCCC."

• Also, it's worth noting that Dr. R.K. Pachauri, the new IPCC chair, is the director of the Indian group TERI, which only months ago called for climate action:

  "through comprehensive international participation and agreement on the final level at which to stabilize the concentrations of GHGs and on medium-term targets for reducing emissions. Carbon trading arrangements based on an equitable per capita allocation also need to be adopted. "(2)

• Perhaps all this is all merely political positioning, and there will be many to say so. But it seems to us, perhaps naively, that the preponderance of evidence indicates that the South is prepared to insist on the point. Indeed, the recent vote over the IPCC chairmanship, and Southern moves to defer the Fourth Assessment Report, indicate that the South's fear of being forced to accept "unfair" commitments remains a defining issue.

• Northern groups, accustomed as they are to thinking of trading as a simple win/win situation, have difficulty understanding the logic of the South's position. Nevertheless, Southern negotiators have at least two good reasons for resisting ad hoc emission limitation commitments, and for continuing to resist them until they receive a guarantee of future convergence to equal per capita rights. And these reasons, please note, maintain their power despite the short term environmental, health, and financial benefits that the South would enjoy through such an ad hoc allocation:
  1. By accepting an allocation based on (for example) growth targets or carbon intensity standards, Southern countries would be conceding that they do not currently have equal per capita emissions rights, and be doing so without any guarantee that they will get such rights in the future.
  2. In both the medium and long term, Southern countries would, absent a guarantee of medium-term convergence to per capita rights, risk being penalized for any reductions that they do make. This is because, if the final allocation is to be even partially grandfathered, countries that make early reductions reduce their emissions baselines, and thus their eventual share of the Earth's atmospheric space.
Be clear here. The two most commonly proposed paths to developing country targets-growth caps and carbon intensity
standards-are fundamentally forms of grandfathering. Under growth caps, a country would be able to sell unused permits, up to a baseline curve defined by some plausible rate of emissions growth. Under CI standards, a country would be able to sell excess permits if it reduced its CI by more than some agreed-to-and rarely explicit-rate. In both cases, importantly, the starting point is precisely current emissions rates, carbon intensities, and rates of growth or decline.

• Kyoto, we all hope, will soon enter into force, and the second commitment period debate is about to begin in earnest. The situation is new, the time is short, and the playing field is shifting. In this context, it is clearly time for all of us to have a big rethink.

• The ideas reflected in this paper are hardly ours alone. There's new thinking going on within the global justice movement, the environmental justice movement, and the NGO movement in general, and much of it turns on the emerging notions of environmental rights, just transitions, environmental space, and of course, the reinvention of the commons. The common property problem (the rights problem by another name) is at the center of all of these notions, and the climate movement isn't going to be able to avoid it. Indeed, it would be both foolish and damaging for it to try.

• The costs issue, too, is quite unavoidable. So note that, here in particular, the best defense really may be a good offense. Why, after all, would a per capita system be more expensive? Pronk himself averred, in an interview just before COP6, that tradable per-capita entitlements would be the most logical and efficient approach, as it would quickly create a large carbon market. This is just straight neo-classical economics, isn't it?

• In this vein, and with regard to the need for speed, RIVM recently published a comparison of a sophisticated "hybrid" proposal and a "contraction and convergence" approach. Its conclusion was that plausible graduation thresholds on wealth and emissions do not bring enough Southern countries under the cap in time to hit 450, and contraction and convergence, in comparison, would be faster. Given the situation, this is a conclusion that demands a Big Think.

• Northern environmentalists talk incessantly about "getting the incentives right," while left-greens around the world doubt that this is possible within the existing world order. In this case, though, it may be. The South has been saying for years that it wants a commitment to per capita before it will agree to accept emission limitations, and what the curves above show, as we read them, is that the second commitment period debate is the time to take them at their word. This may not yet be an opportunity that the diplomats can seize, but it's one that the NGOs should be putting on the table. For one thing, it might actually work.

• The real solution will be one that encourages the most early action, by whatever means. We know this. What we're saying is that this will require not only an openness to pragmatism and experimentation, but also a framework in which the South's legitimate fear of emission reduction commitments is no longer justified. Realism, in these matters, must begin here, and with the fact is that, on every front, the South is largely powerless. It's only within the climate battle that the South has the power to demand fair terms, and it's unwise to assume that Southern negotiators are unaware of this.

• Only a rights framework can honestly offer the South a fair share of the atmospheric space. Only a rights framework can ratchet up the North's willingness to pay to the point where it is even plausibly consistent with the scale of the needed international investments (or, for that matter, the scale of the North's ecological debt). Without such a framework, North to South transfer payments would be marked as "aid," and we know where that leads us. The way out of here is, fundamentally, resource sharing rather than burden sharing.

• This is, of course, a plea for "contraction and convergence," but not in its traditional form. The time has passed when C&C could be asserted as a "Plan B" to fall back on if Kyoto failed, when we could believe that an equity framework would dissolve away the minutia, detail, sleaze, compromise, and hardball politics that have characterized the negotiations since Rio. It would not. Our only claim is that, in a C&C-style transition, the climate regime might actually be robust enough to survive.

• Global events since September 11 have been tremendously disillusioning, but they have not led us to doubt that the "Bonn Coalition" between the Europeans and the South was of tremendous historical importance, or that the best hope for the climate regime is the strengthening of this coalition. We all know this of course; the question is if we always act like we do.

• The Europeans are, evidently, signaling that they can't do much more until the US reenters the regime. Nevertheless, they will be compelled to do so. The logic here is not derived from climate politics alone: Europe very much needs to build anti-hegemonic alliances to counterbalance the Last Superpower, and climate, precisely because it is not yet "high politics," offers one obvious (and powerful) way to do this.

• Pragmatic approaches to early action draw attention to the differing situations and capacities of countries to participate in a full-fledged trading regime, and their focus on this problem is their greatest strength. However, a commitment to convergence to per capita rights would not in any way preclude such differentiation, particularly not in the second commitment period.

• If the US stays out of the climate regime, and the rest of the world goes ahead with any serious thought to a global cap, it will have to explicitly take account of the space occupied by the great free rider. Doing so would put tremendous pressure on the international trade system, but this must be counted as a virtue, for that showdown is coming in any case, and the climate regime carries a weight unique among MEAs. Obviously, this is a big issue; we would only note that is has potential, in terms of further splitting the corporate class.

• The leaders of the US fossil-fuel party may be scum, but they're not dumb scum. When "skepticism" about the science became implausible, they fell back to the "unfairness" and cost arguments, and sometimes we think the US environmentalists have still not appreciated how powerful these arguments are, or what it will take to refute them. This is the "Byrd/Hagel problem," and it alone demands that the NGOs take a strong "fairness" position, domestically as well as internationally.

• < The problem of the US isn't just a problem of the Republicans. It is, as well, the problem of a people who find themselves, with every passing year, farther from their fading ideals. The US people have difficult choices to make, and the sooner we, as NGOs, face the logic of these choices, the better off we'll be. The message to the US people should be something like "If we're going to take more than our share, then we should at least pay for it." Something like this, in any case, is essential, and it requires us to be able to define "our share."

• Recall that, under Clinton, the US was experimenting with voluntary accession and easy graduation as ways of splitting the Southern bloc. This strategy will be back, and it is not ours. To be sure, we want to split the South, but in just the same way that we want to split the North-we want to isolate the supporters of the fossil cartel, and win the mainstream over to the side of sustainable development. It's a different split, and it implies a different coalition, and a very different politics of transition.

• Finally, one point about the US must be absolutely clear: the only acceptable position for CAN has to be that the US must ratify the Kyoto Protocol. If it can't comply, there are rules saying what the penalties are (and we know they're low!) But under no circumstances should CAN groups press developing countries to either take caps in the first commitment period, or to promise to take caps in the second, as a way to get the US to enter, not unless those caps are fair. It's plain who the free rider is here, and CAN must say so uncompromisingly. On this, what equity means is clear.

Tom Athanasiou and Paul Baer
EcoEquity
Berkeley, April 25, 2002

1. These numbers are from the IPCC's Second Assessment Report (1996); the Third Assessment Report (2001) keeps the range but does not give a "best estimate." However the mean of the 15 global climate models reported in the TAR is actually 3.6 degrees C.(Return to text)

2. T E R I. 2002, Rio to Johannesburg: towards concrete action, New Delhi: Tata Energy Research Institute. 10 pp, [Synopsis of the proceedings of DSDS 2002, 8-11 Feb. 2002](Return to text)