Looking Forward to Paris 2015 — The Next Global Conference on Climate Change

Thu, 10/29/2015 - 10:27 — Ryan Reiber

The Paris 2015 Climate Change Conference could lead to a global agreement on climate change mitigation. While unlikely, part of this agreement could include a global carbon pricing system based on the ‘fair’ allocation of carbon budgets (amount of carbon emissions that each country is allowed to produce). A recent article from the World Economic Forum compared three different carbon allocation rules: a tax rule, an equity-based rule, and an egalitarian rule. Each has its benefits and drawbacks.

In the equity-based rule, national carbon budgets are allocated based on a nonlinear function of current emissions per capita. This reduces the complex problem of sharing the burden of climate change mitigation to a single variable (emissions per capita). But most importantly, the curvature of the equity-based line closely aligns with the planet’s carbon budget as determined by scientists: carbon budgets increase very quickly at low emissions per capita, but increase more slowly as emissions per capita increase.

This is in stark contrast to the tax rule — which proposes a linear relationship between a nation’s carbon budget and emissions per capita — and the egalitarian rule — which proposes an equal carbon budget for all nations (regardless of current emission levels). Countries with lower emissions per capita will naturally favor the egalitarian rule, whereas high-emitting nations will tend to prefer the tax solution. The equity-based rule represents a compromise between the two alternatives: low-emission countries will get a smaller carbon budget than under the egalitarian rule, and high-emission countries will get a larger carbon budget than the egalitarian rule, but lower than in the tax rule.

The ETH Chair of Resource Economics has created a nifty climate calculator to compare the impact of various climate policies.

Some Promising News Leading up to the Paris 2015 Conference

More than 150 governments — accounting for 90% of the world’s economic activity — have already submitted their national climate plans to the UN ahead of the climate change conference in Paris next month. The current plans would allocate about $13.5 trillion in investments for energy efficiency and low-carbon technologies between 2015 and 2030. But even these commitments are not enough to limit warming to below 2 degrees Celsius; in fact, the current proposals put the planet on course for at least a 5 GtCO2e overshoot. According to Ceres, to get within the accepted 2 degrees Celsius emissions range, countries would need to:

Commit to new long-term emission targets
Create a system to review and if necessary intensify commitments every 5 years
Implement a carbon pricing system to boost the shift to a low-carbon economy

There’s still a long way to go:

To meet our global 2 degrees Celsius target, we would need to invest more than an additional $1 trillion in clean energy every year up to 2050. But the national climate plans submitted so far are a great start, and an indication that momentum around climate change action continues to grow. 20 years from now, the Paris 2015 Conference could be seen as a crucial turning point in the fight against climate change.

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paris 2015

carbon pricing

clean energy investment

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