Justice and Finance at the Climate Summit

Jeffrey D Sachs

As governments gather in Dubai for this year’s climate conference, CoP28, in early December, two things are painfully clear.

First, we are already in a climate emergency.

Second, the richer countries, especially the US, continue to turn their back on the poorer countries.

This year’s debate will therefore focus on climate justice and financing: How to share the costs of climate disasters and the urgently needed transformation of the world’s energy and land use systems.   

Since the first CoP in Berlin in 1995, our governments don’t have much to show.

In 1995, they promised to stabilise the concentration of CO2 and other greenhouse gases in the atmosphere “to avoid dangerous anthropogenic [human-caused] interference with the climate system”.

CO2 emissions that year were 29 billion tonnes, but are now around 41 billion tons.

Then, the Earth had warmed by around 0,7°C compared with 1880-1920, but by now has warmed by 1,2°C.  

During 1970-2010, warming was around 0,18°C a decade.

Now, Earth is warming by at least 0.27°C a decade. Within 10 years, we’ll hit the 1.5°C upper limit agreed in Paris in 2016 (CoP21).

DISASTERS INTENSIFYING

As a result, climate disasters are intensifying: Floods, droughts, heat waves, super storms, mega fires and more, causing deaths, displacements and hundreds of billions of dollars of damage each year, with losses of US$275 billion estimated for 2022. 
  
What we need to do is clear.

We need to shift from fossil fuels (coal, oil, natural gas) to zero carbon energy: Wind, solar, hydro, geothermal, bioenergy, and nuclear, depending on location.  Countries need to interconnect their power grids with neighbours to diversify energy sources, thereby building resilience and lowering costs.

We need to shift to electric vehicles and to producing hydrogen for industrial use.

We need to end deforestation by raising agricultural productivity of existing farms and managed forests.

These solutions are within reach – but there is no agreement yet on how to share the costs.

There are three costs to consider: “Losses and damages” from climate-related disasters; adapting to climate change (costs of “weather-proofing” society); and, the costs of overhauling the energy system.  

SIMPLE JUSTICE

When it comes to losses, damages and adaptation, those who caused the climate crisis should help pay for those who are suffering, but had little role in causing the crisis.

That is, the richer countries should cover much of the costs paid by poorer countries. That’s simple justice.

When it comes to overhauling energy systems, no country has the “right” to emit CO2, so all should share in the costs.

Yet poorer countries need access to low-cost, long-term financing.  

Here’s the rub. Rich countries, especially the US, so far refuse to accept their fair-share responsibility for losses and damages and adaptation costs of poorer countries.

Nor have rich countries taken practical actions to ensure that poorer countries have access to low-cost financing for the energy transition.  

The US is responsible for roughly 25% of cumulative CO2 emissions since industrialisation started around 1750, even though it constitutes just 4% of the world population.

The US has emitted roughly 400 billion tons of CO2, or around 1 200 tons for each of today’s 330 million people, while in poor African countries, cumulative emissions are roughly one-thousandth of the US rate, roughly 1-2 tonnes per person.

Nonetheless, US politicians brazenly recommend “voluntary” schemes to finance poorer countries, a rather pathetic ploy to shift responsibility.   

TAX THE RICH

If rich countries were taxed just 10 cents a year (US$ 0,10) for each ton of cumulative emissions, the payment would be around US$100 billion a year, with the US paying around US$40 billion a year.

In addition, rich countries should be taxed around US$4 for each ton of new emissions, raising another US$100 billion or so a year.

Combined levies on past and current emissions would bring the total CO2 levies to around US$200 billion a year, with the US share coming to around US$60 billion.  

The US will no doubt continue to kick and scream in order to deny such accountability.

It will claim that paying around US$60 billion a year for past and current emissions would be far too costly – yet the US spends US$1 trillion a year on the military.

In fact, a levy of US$60 billion a year would amount to just 0,2% of the US GDP, a sum that is easily within reach.

I firmly believe justice will come.

World power is rebalancing between the rich and poor, so the ability of the rich world to evade their responsibility is coming to an end.

I believe this will lead to new forms of global taxation under the UN Charter and supervised by the UN General Assembly, including global levies on carbon emissions.

Yes, this will be a rude shock to rich countries that have long imposed their will on the rest of the world.

Yet the climate crisis is teaching us we are in an interconnected world, where all countries must accept their responsibilities for past, present and future actions.

This increasing awareness of interconnectedness and responsibility is the path to justice and to sustainable development for all.

  • Jeffrey D Sachs is professor and director of the Centre for Sustainable Development at Columbia University and president of the UN Sustainable Development Solutions Network; www.jeffsachs.org

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