German Scientists Endorse a Global Carbon Bank

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climate negotiatorsAdvisers to the German government are proposing a new approach to pay for global reductions in greenhouse gas emissions: a global "carbon bank."

The proposal would assign each country its allowable emissions based on its population size in 2010. Countries that exceed their "carbon budget" would be required to purchase excess emissions allowances from the world's least-developed countries through the carbon bank, the German Advisory Council on Global Change suggests.

International climate negotiators continue to disagree on how much funding wealthy nations should provide for developing countries to create low-carbon infrastructure, adapt to climate change, and avoid future losses of carbon-absorbing forests. Countries that are historically large polluters, such as the United States, Japan, and many European countries, have withheld funds until large developing economies such as China and India commit to emissions reductions and dedicate more of their own financial resources to the effort.

The advisory council's report [PDF] recommends that negotiators resolve the financing debate by focusing on per-capita emissions rather than each country's emissions total.

"The only fair and just principle would be to assign [emissions reductions] on a per-capita basis, because no human being can argue they have an inherently bigger right to put carbon dioxide in the atmosphere than anyone else," said Stefan Rahmstorf, an oceanographer with the Potsdam Institute for Climate Impact Research, who serves on the advisory council.

The advisory council proposes that each country's national carbon budget average 2.7 tons of carbon dioxide per person. By 2050, each country would emit an average of 1 ton of carbon dioxide per person, a goal that the report estimates would be possible if the 95 least-developed nations avoided substantial increases in their emissions during the next 40 years.

Currently, most countries in sub-Saharan Africa emit less than 1 ton per person. By comparison, the average U.S. citizen emits 20 tons of carbon dioxide, and the average person in China releases 4 tons, according to the latest estimates.

The world's remaining 90 nations - both industrialized and developing economies - would need to purchase emission allowances from countries with low per-capita emissions to remain within their carbon budgets.

The two most populous countries, China and India, have supported per-capita emissions limits in the past. But even they would need to purchase emissions allowances over time if their development remains contingent on the burning of fossil fuels such as coal and oil. If these countries were to rapidly transition to a low-carbon development plan, however, they could reduce emissions within their budget limits and become beneficiaries of an emissions trading system.

"China always argues that industrial nations have much higher emissions, which is why they don't have to do much yet. This approach will give them an absolutely fair budget," said Rahmstorf, a lead author of the Intergovernmental Panel on Climate Change's 2007 assessment report. "Everybody...has an incentive to start working on this now because they won't be forgiven for anything extra they will emit."

The scheme would require the world's most energy-intensive economies to bear the greatest economic burden, a reason why many industrialized countries have preferred plans such as the Clean Investment Fund, which collects voluntary donations from public treasuries. The advisory council's plan would allow the United States, Australia, and small oil-producing nations, such as Qatar, only six years before they would need to purchase emissions allowances, based on their current emissions levels.

Negotiators would likely need to agree on ways to help the most energy-intensive countries adjust to the new carbon constraints. Highly industrialized countries would need to increase their carbon budgets by 75 percent through 2050, the report estimates, which would cost these countries between 30 billion and 90 billion euros (US$40 billion and $1.3 trillion) between 2010 and 2050. The funding would be provided to the carbon bank to assist low-carbon development in poorer nations. The advisory council did not specify how the bank should be governed.

Rahmstorf acknowledged that the total investment is large but said the price is affordable from a per-capita perspective - roughly 20-60 euros (US$30-85) each year for industrialized countries.

"If we in the rich nations are not willing to spend 20-60 euros each year to solve this major climate crisis, then we just cannot solve it," Rahmstof said.

United Kingdom Prime Minister Gordon Brown has called for the world's wealthiest nations to provide 100 billion euros (US$140 billion) annually for similar measures throughout the developing world.

"Developed countries have created the problem and have a responsibility to help solve it," said Ed Miliband, the U.K. environment secretary, in a speech on Tuesday.

The European Union unveiled a plan this week that would provide financing on the scale suggested by Brown. The EU member states would provide 30 percent of the funding, the United States would be responsible for 24 percent, and the private sector would supply the remaining resources, according to the proposal. 

"The international carbon market, if designed properly, will create an increasing financial flow to developing countries and could potentially deliver as much as 38 billion euro (US $55 billion) per year in 2020," the proposal said.

The advisory council decided to focus its attention on the international climate negotiations following an April study in the journal Nature, led by German climatologist Malte Meinshausen. The study concluded that no more than 750 billion tons of carbon dioxide could be released between now and 2050 to avoid the most damaging effects of climate change, such as drastic sea level rise and massive droughts. The latest estimates of fossil fuel-related emissions suggest that 30 billion tons of carbon dioxide are being released into the atmosphere each year, but emissions from developing countries are rising quickly.

The report recommended that global emissions need to decline by 2020 and that "only a small amount" of carbon dioxide should be emitted worldwide after 2050 in order to limit global warming to 2-degrees Celsius.

"The proposals now on the table would reduce the chance of staying below 2 degrees almost to zero," Rahmstorf said.

Correction: The original story mistakenly reported that 8.5 billion tons of carbon dioxide are annually released into the atmosphere. The estimated level of carbon dioxide emissions is in fact 30 billion tons.

The reporting for this story was made possible courtesy of funding provided by the German and Danish foreign ministries.

Ben Block is a staff writer with the Worldwatch Institute. He can be reached at bblock@worldwatch.org.

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