To cap global carbon, use a global licence scheme

Going, going, gone?
Going, going, gone?

Today’s post is by John Jopling of the Irish think tank FEASTA on behalf of CapGlobalCarbon

Irreversible climate change currently threatens everything the OECD does and stands for. This post suggests how the OECD could play a crucial part in helping to establish an effective global response to climate change.

The science is clear: the main cause of climate change is increased emissions of CO2 from human use of fossil fuels. The global total of emissions is all that matters in the context of avoiding calamitous change in the Earth’s climate system. To avoid runaway climate change, the aggregate global total of emissions from the use of fossil fuels must be reduced by something like 6% each year if we start reducing now, or by a greater percentage the longer we delay.

The reason we now have a global crisis is that the current system of inter-governmental negotiations under the 1992 United Nations Framework Convention on Climate Change (UNFCCC) cannot be relied on to achieve these reductions in the overall total of global emissions.

The science on climate change is worrying enough. The knowledge that there is currently no effective system for addressing it is worse.

The reason is that the current system lacks a vital component: a regulator of total aggregate global emissions. To prevent climate change becoming irreversible, it is essential that an effective regulator of the aggregate global total of emissions from the use of fossil fuels is put in place, not to replace the system of inter-national negotiations but as a back up in case it fails. In case, to be specific, the outcome of the negotiations is not enough to satisfy climate science. We are faced with an emergency. We need to design and implement a system that enables us to address it.

There is no time to be lost. The regulator must be science-based and market-friendly. The easiest way to control emissions is to control production. The easiest way to control production is by a global licence scheme administered by a global institution established for the purpose. The number of licences should be determined in compliance with climate science, the number being reduced each year. The global institution would auction the licences and these would then be tradable. Fossil fuel extraction companies would pay the market price for the licences they buy; and pass on the cost to their customers. The global institution would arrange for the net proceeds from the auction to be distributed to or for the benefit of people throughout the world in equal shares, so low carbon fuel uses would benefit. The scheme would thus contribute to social justice and should attract wide support.

Such a scheme would need the cooperation of nation-state governments. The government of each country would have to ban the introduction into that country of fossil fuels not covered by a global licence.

That is the simplest possible way to make sure that aggregate global emissions from fossil fuels are reduced as required by climate science. It involves the least possible interference with market forces and the least negotiation between nation states. The concept is simple and clear. It can, and should, be sold to all concerned in a non-confrontational way, not blaming anyone for anything. We owe it to ourselves and our children to implement it.

As the current system of inter-governmental negotiations shows no sign of introducing any such scheme or any other effective system to regulate the aggregate global total of carbon emissions, and cannot be relied on to do so, the initiative to do this has to come from the global non-governmental sector. The necessary global institution to run the scheme, call it the Global Climate Trust, would need to be independent of both governments and the fossil fuel industry. It could be established by ordinary citizens and thereafter accepted by governments. This is in practise the only way such a body could ever be established; and it is also probably the only way to make sure that this body is indeed independent.

The Trust could be established by a group of institutions and individuals. If established, for example, in England or Ireland, it could be constituted as a trust for public purposes. It would be a legal entity competent to develop relations with nation-state governments and the fossil fuel industry.

Under its constitution, the Trust would be charged with acting on behalf of humanity as a whole, including future generations. It would be subject to the appropriate regulatory and court system of the country in which it is based. The law requires trustees to act with undivided loyalty to the purposes of the trust and they must act transparently. Obligations written into the constitution of the Trust to ensure transparency and accountability would be enforceable in courts of law.

The idea that an international institution could arise from a citizen’s initiative is not new. There is the inspiring example of Henri Dunant whose actions, after he had seen 40,000 soldiers left dead or dying on the battlefield at Solferino in 1859, led to the formation of the International Committee of the Red Cross.

A number of individuals and non-governmental organisations, with a very wide range of interests and activities, need to discuss the details of the Trust and take responsibility for establishing it. The OECD could perhaps host some of the necessary discussions.

The role of the OECD could be crucial not only in hosting discussions and helping to promote this idea but also in bringing governments on board to support it.

Useful links

Cap and share doesn’t appeal to everybody:

OECD work on carbon markets

Transition to a Low-carbon Economy: Public Goals and Corporate Practices

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