For years now the climate talks have revolved around discussions who should bear the burden of cutting emissions, particularly between developed and developing nations. Much of Paris climate summit will be focused on this notion of equity and how to ensure that each country does its their fair share in the fight against climate change.
Developed countries (known as “Annex 1” in the United Nations' lingo) now typically have falling emissions, but are responsible for the majority of historical emissions. Developing nations (known as “non-Annex”) often have increasing emissions, but are responsible for far fewer historical emissions.
Based on this, developing countries have argued strongly for differentiation. For them this involves developed countries taking the lead on reducing emissions and providing finance and assistance for developing countries undertaking a low-carbon transformation. Developed countries argue that equity means all countries taking action and adopting targets together.
Most of the national pledges that have been submitted for the summit make some mention of why the pledge is “fair” or equitable. Even Oxfam has been in on the action releasing a Fair Shares equity review of national climate pledges.
But this concept of a fair share is a large reason why Paris is at risk of failing to deliver a worthwhile deal. We will not solve climate change until we stop seeing emissions reductions as a burden to be equally shared.
The Burden Of Climate Action?
The way we talk about issues creates a frame in our minds. It bundles up different ideas to create a shared perspective.
For climate change, talk of equity has inevitably framed emissions reductions as a burden which needs to be “fairly distributed”, or as a penalty to atone for past sins.
Nations also talk of “capacity”, or the ability to reduce emissions and adapt to climate change. This of course depends on the state’s economy and politics. But it implies that reducing emissions comes at a high cost and is only worth undertaking if the right capacity is in place.
If there is one way to ensure that countries don’t act it is to frame mitigation as a burden. Luckily this just simply isn’t true. Reducing emissions, and mitigating climate change, is not a burden; it is one of our greatest opportunities.
The Benefits Of Climate Action
The economics of climate change has been slowly moving away from emphasising the costs towards recognising the benefits. This is not surprising given the history of environmental regulation.
Decreasing ozone-depleting substances was originally forecast by industry to have catastrophic economic costs. It ended up being extremely cheap.
Industry initially complained of the potential costs of the Clean Air Act in the United States. But the US Environmental Protection Agency has estimated that the act saved the US economy US$2 trillion in avoided health and productivity losses by 2020. The estimated costs were just US$65 billion. The benefits were 30 times larger than the expected costs.
The same kinds of benefits are on offer when switching from fossil fuels to renewable energy. One US study calculated the health costs of coal-powered electricity to be 0.8-5.6 times greater than the value added to the US economy. Earlier this year the IMF estimated that when accounting for wider costs such as health, fossil fuels are subsidised globally by more than US$5 trillion per year. So even without accounting for climate change, in most cases fossil fuels cost more than they’re worth.
Renewable energy and climate mitigation has the edge over fossil fuels in most wider analyses.
The New Climate Economy Report provides an overview of compelling studies and examples showing why mitigating climate change would be good for economic growth and general human well-being.
Importantly mitigation is already cheap and getting cheaper every year. A report by Frank Jotzo and myself earlier this year showed how the different estimates of the cost of large emissions reductions in Australia range from 0.1-0.21% of annual GDP growth. Not exactly a big hit to the economy. And these are all still narrow analyses that don’t consider all of the co-benefits of mitigation.
Emissions reductions are not a burden to be handed out equally between countries. It is an opportunity that countries should be pursuing with or without an international deal. Talk of avoiding catastrophic climate change just strengthens an energy transformation which already makes economic and social sense.
Breaking Out Of The Prisoner’s Dilemma
Climate change has typically been seen as a prisoner’s dilemma: a game where two rationally behaving actors will avoid cooperation and produce an outcome which is not in their collective interests.
Climate change has been viewed as a prisoner’s dilemma because each country thinks that climate action benefits everyone, but costs the individual country. So countries push for everyone to participate in negotiations to share this cost. It is particularly clear in Paris where there have been repeated calls for an agreement that is “applicable to all” and excludes no-one.
But this is not true, and many countries are beginning to realise this.
Looking around the world, the greatest action being taken against climate change is not about altruism or in the name of equity. They are being done for economic gain and to create better lives for the public.
China is installing vast renewable energy capacity and moving towards limiting coal consumption due to concerns over air pollution, energy security benefits and to secure a head-start in the booming renewable energy market. Germany is undertaking its famed “Energiewende” in order to secure a market advantage in renewable energy and kick-start its economy.
Countries are taking action not for equity or morality, but for their own national interest.
Realising the benefits of mitigation changes the game of negotiations. No longer would we focus on getting everyone on board and distributing “fair-shares”. Instead the aim would be to find ways to maximise collective benefits and opportunities.
Of course least developed countries should receive financial and technological aid. But that is because assistance should be given for any kind of development, not because a low carbon transformation is prohibitively expensive. Fairness does become a bigger issue when talking about other issues such as adapting to climate change impacts, but it shouldn’t be the main focus for reducing emissions.
Climate change is not a prisoner’s dilemma. It is not about equitably sharing a burden. That is a myth. There really is no dilemma when climate action has so many benefits.