climate policy design november 22, 2008 holmes hummel, phd holmes@holmeshummel.net politics of a...

Climate Policy Design

November 22, 2008

Holmes Hummel, PhDholmes@holmeshummel.net

Politics of a Durable Deal:Justice as Realism

Session #2

Climate Policy Design Pro-Series

• Targets, Timetables, and Technology

• Politics of a Durable Deal: Justice as Realism

• Carbon Price Policies: Questions for Tax and Trade

• Cap and Trade: Devils in the Details

• Committing a Carbon Trust: The Trillion Dollar Bargain

• Essential Complementary Policies: California’s Advantage

Politics of a Durable Deal: Justice as Realism

• Sufficiency, Security, Sustainability

• Concepts of Justice

• Sharing Burden and Benefits

• Political Mobilization Bias

• Addressing Inequity in Climate Policy Design

Three Major Energy Quests

• Sufficiency

• Security

• Sustainability

Energy Systems Drive “Development”

History of U.S. Energy Consumption

85% of U.S. energy demands are met with fossil fuels.

8% of U.S. energy demands are met with nuclear power.U.S. Energy Information Administration

World Bank Investments 1947-2007

Sources: U.N. Food and Agriculture Organization; C. Mayhew & R. Simmon (NASA/GSFC), NOAA/ NGDC, DMSP Digital Archive

When do the moral claims for sufficiency subside…?

Source: FY2006 Federal Discretionary Budget; Business Leaders for Sensible Priorities

How is the U.S. committing its resources?

Does not include wars bailouts, stimulus bills…

Or anything else on the national credit card

Source: BP Statistical Review 2004

Famous Nations in U.S. Foreign Relations

Map Scaled by Oil Reserves and Shaded by Oil Consumption

Oil to the Fore in U.S.-China TalksFocus Shifts From Currency

By Neil IrwinWashington Post Staff WriterWednesday, June 18, 2008; D01

Competition for Oil Consumption as a Threat

IPCC AR4 SYN SPM Fig 7

Communities with less access to power are more vulnerable to climate change impacts

IPCC AR4 SYN SPM Fig 7

Three Major Energy Quests

• Sufficiency

• Security

• Sustainability

• Humanitarian welfare

• Competition for resources

• Intergenerational justice

There are trade-offs in the balance,

and structures of power determine who trades.

If moral claims for justice are ignored,

then no global agreements will be stable enough to persist.

Implications for Climate Policy

1. Multiple levels of authority with disparate goals

Multiple tables for negotiation

Multiple vehicles for policy

2. Policy resilience is critical to the long-term humanitarian quest for climate stabilization.

3. Redundancy reduces risk, and coordination accelerates negotiations.

4. The quest is not a single policy that persists for a century…

5. The goal is to maintain a structure for effective policy negotiation that can remain stable even as it transforms over time.

Climate Policy Negotiations Invoke (at least) Four Different Concepts of Justice

Utilitarianism

Retributive Justice

Distributive Justice

Rawls’ Theory of Justice

Utilitarianism

Basic Description: Greatest Good for the Greatest Number

• An action is morally justified on the basis of its (expected) outcome.

• That which delivers society the most aggregate utility is the most just.

• Utility is a unitless term for value, or “usefulness.”

• Cost-benefit analysis is based on the concept of utilitarian justice, using dollars to represent utility.

Issues

• Different people hold different values – and some people may implicitly or explicitly be valued differently in a utilitarian frame.

• Utilitarianism overlooks the distribution of benefits and burdens.

• Difficult to negotiate a decision between two distinctly different and mutually dependent parties.

Retributive Justice

Basic Description: Eye for an Eye

• An action is morally justified if it is a proportionate response to a validated offense in the past.

• The field of criminology is devoted to defining terms of offense.

• Criminal sentences (incarceration, fines, death penalty) are meted out in measures considered proportionate to the crime.

Issues

• Different societies have different definitions of offense, and different considerations in determining a proportional response.

• Responding to injury with injury can feed cycles of retribution that may persist for generations and prevent ultimate resolution.

• Difficult to prioritize conflicting claims.

Distributive Justice

Basic Description: Equality

• The distribution of things – wealth, power, respect – is just if they are allocated “properly” among different people.

• Fairness is fundamental but still disputed: should something be distributed in equal measure, or on the basis of some meritocratic measure, or as an entitlement according to status?

• The income tax structure in the U.S. and laws ensuring equal opportunity reflect deeply felt sentiments toward distributive justice.

• Intergenerational justice is essentially a distributive justice problem over a dimension of time rather than space.

Issues

• Those with authority to distribute resources often attained that position by having more than “their share” already.

John Rawls’ Theory of Justice

Basic Description: You cut, I choose. Or we’ll cut, and flip for choice.

• Social and economic inequalities should be arranged so that they are:

(a) to the greatest benefit of the least advantaged, consistent with the just savings principle, and

(b) attached to offices and positions open to all under conditions of fair equality of opportunity.

• In order for any change to be accepted as an improvement, it must help the least advantaged party (or representative person).

• When designing a system that distributes benefits and burdens, use a “veil of ignorance” about the status you may have as a subject of it.

Issues

• Appealing, but difficult to apply.

Climate Policy Negotiations Invoke (at least) Four Different Concepts of Justice

We can stabilize climate change for just a few percent of global GDP –

what are we waiting for??

Well, the countries most responsible for this problem should start first – and pay

most of the cost.

But the Global North nations will soon be surpassed by China and India as major emitters, so we won’t move forward until

they have committed to shouldering the burden too.

To broker a fair resolution to this dispute, what would that regime need to look like for us to accept it if we woke up

tomorrow in a subsistence family in Haiti or China?

And if the interests of subsistence families are overlooked, what happens if they reject the terms of an international agreement?

If it’s not widely seen as fair, it won’t stick.

• National blocs - UNFCCC

• Per Capita - Contraction & Convergence

• Greenhouse Development Rights

Preamble of the 1992 United NationsFramework Convention on Climate Change

“Acknowledging the global nature of climate change

calls for the widest possible cooperation by all countries and

their participation in an effective and appropriate international

response, in accordance with their common but

differentiated responsibilities and respective capabilities”

Global North = Developed = Annex I

Global South = “Developing” = Non-Annex IGlobal South = “Developing”

Global North = Developed

Global South

Global North

UNFCCC Defined a Global North Bloc

Derailing Negotiations for a Decade

1995 UNFCCC Council of the Parties: “Berlin Mandate”

Parties agree that the Annex I countries should “go first” in sequence, accepting binding targets without obligating Non-Annex I countries.

1997 U.S. Senate Byrd-Hagel Resolution (95-0)

“It is the sense of the Senate that—

(1) The United States should not be a signatory to any protocol... which would--

(A) mandate new commitments to limit or reduce greenhouse gas emissions for the Annex I Parties, unless the protocol or other agreement also mandates new specific scheduled commitments to limit or reduce greenhouse gas emissions for Developing Country Parties within the same compliance period, or

(B) would result in serious harm to the economy of the United States; and…

[the Senate requires a high burden of proof that the economic impact is low]

Justice as Realism for Sustainability

Source: Global Climate Action

Nationalism in Climate Politics

U.S. Energy Information Administration (2005)

Forecast underestimated:

China annual emissions already

exceed U.S.

Source: U.S. Energy Information Administration

How does greenhouse gas pollution per person compare between nations?

Climate Change is a cumulative problem – annual figures distort the problem frame.

of all the human-made CO2 in the sky is from the United

States –

and that’s not counting pollutionfrom the production of goods

imported for consumption here.

Who owns the sky?

• Negotiations between nation-states imply governments own the right to the sky (like cell phone frequencies)

• But if the right to a stable climate belongs to all humans, then are all humans entitled to a share of the sky?

• Distributing the burden for climate change mitigation on a per capita basis has persistent appeal.

Contraction & Convergence:

Global Commons Institute

Equal Per Capita Emission Rights by 2030for 450ppm CO2

“Negotiations for a shared vision on long-term cooperative action at the UNFCCC, including a long-term global goal for greenhouse gases (GHG) emissions reductions, must be based on an equitable burden sharing paradigm that ensures equal sustainable development potential for all citizens of the world and that takes into account historical responsibility and respective capabilities as a fair and just approach.

2008 Statement by G5 Countries(Brazil, Mexico, India, South Africa, and China)

It is essential that developed countries take the lead in achieving ambitious and absolute greenhouse gas emissions reductions in accordance with their quantified emission targets under the Kyoto Protocol after 2012, of at least 25-40 per cent range for emissions reductions below 1990 levels by 2020, and, by 2050, by between 80 and 95 per cent below those levels, with comparability of efforts among them.”

Greenhouse Development Rights

$2 million

0% 20% 40% 60% 80% 100%

The right to development in a carbon-constrained world.

Paul Baer & Tom Athanasiou (EcoEquity)

Sivan Kartha (Stockholm Environment Institute)

Full report available:www.ecoequity.org/GDRs

email infoauthors@ecoequity.org

Dataset and tool for examining the calculations presented hereand exploring alternatives gdrs.sourceforge.net

Climate Policy must to be relevant to Development Policy

• About 800 million people chronically undernourished

• More than 1 billion have poor access to fresh water

• 2 billion people without access to clean cooking fuels

• More than 1.5 billion people without electricity

If energy development is fundamental to all,

what does that mean for a climate regime…?

Paths to 2°C Stabilization, with Risk

$2 million

0% 20% 40% 60% 80% 100%

$2 million

0% 20% 40% 60% 80% 100%

$2 million

0% 20% 40% 60% 80% 100%

Thinking about a North-South Carbon Budget

$2 million

0% 20% 40% 60% 80% 100%

2°C Pathway,

at least 2/3 chance

$2 million

0% 20% 40% 60% 80% 100%

2°C Pathway,

at least 2/3 chance

Annex I (North)emissions path

$2 million

0% 20% 40% 60% 80% 100%

2°C Pathway,

at least 2/3 chance

Non-Annex I (South) emissions path

Annex I (North)emissions path

What kind of climate regime could allow this to happen?

Burden-sharing in a global climate regime

National Obligation: share of global mitigation and adaptation costs based on…

Capacity: resources to pay without sacrificing necessities Income (PPP), excluding income below the $20/day development threshold

Responsibility: contribution to the climate problem Cumulative CO2 emissions starting in 1990, excluding “subsistence” emissions (i.e., emissions corresponding to consumption below the development threshold)

Income and Capacity

National income distributions showing portion of income

(in green) that can be considered “capacity”

Emissions vs. Responsibility Cumulative fossil CO2 (since 1990) showing portion

that can be considered “responsibility”

Global Mitigation Burden

National “Obligation Wedges”

Example:

U.S. vs China

Implications for United States

US mitigation obligation amounts to reduction target exceeding 100% by 2025 (i.e., “negative emission allocation”).

Implications for United States

Physical domestic reductions (~50% by 2025) are one part of the US’s “twofold obligation”. The second part is MRV support for international reductions.

Implications for China

China’s mitigation obligations are not trivial, but are small compared to China’s mitigation potential, and can be discharged domestically.

Implications for China

The majority of the reductions in the South are driven by industrialized country reduction commitments.

Greenhouse Development RightsA climate regime must:

– Ensure the rapid mitigation required by an emergency climate stabilization program

– Support the deep, extensive adaptation programs that will inevitably be needed

– While at the same time safeguarding the right to development

– Defines and calculates national obligations with respect to a development threshold

– Allows those people with incomes and emissions below the threshold to prioritize development

– Obliges people with incomes and emissions above the threshold (in both the North and South) to pay the global costs of an emergency climate program

Greenhouse Development Rights, EcoEquity

This framework can satisfy all four major theories of justice:

- utilitarianism

- retributive justice

- distributive justice

- Rawls’ theory of justice

But to prevail, it must be supported by a strong solidarity movement within the OECD countries that have the highest responsibility and capacity to respond.

Negotiating Concepts of Justice

• Clear utilitarian interest in stabilizing climate change

• Clear distributive justice claims against the U.S. and other OECD nations – and the present generations

• Clear retributive justice claims mounting with impacts

• What’s going on…?

Policy-makers manage many types of risk.

…including risks that their institutions:

will lose political or economic authority

will precipitate conflict in an armored world

will be held liable for damages or losses

will no longer permit them to remain in power

U.S. Distribution of Household Net Worth

$2 million

0% 20% 40% 60% 80% 100%

Percentage of U.S. HouseholdsPercentage of U.S. Households

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

0% 20% 40% 60% 80% 100%

Source: State of Working America, 20062004 data in Tables 5.7 and 5.9

Source: State of Working America, 2006; 2004 data in Tables 5.7 and 5.9; real estate included.

0% 20% 40% 60% 80% 100%

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

0% 20% 40% 60% 80% 100%

Percentage of U.S. Households

0% 20% 40% 60% 80% 100%

$300,000

$100,000

$200,000

$50,000

$100,000

$150,000

$200,000

$250,000

$300,000

0% 20% 40% 60% 80% 100%

$2,200

$81,800

$243,200

$300,000

$100,000

$200,000

To includeTop 20%,we need alarger scale.

$14,770,000

$243,400$576,300 $1,764,000

$81,800$2,200

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

0% 20% 40% 60% 80% 100%

Bottom 80%

Next 10%

Next 5%

Next 4%

Next 0.5%

Top 0.5%

0% 20% 40% 60% 80% 100%

$2,200 $243,200

$2 million

$14,770,000

$243,400$576,300 $1,764,000

$81,800$2,200

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

0% 20% 40% 60% 80% 100%

Bottom 80%

Next 10%

Next 5%

Next 4%

Next 0.5%

Top 0.5%

0% 20% 40% 60% 80% 100%

Bottom 80%

$2 million$2,200 $243,200

$2 million

$14,770,000

$243,400$576,300 $1,764,000

$81,800$2,200

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

0% 20% 40% 60% 80% 100%

Bottom 80%

Next 10%

Next 5%

Next 4%

Next 0.5%

Top 0.5%

0% 20% 40% 60% 80% 100%

Bottom 80%

$2 million$576,300

Next 10%

$2 million

$14,770,000

$243,400$576,300 $1,764,000

$81,800$2,200

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

0% 20% 40% 60% 80% 100%

Bottom 80%

Next 10%

Next 5%

Next 4%

Next 0.5%

Top 0.5%

0% 20% 40% 60% 80% 100%

Bottom 80%

Next 10%

$2 million

$576,300

$2 million

$14,770,000

$243,400$576,300 $1,764,000

$81,800$2,200

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

0% 20% 40% 60% 80% 100%

Bottom 80%

Next 10%

Next 5%

Next 4%

Next 0.5%

Top 0.5%

0% 20% 40% 60% 80% 100%

Bottom 80%

Next 10%

$2 million

$1,764,000

Next 5%

$2 million

$14,770,000

$243,400$576,300 $1,764,000

$81,800$2,200

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

0% 20% 40% 60% 80% 100%

Bottom 80%

Next 10%

Next 5%

Next 4%

Next 0.5%

Top 0.5%

0% 20% 40% 60% 80% 100%

Bottom 80%

Next 10%

$2 million

Next 5%

Next 4%

$1,764,000

$2 million

$14,770,000

$243,400$576,300 $1,764,000

$81,800$2,200

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

0% 20% 40% 60% 80% 100%

Bottom 80%

Next 10%

Next 5%

Next 4%

Next 0.5%

Top 0.5%

0% 20% 40% 60% 80% 100%

Bottom 80%

Next 10%

$2 million

Next 5%

Next 4%

$1,764,000

$2 million

$14,770,000

$243,400$576,300 $1,764,000

$81,800$2,200

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

0% 20% 40% 60% 80% 100%

Bottom 80%

Next 10%

Next 5%

Next 4%

Next 0.5%

Top 0.5%

0% 20% 40% 60% 80% 100%

Bottom 80%

Next 10%

$2 million

Next 5%

Next 4%

$14.7 million

$16 million

$2 million

$14,770,000

$243,400$576,300 $1,764,000

$81,800$2,200

$2,000,000

$4,000,000

$6,000,000

$8,000,000

$10,000,000

$12,000,000

$14,000,000

$16,000,000

0% 20% 40% 60% 80% 100%

Bottom 80%

Next 10%

Next 5%

Next 4%

Next 0.5%

Top 0.5%

0% 20% 40% 60% 80% 100%

Bottom 80%

Next 10%

$2 million

Next 5%

Next 4%

$14.7 million

$16 million

Top 0.5%

Next 0.5%

Wealth Disparity Distorts Democracy

Federal Climate Negotiations

BigOil

BigGreen

Utilities

BigBiz

BigOil

BigGreen

MarketMechanism

DecliningEmissions

Utilities

Cap & Cap & TradeTrade

BigBiz

BigOil

BigGreen

Carbon Sequestration

Cost Containment

MarketMechanism

DecliningEmissions

Free Pollution

Allowances

Utilities

BigBiz

BigOil

BigGreen

DecliningEmissions

Cost Containment

MarketMechanism

Industry

Unions

Trade Protection

Free Pollution

Allowances

Utilities

JobsProtection

Free Pollution

Allowances

BigBiz

BigOil

BigGreen

DecliningEmissions

Cost Containment

MarketMechanism

Industry

Trade Protection

JobsProtection

CivilSociety

AdaptationFunds

Rebates toLow-Income

Unions

Utilities

Free / AuctionPollution

Allowances

Unions

BigBiz

BigOil

BigGreen

DecliningEmissions

Cost Containment

MarketMechanism

Industry

Unions

Trade Protection

Utilities

JobsJobs

Utilities

CivilSociety

AdaptationFunds

BigBiz

BigOil

BigGreen

DecliningEmissions

Cost Containment

MarketMechanism

Industry

Trade Protection

CivilSociety

AdaptationFunds

Tighter Targets

Plan B

ComplementaryPolicies

Unions

UtilitiesFree / Auction

PollutionAllowances

Utilities

USCCIndustry

BigBiz

BigOil

Unions

BigGreen

CivilSociety

Utilities

USCCIndustry

BigBiz

BigOil

Unions

BigGreen

New England

Mid-Atlantic

Midwest

California

CivilSocietyUrban, Liberal

Democrats

• Targets, Timetables, and Technology

• Politics of a Durable Deal: Justice as Realism

• Carbon Price Policies: Questions for Tax and Trade

• Cap and Trade: Devils in the Details

• Committing a Carbon Trust: The Trillion Dollar Bargain

• Essential Complementary Policies: California’s Advantage

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