Returning to 350 ppm CO2: The Total Costs are Manageable, but Can We Share Them Fairly?

Advocates of stringent climate policy face somewhat of a strategic dilemma. On the one hand, as Ackerman and colleagues document in “The Economics of 350,” there is ample evidence that—in conventional economic terms—the costs of steep reductions in emissions to reach 350 parts per million (ppm) in atmospheric CO2 are quite manageable. Consistent with this message, Ackerman and colleagues put the necessary actions in relatively neutral terms: what is needed are “policies to promote energy conservation, development of new energy technologies, and price incentives and other economic measures.” On the other hand, there is also good reason to believe that the kinds of policies required to reach such an objective will be far more sweeping than a carbon cap or carbon tax and a few hundred billion in R&D subsidies. Some analysts call for “war footing”;1 others conclude that the fundamental model of economic growth must be challenged.2

In any case, it’s clear that even if the (conventionally measured) costs of making a transition to a zero-carbon 350 world are as modest as Ackerman and colleagues suggest, we’re not ready for the task, not by a long shot. Indeed, I would argue that it is not, and has never been, worries about the loss of GDP in 2050 that have been the main obstacle to greenhouse gas regulation. Corporations, governments, unions, and consumers all worry about short-term costs to their economic well-being; and, unsurprisingly, the potential losers are effective at defending their interests against the vaguely defined (and temporally distant) beneficiaries of climate protection. Certainly the message of mainstream economic analysis about “big costs to everyone” from rapid action has been a useful cover for much narrower sectoral (or even national) interests, and Ackerman and colleagues provide a useful service by showing credible alternative economic analysis. But it is the distributional impacts today and tomorrow, not the total costs in 2050, that motivate the greatest resistance to emissions reductions.

A rapid move toward a zero-carbon economy in any country will have winners and losers among sectors and regions, and it will take an unusual consensus of national purpose to ensure a “just transition.” Yet an equally large obstacle is the requirement for a fair “global deal.” And in this context, it’s important to be clear about what elsewhere has been called “the South’s Dilemma”:3 even under an emissions trajectory much more forgiving than a 350 pathway, the emissions of developing countries must peak and decline in the next decade, long before these nations have reached the per capita levels associated with “development.”

If we’re to make this kind of transition, some global deal must be reached in the next few years that is “fair enough.” My own work with my colleagues on the Greenhouse Development Rights (GDRs) framework is intended to suggest what such a deal might look like.4 The GDR framework would break down the artificial distinction between developed and developing countries that is enshrined in the UN Framework Convention on Climate Change (UNFCCC), exempting individuals below a “development threshold” from climate-related obligations; rich persons in all countries would then have obligations proportional to their responsibility (contribution to the problem) and capacity (ability to pay).

Given the current lack of trust between North and South, we’re not yet ready for such a global agreement. But as the sense of urgency rises, something like GDRs—a principle-based burden-sharing framework that is “fair enough,” and in which rich people share the costs, may be key to reaching a deal that enables the zero-carbon transition to begin in earnest.