Excellent study material for all civil services aspirants - begin learning - Kar ke dikhayenge!
SHARE:
India and the London climate talks
Read more on - Polity | Economy | Schemes | S&T | Environment
- Worldwide crisis: Climate change is manifesting itself across the world, whether through unprecedented wildfires in Australia, droughts in Sub-Saharan Africa, or winter freezes in Texas. By some counts, India is among the countries most threatened by climate change. It’s in our interest to listen to our climate activists and press for global action.
- One and all: No country alone can make a big difference on its own, but change is possible through cooperative global action. With the Biden administration in US prepared to recommit the US to do its bit, there’s hope for significant movement in the climate talks in London later in 2021. As a leader among emerging markets, India should go with a serious proposal likely to move the needle and also fair to the industrialising world.
- Tax the carbon: Economists agree that a good way to reduce carbon emissions is to tax them. But the changes those taxes bring about will be disruptive in the short run. That means any discussion of imposing a carbon tax will face either the free-rider or the fairness problems.
- Industrialised countries such as the US are concerned that developing countries will free-ride and keep pumping out emissions.
- Indians believe there’s profound inequity in asking India, which has a per capita emission of 1.8 tons of CO2 in 2017, to bear the same burden as the US (16 tons per person), or Saudi Arabia (19 tons).
- Similar incentives: But the least costly way of reducing global emissions would be to give everyone similar incentives – India should not build many more dirty coal plants as it grows, and Europe should close down the plants it already has. So how do we balance these concerns while saving the one world we live in?
- Solution: The economic solution is quite simple: A per-ton carbon levy called the global carbon reduction incentive (GCRI). Every country that emits more than the per capita world average (5 tons) would pay into a global incentive fund. This annual payment would be calculated by multiplying excess emissions per capita by their population and the GCRI. If we started the GCRI at $10 per ton, the US would pay around $36 billion while Saudi Arabia would pay $4.6 billion. Countries below the global per capita average would receive a commensurate payout – Uganda would receive around $2.1 billion, while populous but low-emitting India would get $41.6 billion. Every country faces a loss of $10 for every ton by which they increase per capita emissions, whether they are at a high, low, or average level today. So India has the same incentives to economise on emissions as the US.
- Equity issue: This addresses the equity problem. Low emitters, often the poorest countries and most endangered by climatic changes they didn’t cause, get a payment. Indeed, if the GCRI is raised over time, the collective sums paid out will approach the $100 billion per year that poor countries were promised by rich ones in 2009 for climate adjustment. GCRI also assigns responsibility for payments in a rational way: Fortunately, the big emitters typically have the ability to pay. Each country, including recipients, would decentralise GCRI through a domestic carbon tax, which may be set at a higher level. For example, the Baker-Shultz plan in the US proposes to tax carbon at a rate of $43 per ton, and rebate the sums collected to every American family via a carbon dividend. That would help the tax attract broad political support by keeping average personal income unchanged while curbing emissions. Excluding the richest taxpayers from receiving the dividend would allow the US to use some of the money raised to pay its contribution to the global fund. India, too, would have an incentive to impose a carbon tax at least as high as the GCRI.
- Results: The tax would set developing countries on the right emission path, rewarding their investment in renewables, while discouraging coal. Furthermore, the very poorest countries could use their payments from the global fund to help their people adapt to climate change and reduce incentives for outward migration. They could also buy insurance against climatic disruptions.
- Adjustments: Some adjustments to the GCRI may be necessary. For instance, what’s consumed is as important as how it’s produced, so we should ensure some portion of the emissions embedded in imported goods are added to the importing country’s emissions tally, and subtracted from the exporting country’s tally. The GCRI proposal also ignores past responsibility for building up carbon in the atmosphere. Dealing with that liability will be controversial and shouldn’t impede efforts to address the immediate challenge of climate change. The GCRI proposal offers a fresh, rational and equitable approach to account for, and change, present emission behaviour – all the more necessary after COP25’s failure in Madrid.
- Summary: Despite their past promises, is it optimistic to expect rich emitters to pay? Perhaps they will. Youth in rich nations must push their leaders to accept more equitable burden sharing.
- Knowledge centre:
- Carbon tax - A carbon tax is a fee imposed on the burning of carbon-based fuels (coal, oil, gas). It is the core policy for reducing and eventually eliminating the use of fossil fuels whose combustion is destabilizing and destroying our climate.
- Climate justice and equity - Fossil fuel pollution and climate change hit low-income families and emerging economies the hardest. Those least responsible for climate change are often the most vulnerable to changes in weather patterns, sea level rise, and other impacts, further exacerbating existing inequities. The rich world must step up to help others more, rather than expect equal contributions.
COMMENTS