A Climate Action Plan

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A Climate Action Plan

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• Visible now: Unprecedented climate events are telling mankind that climate change is here, be it the Australian wildfires, Sub-Saharan African droughts or Texas winter freezes. India is one of the most vulnerable on this count.
• London talks: India alone cannot change things, but with the US administration ready to contribute once again to climate agenda, a lot is possible. India should attend the 2021 London summit with a firm proposal, that the West can accept.
• Carbon taxes: When economists say that carbon taxes are a good way to reduce emissions, we also must consider the short-term disruptions it will bring. The rich world will feel that emerging economies will keep pumping emissions, while India will think that it is unfair to ask it to bear similar burdens as the US or Saudi Arabia. [India's per capita CO2 emission was 1.8 tons (2017), while it was 16 T and 19 T for US and KSA, resp.]
• The way out: The least costly way is for India to not build to many dirty coal power plants, and Europe to close many of its own. So a per-ton carbon levy - GCRI - Global carbon reduction incentive - can be levied.

1. Any nation that emits more than global average of 5 tons per capita will pay money into a global incentive fund
2. Calculation - annual payment will be excess emissions per capita multiplied by population and GCRI
3. Assume GCRI = $ 10 per ton. So US will pay $36 b, KSA $4.6 b, and those with below average emissions will be paid from this fund (India will get $41.6 b and Uganda $2.1 b)
4. In this system, all countries face a loss of $10 per ton in increased per capita emissions, irrespective of where they are today. A fair system.

• Equity issue addressed: Low emitter nations who weren't responsible for global warming now get a payment. With a rising GCRI, annual sums to be paid will rise and touch $100 b. That was promised by rich ones in 2009! And big emitters are those with the ability to pay.
• Locally: Each country will put its own local carbon tax, at a higher than GCRI level. So there's a "Baker-Shultz plan" in US to tax carbon at $43 per ton. Sums collected will be given to families in the form of carbon dividend. So there'll be broad political support for the tax (because averge personal incomes won't be hit). And the richest can be excluded from getting any.
• The right way: Such a local carbon tax will put emerging countries on the renewable energy path, and they can adapt well to change. 
• Other proposals: A proposal was to not only have a local carbon tax, but also a "border adjustment tax" to tax imports from countries that don't have a carbon tax. That may push many to start their own local carbon tax, but will allow large importing countries to push their tax policies on others, and protectionism will grow.
• One adjustment: Importing countries are knowingly importing goods with embedded emissions. So a part of that carbon should be added to their national tally, and subtracted from the exporting countries tally.
• Forget the past: The good thing in GCRI is it ignores the past, and allows a focus on the present. The failure of COP-25 in Madrid is a warning that past is not a good place to start!
• Summary: Youth pressure in the rich world on governments may push those to actually go for GCRI, a fresh, rational and equitable approach.

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