Can we still comply with the maximum limit of 2 °C? Approaches to a New Climate Contract

The international climate policy is in trouble. CO2 emissions are rising instead of shrinking. The 2025 climate summit in Paris should lead to a global agreement, but what should be its design? In an earlier paper in Cadmus on the issue, the author outlined a contract formula based on the so-called ‘Copenhagen Accord’ that is based on a dynamic cap and an intelligent burden sharing between politics and the private sector. The private sector was brought into the deal via the idea of a voluntary climate neutrality of private emissions culminating in a ‘Global Neutral’ promoted by the United Nations. All this was based on a global cap-and-trade system. For a number of reasons, it may be that a global cap-and-trade system cannot or will not be established. States may use other instruments to fulfil their promises. The present paper elaborates that even under such conditions, the basic proposal can still be implemented. This may prove useful for the Paris negotiations.

1. Introduction
In view of the current climate-related negotiations and the “schedule” agreed therein, this text presents a suggestion for a global climate contract for the end of 2015, which is to become valid as of 2020 and allows us to still comply with the upper limit value of 2 °C in spite of the moderate economic growth in the industrialized nations and fast (catch-up) growth in the remaining countries. The presented ideas have developed from my suggestion on how to reach a new climate contract which is based on the extensive 2010 FAW/n report on this topic, originally issued on the subject of climate protection for the Global Economic Network Sektion Deutschland e.V.1,2 The updates refer to criticism uttered by attendees of a workshop in September 2013 at the Institute for Advanced Sustainability Studies e.V. in Potsdam led by Professor Klaus Töpfer on the subject of my original suggestion.3 The present text has been supplemented by the experience gained from the congress on “For the economy and society: Added value through more forests” held on 20th March 2014 in Berlin by the Global Economic Network Sektion Deutschland – Senat e.V. and the World Forest Foundation with support from the German Federal Ministry for Economic Cooperation and Development (BMZ) and the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH (German Federal Enterprise for International Cooperation).

“It will be in particular the wealthy premium segment, i.e. the globally most powerful consumers and their companies, who will indirectly pay for the “restructuring of our civilization”.”

Further development of the suggestion as presented previously weakens the required political decisions and thus the rigorous nature of a potential global climate contract as opposed to the initial suggestion in some decisive aspects.4 In particular, the text no longer assumes that the nations of the world will reach any agreement as to a global cap-and-trade system based on the Copenhagen formula over the next few years: Nevertheless, the basic structure of the agreement remains as per what is known as the Copenhagen Formula (going back to a US-Chinese compromise): The industrialized nations will reduce their emissions by an absolute factor, the non-industrialized nations by a factor relative to their economic growth rate. In this course, the nations determine individually and independently their respective reduction target values (pledges). A Green Climate Fund of at least 100 billion US dollars annually, funded by the industrialized nations, to support climate-related action in the remaining countries, is another essential part of the package. All this addresses questions to justify appropriately among the nations with regard to the climate issue, which is the dominant first justice dimension in the public debate in the context of climate issues.

All in all, the Copenhagen Formula renders a dynamic global cap, which may even grow temporarily and which is parameterized based on the economic growth rates of the non-industrialized nations.

For this scenario, the initial suggestion I have assumed is that the described structure could be transferred into a global cap-and-trade system.5As already mentioned, this idea was objected during the IASS workshop since a consensus would be hard to reach on the political level. This text thus only uses as a basis the weaker requirement that the nations of the world shall implement their pledges under the Copenhagen Formula via various implementation mechanisms which cannot probably be integrated into a uniform cap-and-trade system. Individual implementation components at the governmental level could range from carbon taxation across forced technical standards all the way to regional/national cap-and-trade systems (such as the European system of certificates). Furthermore, it is accepted that there will most probably be no internationally coordinated and monitored standardized measurement and monitoring system for emissions. The text subsequently describes how the suggestion as developed previously can be modified and/or amended in such a way that the described restrictions can be complied with.6,7

Based on the status of international discussions, after conclusion of the prep conference in Warsaw in 2013, the basic structure of a climate contract is presented which, on the one hand, appears feasible under aspects of “negotiation mechanics” and the initial situation and, on the other hand, allows us to still comply with the upper limit value of 2 °C. In this course, we try to consider any additional restrictions and/or requirements regarding a climate contract as mentioned during the workshop in Potsdam (exceeding the assumptions mentioned earlier). At the same time we also try to consider the partially very diverse interests of the various nations as well as the “negotiation stand-off” and the narrow remaining time slot until the end of 2015.

2. Fundamental Considerations Regarding a New Draft Contract
Subsequently, we will present a pragmatic proposal for a global climate contract. The proposal logically builds upon the Copenhagen Formula as described below and sees it in a positive light. We cannot expect a better result and this result is already a giant step forward. However, such a contract would not suffice on its own in order to comply with the upper limit of 2 °C. This would require further elements. In this regard, we place greater emphasis when compared to most literature on the potential of negative emissions (e.g. for time gain). Furthermore, the workload needs to be shared between the political and the private sectors (organizations, companies and private persons) and such a shared workload has become a conceptual objective. In this regard, the private sector greatly contributes in 2 ways: It pays (nations) either directly or indirectly for generating less emissions than acceptable per global climate contract in a certain national territory (e.g. by “withdrawing” emission rights). Altogether, this amounts to approximately 250 billion tons of CO2 emissions by 2050 and it pays for “negative emissions” (altogether this amounts to max. 250 billion tons of avoided CO2 emissions by 2050 which will be withdrawn from the atmosphere). This will happen in particular through means of biological carbon sequestration, primarily as large-scale reforestation projects on degraded tropical soil. However, it will also happen in the form of grassland management with forced humification and is about wetlands maintenance and management.

The central element to allow this great contribution in facts and funds is the concept of voluntary climate neutrality of important players (organizations, companies and private persons) against the background of an increasing “moralization of the markets” and an ever-strengthening CSR orientation of brand companies in simultaneous interaction with intelligent and high-performance consumers (e.g. known as LOHAS) in the context of a sustainable marketing management.9,10 This concept furthermore promotes technical civilization restructuring by reducing emission rights and the corresponding Green Race in the field of climate-friendly technologies and can largely contribute to filling the Green Climate Fund for the benefit of developing nations. As of 2020, (a minimum of) 100 billion USD shall be available in the fund per year, however, its funding principle is yet unknown. Further financial contribution affects the promotion of developing nations, i.e. in the context of reforestation projects to generate negative emissions, which, in some aspects, feature characteristics of a Global Marshall Plan.11 This is one of the pillar concepts of the highly successful kids’ and youths’ initiative named Plant-for-the-Planet on this issue.12 Industrialized and non-industrialized nations have different responsibilities. The (voluntary) climate neutrality of many economic high-performers allows an important 2nd justice dimension in climate related activities to gain significance, namely the responsibility of powerful consumers – and their suppliers when compared to other people – in the realm of climate issues.13 Attention should be paid to the fact that these high-performing consumers (approximately 2% of the global population) are spread all over the world with partially very high emission volume levels of up to 100 tons of emissions per person or year, even in poor countries. It is also in such countries that we partially encounter extremely wealthy people.

Please specifically note that I consider the reduction of existing emission rights at a certain point in time in the future as well as the funding of negative emissions through high-performers of the private sector (organizations, companies and private persons) who intend to position themselves as climatically neutral, which is a decisive approach if we still aim to comply with the upper limit value of 2 °C.14,15,16 It will be in particular the wealthy premium segment, i.e. the globally most powerful consumers and their companies, who will indirectly pay for the “restructuring of our civilization”. As already indicated, apart from the north-south issue this affects a second important dimension of justice which needs to be considered as a solution to the climate problem.17 To make it even clearer: A typical Hartz IV recipient (Translator’s remark: Hartz IV = German concept for financial support for long-term unemployed people or people who need to rely on social welfare from the government) in Germany cannot be expected to pay for the climate costs caused by an Indian millionaire’s lifestyle. This would never find consent. On this issue, please note the important cognition from Chakravarthy et al., stating that the upper limit value of 2 °C may yet be comparatively easily complied with if all people were to maintain their individually allocable climate gas emissions today, if those are below 8 tons of emissions per year, and otherwise limited their emission levels to a maximum of 8 tons annually. The premium consumers, who in part generate more than 100 tons of CO2 emissions per year, should thus in particular take voluntary action in climate protection. Positioning oneself individually and voluntarily as climatically neutral is an attractive (and affordable) option in this regard. This was a core topic in an erstwhile article of mine and Chakravarthy et al., and will be subsequently elaborated even further. The required contribution from the private sector, added up until 2050, could make up for a volume balance of approximately 500 billion tons of avoided CO2 emissions and/or CO2 withdrawal from the atmosphere. The costs for this endeavor could be about USD 5,000 billion, i.e. annually approximately USD 140 billion. This is a drastic but bearable amount for this group.

Approximately 2% of the global population will be affected in particular either directly or indirectly, i.e. the top-earners with a financial volume of approximately EUR 1,000 per capitum on an annual average. The thus generated financial volume would apparently suffice to largely top up the Green-Climate-Fund through suspension payments.

* A more detailed version of this text is available (in German) as FAW/n report “Can we still comply with the maximum limit of 2 °C? – detailed version” FAW/n Ulm, 2014
F. J. Radermacher: Head of the Institute for Applied Knowledge Processing (FAW/n); Professor, Computer Science, University of Ulm; Fellow, World Academy of Art & Science
The author wishes to thank Prof. Klaus Töpfer for organizing and carrying out the IASS workshop in Potsdam, Dr. Karsten Sach for (critical) comments
on the content, Dr. Thomas Bruhn for comments on content and wording, the workshop participants in general for their extensive and important input and
Dr. Estelle Herlyn for the content review and revision of this text.
1. F. J. Radermacher, “Klimapolitik nach Doha – Hindernisse in Lösungen verwandeln,” GAIA 22, no.2 (2013): 87-92.
2. F. J. Radermacher, Global Climate Regime after Copenhagen – Implementation of New Potentials (Ulm: FAW/n, 2010).
3. F. J. Radermacher, Can we still comply with the maximum limit of 2 °C? Approaches to a New Climate Contract (unabridged version) (Ulm: FAW/n, 2013).
4. F. J. Radermacher, “Klimapolitik nach Doha”.
5. F. J. Radermacher, “Klimapolitik nach Doha”.
6. F. J. Radermacher, “Klimapolitik nach Doha”.
7. F. J. Radermacher, Can we still comply with the maximum limit of 2 °C?
8. F. J. Radermacher, “Klimapolitik nach Doha”.
9. N. Stehr and M. Adolf, “Sozio-ökonomischer Wandel: Der Konsum der Verbraucher,” in H. Meffert, P. Kenning, M. Kirchgeorg, Sustainable Marketing Management (Springer Verlag, to be published in 2014).
10. F.J. Radermacher, Global Climate Regime after Copenhagen – Implementation of New Potentials (Ulm: FAW/n, 2010).
11. F.J. Radermacher, Global Marshall Plan / A Planetary Contract. For a Worldwide Eco-Social Market Economy (Hamburg: Global Marshall Plan Foundation, 2004).
12. F. Finkbeiner, “Baum für Baum: Jetzt retten wir Kinder die Welt,” Oekom 2010.
13. S. Chakravarty et al., “Sharing global CO2 emission reductions among one billion high emitters,” PNAS 106 no. 29(2009): 11884-11888.
14. “Berliner Appell,” Klimaneutral handeln 2012
15. L. Hölscher and F.J. Radermacher, Climate Neutrality – Hessia leads the way (Springer Vieweg / Springer Fachmedien Wiesbaden GmbH, 2012).
16. F. J. Radermacher, “Klimapolitik nach Doha”.
17. S. Chakravarty et al., “Sharing global CO2 emission reductions”.

Pages: 1 2 3