I’ve argued previously that a national carbon fee and dividend policy is a form of climate justice, because it makes polluters pay for the impacts of their carbon emissions, and the carbon dividend from that revenue compensates victims (all of us) for those impacts, whether we suffer direct impacts (via climate change or health effects of associated pollutants) or our taxes or insurance premiums pay for aid to others impacted directly.
But the carbon dividend doesn’t compensate people in other countries, the carbon fee isn’t collected for past emissions, and its payment from current emissions doesn’t go to future victims.
International climate finance is being pursued, with developed countries expected to send an annual total of $100 billion per year to a Green Climate Fund to support climate action in developing countries. But that is only intended to pay for reducing carbon emissions and adapting to climate change, and it has been a struggle to even raise that much. The U.S. has delivered a total of $2 billion to the fund and recently pledged another $3 billion, pending approval by Congress. A total of $13.5 billion has been committed by developed countries, far short of the goal for the Green Climate Fund. Loans for much more funding are available but hardly qualify as a form of climate justice.
The first success at the COP28 climate conference this year was the agreement on a Loss and Damage fund that would transfer cash from ‘developed’ countries to ‘developing’ countries to compensate them for damage arising from the warming caused by emissions from developed countries. The agreement is voluntary, and the amount initially pledged varies widely, from $100 million per year from Germany and COP28 host UAE to a paltry $17.5 million from the U.S. (the U.S. had opposed even the acknowledgment of loss and damage from past emissions, presumably because it leads the world in past emissions). The total pledged so far ($400 million per year) falls far short of the estimated $400 billion in estimated annual damage by 2030. China, the world’s biggest current carbon emitter, is still considered a developing country, so it is not expected to contribute to the fund, but is not considered particularly vulnerable to climate change and hence will not receive loss and damage funds. Clearly, as the biggest cumulative source of carbon emissions, the U.S. should contribute far more to the Loss and Damage fund. Democratic control of the federal government could allow for funding more consistent with the damage that past U.S. emissions are causing. But even that will be a heavy lift, as Democrat John Kerry, the U.S. special envoy on climate change, opposed such payments as recently as last summer.
So far, there has been little discussion of funds for future impacts. The Climate Group has a Future Fund, but as of January 2022, had raised only $120,000 for it. So, it seems the Green Climate Fund is currently the dominant mechanism for transferring funds to protect future generations through reducing emissions, removing carbon from the atmosphere, and building resilience to withstand future climate change.
However, the Green Climate Fund falls far short of raising the revenue needed. A global price on carbon, or the establishment of a climate club of countries that price carbon and tax imports from countries that do not, could raise the funds necessary to compensate victims and provide resources for mitigation and adaptation.
Why not simply distribute an equal share of global revenue from carbon taxes to individuals in all countries? As the biggest current emitter, China would pay the most, but its many residents would also get a large chunk of the revenue. Residents in poor, developing countries would get more from their carbon dividend than they’d be paying in carbon fees. It would in effect transfer funds from highly polluting nations to low-emitting nations, and from high-emitting people to low-emitting people. It could restore global climate justice.
Steve Ghan leads the Tri-Cities Chapter of Citizens Climate Lobby.