Rich nations’ climate bill estimated at US$170 trillion

Rich nations culpable of excessive greenhouse gas emissions could be compelled to pay up to US$170 trillion in climate compensation or reparations by 2050 to achieve global targets, researchers propose.

The sum, amounting to about US$6 trillion a year, would enable historically low-emitting countries to decarbonise their economies more quickly than they would otherwise have had to, according to the model put forward in the journal Nature Sustainability.

Poorer countries are being asked to transition away from fossil fuels by 2050 in order to keep global warming below 1.5 degrees Celsius compared with pre-industrial levels, despite never having used their “fair share” of the global carbon budget, the researchers argue.

“It is a matter of climate justice that if we are asking nations to rapidly decarbonise their economies, even though they hold no responsibility for the excess emissions that are destabilising the climate, then they should be compensated for this unfair burden,” says Andrew Fanning, an ecological economist and research fellow at the University of Leeds’ Sustainability Research Institute in the UK and lead author of the study.

Delegates at the COP27 climate talks in Egypt’s Sharm El-Sheikh last year agreed to create a Loss and Damage Fund that would see countries most responsible for CO2 emissions, such as the US, UK, Japan, and Russia, compensate those disproportionately impacted.

However, that fund would specifically focus on reparation for the damage caused by climate change.

The researchers say this is the first scheme to look at how historically high-emitters can directly compensate historically low-emitting countries.

“It is a matter of climate justice that if we are asking nations to rapidly decarbonise their economies, even though they hold no responsibility for the excess emissions that are destabilising the climate, then they should be compensated for this unfair burden.”

Andrew Fanning, Sustainability Research Institute, University of Leeds

Fanning says the growing momentum around loss and damage was part of the impetus for the study.

He believes there is growing recognition that climate change is a cumulative problem where historical responsibility needs to be taken into account.

“We figured that a proportional compensation scheme that acknowledges this historical responsibility could help convince low-emitting countries to decarbonise their economies and sacrifice parts of their fair shares [of the carbon budget] to balance the excess of high-emitters,” Fanning told SciDev.Net.

In order to arrive at these figures, the researchers considered estimates by the Intergovernmental Panel on Climate Change (IPCC) of the remaining global carbon budget—the term used to describe how much CO2 can still be emitted into the atmosphere to stand a chance of keeping warming below 1.5 degrees.

They then divided up this global carbon budget across countries based on their population size—drawing on the notion that the atmosphere is a shared collective asset to which everyone has an equal claim.

“Ambitious mitigation to reach net zero by 2050 in all countries could limit warming to 1.5 degrees,” Fanning says, referring to global commitments to balance the greenhouse gases being emitted into the atmosphere and those being removed.

Deeply unjust

However, under the current trajectory, says Fanning, “the global North would overshoot its collective fair share of the 1.5 degrees carbon share three times over, appropriating half of the global South’s fair share in the process.

“This struck us as deeply unjust,” he added.

Historically, the global North has been responsible for almost 90 per cent of emissions, which amounts to US$170 trillion in liabilities, according to the study. The rest was from the global South oil-producing countries of Saudi Arabia and United Arab Emirates.

In the proposed scheme, the US would pick up the biggest bill at US$80 trillion over the period—the equivalent of an annual per capita disbursement of more than US$7,200 until 2050.

The UK would shoulder a bill of US$7.7 trillion over the same period—or annual per capita payment of US$3,500—until 2050.

At least 55 countries would sacrifice more than 75 per cent of their “fair share”, including most Sub-Saharan African countries and India, and could receive an average compensation of US$1,160 per capita per year, according to the analysis.

India would be the biggest beneficiary, poised to receive US$57 trillion up to 2050.

“Our study proposes an evidence-based compensation scheme and demonstrates proof-of-concept quantitatively, but it raises many questions around practical implementation and governance,” says Fanning.

“My hope is that our study is received as an input to ongoing climate adaptation negotiations, especially around [the] recently announced Loss and Damage Fund.”

Obed Ogega, climate scientists and programmes manager at the African Academy of Sciences in Nairobi, Kenya, believes that if such a scheme were adopted it could turn around Sub-Saharan African economies.

Ogega says it should be used to fund skills and knowledge transfer in African countries to build resilience, not just decarbonise.

“[The money] could be channelled through grants and other programmes aimed at building climate resilience in countries that bear the burden of climate change,” he told SciDev.Net.

“Part of such proceeds can used to capacitate research institutions in the continent to enhance climate research as well as establish exchange programmes where students can be afforded training in countries like Israel with a track record of climate resilience technologies.”

This piece was produced by SciDev.Net’s Global desk.