An emissions-trading system based on “benefit-sharing” would offer enormous opportunities to developing countries and provide the key to a new low-carbon global order.

These are excerpts from a quite technical and complex essay and proposal, but relevant to commons-oriented policy-making.

The essay: Claus Leggewie. From carbon insolvency to climate dividends. How observing the 2° target may lead to a new global order (in Eurozine)

The original report: WBGU “Kassensturz für den Weltklimavertrag: Der Budgetansatz”, published 1 September 2009.

The essay starts by noting the general shift towards a p2p culture, and how this demands new political approaches:

“A new, positive culture of participation is articulating itself at all levels: in elections and in membership of clubs, associations and political parties, as well as in non-governmental campaigns for climate protection, alternative energy and sustainability. Important is the growing group of strategic consumers: those who not only shop, move about, build and heat in an environmentally-aware way, but who also call into question dominant models of consumption and submit them to the criteria of sustainability. A tangible financial incentive supported by public sponsorship and reliable information is certainly helpful, yet a considerable number of consumers also change their consumer behaviour on the basis of general norms. For example, the benefits of participating in a public project are often seen not only in terms of results achieved, but also in terms of taking part, in other words the satisfaction in having done something for the environment, and the confidence gained in being recognized for this.

Global leaders will find it significantly easier to steer towards big cooperation targets if they are supported by visions of the future within civil society. The Copenhagen targets should not be portrayed as sheer austerity measures, but rather as a chance for benefit-sharing and for the long overdue entry into a climate-friendly global society. A low-carbon society is not a crisis scenario, but rather the realistic vision of liberation from the path of expensive and risky over-development. In 1963, when the world narrowly escaped nuclear catastrophe, the physicist Max Born wrote: “World peace in a world that has grown smaller is no longer a Utopia, but rather a necessity, a condition for the survival of mankind.” Those words have never rung truer.”

How can this be done? … by reframing climate change solutions in a positive way:

“The Kyoto process and the Copenhagen negotiations have up to now have come under the heading of “burden sharing”; the reduction of greenhouse gas emissions has been considered a handicap and an unfair demand, even as being fatal to growth and prosperity. Thanks to this point of view, nations are imprisoned in a dilemma, a situation in which single actors place greater weight upon individual advantages than upon the collective benefits of a possible cooperative solution. Attempts motivated by short term self-interest to minimize one’s own climate-political commitments, in other words to negotiate a discount here and an emissions rebate there, have the net result of causing irreversible damage, not only to global society as a whole, but also to each individual nation.

Instead of burden sharing, the world climate treaty drafted by the WBGU proposes a system of benefit sharing. The givers and takers of classical development cooperation will become partners with complementary interests. The world map will be redrawn and with it the “formulas for power”: Sub-Saharan Africa can offer the most emissions rights, while India (whose budget if emissions remain constant will last another 112 years), Bangladesh (384 years), Pakistan (124 years) and Ethiopia (1200 years) will become strategically important actors in the global emissions market, which will offer them immense opportunities for development.

The crucial change in world society lies in the mid-term uncoupling of economic growth and fossil energy extraction. Until now, the wealth of nations has been based upon the combustion of coal, gas and oil; however the twenty-first century – as long as the 2°C target is taken seriously – will witness an inversion. Nations less advanced down the path of carbonization (such as large parts of Africa), or those that leave the path in time (such as India and Pakistan), will now also be able to become wealthy by assisting societies that must de-carbonize rapidly. A responsible global climate policy entails a fundamental change in international relations, one that entails not only what are perceived as unreasonable austerity requirements, but also a kind of indirect climate dividend, in other words a certain quality of life. For a long time, climate change has for most people been a scientific abstraction. It only began to take concrete shape when the signs became perceivable and the costs calculable. People become active when they recognize the material – but not only the material – benefits of their actions.

Of course, this is still a utopia. In its current state, cap-and-trade schemes to reduce emissions are far from being fair and effective; making the necessary institutional innovations in the field of “global governance” would require significant courage. Ottmar Edenhofer and the WBGU suggest setting up a central climate bank, which as a global budget controller would supervise the transfer of emissions allowances. This bank would also have the job of making sure that emissions trading did not oppose the goal of remaining within the entire global budget, for example via the complete sale of unused emissions credits by individual developing countries at the beginning of the contract period. In order to achieve this, the Central Climate Bank must have the power to do its job. That, in turn, implies that as an institution of global governance, it is accountable and that it has democratic legitimacy – something fundamentally lacking in transnational agencies such as the World Bank.

What is needed is a financing mechanism bound by international law, which – according to the logic of the budget system and the principle of liability – is essentially fed by countries with historically higher emissions. Countries’ financial input might be generated by means of a national carbon tax or via the auctioning of national emissions allowances. This mechanism would have the advantage of being measurable, reportable and verifiable. The global central climate bank can collect these funds in a central fund and distribute them according to an agreed method; it must be able to effectively sanction countries that fail to meet their payment commitments. Conceivable here are liability regulations for certain countries, temporary exclusion from the flexible mechanism or fines (as in the EU). The necessary funds can by no means be put up entirely by the public purse: private investors, especially in industrializing and industrialized countries, must be attracted via low-interest loans and investment security. Matching funds are another financing option: here, private income is raised by a certain percentage via a state share.

The “normal mode” of international cooperation is too slow for this re-structuring: as the Copenhagen climate negotiations have proved, the tendency is to agree on the lowest common denominator. The predominance of national interests and the logic of competition between nations is demonstrated in the ineffectual negotiation rounds of the World Trade Organization, the merely rhetorical nature of the Millenium Development Goals, not to mention the political processes within the most advanced arena of cross-border cooperation – the European Union. Although the view is widely held among political decision-makers that in an interdependent world the growing number of global problems can only be solved by means of global governance, this has yet to translate into an acceleration of the routines of global negotiation.

A successful climate policy based on the 2°C target therefore depends upon a revolution in international cooperation, both in its content and in its institutional form. Historically, there are very few positive images for such a revolution; perhaps for the utterly unexpected reform course of Mikhail Gorbachev would be one. As is well known, the Soviet head of state admitted that the real-socialist model had become bankrupt and that maintaining the rigid model of confrontation between East and West would accelerate the political downfall of the Soviet Union and its associates and increase the danger of international confrontation. The climate crisis demonstrates parallels: the high-carbon model of development is no less far away from bankruptcy, and an international negotiation tactic based on short-term interests will prompt the collapse of the carbon economy and generate immense international tensions and conflicts. The parade of nations laying claim to the Arctic is an example of this, as is the increasing pressure of migration from island and coastal regions.

A world climate treaty will inevitably involve some degree of conflict. However the predominant dilemma in which countries are caught can only be overcome once all become aware of the impending danger, rather as if a meteorite were on collision course with the earth. Is this not to dramatize an increase in the average global temperature of 2°C? Most would say so. However it is obvious that the indisputable effects of global warming upon the natural world (rising sea-levels, increase in extreme weather phenomena, extinction of species and eco-systems, etc.) and upon human society (supply crises, forced migration, destabilization of political systems, etc.), even if these differ from region to region, will mean extremely negative consequences for all climate zones and all societies. In this sense, the climate change problem can indeed be compared with a large meteorite hitting earth, which would cause gigantic flooding and an abrupt change in the global climate (an “impact winter”). In other words: the effects of unhindered global warming are a problem for humankind at large. There is no “outside” where negative consequences can be distributed. In this instance, there are good grounds for applying the oft-abused concept of the “community of fate” to the climate problem. It is only when this realization asserts itself that there will be a chance of breaking the global climate deadlock. When it becomes clear that no country will ultimately be spared from the consequences of an increase in global temperatures between 4°C and 6°C, then the willingness to enter into the international cooperation that is necessary if dangerous climate change is still to be prevented dangerous must grow.

However there are no historical precedents for the technical-financial efforts now required. One could (following Al Gore) compare it to the US government’s Apollo programme in 1960, when a clear and what at the beginning also seemed to be a utopian goal (a human being on the moon) was announced. In order to realize this within ten years, resources and human capital on a scale entirely unheard of until then (25 billion US$, 400 000 people) were deployed; equally crucial was the clear engagement of the Kennedy administration, which set clear targets and schedules.

Today, the completely different premises of climate politics require a significantly more far-reaching (geographically and in content) combination of political leadership, technical innovation and social mobilization. The programme of worldwide de-carbonization is motivated not so much by the technological optimism of the “open frontier” that has pushed the US into the fore in the past, as an exorbitant threat to humankind in the form of dangerous climate change and the acute urgency of political action. Seen historically, turning away from fossil fuel politics requires a similar act of moral-political will as the abolition of slavery and child labour in the eighteenth and nineteenth centuries. The motor of these initiatives was not the anticipation of technological and economic advantages (which first emerged over the course of the industrial revolution), but rather an intentional break with a habit and its accompanying social environment that had become morally and politically untenable.

Institutionally, the L’Aquila resolve to raise the 2°C target to a global measure of climate politics implies a new formation of global government. This includes the consolidation of “eye to eye” negotiations between the old and the new hegemonic powers (the US, the EU; China) on the one hand, which as the G2 or G3 and in the UN World Security Council have the power of veto, and the developing and emerging countries on the other, including new regional powers such as Mexico, Egypt, Turkey and Indonesia. In this framework, the old G-7/8 can no longer function as a hegemonic centre, but rather as a kind of broker and preparatory body. Simultaneously, within a variable architecture of negotiation, links must exist with the numerous conference institutions of the United Nations, which continue to carry the full weight of the G192. Partnerships will also arise with political-economic regional associations such as the EU, Mercosur, or the African Union. And that is not all: in the framework of emissions allowances-trading, future global climate policy will also be determined by bilateral treaties. This flexible (and, alas, fragile) architecture of multi-level negotiation can function only as long as it is oriented towards clear moral bases for negotiation, has sufficient democratic legitimacy, and is supported in national and local arenas of action. Power structures like the G20 imply a kind of democratization paradox: they include nations and agendas that until now have not been sufficiently included, and in the ideal case, in the sense of a democracy-producing multilateralism, provide global public goods. However they themselves do not possess a mandate that accrues to them, at best indirectly, via non-governmental organizations. “