Thursday, 10 December 2015

Choosing a balance and assessing fairness

By Catherine Leining, Policy Fellow, Motu Economic and Public Policy Research

In Paris, the 21st session of the Conference of Parties to the UN Framework on Climate Change includes about 40,000 participants, including 25,000 official delegates, from nearly 200 countries. Two of the sticking points under discussion in the closing days of the conference relate to how much countries should be able to invest in mitigation overseas to help meet their own targets, and how to assess the fairness of countries' overall contributions to reducing global emissions and limiting temperature increases. Both of these issues are important to New Zealand.

This is the second part of my discussion of what this country needs to consider for a low-emission future. The first was about setting targets top-down versus bottom up and a look at assessing costs and creating a domestic pathway toward zero-net emissions will be coming soon.

Balancing domestic and global contributions

The atmosphere doesn't care where emissions or emission reductions come from. New Zealand can make a legitimate contribution to global mitigation whether this is through domestic investment, overseas investment, or a combination of both. To date, New Zealand's climate policy has been designed to allow us to increase our own emissions while outsourcing our emission reductions to other countries as long as our producers were making economically efficient decisions that took the global cost of carbon into account.

That may have been a reasonable starting point, but the global price has collapsed and strategic domestic mitigation isn't happening. The reality is that New Zealand needs to decarbonise its own economy while helping other countries to make this transition. This would be a powerful choice to make and has benefits to all.

There is no ideal line between domestic and international mitigation effort, and I don't see any merit in fixing the position of that line now. That line may need to shift back and forth over time as new technologies emerge and countries' circumstances change. We can no longer rely on our old Kyoto strategy of deferring domestic action and expecting developing countries to sell us their so-called low-hanging fruit via cheap carbon credits. At the same time, new market and financing models for supporting developing country mitigation are emerging, so we also will not need to rely solely on high-cost domestic action in order to make an effective global contribution.

Our domestic mitigation potential need not limit our global contribution and it's important to think strategically about how we can contribute on both fronts.

Assessing fairness

There are many dimensions to fairness. All countries need to transition toward zero net emissions; the element of fairness is in how quickly countries make the transition and how much they contribute to the global cost of the transition. Ultimately I think that fairness will not be dictated by a formulaic calculation of atmospheric entitlement or mitigation cost per capita or as a percentage of GDP. Instead, it will come more from the heart, driven by some combination of our capacity to reduce emissions, our willingness to take responsibility for contributing to the problem, our natural human desire to help others and prevent harm, and - very significantly - the benefits we stand to gain nationally and globally from accelerating our effort and encouraging others to act.

I am encouraged by the turnout at the recent climate marches around the world and people's interest in finding opportunities to reduce emissions, including at a household level.

Perhaps we can be guided by a fresh take on the Golden Rule: "Emit unto others as we would have them emit unto us."

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