Piketty: Rich individuals must foot bill for climate change

Individuals, not states, should be charged for the CO2 they emit. This idea is central to the system proposed by French economist Thomas Piketty, which would place more responsibility for climate change at Europe’s door. EURACTIV France reports. 

The issue of climate justice, a potential bone of contention between the countries of the global North and South, is largely being glossed over ahead of COP21. But it was at the heart of a meeting on Tuesday (3 November) organised by the Paris-based Institute for Sustainable Development and International Relations (IDDRI) on inequality and the climate.

“We must put an end to environmental colonialism. Individuals have a right to development, wherever they are,” the said Sunita Narain, the director of the Indian Centre for Science and Environment.

India is distrustful of any agreement which is made between the big polluters and leaves the least developed countries out of the process.

“The problem is that the United States will manage to get their total lack of ambition accepted in the Paris agreement, which means Africa and India will have no room for development,” the expert warned: the earth has a limited carbon budget if the global temperature rise is to be kept below +2°C.

>>Read: COP21 agreement set to miss CO2 reduction target by 10 gigatons

A lack of ambition from some countries will thus necessarily limit the development potential of others, and undermine the basic principle of fairness. Many researchers fear that the current high-carbon American lifestyle may simply not be negotiable, as the country’s political difficulties, like the Senate’s refusal to act on climate change, may prove insurmountable.

Faced with this dilemma, France’s star economist Thomas Piketty, author of the best-selling book Capitalism in the Twenty-First Century, launched a collaborative project with the Paris School of Economics and the IDDRI. He teamed up with with Lucas Chancel, a researcher at the IDDRI, to present a new approach that takes CO2 emissions into account on an individual basis, rather than by country.

Carbon and inequality

Piketty proposes a method of calculation based on the amount of CO2 produced, but also consumed by each individual, which would radically change our idea of each person’s responsibilities. Under this system, the carbon balance sheet of European citizens, who are normally considered as relatively ‘light’ emitters of CO2 per individual, would be significantly altered, as the greenhouse gases associated with consumer products would be taken into account.

According to Piketty, “income inequality is more and more closely linked to inequalities in CO2 emissions”: it is the rich Europeans, Americans and Chinese that emit the most CO2, while the emissions from the world’s poorest citizens are falling.

The richest 1% of Americans, Luxembourgers, Singaporeans and Saudis emit more than 200 tonnes of CO2 per person per year; 2,000 times more than the poorest in Honduras, Rwanda or Malawi.

Financing adaptation by taxing the rich

As a result of this analysis, Piketty believes “the countries of the North should be convinced to finance more adaptation. Climate change adaptation funds currently stand at $10 billion, while the United Nations Environment Programme estimates the need at 200 times this amount”.

Piketty recalled the fact that the media always present the United States and China as the biggest emitters, responsible for 42% of global CO2 emissions, with Europe far behind at only 10%.

“But if you factor in the emissions of products consumed, Europe’s CO2 emissions are closer to those of the US and China,” the economist insisted. Under this calculation, the EU emits 16% of the global total, compared to 21% for both China and the United States.

The economists propose two solutions: either to implement an effective carbon tax to finance climate change adaptation and protect those on the smallest incomes, or to increase the tax on air tickets. This would be “easier to implement but less well targeted at top emitters”, the economists admitted.

A costly solution for Europe

Karl Friedrich Falkenberg, the former Director-General of the European Commission’s DG Environment and an advisor to the Commission’s think tank on sustainable development, has ruled out this possibility. “Changing from the principle of producer/payer to consumer/payer would absolve producers of responsibility for their CO2 emissions,” he said.

If Chinese emissions were recorded in the US or the EU, China would never be encouraged to clean up its production methods. The country continues to consume enormous quantities of coal, despite possessing the technology to produce clean energy. For Karl Friedrich Falkenberg, this paradox is even less acceptable than climate injustice.