How to Save Global Climate Efforts
The disappointing results of the Paris Climate Agreement are a hard pill to swallow. The key flaw lies in its voluntary nature, which creates noncooperation and forces countries to weigh participation against economic advantage.
The Lackluster Results of the Paris Climate Agreement
The overarching goal of the Paris Agreement is “holding the increase in global average temperature to well below 2 degrees Celsius above pre-industrial levels.” (Intergovernmental Panel on Climate Change). To put this in perspective: global greenhouse gas emissions would have to be halved by 2030. In pursuit of this end, each country is expected to make a nationally determined contribution of some sort: reducing carbon intensity, cutting automobile emissions, reducing overall GHG emissions, etc.
But do these pledges align with the 2-degree goal and do countries adhere to their respective pledges? Overwhelmingly, the answer is “no” to both questions. A study by the Universal Ecological Fund reviewed the climate pledges of 184 countries for 2020–2025. 70% were insufficient to meet the Agreement’s goal, among them four of the top five greenhouse gas emitters: China, the US, India, and Russia.
“Countries need to double and triple their 2030 reduction commitments to be aligned with the Paris target.” — Sir Robert Watson, former chair of the Intergovernmental Panel on Climate Change and co-author of the Universal Ecological Fund report
When countries do submit convincing pledges, they rarely follow through. The Climate Action Tracker follows the goals of the 33 countries responsible for over 80% of emissions- and their findings are disquieting. Only 8 out of the 33 are meeting their nationally determined contributions.
The Prisoner’s Dilemma
The Paris Agreement is an “indivisible” agreement that concerns global commons — resources whose impacts are spread ‘indivisibly’ around the globe. Cyberspace, pandemics, and climate change do not abide by borders.
In contrast to universally beneficial or reciprocity-reliant agreements, in which common sense or economic consequences incentivize participation, indivisible agreements are precarious because countries can gain an edge (often of the economic variety) by deviating from the globally beneficial effort. A ‘prisoner’s dilemma’ then results because each state is compelled to better its own position at the expense of the other actors.
The very structure of international climate agreements like the Paris Agreements overlooks the prisoner’s dilemma instead of solving it, leaving vulnerabilities to be exploited by short-sighted leaders and free-riders.
More on Free Riding
Since climate change occurs within global common space, the benefits of emission reductions do not always accrue within the countries that make reductions. Consider this scenario: the U.S. spends $50 on carbon reduction, resulting in a $100 decrease in global damages, but the U.S. only receives $10 of those benefits. Applying cost-benefit analysis, the return on investment is not great enough to justify the initial cost of carbon reductions. Even if the U.S. still wanted to reap the diplomatic benefits of participating in a carbon reduction agreement, they could simply understate their carbon emissions or only adhere to the less ambitious policy directives, such as the lackluster, nationally-determined contributions of the Paris Agreement. Keep in mind that any free-riding country can also still receive a portion of the common benefits from the efforts of other countries to decrease emissions.
This is especially harmful to developing nations because even if they decrease their emissions substantially, the impacts of climate change will still disproportionately affect them. For example, Trinidad & Tobago and Tunisia are shifting to sustainable growth practices and resource protection — to the extent that they are both listed in the top 15 countries for environmental protection by Yale University’s 2018 Environmental Performance Index — but 100% of their populations are still exposed to unsafe levels of air pollution.
Ultimately, noncooperation has prevailed and very few of the largest carbon emitters have assumed strong climate policies. Since adherence to the Paris Climate Agreement is completely voluntary, an avenue for punishing free riders or rewarding cooperation is nonexistent.
Join the Club
The international community can learn from the Paris Agreement’s flaws and found a ‘climate club.’ At its simplest level, the club approach shares a public resource (in this case, the global climate) among members cooperatively, beneficially, and stably (think military power among NATO members) in exchange for club ‘dues’ in the form of contributions. This model will overcome the deficiencies of the Paris effort with two key mechanisms:
- Unified action towards a common objective
- Penalties for nonmembers or substandard members.
Unified Action
First, this club should adopt a quantitative mechanism for reaching a two-degree temperature limit, ideally an international carbon price per metric ton that increases over time. To reach the two-degree limit, according to a 2019 World Bank report, an initial $40–80 USD unit price should be instituted with an approximate 3–4% percent increase per year. This maximizes global-level interactions by centering negotiations around a single number: dollars per ton. Additionally, countries would be free to implement the price as they see fit, whether that is taxation or cap-and-trade (which is currently in use in the European Union).
Penalties
The penalty for nonmembers or members who do not meet the two-degree goal distinguishes the club approach from the Paris approach. Without this system of incentives, the club approach too will fall into the trap of powerlessness.
The simple and effective solution is a uniform percentage tariff on nonmember imports. Once the tariff cost exceeds the cost of emission reduction for a country, it is in their interest to join the club. A 2015 study in the American Economic Review indicates that modest trade penalties and a carbon price up to $50 per ton will make the club favorable for every nation, ideally at a $25 carbon price per ton and a 3 percent tariff. Although these numbers might vary with income, global development level, and emission rates, the underlying theory will still apply.
The Bottom Line
Despite half a century of climate conferences and two international climate agreements, virtually zero progress has been made toward a truly global initiative against climate change. The Conference of Parties held by the United Nations Climate Change Framework Convention in 1995 was followed by 24 more conferences dedicated to emissions reductions, yielding nothing but two failed climate accords: first the Kyoto protocol and then the Paris Climate Agreement. As the saying goes: “Insanity is doing the same thing over and over again and expecting different results.” The international community must stop its twenty-six year-long streak of insanity and adopt the climate club model to correct the mistakes of its predecessors.
