Chancel and Piketty.pdf

Carbon and inequality: From Kyoto to Paris Trends in the global inequality of carbon emissions (1998-2013) & prospects for an equitable adaptation fund World Inequality Lab Lucas Chancel, Thomas Piketty To cite this ver...

Carbon and inequality: From Kyoto to Paris Trends in the global inequality of carbon emissions (1998-2013) & prospects for an equitable adaptation fund World Inequality Lab Lucas Chancel, Thomas Piketty To cite this version: Lucas Chancel, Thomas Piketty. Carbon and inequality: From Kyoto to Paris Trends in the global inequality of carbon emissions (1998-2013) & prospects for an equitable adaptation fund World In- equality Lab. 2015. halshs-02655266 HAL Id: halshs-02655266 https://halshs.archives-ouvertes.fr/halshs-02655266 Preprint submitted on 29 May 2020 HAL is a multi-disciplinary open access L’archive ouverte pluridisciplinaire HAL, est archive for the deposit and dissemination of sci- destinée au dépôt et à la diffusion de documents entific research documents, whether they are pub- scientifiques de niveau recherche, publiés ou non, lished or not. The documents may come from émanant des établissements d’enseignement et de teaching and research institutions in France or recherche français ou étrangers, des laboratoires abroad, or from public or private research centers. publics ou privés.  WID.world WORKING PAPER SERIES N° 2015/7 Carbon and inequality: From Kyoto to Paris Trends in the global inequality of carbon emissions (1998-2013) & prospects for an equitable adaptation fund Lucas Chancel Thomas Piketty November 2015 World Inequality Lab  PSE | November 2015 Carbon and inequality: from Kyoto to Paris Abstract. This study presents evolutions in in proportion to their emissions in excess of this the global distribution of CO2e emissions (CO2 and threshold. North Americans would then contrib- other Green House Gases) between world individ- ute to 46% of the fund, vs. 16% for Europeans, 12% uals from 1998 and 2013 and examines different for China. In strategy 3, the effort is shared by all strategies to finance a global climate adaptation top 1% emitters in the world (i.e. all individuals fund based on efforts shared among high world emitting more than 9.1 times world average emis- emitters rather than high-income countries. To sions). North Americans would then contribute to this end, we combine data on historical trends in 57% of the tax, vs. 15% for Europeans, 6% for Chi- per capita country-level CO2e emissions, consump- na. In these strategies, European contributions to tion-based CO2e emissions data, within-country adaptation finance would decrease in proportion income inequality and a simple income-CO2e compared to today, but substantially increase in elasticity model. We show that global CO2e emis- absolute terms. In these strategies, European con- sions inequalities between individuals decreased tributions to adaptation finance would decrease in from Kyoto to Paris, due to the rise of top and mid proportion compared to today, but largely increase income groups in developing countries and the in absolute terms. American contributions would relative stagnation of incomes and emissions of increase both in absolute and relative terms. We the majority of the population in industrialized also discuss possible implementations via coun- economies. Income and CO2e emissions inequali- try-level carbon and income taxes or via a gen- ties however increased within countries over the eralized progressive tax on air tickets to finance period. Global CO2e emissions remain highly con- the adaptation fund. This latter solution might be centrated today: top 10% emitters contribute to easier to implement but less well targeted at top about 45% of global emissions, while bottom 50% emitters. emitters contribute to 13% of global emissions. Top 10% emitters live on all continents, with one Disclaimer: Responsibility for the views ex- third of them from emerging countries. pressed in this study lies entirely with the authors The new geography of global emitters calls and does not necessarily reflect those of the Paris for climate action in all countries. While devel- School of Economics or Iddri. oped and developing countries already engaged in mitigation efforts, contributions to climate ad- Acknowledgments: The authors are partic- aptation funds remain almost entirely financed ularly grateful to Branko Milanovic, Christopher by developed nations, and for the most part by Lakner, Paul Segal, Sudhir Anand, Glenn Peters, Europe (62%). In order to increase climate adap- Robbie Andrews, the Iddri team and Julia Stein- tation finance and better align contributions to berger for their comments and/or help with the the new distribution of high emitters, we examine provision of specific data sources. the implications of a global progressive carbon tax to raise €150 billion required annually for cli- C O N TA C T mate adaptation. In strategy 1, all emitters above [email protected] world average emissions (i.e. all individuals emit- [email protected] ting more than 6.2tCO2e per year) contribute to the scheme in proportion to their emissions in excess of this threshold. North Americans would contrib- ute to 36% of the fund, vs. 21% for Europeans, 15% for China, and 20 % for other countries. In strat- egy 2, the effort is shared by all top 10% emitters in the world (i.e. all individuals emitting more 2 than 2.3 times world average emissions), again  PSE | November 2015 Carbon and inequality: from Kyoto to Paris TABLE DES MATIÈRES Résumé de l’étude en français 5 TABLE OF CONTENTS Executive Summary in English 9 Section 1. Introduction 12 Section 2. Climate adaptation funding: the gap 13 Section 3. Historical CO2e emissions: key facts and Figures 15 Section 3.1. Global CO2e budget and annual emissions 15 Section 3.2. Per capita emissions over time 15 Section 4. Combining income inequality statistics with CO2e emissions: a literature review 20 Section 4.1. CO2e emissions, living standards and income levels 20 Section 4.2. Previous work on the global distribution of CO2e emissions 22 Section 4.3. Recent research on the world distribution of income 24 Section 5. Our methodology 25 Section 5.1. Distribution of income 25 Section 5.2. Distribution of CO2e emissions 25 Section 5.3. Coverage of the study 27 Section 6. A global distribution of carbon emissions: from Kyoto to Paris 28 Section 6.1. From production to consumption-based emissions 28 Section 6.2. Where do high and low emitters live? 28 Section 6.3. Who is hiding behind the numbers? Focus on top, bottom and middle emitters 29 Section 6.4. How unequal are global carbon emissions? 31 Section 6.5. Who benefitted from the highest growth in CO2e emissions since Kyoto? 32 Section 6.6. Did global CO2e emission inequalities increase or decrease over the past decades? 33 Section 7. Financing adaptation via a global progressive carbon tax 35 Section 7.1. Proposed strategies for climate adaptation contributions 35 Section 7.2. Implementation via country-level progressive taxation 38 Section 7.3 Implementation via a global progressive tax on air tickets 38 Section 8. Conclusions and prospects for future research 40 Bibliography 41 Appendix Figures and Tables 44 3  PSE | November 2015 Carbon and inequality: from Kyoto to Paris LISTE DES FIGURES LISTE DES TABLEAUX Figure E.1. Répartition géographique des émetteurs Tableau E.4. Qui devrait contribuer aux fonds de CO2e 6 d’adaptation pour le climat? 7 Figure E.2. Comment les émissions de CO2e ont-elles évolué entre Kyoto et Paris LISTE OF TABLES pour différents groupes d’émetteurs ? 6 Table E.4. Who should contribute to climate Figure E.3. Inégalités mondiales d’émissions de CO2e: adaptation funds? 11 importance des inégalités intra et inter pays 6 Table 1. Current per capita CO2e emissions 19 Table 2. Global GDP, Population LISTE OF FIGURES and GHG coverage (%) 27 Table 3. Current per capita CO2e emissions - Figure E.1. Breakdown of top 10, middle 40 consumption-based 28 and bottom 50% CO2e emitters 10 Table 4. Bottom global CO2e emitters, 2013 29 Figure E.2. How did CO2e emissions grow from Table 5. Top global CO2e emitters, 2013 29 Kyoto to Paris for different groups of emitters? 10 Table 6. Average world emitters in 2013 30 Figure E.3. World CO2e emissions inequalities: Table 7. CO2e emissions concentration shares within and between country importance 10 in 2013 (%) 31 Figure 1A. Contributors to global adaptation Table 8. Evolution of percentile ratios for CO2e funds (2014) 13 emissions 33 Figure 1.B. Distribution of current Table 9A. Population, mean emissions and world production-based CO2e emissions 14 shares in strategies 0-1 36 Figure 1.C. Distribution of cumulated Table 9B. Population, mean emissions and production-based historical CO2e emissions 14 world shares in strategies 2-3 36 Figure 2A. Share in global CO2e emissions Table 10. Implementation via country-level since 1820 16 progressive income taxation 37 Figure 2B. Share in cumulated global Table 11. Who should contribute to climate CO2e emissions since 1820 16 adaptation funds? 39 Figure 3. Global CO2e emissions per region, Table A.1. Income concentration shares from 1820 to today 17 over time (%) 48 Figure 4. Per capita CO2e emissions per world region 18 Figure 5. Regional composition of emissions per global CO2e quintile. 28 Figure 7. Regional composition of top 10, middle 40 and bottom 50% emitter groups 31 Figure 7. Growth of CO2e emissions from 1998 to 2013 32 Figure 8. Evolution of within & between country CO2e emissions inequalities 33 Figure A.0. List of countries and available years 44 Figure A.1. Breakdown of global GDP in 2014 46 Figure A.2. Breakdown of consumption-based CO2e emissions in 2013 46 Figure A.3. Distribution of world emitters according to GHG emission categories 47 Figure A.4. Income growth from 1998 to 2013 48 4  PSE | November 2015 Carbon and inequality: from Kyoto to Paris Carbone et inégalité: de Kyoto à Paris Evolution de l’inégalité mondiale des émissions de CO2 (1998-2013) et perspectives pour un financement équitable de l’adaptation RÉSUMÉ DE L’ÉTUDE 13% des émissions (Figure E.1). Les grands émet- EN FRANÇAIS teurs sont aujourd’hui sur tous les continents et un tiers d’entre eux vient des pays émergents. Cette étude analyse l’évolution des inégalités Parmi les individus les plus émetteurs de la pla- d’émissions de CO2e (CO2 et autres gaz à effet de nète en 2013, nos estimations mettent en avant les serre) entre individus, dans le monde entier, de 1% les plus riches Américains, Luxembourgeois, 1998 à 2013. Nous utilisons ces résultats pour Singapouriens et Saoudiens, avec des émissions construire et examiner différentes stratégies de annuelles par personne supérieures à 200 tCO2e. financement d’un fond mondial pour l’adaptation A l’autre extrémité de la pyramide des émetteurs, au changement climatique, fondé sur un principe on retrouve les individus les plus pauvres du Hon- d’équité entre individus et non entre pays. A cette duras, du Mozambique, du Rwanda et du Malawi, fin, l’étude combine des données historiques sur avec des émissions 2000 fois plus faibles, proches l’évolution des inégalités de revenus à l’intérieur de 0,1 tCO2e par personne et par an. Au milieu de des pays ainsi que des données sur les émissions la distribution mondiale des émetteurs (entre 6 et nationales liées à la consommation (incluant donc 7 tCO2e par an), on retrouve des groupes tels que les imports et les exports de CO2e). Une loi simple les 1 % les plus riches tanzaniens, une partie de la reliant revenu individuel et émissions, à l’intérieur classe moyenne chinoise ou des Européens aux de chaque pays, est utilisée. Nos données couvrent revenus modestes (deuxième et troisième décile approximativement 90% de la population, du PIB français et allemand par exemple). et des émissions mondiales de CO2e. Les résultats Les classes moyennes et aisées des pays émer- ne dépendent pas seulement des inégalités de re- gents ont accru leurs émissions plus rapidement venu à l’intérieur des pays, mais aussi des évolu- que tous les autres groupes sociaux à l’échelle tions en matière d’émissions liées à la consomma- mondiale au cours des 15 dernières années, avec tion entre pays. des taux de croissance cumulés des émissions L’étude montre que les inégalités mondiales atteignant 40 % (Figure E.2). Certains groupes d’émissions de CO2e entre individus ont diminué sociaux ont vu leurs émissions croître beaucoup entre 1998 et aujourd’hui, en raison de la progres- moins rapidement depuis 1998, voire diminuer sion des classes moyennes et aisées dans les pays dans le cas des individus les plus faiblement émet- émergents et la stagnation relative des revenus et teurs. Au sommet de la pyramide des émetteurs, des émissions de la majorité de la population dans la majorité de la population des pays industrialisés les pays industrialisés. Les inégalités de revenus a vu ses émissions croître relativement modeste- et de CO2e ont cependant augmenté à l’intérieur ment (10 %). Si les différences d’émissions entre des pays au cours des quinze dernières années. Les le milieu de la distribution et le sommet se sont émissions de CO2e demeurent fortement concen- réduites, elles se sont accrues entre le bas de la py- trées aujourd’hui: les 10% des individus les plus ramide des émetteurs et le milieu. Ces tendances émetteurs sont aujourd’hui responsables de 45 % sont positives du point de vue des revenus (émer- des émissions mondiales alors que les 50 % les gence d’une classe moyenne mondiale) mais elles moins émetteurs sont responsables de moins de constituent un réel défi en matière climatique. 5  PSE | November 2015 Carbon and inequality: from Kyoto to Paris FIGURE E.1. RÉPARTITION GÉOGRAPHIQUE DES ÉMETTEURS DE CO2e Les 10% les plus grands émetteurs : Les 40 % du milieu : La moitié inférieure des émetteurs : 45% des émissions mondiales 42% des émissions mondiales 13% des émissions mondiales Afrique S. Amérique 3% Moyen-Orient Autre asie Autres pays riches Russie/ Asie cent. Chine latine 5% 6% 7% 35% 9% 4% Amérique Russie/ Asie cent. Autres pays riches Autres pays d’Asie du Nord 7% 4% 23 % 40 % Afrique S. 2% Asie 8% Inde Russie/Asie cent. Chine 36 % 1% 10 % Amérique du Nord Afrique S. 7% 10 % Moyen- Chine Orient 16 % UE 7% 19 % Amérique latine Inde Inde UE Moyen- 6% Amérique 1 % 5% 18 % Orient latine 5% 5% Source: auteurs. Lecture : Parmi les 10 % des individus les plus émetteurs au niveau mondial, 40 % des émissions de CO2e satisfont les besoins des Nord-Américains, 20 % des Européens et 10 % des Chinois. FIGURE E.2. COMMENT LES ÉMISSIONS FIGURE E.3. INÉGALITÉS MONDIALES DE CO2e ONT-ELLES ÉVOLUÉ ENTRE KYOTO D’ÉMISSIONS DE CO2e: IMPORTANCE ET PARIS POUR DIFFÉRENTS GROUPES DES INÉGALITÉS INTRA ET INTER PAYS D’ÉMETTEURS ? 0,5 40 Inter Taux de croissance de CO2e cumulé entre 1998 et 2013 Niveau d’inégalité 30 0,4 20 0,3 Intra 10 0,2 0 1998 2003 2008 2013 -10 Source : auteurs. Lecture: En 2008, la composante intra-pays 0 10 20 30 40 50 de l’indice de Theil était de 0,35 et la composante entre-pays Cinquantile de la distribution mondiale des émissions de GES de 0,40, i.e. les inégalités intra-pays contribuaient à hauteur de Source : auteurs. Lecture: le groupe représentant les individus 47 % à l’inégalité globale contre 53 % pour les inégalités mon- les 2 % les moins émetteurs au monde a vu ses émissions de diales - telles que mesurées par l’indice de Theil. CO2e par tête baisser de 12 % en 1998 et 2013. 6  PSE | November 2015 Carbon and inequality: from Kyoto to Paris TABLEAU E.4. QUI DEVRAIT CONTRIBUER AUX FONDS D’ADAPTATION POUR LE CLIMAT? Financement par des taxes progressives sur le CO2e Stratégie 1 Stratégie 2 Stratégie 3 Financement en proportion Partage du Partage du Financement selon des émissions Partage du financement financement Régions une taxe sur les totales (taxe financement parmi parmi les 10% les parmi les 1% les billets d’avion (%) proportionnelle tous les émetteurs plus émetteurs plus émetteurs sur le CO2e) (%) au-dessus de la (2,3 x au-dessus (9,1 x au-dessus moyenne mondiale de la moyenne de la moyenne (%) mondiale) (%) mondiale) (%) Amérique du Nord 21,2 35,7 46,2 57,3 29,1 UE 16,4 20,0 15,6 14,8 21,9 Chine 21,5 15,1 11,6 5,7 13,6 Russie/Asie centrale. 6,0 6,6 6,3 6,1 2,8 Autres riches 4,6 5,8 4,5 3,8 3,8 Moyen-Orient/Afrique du Nord 5,8 5,4 5,5 6,6 5,7 Amérique latine 5,9 4,3 4,1 1,9 7,0 Inde 7,2 1,0 0,7 0,0 2,9 Autres Asie 8,3 4,7 4,1 2,7 12,1 Afrique subsaharienne 3,1 1,5 1,5 1,1 1,1 Monde 100 100 100 100 100 Source: auteurs. Lecture: l’Amérique du Nord représente 46,2 % des émissions mondiales générées par des individus émettant plus de 2,3 fois la moyenne mondiale. Les individus émettant 2,3 fois plus que la moyenne mondiale (soit 14,3 tCO2e) appartiennent aux 10 % les plus émetteurs. Note : 27 % des émetteurs mondiaux émettent plus que la moyenne mondiale (Stratégie 1). Ces calculs correspondent aux émissions liées à la consommation des individus. Nos résultats montrent que les inégalités de la Corée du Sud, du Mexique et de la Colombie d’émissions de CO2e mondiales sont de plus en au Fonds Vert pour le Climat, des pays émergents plus expliquées par les inégalités à l’intérieur des et en développement financent de facto l’adapta- pays – et non entre pays. En effet, les inégalités in- tion au changement climatique et remettent en tra-pays expliquaient un tiers de l’inégalité mon- cause les principes de répartition qui semblaient diale des émissions de CO2e individuelles en 1998 prévaloir jusqu’à présent. Toutefois, leur contribu- et représentent aujourd’hui la moitié de cette iné- tion demeure symbolique à l’heure actuelle et ne galité (Figure E.3). Cela renforce la pertinence d’un reflète ni la répartition des émissions historiques focus sur les individus plutôt que sur les pays for- de gaz à effet de serre, ni la nouvelle géographie tement émetteurs. des grands et petits émetteurs individuels. La nouvelle géographie des émetteurs appelle Cette étude examine de nouvelles stratégies en à des actions de lutte contre le changement cli- vue d’augmenter le volume global de l’aide pour matique dans tous les pays. Alors que les pays l’adaptation au changement climatique. Dans ces en développement et émergents contribuent de stratégies, les émissions individuelles et non les manière croissante aux efforts de réduction des émissions nationales ou le PIB par tête, seraient émissions (efforts dits d’atténuation), la contri- la base de calcul des contributions. Afin de mieux bution aux fonds internationaux de financement aligner les contributions aux fonds d’adaptation à de l’adaptation au changement climatique de- la nouvelle distribution mondiale des émetteurs, meure essentiellement le fait des pays développés l’étude examine les implications d’une taxe mon- (et principalement de l’UE, avec plus de la moitié diale progressive sur le CO2e afin de lever 150 mil- des financements, cf. section 2). Si une hausse des liards d’euros nécessaires pour financer l’adap- contributions des pays du Nord est nécessaire, tation (Tableau E.4). Dans la stratégie 1, tous les notre étude montre que les classes aisées des pays émetteurs au dessus de la moyenne mondiale (i.e. émergents, du fait de la hausse de leurs revenus et tous les émetteurs au dessus de 6,2 tCO2e par an) de leurs émissions, pourraient également contri- contribuent à l’effort en proportion de leurs émis- buer à ces fonds. Avec les contributions récentes sions dépassant le seuil. Les Nord-Américains 7  PSE | November 2015 Carbon and inequality: from Kyoto to Paris contribueraient à hauteur de 46 % des efforts, Nous discutons également de la mise en place contre 16 % pour les Européens et 12 % pour les de telles mesures via des taxes nationales sur le chinois. Dans la stratégie 3, les efforts sont répartis revenu et via une taxe progressive généralisée sur entre les 1% les plus émetteurs (i.e. tous les indi- les billets d’avion. Une taxe sur les billets d’avions vidus au-dessus de 9,1 fois la moyenne mondiale). a déjà été mise en place dans 9 pays et est actuel- Les Nord-américains contribueraient à hauteur de lement utilisée pour financer des programmes de 57 % des efforts, contre 15 % pour les Européens développement international. La taxation de tous et 6 % pour les Chinois. Dans ces nouvelles clefs les billets de première classe à hauteur de 180 € et de répartition des efforts, la part des financements de tous les billets de classe économie à hauteur de provenant de l’Europe diminuerait en propor- 20 € permettrait de générer 150 milliards d’euros tion mais augmenterait en absolu. En effet, dans pour l’adaptation chaque année. Cette solution la stratégie 3, la plus favorable aux Européens, le serait plus facile à mettre en oeuvre qu’une taxe volume de financement provenant du Vieux conti- progressive sur le CO2 mais ciblerait moins bien nent atteindrait 23 milliards d’euros, soit plus de les grands émetteurs individuels. trois fois sa contribution actuelle. 8  PSE | November 2015 Carbon and inequality: from Kyoto to Paris EXECUTIVE SUMMARY in the world, with annual per capita emissions IN ENGLISH above 200tCO2e. At the other end of the pyramid of emitters, lie the lowest income groups of Hon- This study presents evolutions in the global dis- duras, Mozambique, Rwanda and Malawi, with tribution of CO2e emissions (CO2 and other Green emissions two thousand times lower, at around House Gases [GHG]) between world individuals 0.1tCO2e per person and per year. In the middle of from 1998 and 2013 and examines different strat- the world distribution of emitters (between 6 and egies to contribute to a global climate adaptation 7tCO2e per person and per year), lie groups such as fund based on efforts shared among high emit- the top 1% richest Tanzanians, the Chinese 7th in- ters rather than high-income countries. To this come decile, the French second income decile or end, we combine data on historical trends in per the third German income decile. capita country-level emissions, within-country Middle and upper classes of emerging coun- income inequality, as well as environmental in- tries increased their CO2e emissions more than put-output data (capturing consumption-based any other group within the past 15 years. This led CO2 emissions and other GHG gases) and a sim- to a reduction in the global dispersion of CO2e ple income-CO2e elasticity model. Our data cov- emissions - especially between the middle of the ers approximately 90% of world GDP, population income distribution and the top (Figure E.2). How- and CO2e emissions. Our results depend not only ever, the inequality of CO2e emissions increased on within country inequalities, but also on chang- between the bottom of the distribution and the es in consumption-based CO2e emission levels of middle. While these trends, if continued, are pos- countries. itive from an income point of view (emergence of We show that global CO2e emissions inequali- a global middle class), they constitute a real chal- ties between individuals decreased from Kyoto to lenge for future global CO2e emissions levels. Paris, due to the rise of top and mid income groups Our estimates also show that within-country in developing countries and the relative stagna- inequality in CO2e emissions matters more and tion of incomes and emissions of the majority of more to explain the global dispersion of CO2e the population in industrialized economies. In- emissions. In 1998, one third of global CO2e emis- come and CO2e emissions inequalities however sions inequality was accounted for by inequality increased within countries over the period. Global within countries. Today, within-country inequali- CO2e emissions remain highly concentrated to- ty makes up 50% of the global dispersion of CO2e day: top 10% emitters contribute to 45% of global emissions (Figure E.3). It is then crucial to focus on emissions, while bottom 50% contribute to 13% high individual emitters rather than high emitting of global emissions. Top 10% emitters live on all countries. continents, with one third of them from emerging The new geography of global emitters calls for countries (Figure E.1). climate action in all countries. While developed Our estimations show that the top 1% richest and developing countries already engaged in Americans, Luxemburgers, Singaporeans, and mitigation efforts, contributions to climate adap- Saudi Arabians are the highest individual emitters tation funds remain almost entirely financed by 9  PSE | November 2015 Carbon and inequality: from Kyoto to Paris FIGURE E.1. BREAKDOWN OF TOP 10, MIDDLE 40 AND BOTTOM 50% CO2e EMITTERS Top 10% Middle 40% Bottom 50% emitters: emitters: emitters: 45% of world 42% of world 13% of world emissions emissions emissions South Africa 3% Latin America MENA Other Asia Other Rich Russia/C. Asia China 5% 6% 7% 35% 9% 4% North Russia/ C. Asia Other Rich Other Asia America 7% 4% 23% 40% S. Africa 2% Asia 8% India Russia/C. Asia China 36% 1% 10% North America South Africa 7% 10% China MENA 16% EU 7% 19% Latin America 6% India India EU MENA 1% 5% Latin 18% 5% America 5% Source: authors. Key: Among the top 10% global emitters, 40% of CO2e emissions are due to US citizens, 20% to the EU and 10% from China. FIGURE E.2. HOW DID CO2e EMISSIONS GROW FIGURE E.3. WORLD CO2e EMISSIONS FROM KYOTO TO PARIS FOR DIFFERENT INEQUALITIES: WITHIN AND BETWEEN GROUPS OF EMITTERS? COUNTRY IMPORTANCE 0,5 40 Between Cumulative CO2e growth rate between 1998 and 2013 Level of inequality 30 0,4 20 0,3 Within 10 0,2 0 1998 2003 2008 2013 -10 0 10 20 30 40 50 Fiftieth of global CO2e distribution Source: authors. Key: in 2008, the within-country component of the Theil index was of 0.35 and the between-country com- Source: authors. Key: the group representing the 2% lowest ponent of 0.40, i.e. between-country inequalities contributed CO2e emitters in the world, saw its per capita CO2e emissions to 53% of total inequalities - as measured by the Theil index. level decrease by 12% between 1998 and 2013. developed nations, and for the most part by Eu- Korea, Mexico or Colombia to the Green Climate rope (with more than half total contributions, see Fund, emerging and developing countries are section 2). If it is necessary to increase the volume committing to finance adaptation and broke the of adaptation finance from developed countries, standard developed-developing countries divide our study shows that upper income groups of which seemed to prevailed so far. However, their emerging countries, who benefited from income contributions remain symbolic at this stage (less growth and resulting CO2e emissions growth than 1% of all global adaptation funds) and the over the past decades, could also participate in equity logic behind adaptation funding remains 10 to such funds. With the contributions of South unclear.  PSE | November 2015 Carbon and inequality: from Kyoto to Paris TABLE E.4. WHO SHOULD CONTRIBUTE TO CLIMATE ADAPTATION FUNDS? Progressive carbon tax strategies Strategy 1 Strategy 2 Strategy 3 Effort sharing Effort sharing according to all Effort sharing Effort sharing Effort sharing according to a Regions emissions (flat among all emitters among top 10% among top 1% global tax on air carbon tax) (%) above world emitters (above emitters (above tickets (%) average 2.3x world 9.1x world average) (%) average) (%) (%) North America 21.2 35.7 46.2 57.3 29.1 EU 16.4 20.0 15.6 14.8 21.9 China 21.5 15.1 11.6 5.7 13.6 Russia/C. Asia 6.0 6.6 6.3 6.1 2.8 Other Rich 4.6 5.8 4.5 3.8 3.8 Middle East/N.A. 5.8 5.4 5.5 6.6 5.7 Latin America 5.9 4.3 4.1 1.9 7.0 India 7.2 1.0 0.7 0.0 2.9 Other Asia 8.3 4.7 4.1 2.7 12.1 S.S. Africa 3.1 1.5 1.5 1.1 1.1 World 100 100 100 100 100 Source: Authors. Air passenger data from World Bank ( 2015). Key: North Americans represent 46.2% of global emissions released by individuals who emit 2.3 times more than the global average. Individuals who emit more than 2.3 times average emissions (14.3 tCO2e per year) belong to the top 10% emitters. Note: 27% of individuals emit more than world average emissions (Strategy 1). These estimations focus on consumption-based emissions. This report suggests novel strategies to in- world (i.e. all individuals emitting more than 9.1 crease global climate adaptation funding, in times world average emissions). North Americans which individual CO2e emissions (rather than na- would then contribute to 57% of efforts, vs. 15% tional CO2e or income averages) are the basis for for Europeans, 6% for China. In these new strate- contributions. In order to better align these con- gies to finance climate adaptation, the share of Eu- tributions to the new distribution of high emitters, rope would decrease in proportion, but increase in we first examine the implications of a global pro- absolute terms. In strategy 3, the most favourable gressive carbon tax to raise €150 billion required to Europeans, the volume of finance coming from annually for climate adaptation (Table E.1). In Europe would reach €23 billion, more than three strategy 1, all emitters above world average emis- times its current contributions. sions (i.e. all individuals emitting more than 6.2t We also discuss possible implementations per year) contribute to the scheme in proportion to via country-level carbon and income taxes or via their emissions in excess of this threshold. North a generalized progressive tax on air tickets to fi- Americans would contribute to 36% of the fund, nance the adaptation fund. A tax on air tickets vs. 20% for Europeans, 15% for China. In strategy has already been implemented in 9 countries and 2, the effort is shared by all top 10% emitters in the is currently used to finance development pro- world (i.e. all individuals emitting more than 2.3 grams. Taxing all business class tickets at a rate times world average emissions), again in propor- of €180 and all economy class tickets at a rate of tion to their emissions in excess of this threshold. €20 would yield €150 billion required for climate North Americans would then pay 46% of the tax, adaptation every year. This latter solution might vs. 16% for Europeans, 12% for China. In strategy be easier to implement but less well targeted at 3, the effort is shared by all top 1% emitters in the top emitters. 11  PSE | November 2015 Carbon and inequality: from Kyoto to Paris SECTION 1. to a global climate adaptation fund based on ef- INTRODUCTION forts shared among high emitters rather than high-income countries or historical emissions. In Environmental degradation, in particular cli- effect, we simulate different variants of a global mate change (IPCC, 2014a), and rising economic progressive carbon tax. We also discuss possible inequalities (Piketty, 2014; OECD, 2011) are two implementations via country-level carbon and key challenges for policymakers in the decades to income taxes or via a generalized progressive tax come. Both challenges endanger democratic in- on air tickets. Our basic premise is that in order stitutions and social contracts. In order to address to increase funding and acceptability for a world these two challenges, it is essential to better un- adaption fund, it is necessary to deepen our un- derstand interactions between economic inequali- derstanding of what an equitable distribution of ties and environmental degradation. efforts between countries should look like. Rather Different types of “environmental inequali- than clearing developed countries from their re- ties” can be distinguished: inequalities in terms sponsibilities, this approach calls for an increase of exposure to environmental degradation, and in current contributions from high emitters wher- inequalities in contribution to pollution. Expo- ever they are on the planet. sure inequalities occur between countries (tropi- The rest of this report is organized as follows: in cal countries are more exposed to climate change section 2, we review the current debate on climate than more temperate zones, for instance- see adaptation funds and the need to find new financ- IPCC, 2014), but also within countries and among ing schemes. Section 3 provides data on historical social or ethnic groups. Aizer et al. (2015), for in- regional CO2e emissions trends. Existing litera- stance, showed how African-Americans are more ture on global distributions of CO2e emissions is likely to suffer from exposure to lead pollution in discussed in section 4 and section 5 presents the Northeastern USA, which in return affects their methodology followed. Section 6 presents our re- life chances and capabilities. The second type of sults of the current distribution of individual CO2e environmental inequality, upon which we focus emissions and its evolution over the past 15 years in the present study, relates to contribution to pol- (1998-2013). Finally, section 7 applies our results lution inequalities, or to the differentiated impacts to different progressive carbon tax options on the of social groups or individuals on environmental world top carbon emitters in order to finance ad- degradation (see Chakravarty and Ramana, 2011). aptation funds. Environmental inequalities can also take a third form, namely policy effect inequalities. These are inequalities generated by environmental policies that alter income distributions. Energy policies which increase the price of energy can have re- gressive impacts, i.e. hit the poor relatively more than the rich (Sterner, 2011). A fourth form of environmental inequalities relates to policy mak- ing inequalities, i.e. different social groups do not access environmental policy making in the same way (Martinez-Alier, 2003). This study focuses upon the second type of en- vironmental inequalities (unequal contributions to pollution). We present novel and up-to-date estimates of the global distribution of individu- al CO2e emissions (and other green house gases1) between world individuals from 1998 and 2013. We then examine different strategies to contribute 1. Unless specified, CO2e and CO2 equivalent (CO2e) are used 12 interchangeably.  PSE | November 2015 Carbon and inequality: from Kyoto to Paris SECTION 2. As crucial as the question of the volume of fi- CLIMATE ADAPTATION nance required for adaptation is the repartition of FUNDING: THE GAP the financial effort and the equity logic followed to share the contributions. In order to increase the The effects of climate change are already palpable: total volume of finance that countries are ready warmer temperatures, ocean and sea level rise as to allocate to the fund, it seems critical to better well increased frequency of high precipitations understand how an equitable distribution of con- events (IPCC, 2013). Further warming will inevita- tributions should look like. Figure 1A presents the bly occur in the decades to come - the question is regional breakdown of global climate adaptation whether it can be limited to a two degree rise - and funds contributors. Such data is indeed imper- will place higher pressure on ecosystems and hu- fect given the difficulty to measure such financial man populations, particularly those living in trop- flows, but remains a useful benchmark. According ical areas and close to seashores of the developing our estimates, the European Union provides more world2 (IPCC, 2014a). Estimates of costs to adapt to than 60% of funds, the USA a quarter, other rich such changes in developing countries range from countries making up 13% of the effort. €60 billion per year according to the IPCC (2014b) up to €300 billion per year3, according to the Unit- FIGURE 1A. CONTRIBUTORS TO GLOBAL ed Nations Environmental Program (UNEP, 2014). ADAPTATION FUNDS (2014) It should however be reminded that many types of Japan, Australia, Emerging and developing climate change impacts cannot easily (or not at all) New Zeland 0,8% be valued in economic terms (for e.g. human loss- 13% es or the extinction of living species). EU Current flows for climate adaptation in devel- 61% oping countries fall short of these figures. Accord- ing to the OECD (2015), they reached only about €10bn in 2014, with less of €2bn in donations. In North America 25% comparison, funds allocated to climate mitiga- tion in developing countries (i.e. actions to reduce carbon emissions rather than adapt to a warmer climate) are four times higher. The OECD and the UNEP anticipate a climate adaptation finance gap, despite the diversity of global funds existing to finance adaptation in developing countries: the newly established Green Climate Fund should in Source: Authors. Data from climatefundsupdate.org and gcca. theory dedicate half of its resources to adaptation, South Africato 61% of global climate eu. Key: Western Europe contributes Russia/C. Asia 5% but only 20% of the €4.3bn pledged currently sup- adaptation funds.Note: 8% the breakdown is basedChina on a total value port adaptation programs. Other international of funds of €7.5bn. The focus is solely on global funds pledged 25% Other Rich funds are specifically directed at adaptation, such and/or actually 5%disbursed. Bilateral funds and funds disbursed as the World Bank’s Pilot Program for Climate Re- by developing countries for themselves are not taken into silience and the UNFCCC Least Developed Coun- account. Other Asia 8% tries Fund but their volume remains low compared to the requirements4. EU 11% North America mate Change 16% Fund with €280m, both established by the India UNFCCC and operated by the Global Environmental Faci- 2. Even though other zones, including temperate regions in 7% lity, the Adaptation for Smallholder Agriculture Program developed countries are also at risk. Mid. East NA Latin America with €250m, administered 8% by the 7%UN International Fund 3. According to the latest Adaptation Gap publications for Agricultural Development as well as the Adaptation (UNEP, 2014), adaptation costs could climb as high as $150 Fund established by the UNFCCC, with €180m. The Global billion (€125bn) by 2025/2030 and $250-500 billion per Climate Change Alliance of the European Union also acts year (€208bn - €416bn) by 2050. in the field of Adaptation with about €120m in 2014. In ad- 4. These two schemes respectively operated €800m and dition, not listed here, are all the funds directly disbursed €750m in 2014. Other schemes include the Special Cli- by developing countries. 13 Latin America Mid. East / N.A. 6% 3% Africa EU 5% 20% South Asia 7% Other Rich  13% EU 61% Japan, Australia, Emerging and developing New Zeland 0,8% 13% North America 25% EU PSE | November 2015 61% Carbon and inequality: from Kyoto to Paris North America 25% While this breakdown could a priori be justi- FIGURE 1.B. DISTRIBUTION OF CURRENT fied by countries’ historical responsibilities for PRODUCTION-BASED CO2e EMISSIONS climate change – in line with “retributive justice” South Africa principles and the UNFCCC “Common But Differ- Russia/C. Asia 5% entiated Responsibilities” (CBDR) principle, such 8% China 25% arguments need to be made more explicit. We Other Rich show below that European countries are respon- 5% sible for less than 11% of current emissions, and South Africa 20% of cumulated emissions since the industrial Other Asia 8% Russia/C. Asia 5% 8% China revolution - and emerging countries already ac- 25% count for more than a third of cumulated histor- Other Rich 5% EU ical CO2e emissions (see figures 1B-1C). Another 11% logic which could justify such a breakdown of the North America Other Asia 16% contributions to adaptation could be ability to 8% India 7% pay of contributors (for e.g. their GDP per capita Mid. East NA Latin America and income levels – see figure A.1.) following a 8% 7% EU “distributive justice” principle or the “Respective 11% North America Capabilities” principle of the UNFCCC. This logic Source: authors 16% based on CAIT (WRI, 2015).India Key: China rep- may however also be challenged, given the impor- resents 25% of global CO2e emissions when measured 7% from a tance of within-country inequalities. Once again, production base. Note: data Mid. East NAfrom 2012. Latin America 8% 7%East / N.A. our objective is not to clear Europe (or the USA) Latin America Mid. 6% 3% from their responsibilities - their contributions FIGURE 1.C. DISTRIBUTION OF CUMULATED Africa EU to adaptation should substantially increase, but PRODUCTION-BASED5% HISTORICAL20% CO2e rather examine novel effort sharing strategies in EMISSIONS South Asia which within-country inequalities would also be 7% Latin America Mid. East / N.A. taken into account. Other Rich 6% 3% It is interesting to note the presence of contrib- 5% Africa EU 5% utors from emerging and developing countries in 20% Fig. 1A. South Korea, Mexico, Peru and Colombia SouthChina Asia 7% 12% contribute to global climate adaptation finance via North America their recent pledges to the Green Climate Fund. Other Rich 27% 5% / C. Asia Russia Their contributions only represent 1% of all ad- 15% aptation finance, but it is noteworthy because it China is de facto calling into question standard under- 12% standing of climate equity principle in climate de- North America 27% bates. There is thus an opportunity to reassess the Russia / C. Asia 15% current repartition of climate adaptation funding efforts -with the objective to increase the volume Source: authors based on CAIT (WRI, 2015) and CDIAC (Boden of efforts- in the light of new equity principles5. et al., 2015). Key: Emissions from North America represent 27% In this paper, we examine a logic in which indi- of all CO2e emissions ever emitted since the industrial revolu- viduals, rather than countries would contribute tion. Note: these are production-based emissions estimates. to adaptation efforts, on the basis of their current Regions may slightly vary from those of other graphs, see contributions to climate change. This calls for the Boden el at. (2015). construction of an up-to-date global distribution of individual CO2e emissions, as it does not exist so far. 5. For a review of different proposal for climate adaptation fi- nance and different equity approaches to it, see Brown and 14 Vigneri (2008) and Baer (2006).  PSE | November 2015 Carbon and inequality: from Kyoto to Paris SECTION 3. Europe and North America’s shares in global emis- HISTORICAL CO2e EMISSIONS: sions had shrunk, though not at the same pace: KEY FACTS AND FIGURES Western Europe represents 9% of global emissions today (about 3.6 Giga tonnes of CO2e per year), while North America maintains itself at a rela- Section 3.1. Global CO2e budget and tively high level: it represents 16% of emissions (7 annual emissions Gt). The new high global emitting region is indeed Asia, and in particular China, which emits close to Before turning to a global distribution of individu- 25% of world CO2e emissions (11 Gt). Fig. 2B shows al CO2e emissions, and its implications for climate the change in cumulated historical emissions per adaptation finance, we review a few key facts and region. It comes out that emissions stemming figures of global climate change debates, which from Western Europe, North America, Japan and will be referred to later in this report. In order to Australia account for less than 50% of global his- secure reasonable chances to limit global warming torical emissions since the industrial revolution8. to a 2°C average temperature rise the Intergovern- China accounts for 12% of all anthropic emissions mental Panel on Climate Change (IPCC) estimates ever produced. that we are left with the equivalent of about 1000 gigatonnes (Gt) of CO2e to emit before 2100. In 2014, global CO2e emissions reached approximate- Section 3.2. Per capita emissions ly fourty-five GtCO2e6. At this rate of emissions, the over time world will reach the 2°C limit in about twenty years and a prolongation of current emissions trends China is the world’s highest emitter today, but its throughout the century will increase global tem- emissions per head are still below those of most peratures by more than 4°C by 2100 (IPCC, 2014a). of western European countries and the USA. It is From the 1000 Gt budget, it is possible to calcu- essential to go beyond national totals in order to late the sustainable level of emissions per capita, get a sense of how CO2e is distributed among hu- i.e. the amount of CO2e emissions each individu- mans. In 1820, per capita CO2e emissions were zero al is entitled to emit, between now and 2100. The for most of the world and 0.5t per person in West- sustainable level of CO2e to emit per person per ern Europe. In 1920, world CO2e emissions’ aver- year, from now to 2100 is approximately 1.2tCO2e7 age was close to 3.4 tonnes per capita: the second - about 6 times lower than the current average an- industrial revolution had occurred and spread to nual per capital emission level of 6.2tCO2e. the North American continent. North American Since the first industrial use of coal in the early emissions had skyrocketed to 19 tonnes per per- 18th century Britain, the geographical repartition son, while Western Europeans emitted about 6 of CO2e emissions changed constantly and rad- tonnes of CO2e. ically (Fig. 2A). At the end of the first industrial This early gap between American and Euro- Revolution, in the 1820s, emissions from Western pean per capita emissions deserves attention: as Europe accounted for more than 95% of the global early as the 1920s, Americans were consuming total. A hundred years later, in 1920, North Amer- three times more energy per capita than Euro- ica was the highest emitting region in the world, peans and emitting three times more CO2e emis- with 50% of global emissions. Another hundred sions as a result. If Europeans slightly caught up years down the line (that is today), both Western with their American counterparts after the second World War (thanks to the so-called “Golden age of growth”, the development of mass private trans- portation and mass consumption) a 10 tonnes dif- 6. It is about 43 GtCO2e excluding for all GHGs excluding ference persisted between Americans and Western land-use change and 46GtCO2e including land-use change Europeans throughout the 20th century, despite (such as deforestation for agriculture for instance). 7. The IPCC RCP 2.6 scenario (IPCC, 2013) estimates that the leftover budget, accounting for non-CO2 GHG, is 275 PgC, i.e. about 1000GtCO2e. We divide the 1000GtCO2e by esti- 8. Looking at consumption-based emissions (as we do below) mated cumulated annual population from now to 2100, i.e. rather than production base emissions would increase the 795 billion-year individuals according to the UN. share and responsibility for developed countries. 15  PSE | November 2015 Carbon and inequality: from Kyoto to Paris 100 Middle East % Latin America Africa FIGURE 80 2A. SHARE IN GLOBAL CO2e EMISSIONS SINCE 1820 South Asia % of annual global CO2e emissions 100 Middle East % Other Rich Latin America 60 Africa China 80 South Asia % of annual global CO2e emissions 40 Other Rich Russia / C. Asia 60 China 20 North America 40 EU Russia / C. Asia 0 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 20 North America EU 0 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 Source: authors’ estimates based on CAIT (WRI, 2015), CDIAC (Boden et al., 2015), Maddison (Maddison, 2013). Key: in 2010, 9% of global CO2e emissions are emitted in Western Europe. Note: data is smoothed via 5-year centred moving averages. The composi- tion of each region in this graph may slightly vary from the rest of the study, see Boden et al. (2015) for details. FIGURE 2B. SHARE IN CUMULATED GLOBAL CO2e EMISSIONS SINCE 1820 100 Middle East % Latin America Africa South Asia 80 Other Rich 100 Middle East % of cumulated global CO2e emissions % China Latin America Africa 60 South/ C. Russia Asia Asia 80 Other Rich % of cumulated global CO2e emissions 40 China North America 60 Russia / C. Asia 20 40 EU North America 0 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010 Source: 20 authors’ estimates based on CAIT (WRI, 2015), CDIAC (Boden et al., 2015), Maddison (Maddison, 2013). Key: In 2010, 12% of cu- mulated global CO2e emissions, since the Industrial revolutions, were emitted in China. Note: data is smoothed via 5-yearEUcentred mov- 16 ing averages. Composition of each regionsin this graph may slightly vary from the rest of the study, see Boden et al. (2015) for details. 0 1820 1830 1840 1850 1860 1870 1880 1890 1900 1910 1920 1930 1940 1950 1960 1970 1980 1990 2000 2010  PSE | November 2015 Carbon and inequality: from Kyoto to Paris FIGURE 3. GLOBAL CO2e EMISSIONS PER REGION, FROM 1820 TO TODAY