Global Unanimity Agreement on the Carbon Budget

H. Llavador, J.E. Roemer

Like Comment

Received Date: 1st April 19

Carbon budgets are a useful way to frame the climate mitigation challenge and much easier to agree upon than the allocation of emissions. We propose a mechanism with countries agreeing on the global carbon budget, while the decision to emit is decentralized at the country level. The revenue from carbon emissions is collected in a global fund and allocated according to endogenously defined weights proportional to the marginal cost of climate change. The proposal features a unanimous agreement of the national citizenries of the world and global Pareto efficiency. We run a simulation in the spirit of the Paris Agreement, with zero emissions after 2055. At the Global Unanimity Equilibrium, permits are priced at 90$/tC, yielding 1.3 trillion dollars annually. Africa, India and the less developed countries in Asia are the only net recipients, while the US and China are the largest net contributors.

Read in full at SSRN.

This is an abstract of a preprint hosted on an independent third party site. It has not been peer reviewed but is currently under consideration at Nature Communications.

Go to the profile of Nature Communications

Nature Communications

Nature Research, Springer Nature