Developed countries like Western Europe and the United States which are responsible for most of the heat-trapping emissions pumped into the atmosphere since the industrial revolution could be liable to pay a total of USD 170 trillion in compensation or reparations by 2050 to the developing countries like India to help ensure climate change targets are met, a study has said.
The study said that, for instance, India, being a low carbon emitter historically, could be entitled to receive compensation of USD 57 trillion, or nearly USD 1,200 per capita each year until 2050.
The compensation system is based on the idea that the atmosphere is a commons, a natural resource for everyone to use equitably and sustainably. The study published in the scientific journal Nature Sustainability echoes the views of the developing countries which say that they have lower emissions, but are still bearing the brunt of a hotter climate through more severe heat waves, floods and droughts.
Greenhouse gas emissions have provided a wealth of benefits to developed countries at the expense of developing ones. In light of this “unjust enrichment,” developed countries now have to recognise their duty of climate restitution towards developing countries, the study said adding that “this money, which amounts to nearly USD 6 trillion per year or about 7 per cent of annual global gross domestic product (GDP), would be distributed as compensation to low-emitting countries like India that must decarbonise their economies far more rapidly than would otherwise be required”.
According to the study, the UK could be liable to pay USD 7.7 trillion for excessive CO2 emissions over the period to 2050-that is equivalent to an annual payment of nearly USD 3,500 per capita each year until 2050.
The US could be liable to pay USD 80 trillion over the period or an annual per capita payment of more than USD 7,200 until 2050.
Delegates at the COP 27 talks in Egypt last year agreed to establish a Loss and Damage Fund for countries affected by climate change. Researchers-led by an academic at the University of Leeds-have published in the journal Nature Sustainability a major study into how an evidence-based compensation scheme could work across nearly 170 countries.
The study was led by Dr Andrew Fanning, Visiting Research Fellow in the Sustainability Research Institute at the University of Leeds, and Research & Data Analysis Lead at the Doughnut Economics Action Lab in Oxford.
“It is a matter of climate justice that if we are asking nations to rapidly decarbonise their economies, even though they hold no responsibility for the excess emissions that are destabilising the climate, then they should be compensated for this unfair burden,” said Dr Fanning.
To set a monetary value on the losses incurred by low-carbon emitting countries, the researchers first obtained the most recent remaining global “carbon budgets” estimated by the Intergovernmental Panel on Climate Change (IPCC).
A carbon budget represents how much carbon could be released into the atmosphere to achieve a given climate target, such as keeping global warming to 1.5° Celsius. Starting from 1960, that carbon budget is equivalent to 1.8 trillion tons of CO2.
Some countries were within their fair share allocation, while others, most notably the industrialized nations of the global North, have already significantly overshot their allocation-in effect, appropriating other countries’ fair shares of the atmospheric commons.
For example, the UK has used 2.5 times its fair share-and the US has used more than four times its fair share. India, on the other hand, has used just under one quarter of its fair share.
Using carbon prices from the latest IPCC scenarios, the researchers were able to put a monetary value on each country’s excess emissions in a world that respects the 1.5°C climate target.
That total figure was USD192 trillion (within a range of between $141 trillion and $298 trillion), with the global North responsible for 89 per cent, or USD170 trillion, and the remainder from high-emitting countries in the global South, especially the oil-producing nations, such as Saudi Arabia and United Arab Emirates.
Under the scheme, that money would be divided among the low carbon emitting countries based on how much of their fair share allocation they would lose.