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New World Economy — COP28 must represent the start of climate finance justice

Jeffrey D Sachs
By Jeffrey D Sachs
28 Nov 2023
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If the rich countries were taxed just $0.10 per year for each tonne of cumulative emissions, the payment by the rich countries would be around $100-billion per year, with the US paying around $40-billion per year.

As governments gather in Dubai for this year’s climate conference, two things are painfully clear. First, we are already in a climate emergency. Second, the richer countries, and especially the US, continue to turn their back on the poorer countries.

This year’s debate will therefore focus on climate justice and financing: how to share the costs of the climate disasters and the urgently needed transformation of the world’s energy and land use systems.  

The Dubai conference is the 28th annual Conference of the Parties to the UN Framework Convention on Climate Change, that is, COP28. The first COP was in Berlin in 1995. Our governments don’t have much to show for their work.

Back in 1995, they promised to stabilise the concentration of CO2 and other greenhouse gases in the atmosphere “to avoid dangerous anthropogenic [human-caused] interference with the climate system”. CO2 emissions that year were 29 billion tonnes, but this year are around 41 billion tonnes. Then, atmospheric CO2 was 361 parts per million (ppm), but now is 419 ppm. Then, the Earth had warmed by around 0.7°C compared with 1880-1920, but by now has warmed by 1.2°C.

The rate of warming is also increasing. During 1970-2010, warming was at a rate of around 0.18°C per decade. Now, Earth is warming by at least 0.27°C per decade. Within 10 years, we will hit the 1.5°C upper limit agreed in Paris in 2016 (at COP21). In fact, we’ll most likely break through that limit far sooner.

As a result, the climate disasters are intensifying: floods, droughts, heat waves, super-storms, mega-fires, and more, causing deaths, displacements, and hundreds of billion dollars of damages each year, with losses of $275-billion estimated for 2022.  

Read more in Daily Maverick: Scientists warn planet Earth reaching point of no return without urgent climate change interventions

What we need to do is clear: we need to shift from fossil fuels (coal, oil, natural gas) to zero-carbon energy — wind, solar, hydro, geothermal, bioenergy, and nuclear, depending on location.

Countries need to interconnect their power grids with neighbours to diversify energy sources, thereby building resilience and lowering costs. We need to shift to electric vehicles and the production of hydrogen for industrial use. We need to end deforestation by raising agricultural productivity of existing farms and managed forests. 

Question of costs


These solutions are within reach — but there is no agreement yet on how to share the costs. There are three costs to consider. The first are “losses and damages” from climate-related disasters. The second are costs of adapting to climate change, that is, the costs of “weather-proofing” the society. The third are costs of overhauling the energy system.

When it comes to losses and damages and adaptation, those who caused the climate crisis should help to pay for those who are suffering but had little role in causing the crisis. That is, the richer countries should cover much of the costs paid by the poorer countries. That’s simple justice.

When it comes to overhauling the energy system, no country has the “right” to emit CO2, so all should share in the costs. Yet the poorer countries need access to low-cost, long-term financing.

Now here’s the rub. The rich countries, and especially the US, so far refuse to accept their fair share of responsibility for losses, damages and adaptation costs incurred by poorer countries. Nor have the rich countries taken practical actions to ensure that the poorer countries have access to low-cost financing for the energy transition.

The US is responsible for roughly 25% of cumulative CO2 emissions since the start of industrialisation around 1750, even though the US constitutes just 4% of the world population. The US has emitted roughly 400 billion tonnes of CO2, or around 1,200 tonnes for each of today’s 330 million Americans, while in poor African countries, cumulative emissions are roughly one-thousandth of the US rate, roughly 1-2 tonnes per person.

Nonetheless, US politicians brazenly recommend “voluntary” schemes to finance the poorer countries, a transparent and rather pathetic ploy to shift responsibility away from the US.  

If the rich countries were taxed just 10 cents per year ($0.10) for each tonne of cumulative emissions, the payment by the rich countries would be around $100-billion per year, with the US paying around $40-billion per year.
In addition, the rich countries should be taxed around $4 for each tonne of new emissions, raising another $100-billion or so per year. The combined levies on past and current emissions would bring the total CO2 levies to around $200-billion per year, with the US share coming to around $60-billion.

The US will no doubt continue to kick and scream in order to deny such accountability. It will claim that paying around $60-billion a year for past and current emissions would be far too costly — yet the US spends $1-trillion per year on the military, a vastly excessive amount. In fact, with an annual US GDP of around $26-trillion, a levy of $60-billion per year would amount to just 0.2% of the US GDP, a sum that is easily within reach.

I firmly believe that justice will come. World power is rebalancing between the rich and poor, so that the ability of the rich world to evade their responsibility is coming to an end.

I believe that this rebalancing will lead to new forms of global taxation under the UN Charter and supervised by the UN General Assembly, including global levies on carbon emissions.

Yes, this change will be a rude shock to rich countries that have long imposed their will on the rest of the world. Yet the climate crisis is teaching the world that we are in an interconnected world, where all countries must accept their responsibilities for past, present, and future actions.

This increasing awareness of interconnectedness and responsibility is the path to justice and sustainable development for all. DM

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