Exploring the Role of Technology in Equitable Allocation of Climate Benefits and Burdens

Perspective

The notion that the current distribution of emissions and energy use across the world is highly inequitable is extensively recognised. Nevertheless, equity concerns are one of the leading bottlenecks...

Climate change, a global challenge, demands a collective solution. Presently, countries around the world are endeavouring towards a new, universal treaty on climate change. The new deal is expected to be embraced at the Paris Conference of Parties (COP 21) of the United Nations Framework Convention on Climate Change (UNFCCC) later this year. And in the run-up to the Paris Conference, countries and leaders are engaging in intensive dialogues and deliberations to ensure that the new agreement is ambitious and adequate to meet the demands of science in the light of a 2 degree stabilisation goal. The following article makes an attempt to understand and explore the possibilities of a technology-driven climate mechanism, which could address the questions of equity and efficiency concurrently.

Setting the Context

Issues related to justice, fairness and equity have been central to the international climate change discourse and deliberations. Provisions of equity have been explicitly considered in the United Nations Framework Convention on Climate Change (UNFCCC) in the form of ‘common but differentiated responsibilities’ and structure of differentiated commitments (Annex I, II, and non-Annex I) to name a few. The Kyoto Protocol also assigns prominence to equity considerations, e.g. creation of adaptation fund from the share of proceeds generated out of Clean Development Mechanism (CDM) activities. But, equity, in the context of climate policy, is not a single, precisely defined theory. In broad terms, it refers to equitable/fair allocation of climate benefits and burdens across countries/individuals based on rationales of responsibility towards the problem and techno-economic capabilities/requirements to address the problem. Accordingly, some of the extensively discussed equity principles include: (a) the egalitarian principle (parity principle/per-capita approach); (b) the sovereignty principle (proportionality principle/per-country approach); (c) the polluter pays principle (refined as current versus historical responsibility); (d) the ability to pay principle (comparable-burden principle); (e) principles of preserving future development opportunities; and, (f) considerations of adjustment costs while making emissions allocations.

The notion that the current distribution of emissions and energy use across the world is highly inequitable is extensively recognised. Nevertheless, equity concerns are one of the leading bottlenecks in the way of a unified and effective international climate change agreement. The global and long-term nature of the climate change challenge and variance amongst countries in terms of: (a) contribution (historical and current) to the problem; (b) vulnerability and impacts (localised) it may cause; and, (c) costs of adaptation and its mitigation make the situation very multi-faceted and subjective. Thus, the elements that define the concept of equity in climate policy are complex, coalescing milieus unique to individual countries, and those common to several or many. In addition, the debate on creating a balance between considerations of equity and efficiency (including eco-efficiency and cost-efficiency) further complicates

the situation. These issues constitute some of the critical dilemmas before the policy-makers and implementers who have to devise equitable yet effective and early solution to the climate change challenge.

Evaluating the Problem

The current climate change regime is primarily based on an emission-reduction targets approach through predominant use of carbon pricing mechanisms. In fact, carbon markets under the UNFCCC have been burdened with expectations related to promoting sustainable development and technology, and finance transfer (from developed to developing countries) besides cost-effective greenhouse gas (GHG) abatement. However, this approach has met with limited success (with respect to both equity and efficiency) on all counts such as aggressive emissions reduction, technology cooperation among nations and financial support to low-income countries for mitigation and adaptation. Further, multiple studies highlight that even substantial emissions reduction by the developed world adopting the reductions approach, will not be able to create ample carbon space for the developing countries to claim their entitlements of the ‘atmospheric commons’ as per the carbon budget and Greenhouse Development Rights (GDR) theories.

Therefore, given the scale and urgency of the climate change challenge and the deep-rooted and innate conflicts of interest in defining equity among countries, probably the time has come that a new climate regime is proposed which focuses on low-carbon technology revolution. Linkages between emission caps/reductions and technology cannot be denied. So, drawing lessons from the past, a new approach is worth exploring, which focuses on low-carbon technology innovation and diffusion with an aim to enlarge the carbon space, instead of re-allocating/re-distributing the diminishing global carbon space. The principles of equity could thereby play a role in not “allocating a shrinking emissions pie but in informing the relative contributions of countries to generating such a pie-enlarging revolution”. The new technology-led mechanism could focus on certain priority sectors like power generation, industrial efficiency, etc. and include elements like creation of international funds to promote R&D and technology cooperation, flexible IPR regimes, differential royalty/licensing schemes, etc. The contribution to and benefits from these institutions could be proportional to the GDP, per-capita emissions, future development needs, etc. of individual countries .

Furthermore, speaking in the context of various equity proposals being debated currently, barring the principle of “preserving future development rights”, all other theories could lead to negative results, directly or indirectly for both developed and developing nations in the long-run. Even in the case of “preserving future development rights” theory, the current pace of technology development is highly inadequate to sustain the business-as-usual growth rates of developing countries, let alone the world as a whole. Thus, another strong reason for converging equity concerns with technology is that countries are more likely to adhere to, and faithfully implement, an agreement that is considered fair and does not demand drastic GHG reductions or compromise on development imperatives.

In addition, as discussed above, although the carbon markets were launched with the explicit motives of spurring technology innovation and diffusion, the falling carbon prices and inconsistent market signals have defeated the very purpose. And it is doubtful whether carbon prices will ever reach a level where they become a potent technological driver. Studies highlight that markets could prove effective in diffusion of existing technologies (getting technologies ‘off-the-shelf’); however, a focussed mechanism is required to add new abatement technologies ‘on-the-shelf’.

According to researchers, some of the indicators that can be used to evaluate the effectiveness of a climate regime include: (a) environmental outcome (in terms of emissions reductions); (b) cost-effectiveness; (c) innovation (to abate mitigation costs and enhance efficiency); (d) institutional resilience (scale of emissions reduction); and, (e) participation and political acceptability. In this light, a technology-focussed approach based on principles of equity is expected to facilitate greater environmental outcomes, promote technology innovations, prepare institutions for large scale reductions and have greater political acceptance across nations. Therefore, it is essential that the new climate framework directly integrates the technology strategy with the equity and efficiency criteria and various mitigation mechanisms.

On the flip side, one of the biggest challenges a technology-driven mechanism could face pertains to high degree of uncertainty and unpredictability. And in this case, interestingly, both climate and technology changes have inherent elements of uncertainty – the timing and extent of climate change and the pace of technological development cannot be predicted with surety. Thus, a technology-focussed regime certainly needs to be complemented with a targets regime supported by carbon pricing instruments alongside an aggressive adaptation strategy. Besides, a technology-based climate policy may not be economically very attractive but some researchers propose a ‘graduation mechanism’ to allow developing nations to achieve an economic status comparable to that of developed nations before being required to undertake emissions reduction commitments. In addition, availability of a broad assortment of low-carbon technologies could emerge as a driving force in reducing mitigation costs on a global scale.

Yet another caveat to this proposal is the counter-argument to the common notion that with new and innovative technological advancements, consequences of climate change could be addressed effectively. However, a pragmatic evaluation of the problem reveals that the pace of economic growth in most scenarios surpasses the achievements in resource efficiency and optimisation. Do we have or can we in the near-term develop magic-bullet technological solutions which would enable sustainable development goals following principles of global equity without upsetting the high-emission development pathways of a majority of the nations?

Conclusions

Indeed, climate change is a shared problem which needs a shared response at the earliest. While many possible approaches have been put forward based on various combinations of efficiency and equity criteria, there is nothing approaching consensus today. The inherent conflict of interests and varying socio-economic imperatives of different country groups impede any process of seeking an ambitious and collective solution to the problem. Moreover, in the absence of a definitive guide to what constitutes equity and what is equitable and acceptable for different interest groups, a climate protocol primarily based on technological innovation and cooperation could provide the solution to this impasse. Fast-paced technology innovation followed by massive diffusion of the newly developed technology, particularly in the developing countries, are indispensable for efficiently and significantly reducing emissions in the future. Additionally, this could play a vital role in increasing participation by developing countries without hurting the interests of the developed world to a large extent. However, much deeper and detailed discussions amongst the stakeholders is needed before devising any new climate protocol driving technological innovation and cooperation based on fundamentals of equity.

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Author

Nimisha Pandey

Nimisha Pandey has around 9 years of experience in the sphere of environment management and climate change both at policy and field levels. Currently, she is a Research Fellow at TERI (The Energy and Resources Institute), New Delhi, India. She works on the international climate policy and climate negotiations with a focus on mitigation issues. Her primary thrust is on understanding and assessing international and domestic climate policy dialogue in the context of existing and emerging carbon markets at the international and national levels.

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