Save the climate Climate policy – effective & fair
DE
Climate policy – effective & fair

Two things are crucial for limiting global warming

Keep to a Paris-compatible remaining CO2 budget and make the CO2 price effective and fair through a full climate dividend.

A clear goal and a central tool

The remaining carbon budget defines what must be achieved. An effective CO2 price helps us achieve it efficiently and fairly.

1 Central goal

A Paris-compatible remaining CO2 budget

CO2 emissions accumulate in the atmosphere. The sum of the emissions we still cause is therefore crucial for limiting global warming.

Carbon clock by the Potsdam Institute for Climate Impact Research (PIK)
Notes on the carbon clock

The clock indicates how long the remaining budget would last if annual emissions stayed constant. You can choose between the 2°C and 1.5°C scenarios.

The clock illustrates how tight the remaining budgets are. In reality, emissions will not remain constant for a number of years and then suddenly fall to zero. As a rough guide, doubling the displayed number of years gives the time available to reach zero emissions along a linear reduction path.

A web app for deriving global linear emission paths and taking an overshoot into account is available at global-paths.climate-calculator.info.

The budgets used for the clock are based on a probability of compliance of only 66%. The closer we move towards the 2°C limit, the more certain we should be that we will not exceed it.

Background information on the carbon clock

The Paris Agreement established a ratchet mechanism under which countries are expected to submit increasingly ambitious nationally determined contributions (NDCs).

We urgently need a global discourse on each country’s fair share of the necessary global effort – especially for the major emitters China, the USA, the EU, India, Russia and Japan, which together account for around 70% of CO2 emissions. The pressure on all parties to submit Paris-compatible NDCs must be massively increased.

When an NDC is derived from a global remaining carbon budget, at least the two most important factors – current reality and climate justice – should be taken into account. A weighted allocation key can reflect both a country’s share of current global emissions and its share of the global population.

2 Central tool

An effective CO2 price & full climate dividend

“Effective” means that the CO2 price is high enough for the reduction targets to be met – however high it has to be: a whatever-it-takes CO2 price.

The entire revenue from CO2 pricing should be returned to citizens in equal amounts per capita. A full climate dividend creates broad acceptance for ambitious climate policy and provides highly effective social compensation.

The broadest possible social agreement is needed to accept the CO2 price required for successful decarbonisation. Such an agreement also creates the essential planning security for private and public investment in a fossil-free future.

Interaction between an effective CO2 price and a full climate dividend
Effective CO2 pricing and the climate dividend
How an effective CO2 price with a climate dividend works

If all fossil fuels are priced uniformly according to their carbon content, the end-consumer prices of products reflect their CO2 footprint throughout the value chain.

Every company in the supply chain has an incentive to reduce the carbon footprint of its products in order to increase profits or remain competitive. Consumers can decide whether a product is still worth its price or whether alternatives are preferable.

If the CO2 price is high enough, the overall reduction target can be met with innovative, customised and cost-effective solutions – including the necessary lifestyle changes.

The state must still accelerate planning and approval procedures, make sufficient land available for wind turbines, build power lines, cycle paths and railway infrastructure, and remove regulations that obstruct a fossil-free future. The better this wider instrument mix works, the less the CO2 price has to rise to meet the targets.

Carbon leakage remains an open flank of purely national climate policy. Intelligent safeguards are therefore needed for particularly CO2-intensive production processes as long as comparable rules or ambitions do not exist globally.

A climate dividend is calculated by dividing the total revenue from CO2 pricing by the number of citizens. With a full climate dividend, people with average per-capita emissions are not burdened by the CO2 price itself. Low-income earners and families generally benefit because their per-capita emissions are usually well below average.

Explore the interaction between CO2 pricing and the climate dividend with the CO2 price calculator.

Paradigm shift in climate policy

Effective CO2 prices + full climate dividend = effective climate protection + full solidarity

Emissions trading systems with binding emission caps (hard caps) are the best instrument for ensuring compliance with remaining CO2 budgets. They generate the CO2 price required to stay within the cap. The resulting whatever-it-takes CO2 prices are politically conceivable and socially justifiable only with a full climate dividend.

Climate protection is human protection.