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Carbon and Inequality: from Kyoto to Paris

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Carbon and Inequality: from Kyoto to Paris PSE | November 2015 Carbon and inequality: from Kyoto to Paris Carbon and inequality: from Kyoto to Paris Trends in the global inequality of carbon emissions (1998-2013) & prospects for an equitable adaptation fund Lucas Chancel, Iddri & Paris School of Economics Thomas Piketty, Paris School of Economics 3RD NOVEMBER, 2015 1 PSE | November 2015 Carbon and inequality: from Kyoto to Paris Abstract. This study presents evolutions in in proportion to their emissions in excess of this the global distribution of CO2e emissions (CO2 and threshold. North Americans would then contrib- other Green House Gases) between world individ- ute to 46% of the fund, vs. 16% for Europeans, 12% uals from 1998 and 2013 and examines diferent for China. In strategy 3, the efort is shared by all strategies to fnance a global climate adaptation top 1% emitters in the world (i.e. all individuals fund based on eforts shared among high world emitting more than 9.1 times world average emis- emitters rather than high-income countries. To sions). North Americans would then contribute to this end, we combine data on historical trends in 57% of the tax, vs. 15% for Europeans, 6% for Chi- per capita country-level CO2e emissions, consump- na. In these strategies, European contributions to tion-based CO2e emissions data, within-country adaptation fnance would decrease in proportion income inequality and a simple income-CO2e compared to today, but substantially increase in elasticity model. We show that global CO2e emis- absolute terms. In these strategies, European con- sions inequalities between individuals decreased tributions to adaptation fnance would decrease in from Kyoto to Paris, due to the rise of top and mid proportion compared to today, but largely increase income groups in developing countries and the in absolute terms. American contributions would relative stagnation of incomes and emissions of increase both in absolute and relative terms. We the majority of the population in industrialized also discuss possible implementations via coun- economies. Income and CO2e emissions inequali- try-level carbon and income taxes or via a gen- ties however increased within countries over the eralized progressive tax on air tickets to fnance period. Global CO2e emissions remain highly con- the adaptation fund. This latter solution might be centrated today: top 10% emitters contribute to easier to implement but less well targeted at top about 45% of global emissions, while bottom 50% emitters. emitters contribute to 13% of global emissions. Top 10% emitters live on all continents, with one Disclaimer: Responsibility for the views ex- third of them from emerging countries. pressed in this study lies entirely with the authors The new geography of global emitters calls and does not necessarily refect those of the Paris for climate action in all countries. While devel- School of Economics or Iddri. oped and developing countries already engaged in mitigation eforts, contributions to climate ad- Acknowledgments: The authors are partic- aptation funds remain almost entirely fnanced ularly grateful to Branko Milanovic, Christopher by developed nations, and for the most part by Lakner, Paul Segal, Sudhir Anand, Glenn Peters, Europe (62%). In order to increase climate adap- Robbie Andrews, the Iddri team and Julia Stein- tation fnance and better align contributions to berger for their comments and/or help with the the new distribution of high emitters, we examine provision of specifc data sources. the implications of a global progressive carbon tax to raise €150 billion required annually for cli- CONTACT mate adaptation. In strategy 1, all emitters above [email protected] world average emissions (i.e. all individuals emit- [email protected] ting more than 6.2tCO2e per year) contribute to the scheme in proportion to their emissions in excess of this threshold. North Americans would contrib- ute to 36% of the fund, vs. 21% for Europeans, 15% for China, and 20 % for other countries. In strat- egy 2, the efort is shared by all top 10% emitters in the world (i.e. all individuals emitting more 2 than 2.3 times world average emissions), again PSE | November 2015 Carbon and inequality: from Kyoto to Paris TABLE DES MATIÈRES Résumé de l’étude en français 5 TABLE OF CONTENTS Executive Summary in English 9 Section 1. Introduction 12 Section 2. Climate adaptation funding: the gap 13 Section 3. Historical CO2e emissions: key facts and Figures 15 Section 3.1. Global CO2e budget and annual emissions 15 Section 3.2. Per capita emissions over time 15 Section 4. Combining income inequality statistics with CO2e emissions: a literature review 20 Section 4.1. CO2e emissions, living standards and income levels 20 Section 4.2. Previous work on the global distribution of CO2e emissions 22 Section 4.3. Recent research on the world distribution of income 24 Section 5. Our methodology 25 Section 5.1. Distribution of income 25 Section 5.2. Distribution of CO2e emissions 25 Section 5.3. Coverage of the study 27 Section 6. A global distribution of carbon emissions: from Kyoto to Paris 28 Section 6.1. From production to consumption-based emissions 28 Section 6.2. Where do high and low emitters live? 28 Section 6.3. Who is hiding behind the numbers? Focus on top, bottom and middle emitters 29 Section 6.4. How unequal are global carbon emissions? 31 Section 6.5. Who beneftted from the highest growth in CO2e emissions since Kyoto? 32 Section 6.6. Did global CO2e emission inequalities increase or decrease over the past decades? 33 Section 7. Financing adaptation via a global progressive carbon tax 35 Section 7.1. Proposed strategies for climate adaptation contributions 35 Section 7.2. Implementation via country-level progressive taxation 38 Section 7.3 Implementation via a global progressive tax on air tickets 38 Section 8. Conclusions and prospects for future research 40 Bibliography 41 Appendix Figures and Tables 44 3 PSE | November 2015 Carbon and inequality: from Kyoto to Paris LISTE DES FIGURES LISTE DES TABLEAUX Figure E.1. Répartition géographique des émetteurs Tableau E.4. Qui devrait contribuer aux fonds de CO2e 6 d’adaptation pour le climat? 7 Figure E.2. Comment les émissions de CO2e ont-elles évolué entre Kyoto et Paris LISTE OF TABLES pour diférents groupes d’émetteurs ? 6 Table E.4. Who should contribute to climate Figure E.3. Inégalités mondiales d’émissions de CO2e: adaptation funds? 11 importance des inégalités intra et inter pays 6 Table 1. Current per capita CO2e emissions 19 Table 2. Global GDP, Population LISTE OF FIGURES and GHG coverage (%) 27 Table 3. Current per capita CO2e emissions - Figure E.1. Breakdown of top 10, middle 40 consumption-based 28 and bottom 50% CO2e emitters 10 Table 4. Bottom global CO2e emitters, 2013 29 Figure E.2. How did CO2e emissions grow from Table 5. Top global CO2e emitters, 2013 29 Kyoto to Paris for diferent groups of emitters? 10 Table 6. Average world emitters in 2013 30 Figure E.3. World CO2e emissions inequalities: Table 7. CO2e emissions concentration shares within and between country importance 10 in 2013 (%) 31 Figure 1A. Contributors to global adaptation Table 8. Evolution of percentile ratios for CO2e funds (2014) 13 emissions 33 Figure 1.B. Distribution of current Table 9A. Population, mean emissions and world production-based CO2e emissions 14 shares in strategies 0-1 36 Figure 1.C. Distribution of cumulated Table 9B. Population, mean emissions and production-based historical CO2e emissions 14 world shares in strategies 2-3 36 Figure 2A. Share in global CO2e emissions Table 10. Implementation via country-level since 1820 16 progressive income taxation 37 Figure 2B. Share in cumulated global Table 11. Who should contribute to climate CO2e emissions since 1820 16 adaptation funds? 39 Figure 3. Global CO2e emissions per region, Table A.1. Income concentration shares from 1820 to today 17 over time (%) 48 Figure 4. Per capita CO2e emissions per world region 18 Figure 5. Regional composition of emissions per global CO2e quintile. 28 Figure 7. Regional composition of top 10, middle 40 and bottom 50% emitter groups 31 Figure 7. Growth of CO2e emissions from 1998 to 2013 32 Figure 8. Evolution of within & between country CO2e emissions inequalities 33 Figure A.0. List of countries and available years 44 Figure A.1. Breakdown of global GDP in 2014 46 Figure A.2. Breakdown of consumption-based CO2e emissions in 2013 46 Figure A.3. Distribution of world emitters according to GHG emission categories 47 Figure A.4. Income growth from 1998 to 2013 48 4 PSE | November 2015 Carbon and inequality: from Kyoto to Paris Carbone et inégalité: de Kyoto à Paris Evolution de l’inégalité mondiale des émissions de CO2 (1998-2013) et perspectives pour un fnancement équitable de l’adaptation RÉSUMÉ DE L’ÉTUDE 13% des émissions (Figure E.1). Les grands émet- EN FRANÇAIS teurs sont aujourd’hui sur tous les continents et un tiers d’entre eux vient des pays émergents. Cette étude analyse l’évolution des inégalités Parmi les individus les plus émetteurs de la pla- d’émissions de CO2e (CO2 et autres gaz à efet de nète en 2013, nos estimations mettent en avant les serre) entre individus, dans le monde entier, de 1% les plus riches Américains, Luxembourgeois, 1998 à 2013. Nous utilisons ces résultats pour Singapouriens et Saoudiens, avec des émissions construire et examiner diférentes stratégies de annuelles par personne supérieures à 200 tCO2e. fnancement d’un fond mondial pour l’adaptation A l’autre extrémité de la pyramide des émetteurs, au changement climatique, fondé sur un principe on retrouve les individus les plus pauvres du Hon- d’équité entre individus et non entre pays. A cette duras, du Mozambique, du Rwanda et du Malawi, fn, l’étude combine des données historiques sur avec des émissions 2000 fois plus faibles, proches l’évolution des inégalités de revenus à l’intérieur de 0,1 tCO2e par personne et par an.
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