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Carbon inequality: redressing the balance for universal sustainable energy access

By Heidi Vella 18 Dec 2020 (Last Updated December 15th, 2020 22:18)

Around 13% of the global population don’t have access to energy for their basic needs. Meanwhile, high energy and transport use by the richest in society creates more than double the carbon emissions of the poorest according to a new report. How can this imbalance be redressed, while also meeting global warming mitigation targets? We speak to Tim Gore, head of climate policy at Oxfam International, about the issue.

Carbon inequality: redressing the balance for universal sustainable energy access
By far the largest share of emissions came from transport: car journeys and, especially for the very highest emitters, flights. Source: Takisha Rappold

From 1990 to 2015, during which annual emissions grew 60%, the world’s richest 1%, around 63 million people, were responsible for 15% of cumulative emissions and 9% of the carbon budget (an estimate of the maximum amount of greenhouse gases that can be released into the atmosphere over time while keeping warming to a set limit). This is twice as much as the poorest half of the world’s population, according to a new report, ‘Confronting Carbon Equality’, authored by Oxfam and the Stockholm Economic Institute. 

It found that the richest 10%, around 630 million people, were responsible for 52% of the cumulative carbon emissions during this period. By far the largest share of emissions came from transport: car journeys and, especially for the very highest emitters, flights. By comparison, the poorest 50%, 3.1 billion people, were responsible for just 7% of cumulative emissions and used just 4% of the available carbon budget.

This effectively means that the global carbon budget is being rapidly depleted, ‘not for the purpose of lifting all of humanity to a decent standard of living, but to a large extent to expand the consumption of a minority of the world’s very richest people’, the report states. Which begs the question: can the balance be fairly and effectively redressed? 

Heidi Vella (HV): Why was it important to produce this report and what are the key takeaways from it?

Tim Gore, head of climate policy, Oxfam International (TG): There is a strand of public debate that teaches us that overpopulation is primarily why we’re stressing the ecological boundaries of the planet. We simply have too many people. What our report shows is, it’s not how many people that is the problem, but that there’s a minority of people using far beyond what they need for a decent standard of living. We’ve been essentially squandering the global carbon budget to increase the consumption of a minority of very rich people and not primarily to reduce poverty around the world. 

That’s an important takeaway message: extreme inequality in carbon emissions is pushing the planet to the brink of climate chaos. It isn’t the emissions of very poor people, even in very populous countries. If we want to keep within the targets of the Paris Agreement on climate change then we have to get serious about reducing those very high carbon footprints of the richest people.

HV: Where is this happening geographically, is it a Global North vs Global South problem? 

TG: Around the 1990s, the vast majority of people in that group were in northern, developed countries. Now around half the emissions of that group are from people in North America and Europe. But they are also from every continent in the world, increasingly China and Middle Eastern countries. The flip side is, there are countries like the UK, and others in Europe and also America, that have people who are very poor and also lower emitters as well. 

HV: How can governments stop the richest 10% ‘squandering the global carbon budget’, while providing affordable electricity and raising living standards for the poorest? 

TG: Shifting the world to a renewable energy supply is critical. This has been the primary focus of climate policy for the last 20-30 years, and it remains critical. However, what this research shows is, in addition to that, it’s important to also measure and address the demand for energy. It’s not enough any longer to just try and shift the supply of energy because we don’t have enough time or enough carbon budget left.

That’s where we need additional policies to reduce demand. This can include energy efficiency measures, such as investing in energy efficient homes. This tends to have pro-poor benefits as it reduces energy bills, which is good for those living in fuel poverty. 

But it’s also about addressing lifestyles; do people need to buy as much? Do they need to own several cars? Can we invest in public transport? Can we invest in new digital infrastructure and work from home more? This is becoming more normalised. We need those types of policies and government initiatives that encourage those choices, as well as trying to shift the supply of energy towards renewables because we have so little time left. 

The International Energy Agency’s World Energy Outlook report, which came out just a couple of weeks ago, supports this argument. It shows for the first time, very clearly, that if we’re to hit the targets we need by 2030, a lot of the reductions required will come from demand-side measures, not only from shifting energy technology on the supply side. I think that is what the policy community is starting to come to terms with; we do actually need to change the way we live. 

HV: Taxes are also discussed in the report…

TG: Taxes are certainly part of the policy toolkit but it’s important to make carbon taxes progressive, rather than regressive. One thing that can be done is raise taxes on services that are associated with luxury carbon consumption, things that poorer households tend not to use. Flying is an example: around 20%-25% of the global population has never boarded a plane. SUVs are another example. We know these are highly polluting vehicles, the cost of which is out of reach for the vast majority of households. 

However, it’s really critical to ensure that revenues from those taxes are recycled to the benefit of poorer households. This could be a straight dividend payment to low income households, or a simple cash rebate from the state. Or it could be reinvested into measures that proportionately benefit poor households, such as investing in things like energy efficiency in homes or public transport.

It’s also possible to make tax revenues neutral by adding taxes to some carbon-intensive areas and removing them from other areas, such as payroll taxes, for example. This would tend to encourage the expansion of jobs, without reducing the overall fiscal revenues for government. 

HV: Another element to this discussion is providing electricity to the millions still without in the Global South. How can this be achieved and paid for?  

TG: We advocate for various forms of revenue raising mechanisms, which could be directed to poorer countries for adapting to climate change or for getting onto a low-carbon development pathway. Flights are a good example. An international air passenger levy for frequent fliers could be co-ordinated and the revenues directed through The Green Climate Fund, which is the global institution created to help developing countries transition to a low carbon pathway. 

Certainly, there’s an argument to say that rich, high emitters, wherever they live in the world, should be contributing to poor or lower emitters, who tend to be those that are most vulnerable to climate impacts. [This could be] to either  help them to adapt to those changes in the climate or to adopt low carbon technologies.

HV: What are your thoughts on a so-called carbon border tax, that would see a tax levied on products based on their carbon footprint? 

TG: This is a policy that the European Union is carefully looking at. It’s called a carbon border adjustment mechanism. It’s definitely part of the debate but we should be cautious as today, on its own, it will have quite an adverse impact on developing countries. I think a better solution is to strengthen standards in the European market so that both international and domestically produced goods have to meet certain standards. 

That’s a fair way of ensuring that whatever is sold and ultimately consumed in a country meets a certain standard, without being a trade protection measure that essentially penalises imports and can serve to protect domestic producers. A carbon tax on its own is probably a bit of a blunt instrument and the international fight against climate change is only going to succeed if it’s built on cooperation and trust. 

HV: How hopeful do you feel that the political will is there? 

TG: I think we’re on the brink of climate breakdown. And to me, there’s no question that the world is not taking that seriously enough. I don’t think we can overstate the urgency with which stronger measures are needed. But that said, I think there are some reasons for optimism in recent years; clearly, the announcement from China of moving towards a carbon neutral target by 2060 is potentially game changing. 

Of course, much hinges on what their near-term targets will be for 2030 what the implementation looks like and whether they follow through with the right policy to meet that target. That’s essentially huge. And similarly, of course, the new administration in the US can also make a massive difference. We still just about have a window of opportunity left to keep global heating to 1.5° but there’s no more wiggle room.