A new report by global justice organisation Equal Right and economists at independent think tank Autonomy has proposed a new global ‘cap and share’ system that taxes carbon at source and redistributes the proceeds worldwide through a Universal Basic Income scheme.
The system aims to simultaneously halt further fossil fuel-induced climate change, redistribute resources in line with climate justice and abolish extreme poverty permanently.
To keep global temperatures below 1.5C of warming, the ‘cap and share’ system would gradually reduce the extraction cap by around 10% per year, bringing fossil fuel extraction to less than 3% of current levels by 2060.
Economists modelled a carbon charge that would initially start at $135 per tonne of CO2, raising $4.9 trillion in the first year and rising to $20 trillion a year by 2056.
Proceeds from the ‘cap and share’ system would achieve the transfer of hundreds of trillions of dollars from fossil fuel firms and wealthy consumers to the global 99%.
The report proposes a $1 trillion annual climate grant budget for Most Affected People and Areas, a global Green New Deal investment fund, and a universal basic income for people worldwide, through a monthly cash ‘dividend’ payment to every adult and child.
The initiative has been launched following the Paris summit on global climate finance last month. Barbados PM Mia Mottley is leading the fight for countries of the Global South to be given access to hundreds of billions of dollars to tackle climate change. She has also proposed a Universal Basic Income for all citizens of Barbados.
According to the IMF, fossil fuel subsidies totalled $5.9 trillion in 2020, which was nearly 7% of the world’s entire GDP.
We will be exploring this new proposal at our launch event on Thursday 10th August. Alongside many climate justice experts, the launch will draw contributions not limited to Climate Action Network International (CAN-I), Fridays For Future and the Pan African Climate Justice Alliance (PACJA). We will present our cap and share proposal, explore potential impacts, and open up space for ongoing co-creation. The new global coalition, the Cap and Share Climate Alliance, will also be introduced.
Please register for the event here. Translated captions will be available in a number of languages. Regional events focused on Africa, Latin America and the Caribbean, and Asia and Pacific will follow this autumn.
Laura Bannister, Executive Director at Equal Right, said:
“People worldwide are demanding climate justice – and rightly so – but where could the money come from to pay for it?
“This proposal aims to offer an answer: one that could provide a backdrop of redistributive finance and fossil fuel regulation that could help make other climate justice initiatives possible.”
Luiz Garcia, Lead Economist at Autonomy, said:
“A carbon cap at this scale would ensure that we avoid the worst effects of climate change.
“Our modelling makes a compelling case for governments to look at this new global system to ensure the biggest polluters are made to pay for the climate crisis.
“Climate reparations, provided both through community grants and through cash transfers to individuals, are vital in order to address climate-related poverty, such as forced migration or increased food prices.
“These transfers provide direct financial assistance to those affected, alleviating hardships and supporting communities in adapting to changing environmental conditions.”
SOURCE: EQUAL RIGHT