Global Climate Compensation

Deutsche Version (English translation below)

Können wir die Klimakrise bewältigen? Die Antwort lautet ja, und es würde etwa $1.30 pro Kopf und Tag kosten. Dies ist weniger als eine Tasse Kaffee.

Das Problem ist nur, dass sich nicht alle Menschen auf der Welt so viel Geld haben. Die Wohlhabenderen müssen also bereit sein, den Ärmeren zu helfen.

Fast 30 Jahre nach der Unterzeichnung der Klimakonvention der Vereinten Nationen (UNFCCC) gibt es immer noch keinen praktikablen Plan, wie die Erderwärmung auf weniger als +2°C begrenzt werden kann, und die CO2-Konzentration der Atmosphäre steigt immer schneller an. Zusammen mit einigen Kollegen versuche ich deshalb einen Plan auszuarbeiten, um das Problem im Griff zu bekommen. Die Details dazu finden Sie hier:

Ich meine dies ernst. Das CO2-Budget für +1.5°C Erderwärmung werden wir in weniger als 8 Jahren ausgeschöpft haben. Die Weichenstellung für eine bessere Zukunft muss also in den nächste 1-2 Jahren passieren. Nach COP25 in Paris und der Rede von Donald J. Trump in Davos bin ich der Meinung, dass die Reichen und Mächtigen versagt haben.

Melden Sie sich also bei mir, wenn sie an der Idee der globalen Klimakompensation mitarbeiten wollen. Das Problem können wir nur gemeinsam lösen. Das erste Treffen findet am 31. Januar 2020 in Zürich statt.

English Version

Can we overcome the climate crisis? The answer is yes, and it would cost about $1.30 per person per day. This is less than a cup of coffee.

The only problem is that not everyone in the world has that amount of money. The affluent must be willing to help the poor.

Almost 30 years after the signing of the United Nations Framework Convention on Climate Change (UNFCCC), there is still no workable plan to limit global warming to less than +2°C and the CO2 concentration in the atmosphere is rising faster than ever. Together with some colleagues, I am therefore trying to work out a plan to get the problem under control. You can find the details here:

I’m serious about this. We will have exhausted the CO2 budget for +1.5°C global warming in less than 8 years. The course for a better future must therefore be set in the next 1-2 years. After COP25 in Madrid and Donald J. Trump’s speech in Davos, I believe that the rich and powerful have failed.

So, get in touch with me if you want to work on the idea of global climate compensation. We can only solve the problem together. The first meeting will be in Zurich on January 31, 2020.

Watch this: Jeremy Rifkin on the Green New Deal

If you do not have time to watch this 55 minute talk by Jeremy Rifkin, you’re really not entitled to have an opinion on the issue of climate change.

In my opinion, he is far too optimistic about the possibilities of technology and he could have questioned the need for economic growth and talked about Degrowth. However, he is right about the fact that we are facing a revolutionary transformation of business and society. Old business models simply do not work anymore.

What Mr Rifkin misses

I have recently proposed Global Climate Compensation as a way to solve the climate crises. It is interesting to compare it with the lecture given by Jeremy Rifkin above. Here is my perspective:

  1. Rifkin is right about the seriousness of the Climate Crises and the need to act now.
  2. He is also right about the need for a fundamental transformation of technology and that digitalization and information are important.
  3. One problem is that ICT is currently a main driver of environmental destruction. Currently, data centers consume enormous amounts of power worldwide, even though they try to run in an optimal fashion. Distributed data centers will be less efficient and use more resources.
  4. Mr Rifkin wants to finance the transition by allowing governments to borrow more money, which is essentially equivalent to printing money. In other words, he wants to inflate and already inflated economy with more cheap money. Since global debt is already at a record level, this is probably not a good idea.
  5. He is not talking about a carbon tax, meaning that there will be no incentive to use less energy under his plan. By making energy even cheaper, it is unlikely that energy demand will decrease. We will only use renewable energy in addition to oil, coal, and gas.
  6. Even though he talks about unequal wealth distribution in this introduction, he fails to address this in his plan, which contains nothing about climate justice.

Obviously, Mr. Rifkin believes that economic growth will fix problems all. His views on technology and the environment are reasonably modern – albeit slightly naïve – but his economic ideas are still firmly rooted in the 19th century.

In contrast, Global Carbon Compensation takes money out of the fossil sector and uses it for the energy transition. This increases the price of fossil fuel and provides the necessary funds without further increasing global debt. In other words, it slowly deflates the carbon bubble and uses the money to deflate the debt bubble. Seems like a good idea.

Let’s Solve the Climate Crisis in 2020

In order to stop climate change, we need to call on less than 300 companies to compensate their carbon emissions. Somehow, this does not seem impossible.

By Henrik Nordborg
Zurich, 2019-12-29

The American historian Barbara W. Tuchmann begins her book The March of Folly with the following observation:

A phenomenon noticeable throughout history regardless of place or period is the pursuit by governments of policies contrary to their own interests. Mankind, it seems, makes a poorer performance of government than of almost any other human activity. In this sphere, wisdom, which may be defined as the exercise of judgment acting on experience, common sense and available information, is less operative and more frustrated than it should be. Why do holders of high office so often act contrary to the way reason points and enlightened self-interest suggests? Why does intelligent mental process seem so often not to function?

Tuchman, Barbara W., The March of Folly: From Troy to Vietnam.

She goes on to describe a number of examples of governments acting stupidly, even though they had all the information required for rational decisions. The book, which was published in 1984, only covers events up to the Vietnam war. Looking at the world today, we could easily add many more examples governmental madness. The question is only whether there will be anyone left to read them.

It is now obvious that humanity has failed to react to the threat of climate change and that we still do not have the faintest idea how to solve the problem. Both the United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Agreement have failed to produce any tangible results and we are rapidly running out of time. The most recent reports by climate scientists indicate that we are close to reaching important tipping points, which would make climate change irreversible. On the other hand, greenhouse gas emissions are higher than ever before and are still increasing. Humanity is accelerating towards the precipice.

Given that we have less than ten years of carbon budget left at current emission rates, one could argue that we have already passed the political point of no return. Staying below 1.5°C of warming would require cutting global CO2 emissions by at least 7.6% annually, starting right now. There is zero probability of this happening as a result of international climate talks. In other words, humanity has about as much chance of surviving the 21st century as the proverbial snowball in hell.

It does not have to be like this. Most carbon emissions (carbon dioxide and methane) result from the activities of a small number of fossil fuel producers. Requiring them to compensate all the emissions resulting from the fuel they use and sell will introduce a global price on carbon emissions, incentivizing people to use less fossil fuel and to invest in alternatives. Do we want to force a couple of hundred companies to pay up, or do we accept the end of life as we know it? We only have a few years left to decide.

Global Climate Compensation

The simple truth is that we need to stop using fossil fuel as quickly as possible. In a market-based economy, this is most easily achieved by introducing a high and increasing price on carbon emissions globally. The only problem is that poor people cannot afford higher energy prices, which is why carbon prizing must be coupled to a financial redistribution scheme to be socially acceptable. One way to achieve all this is the following scheme for Global Carbon Compensation:

  1. All producers of fossil fuel pay a fee proportional to their production to a global fund.
  2. The money from the fund is distributed among the world’s nations on a per capita basis.
  3. The carbon price increases with time and with the carbon concentration in the atmosphere.

For simplicity, we can consider a price of 100 USD per ton of carbon dioxide to start with. With current emissions of approximately 37 Gt CO2 per year, the fund will receive 3.7 trillion USD annually. This is a lot of money but still less than the 5.2 trillion USD of annual subsidies given to the fossil fuel sector according the IMF. Every nation will receive a sum corresponding to approximately USD 480 per capita. This is a significant amount of money for many developing countries in the world. Thus, countries with a small carbon footprint will benefit and those with a high footprint will suffer.

A carbon price of 100 USD/t is not enough to decarbonize the world economy, but it will have significant impact. Here are some examples of price increases based on carbon emissions:

  1. Electricity from coal-fired power plants: 8 cents/kWh
  2. Gasoline: 24 cents/liter or 92 cents/gallon
  3. Barrel of oil: 40 USD
  4. Flying from London to New York and back: 180 USD economy, 340 USD business class.

Why this makes sense

In order to burn one ton of carbon, we need to add 2.67 tons of oxygen to produce 3.67 tons of carbon dioxide. Without this oxygen and the right to emit the resulting carbon dioxide into the atmosphere, carbon-based fuels would be worthless. In other words, the business models of the fossil fuel companies depend on their right to destroy the atmosphere. There is no reason for why they should not pay for this right. In other words, the carbon footprint of a fossil fuel company consists of the direct emissions and all the carbon sold.

Fortunately, there are fewer than 300 significant fossil fuel companies in the world and we know exactly how much carbon they produce. We do not question their right to do business or to be profitable, but they must pay for their use of the atmosphere, which belongs to all of us. Obviously, they will react by increasing the price of fuel, thereby passing on the higher costs to their customers. The effect will be similar to that of a global carbon tax, but with fossil fuel producers and not the governments raising prices. This is an important distinction. The price of fossil fuel depends on many factors, such as the production cost, the carbon prize, and the profits of the producers. Today, fossil fuel companies are highly profitable, and their profits are paid for by consumers everywhere. Anyone arguing that access to cheap fossil fuel is important to society, needs to explain why the profit-making of the oil companies is tolerated. They can’t have it both ways. If these companies are required to pay climate compensation, the cost would be split between their shareholders and their customers.

Just as it is very efficient to implement the carbon prize directly at the source, it makes sense to use national governments to distribute the money from the fund. This has the additional benefit of not violating national sovereignty. Every government will receive a large sum of money, which it can use as it sees fit. Since fossil fuel prices will increase significantly, it will be wise to use the money for investments in renewable energy and to protect the weakest in society from the effects of rising living costs. In developing countries, it will be possible to do a lot more than that. After all, giving everyone in the Global South a universal basic income of 40 USD per month would change a lot of things.

Global Climate Compensation will transfer large sums of money from countries with a high per capita carbon footprint to countries using less resources. This is both necessary – in order to avoid an unprecedented refugee crisis and human suffering – and fair. After all, the industrialized nations do not have to pay for their historic emissions and the damage they have caused in the past. Furthermore, contributing to the fund is voluntary, as nobody is obliged to use fossil fuel. A significant increase in the price of fossil fuel will automatically lead to a reduction in demand, meaning that the figure of 3.7 trillion USD given above is probably far too high. Energy efficient countries will benefit from the GCC, regardless of their wealth and average income. The scheme therefore does not punish rich and developed countries but inefficient ones. The fund could be managed by the United Nations, which would give a badly needed boost to international collaboration without the need to establish yet another organization, but this is not necessary. The general rule is to simply pay out the money to countries based on the size of their population and not to interfere in national politics. However, a country behaving badly could be black-listed and lose its right to receive payments from the fund.

It also makes sense to couple the emission price to the carbon dioxide concentration in the atmosphere in order to prevent a massive sell-off of fossil fuel. As soon as it becomes clear that the price of carbon will increase, fossil fuel producers will have strong incentive to sell as much as possible as quickly as possible. With a cleverly implemented carbon prize, this sell-off would simply make the prize increase even faster.

Is it possible to decarbonize the economy without sacrificing economic growth? Global Carbon Compensation is the only way to find out. If the proponents of technological solutions are right, the introduction of global carbon prizing will simply lead to a rapid decarbonization of the economy. If not, carbon emissions will sink anyway, but mainly through reduced consumption and sufficiency.

It is very difficult to find an argument against GCC which is not based on simple greed or selfishness. The principle that carbon emissions should cost the same everywhere makes a lot of sense. Likewise, it is easy to accept the idea that all humans have the same right to the oxygen in the atmosphere. Implementing this plan through fossil fuel companies and national government means that less than 500 parties need to be involved in working out the details. Furthermore, it the plan does not even need political approval, as there is no law preventing private companies from making donations to a fund run by the UN even today.

How to make it happen

How realistic is this plan for Global Carbon Compensation? Obviously, the usual suspects like the fossil fuel industry and the governments of oil-producing nations will be vehemently opposed to it. The real question is therefore how many of us are prepared to oppose them.

The idea behind GCC is to give the fossil fuel producers a fair chance to show that they are willing to be part of solving the climate crisis. If they agree, they can start contributing to the fund immediately. If not, they have officially declared themselves enemies of humanity and lost all rights to exist. We will go after the companies, their owners, and their employees in every way possible, including government sanctions, legal actions, and activism. A company producing fossil fuel but refusing to pay GCC will be considered the moral equivalent of drug cartel but will find it a bit more difficult to hide. Owning shares in or working for a fossil fuel company not participating in GCC will be considered a crime against humanity. Governments and major corporations will only buy fossil fuel from corporations participating in GCC.

The time has come to get serious about solving the climate crisis. It will involve an unprecedented level of international collaboration and the transfer of financial resources from rich countries to poorer ones. Global Climate Compensation accomplishes this with a minimum amount of bureaucracy and government intervention and the plan could be implemented immediately. It will not solve all problems, but it is our best chance addressing climate change.

Are we going to allow a small number of fossil fuel producers to kill our children? If not, we’d better start acting now. So let’s demand Global Climate Compensation as soon as possible. There are less then 300 fossil fuel companies and millions of us, so it should not be too difficult.

Update 2020-01-25

Apparently, the CEOs of the oil companies are already discussing reducing their emissions because of the social pressure:

Eating Your Planet: The Movie

It was a great pleasure to give a lecture on the climate crises at the ETH last Wednesday. The timing could not have been better (or worse), as the European parliament declared a “climate and environmental emergency” the same day. Thanks to Thomas Schmid and the IEEE for organizing the event. Thanks also to everyone who attended the lecture and especially to those who gave me feedback. I promise to respond to the e-mails as soon as possible.
The presentation, a video recording, and a lot of information and sources can be found here:

Erneuerbare Energie und Umwelttechnik an der HSR

Ich durfte heute die neuen Studierenden des Studienganges EEU an der HSR begrüssen. Im letzten Jahr haben wir viele spannende Projekte und Anlässe durchführen können. Einige davon sind in in diesem Newsletter dokumentiert.

Hier noch ein Film zum schönen Sommaranlass von swisscleantech an der HSR mit Frau Bundesrätin Simonetta Sommaruga. Es geht jetzt darum, die Energiezukunft umzusetzen.

swisscleantech Sommeranlass an der HSR,