numbers, not adjectives — D. J. C. MacKay

International Cooperation against Climate Change

by Carl Edward Rasmussen, 2023-11-14.

Effectively addressing climate change requires international cooperation between countries. Strong individual economic pressures conflict with our common global interests. Only through global cooperation can individual and common incentives be re-aligned. Cooperation requires commitment and trust. Unfortunately, our current principal international mechanism, the Paris Agreement, has no binding commitments and fosters mistrust. The agreement is therefore structurally flawed, and exceedingly unlikely to succeed in its goals. You may think that the climate change problem is inherently intractable, but that's not the case. International agreements without the profound deficiencies of the Paris Agreement are possible. Here, I present one such proposal, the Voluntary International Carbon Alliance (VICA). Below I give a little more details for the preceding arguments.

Necessity of Cooperation

Renewable, or green energy sources are more expensive than fossil fuels. Although wind and solar have become cheaper, they are intermittent and system solutions meeting continuous demand, sectors difficult to de-carbonise and existing infrastructure all mean that green solutions are more costly (otherwise, we wouldn't have a climate problem). This creates strong economic pressures to keep using fossil fuels. The real environmental cost of using fossil fuels are not accounted for in national deliberation. The majority of the greenhouse gases released by any country are quickly diluted and spread throughout the global atmosphere. Therefore the own individual contribution to any country's own climate problem is small, and indeed typically remains completely unaccounted for in monetary terms. This is what economists call unpriced externalities. However, if every country follows their individual rational reasoning, then we all end up bearing the full burden of the resulting climate change even if the costs vastly exceed the individual benefits. This is sometimes called the tragedy of the commons. The root cause of this problem is the misalignment between individual and common incentives. The problem can only be solved through international cooperation.

The Nature of Cooperation

The prize of successful cooperation is that we all end up better off, because we avoid most of the very bad consequences of unchecked climate change. But the mechanism of cooperation must be carefully designed to avoid individual members defecting to their own benefit, but at the common cost. In the case of climate change, there is no global government or authority which can enforce rules on sovereign contries. Therefore cooperation must rely on mutual commitment and trust between members. The only reason why a country would accept the extra burden associated with rapidly phasing out fossil fuels is if other countries also commit and they can be trusted to honour their commitments, thereby ensuring the prize for all.

The Paris Agreement

The UN FCCC Paris Agreement is currently the main global cooperative agreement. Unfortunately, the agreement has very considerable shortcomings, which means that it is exceedingly unlikely to succeed. Its two main structural deficiencies are that it doesn't have binding commitments, and that it fosters mistrust. The agreement revolves around so-called Nationally Determined Contributions, NDCs, which embody efforts by each country to reduce emissions. However, NDCs make statements about emissions far into the future and there is no requirement that NDCs are honoured. Many contries have submitted NDCs that probably won't be honoured. For example, the UK has an NDC stipulating a 68% reduction in emissions by 2030 compared to 1990, but the government's independent advisory Climate Change Committee says the UK is not on track to meet this target. Additionally, the long time-horizons of NDCs and Net Zero by 2050 intensions make it difficult or impossible to verify whether countries intend to comply. And the UK is not alone. Such behaviour obviously fuels distrust internationally, and fundamentally undermines emission reduction efforts.

The Voluntary International Carbon Alliance, VICA

The structural deficiencies of the Paris Agreement are not inevitable. The Voluntary International Carbon Alliance is a simple, practical proposal for cooperation, which provides immediate, strong economic incentives for emission reduction, enforces commitment and fosters trust between countries. The Alliance is simple and fully transparent, has no room for negotiation (which bogged down the Kyoto Protocol) and evolves on an annual basis, which makes it easy to continuously verify member's commitment, thereby forging trust. It is built on the ethical foundational principle that the right to the atmosphere belongs equally to all people. It is designed to co-exist with (not replace) other initiatives.

Global state

The root cause of the global warming problem is the increasing concentration of CO2 (and other greenhouse gases) in the atmosphere. The CO2 concentration is currently increasing by 2.5 ppm per year, the highest growth rate in modern times. Although many physical mechanisms play a role in global warming, data from the past 64 years show a very tight empirical relationship between CO2 and average global surface temperature. These two observations together indicate that the global average temperature is currently rising by 0.1°C every 4 years, ie likely crossing 1.5°C by 2035. This further corroborates the urgency of change of approach.

The UK

The UK where I currently live is one of the countries not doing enough to limit global warming. Here is a note comparing legislated greenhouse gas limits with actual emissions. I also discuss whether the legislated limits are fit for purpose. I also look at the woefully inadequate numbers in the UK government's Jet Zero strategy.

Constructive ideas

The Voluntary International Carbon Alliance is described on this page and this slide deck. A short talk about possible mechanisms against climate change.