An International Carbon Fund?
Lord John Browne, former CEO of BP, and Nick Butler, the Director for Energy Studies at the Cambridge Judge Business School, have proposed an International Carbon Fund, on the model of the International Monetary Fund: to decide on global carbon emissions reductions targets, and then to decide quotas for emissions for each country. The Fund would also monitor and verify compliance. Sounds a great idea to us! Certainly, something as ambitious as this is needed if the world is actually reduce emissions before it is too late.
“The ICF would begin by setting a target in terms of the amount of emissions reduction necessary to keep the concentration of carbon below an agreed ceiling – for the sake of argument 450 ppm. The target would be global but delivery is of necessity local.
The second task of the fund would be to allocate quotas – a proportion of the target for which each participating state would be responsible. Any allocation is a matter for political negotiation but formulas could be constructed to reflect current emission levels and variations in per capita income. The aggregate target and quotas would be reviewable, perhaps every five years, to reflect progress and advances in scientific knowledge.
Although the target and the allocations would be centralised decisions, the carbon fund would not tell individual countries how to meet their national goals. The market, including the elements of personal choice that reflect national culture, would produce many different answers.
The third crucial task of the ICF would be to establish a system to monitor and verify action on reductions, as well as mechanisms to fund clean, low carbon development through loans or grants to the poorest countries. Finally, the fund would legitimise the creation of a trading exchange designed to ensure that emissions were reduced in the most cost-effective way. The currency of the exchange would be carbon reduction units, or crus for short.”