A new market‐based climate change solution achieving 2°C and equity

Abstract

Current climate change strategies seem increasingly incapable of averting planetary catastrophe. The United Nations (UN) strategy places responsibility for CO 2 reduction on governments, but governments by nature seek lower burdens. Moreover, arbitrary, ambition-based pledges seriously fail to produce what science tells us is necessary to achieve any identified climate target. In addition, climate financing holds little hope as increasingly dire fiscal circumstances are to persist for decades. The time has come to seek a new effective system before it is too late. Such a system would cap global emissions with a global carbon budget that achieves the adopted target. The most cost-effective plan is to put a global price on carbon, which can be accomplished by creating a global upstream carbon market. In such a market system, a limited amount of allowances would be sold to polluters. It would achieve the target most cost-effectively, raise new revenue from the sales of allowances which would help vulnerable countries in their energy transition and low-carbon sustainable growth.