Why being scooped by Piketty is no bad thing for Oxfam (but what will the government of India think?)

November 13, 2015

     By Duncan Green     

Guest post from Tim Gore, Oxfam’s climate change policy czar Tim Gore mugshot

No-one likes to be scooped, least of all researchers who have battled through Oxfam’s internal sign-off process. But when the authors who beat you to the publication punch include one of the most famous economists in the world – as we experienced last week – we can at least be reassured that our analysis is on the right track.

Thomas Piketty and Lucas Chancel have just published an excellent paper assessing the global inequality of carbon consumption. We’ve done the same thing, but our paper is due for release during the first week of the Paris COP. Both studies apply a simple elasticity model to data on the global distribution of income, allocating estimates of national emissions consumption to richer and poorer citizens within countries.

Gore 1This allows us both to show the shocking extent of global inequality of carbon consumption and that within (notably middle income) countries. Reassuringly for our number-crunching skills, even if frustratingly for our media hits, we find very similar results. The Piketty/Chancel paper suggests the top 10% highest emitters in the world are responsible for 45% of global emissions, the bottom 50% for 13%. Our numbers are in the same ballpark, with a slightly more pronounced gap.

Clearly we agree on a few important things. Firstly, that carbon inequality is extreme and that tackling it is key to fighting climate change. Secondly, that high emitters should in principle be treated alike, wherever they happen to live.

But while the Piketty/Chancel paper focuses on the policy implications of their findings for the top end of the global distribution, ours is more interested in the bottom. These are largely complementary approaches, but they do lead to some different policy conclusions, which are highly pertinent to one of the most contentious issues on the table in Paris.

Piketty and Chancel propose various forms of progressive carbon taxation on high emitters to fund global adaptation Gore 2efforts.  Under their preferred scheme in which contributions are split between individuals in the top 10% of world emitters, North America would contribute 46%, EU 16% and China 12% of the total.

We’ve certainly made our fair share of proposals for innovative ways to close the gap in adaptation finance (here, here, here). But we might struggle to make the case for this one in the G77 group of developing countries.  Here’s why.

Right now rich countries are demanding an expansion of the pool of climate finance contributors as a trade-off for making any new finance commitments in Paris. The essential choice for ministers at the COP will be between language that encourages new countries to contribute that are “in a position to do so” (supported by the rich countries and some others) and those that are “willing to do so” (the maximum the Indian government amongst others seems prepared to consider, as floated by China). Expect that one to go to the last night.

Official negotiating text for Paris showing options – “in a position to do so” vs “willing to do so”. Lawyers licking their lips on billable negotiating time.....

Official negotiating text for Paris showing options – “in a position to do so” vs “willing to do so”. Lawyers licking their lips on billable negotiating time…..

Oxfam and Piketty and Chancel would agree more objective indicators are vital to guide equitable effort sharing of climate finance – as suggested by the “in a position to do so” formulation. But the question Piketty and Chancel have to answer is whether the presence of a share of the world’s very highest emitters is a sufficient indicator of a country’s capacity to contribute.

As our studies make clear, many of the middle income countries that are being squeezed for new contributions are now not only home to a share of the highest emitters in the world, but also to most of the lowest. Indeed the vast majority of the lowest 50% live in India and China. As we’ve argued before (here and here), only countries that have the capacity to tackle their domestic poverty challenges should be expected to contribute to international adaptation funds, and on that score the middle income countries look very different.

There’s no question rich high emitters should be paying for their emissions wherever they live, and that the revenues climatechange_cartoonshould be redistributed to benefit the poorest and least emitting. But for some countries, like India, that should be a primarily domestic affair (as I suggested for South Africa here). For others, like Brazil, Singapore or South Korea, it’s time to step up on the global stage. China has recently pledged $3.1bn themselves, though in bilateral South-South flows.

So where does that leave the government of India reading our studies? They should be reassured with our findings that the vast majority of Indians are very low emitters by global standards (we’ll have some more specific comparisons between countries in our paper).

They may though see the Piketty/Chancel paper as exactly the sort of argument they fear will be used to press them into making contributions in the years ahead (even though they are clear rich countries would hugely increase contributions under their proposals). We would argue that the presence of rich emitters in their population is not the only test of whether they are “in a position” to contribute, and thus that they have nothing to fear from objective indicators.

We’re looking forward to continuing to work with Piketty and Chancel and any others interested in progressing these debates in Paris and beyond, there’s much more to be said about all this. It’s clear we are pushing in the same direction, and in terms of achieving the changes Oxfam wants to see in the world, it’s working in such alliances that ultimately matters more than securing a splash of headlines from a new report on launch day.

November 13, 2015
Duncan Green