"Economists Propose Carbon-Pricing-Linked Climate Reparations"
Social Cost of Carbon
monetary value of long-term damage from one tonne of CO2 emitted in a given year
Emissions Trading Scheme
a cap-and-trade system where firms trade pollution permits within a fixed overall limit
The climate justice debate rests on an old asymmetry. Developed countries, mostly in the OECD, caused most of the carbon already in the atmosphere. Developing countries, grouped as the Global South, now account for a rising share of future emissions even though their historical contribution is small. The Common But Differentiated Responsibilities (CBDR-RC) principle was created to address this. It was first set out in the 1992 Rio Declaration at the Earth Summit, and later carried into the UNFCCC (1992) and the Paris Agreement (2015). It holds that richer nations, having caused more damage, must take on greater responsibility for fixing it.
Climate finance was meant to operationalise this principle. The Green Climate Fund was set up to help developing countries with adaptation and mitigation. The Loss and Damage Fund was agreed at COP27 and made operational at COP28 to compensate vulnerable nations for climate harm already done. In practice, disbursements under both mechanisms have stayed far below assessed needs. This gap is central to the new proposal discussed here: instead of routing money through government-to-government funds, it suggests direct payments to citizens, calculated using the Social Cost of Carbon, a monetary measure of the long-term damage caused by one tonne of CO2 emitted in a given year. This is the same tool economists use to price the externality that carbon pricing instruments, like a carbon tax or an emissions trading scheme, are designed to correct.
Carbon pricing works on a simple idea. If polluting is costless, firms have no reason to cut emissions. A carbon tax fixes a price per unit of pollution. A cap-and-trade emissions trading scheme instead fixes a total quantity of allowed pollution and lets firms trade permits within that cap, so the price emerges from the market itself. Article 6 of the Paris Agreement sets out the principles for such international carbon markets, allowing countries to cooperate voluntarily in meeting their climate targets.
India already has real experience with this model. …
Which one of the following statements best describes the term 'Social Cost of Carbon'? It is a measure, in monetary value, of the
Which of the following statements regarding 'Green Climate Fund' is/are correct?
1.It is intended to assist the developing countries in adaptation and mitigation practices to counter climate change.
2.It is founded under the aegis of UNEP, OECD, Asian Development Bank and World Bank.
Select the correct answer using the code given below.
Consider the following statements:
Statement I: Article 6 of the Paris Agreement on climate change is frequently discussed in global discussions on sustainable development and climate change.
Statement II: Article 6 of the Paris Agreement on climate change sets out the principles of carbon markets.
Statement III: Article 6 of the Paris Agreement on climate change intends to promote inter-country non-market strategies to reach their climate targets.
Which one of the following is correct in respect of the above statements?
Consider the following statements about Article 6 of the Paris Agreement: 1. It enables countries to pursue voluntary cooperation, including carbon markets, in implementing their climate targets. 2. It establishes principles for international carbon markets. 3. It mandates a single uniform carbon tax rate for all signatory countries. How many of the above statements are correct?
Consider the following statements regarding the Common But Differentiated Responsibilities (CBDR-RC) principle: 1. It was formally enshrined in the Rio Declaration of 1992. 2. It holds that developed countries, having historically emitted more, must take on relatively greater responsibility for climate action. Which of the statements given above is/are correct?
With reference to market-based instruments for pollution control, consider the following statements: 1. An emissions trading scheme fixes a total cap on allowed pollution and lets firms trade permits within that cap. 2. Under such a scheme, the market price of a permit is fixed in advance by the regulator rather than emerging from trading. Which of the statements given above is/are correct?
Match List-I (Climate finance/market mechanism) with List-II (Associated fact) and select the correct answer using the code given below:
List-I:
A.Loss and Damage Fund
B.Green Climate Fund
C.Surat Emissions Trading Scheme
D.Social Cost of Carbon
List-II:
1.Monetary damage estimate per tonne of CO2 emitted
2.Agreed at COP27, operationalised at COP28
3.India's first market-based pollution control pilot, from 2010
4.Operates under the UNFCCC to fund adaptation and mitigation
Which of the following are examples of carbon pricing mechanisms? 1. A carbon tax levied per unit of emissions. 2. A cap-and-trade emissions trading scheme. 3. A production-linked fiscal incentive for manufacturing. Select the correct answer using the code given below.
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