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This discussion note finds that the rolling ‘updated 5 + indicative 5’ cycle with synchronised updating of the Dynamic Contribution Cycle which, as reflected in the submissions, has been receiving traction, is by far the best procedural bet for enhancing collective NDC ambition.

To address climate change, we need to complement a punitive push with an aspirational pull on consumer behaviour in the right direction.OCP Blog

This policy brief gives an account of how Article 6 of the Paris Agreement came into being, focussing in particular on the role of Brazil and the EU in the run up to Paris. It then seeks to clarify the basic concepts involved in the Article 6 debate, and proposes ways in which opposing positions on the opertionalisation of the market mechanisms can be reconciled.

Whether or not the regime emerging from the current negotiations under the UN Framework Convention on Climate Change (UNFCCC) will be based on an explicit cost/burden sharing formula, the debate about (implied) costs/burdens will be central. Such a debate cannot be genuinely meaningful in the absence of an acceptable operationalisation of Article 3.1 in general, and of the concept of ‘respective capability’ in particular.

We propose a framework (‘The Oxford Approach’) for measuring national ‘differentiated economic capabilities’ (‘ability to pay’) as integral part of an operationalisation. It is based on the well-known income tax paradigm:

• A measure of overall economic size is progressively modified in terms of relative prosperity levels to produce a ‘gross capability measure’ (analogous to gross taxable income). As such, gross capability represents a measure of general ability to pay.
• Drawing further from the tax paradigm, the framework introduces deductions in order to take into account other costs deemed to have priority. In keeping with the global priority to address poverty explicitly stated in the UNFCCC and the Rio+20 Declaration, Poverty Capability Adjustments are deducted from the gross capability measure, to arrive at what we call the net ‘Oxford Capability Measure’ (OCM) to pay for climate change cost/burdens.

The primary purpose of the OCM is to define or assess climate change cost/burden sharing (schemes). We believe the Oxford Approach to be acceptable for this not only because it is modelled on progressive income tax with deductions, a burden sharing scheme used by most if not all countries of the world, but also because of the progressiveness calibration through countries’ revealed preferences.

To illustrate the potential use of this methodology we consider two examples: assessing the fairness of a given cost distribution; and developing a (rule-based) ‘graduation scheme’ regarding obligations to pay. We assess the fairness of the 2010 distribution of climate change impact costs as reported in the second edition of the Climate Vulnerability Monitor with reference to an OCM equity benchmark. We then turn to the question of defining a fair benchmark for taking on cost/burden obligations, concluding that while an OCM per capita scheme would be best, one could use ‘poverty intensity of GDP’ as a second best surrogate.

• Oxford Energy and Environment Brief 
• Republished in Environmental Liability, Issue 1, 2011
• And in part as "Roll up the sleeves even higher" in Trading Carbon, Vol. 5, Issue 2, March 2011

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• English version
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