Witnessing the consequences of climate change in Africa firsthand, I have devoted my career to advocating for climate and economic justice. As a Campaign Manager at Equal Right, one of our primary initiatives is promoting the global ‘Cap and Share’ policy. This transformative solution aims to shift the conversation on climate finance beyond countries’ contributions, extend the burden of cost to polluters, direct trillions of dollars to the Global South, and ensure that all countries benefit from cash payments and investments in the Green Economy.
Africa presents a compelling case for climate reparations. Despite contributing less than 4% of global greenhouse gas emissions, the continent is home to many regions and populations most severely affected by them. According to a 2019 report by the African Development Bank, the climate crisis is projected to cost Africa between 5% to 15% of its GDP, whilst historical exploitation by colonial powers has led to significant environmental degradation and socioeconomic disparities in African countries.
Equal Right’s Cap and Share model represents a hopeful pathway to provide countries in Africa with access to financing to benefit the most affected people and areas.equal
The Cap and Share Model
While Cap and Share is a bold and ambitious plan, it is not complex. There are four main components to it:
- Cap
A legally binding cap on the maximum amount of fossil fuel that can be extracted is integral to keep us within planetary boundaries. Lowering this cap each year is also necessary to reduce the amount of extraction allowed up until the point no new fossil fuel is dug up.
In line with this plan, fossil fuel companies would need to obtain permits from a new international body to extract fossil fuel within the limits of the cap. Strict penalties need to be implemented for any fossil fuel company that goes over the cap, with no offsets or carbon trading allowed, such as in the form of environmentally beneficial activities to compensate for carbon footprint.
2. Charge
Fossil fuel companies would be charged for every tonne of C02 equivalent they extract. For instance, Equal Right’s model considers a cap at 2022 extraction rates, which equals to 36.3 gigatonnes per year, and a charge of $135 per tonne, increasing every year by 16%. This scheme delivers just under $5 trillion in its first year of operation alone for equitable climate finance.
We also advocate for a permit system to prioritise companies with clear decarbonisation plans and, in turn, deprioritise big polluters or companies with the worst ethical standards. Preference could also be given to the Global South companies, recognising the principles of “Common But Differentiated Responsibilities” (CBRD), lower rates of extraction historically and developing nation’s lower capacity to absorb economic shocks caused by a swift transition away from fossil fuels.
3. Fund
The money raised from the charge would be placed in a democratically owned and operated wealth fund, the Global Commons Fund (GCF) which would invest in a green, just transition, as well as continue to build sustainable, intergenerational wealth for the people around the world. We expect such a fund to generate returns of at least 3.6% annually and be worth $190 trillion within 35 years.
The fund would prioritise low-to-zero interest investments in the Global South and Most Affected People and Areas (MAPA), offering equity, or repayments contingent on profitability only, thus limiting the risk of creating new, unsustainable debt.
4. Share
Recognising everyone’s equal right to a share in global wealth and resources, we advocate that a portion of the proceeds from this fund be shared in the form of a universal cash payment, or Universal Basic Income. Our modelling suggests a payment of at least $30 a month to every individual in the world could be achieved immediately, reaching $70 by 2050, taking steps to eliminate global absolute poverty in the long term. Such a payment would further help individuals deal with the costs of the climate crisis, including inevitable increases in fossil fuel energy costs in the early years of the scheme.
Addressing Key Challenges
Cap and Share is not the solution to all problems associated with the climate crisis, but it makes a lot of problems easier to solve.
Unlike Cap and Trade systems, which allow companies to buy their way out of compliance, Cap and Share imposes a legally binding cap on all fossil fuel extraction, ensuring actual reductions in emissions. Existing Cap and Trade systems and policies, like the EU’s Emission Trading system (ETS) could be developed into a more progressive system, for example, like the current Citizen’s Initiative led by The Climate Club, calling for proceeds from the ETS to be redistributed back to the EU’s poorest households.
Extractive practices continue to exploit the Global South, diminishing the local ecosystems and communities, all the while continuing to enrich those in the North. To create equitable caps, we propose considering both current and historical emissions, ensuring that past injustices inform present-day policies. This would rectify deep-seated inequalities between the two parts of the world by redistributing wealth to Global South communities as a form of reparations for historical climate debt.
Moreover, the GCF would act as a safeguard for global wealth, providing a stable fund for future generations, while the Universal Basic Income model could support individuals everywhere.
Time for Action
With the clock ticking down to the 2024 United Nations Climate Change Conference (COP29) and the pressure mounting on member states to agree on a New Collective Quantified Goal (NCQG) for climate finance, now is the time for a conversation around how Cap and Share could raise trillions for climate justice and support a just transition for all.
Cap and Share not only offers a roadmap for managing climate impacts but also creates pathways for empowerment. By investing in local communities and addressing the exploitative practices surrounding fossil fuel extraction, we can build a more resilient future.
It’s now the time for decisive action to uplift communities in Africa and beyond.
About Equal Right: Equal Right is a global justice organisation campaigning for climate and economic justice without borders. We research solutions and build movements to achieve global redistribution, tackle global inequalities and secure fundamental human rights for people everywhere. We believe in the ‘Equal Right’ we all have over the global commons and the wealth it generates.
