Climate Justice

Cap and share
for climate justice without borders

Our atmosphere is global. CO2 pollution, most of which takes place in the Global North, has severe impacts in the Global South. Climate justice, a concept developed within Black and Indigenous climate movements, demands action that acknowledges this imbalance and provides redress to the Most Affected People and Areas (MAPA). Crucially, this redress must be paid for - where could the money come from?

Equal Right is working with partners around the world to co-create a potential solution - Cap and Share - which would directly control fossil fuel extraction and return extracted wealth to communities all over the world. Cap and share is an international mitigation and climate finance system that could underpin wider climate justice initiatives and support a just and radical green transformation.

Several models for cap and share exist, all with slightly different emphasis and benefits. Our cap and share proposal, produced in partnership with Autonomy, is described and modelled in our discussion paper, 'Climate Justice Without Borders: Cap and share as a mitigation and climate finance solution'. For a summary, read the media coverage here or click the buttons below to read our briefing in English, French or Spanish.

CLIMATE JUSTICE WITHOUT BORDERS

How Cap and Share can end fossil fuel extraction and raise trillions for climate finance

Cap

  • On the maximum amount of fossil fuel that can be extracted, lowered each year until it reaches zero

  • Set by international agreement and informed by climate experts depending on the world’s remaining carbon budget

  • Legally binding with penalties for companies or countries exceeding it

  • Fossil fuel companies would apply for permits to extract fossil fuel within cap limits

Charge

  • Fossil fuel companies pay a charge for every tonne of CO2 equivalent they extract

  • Our models includes a cap at 2022 extraction rates and a charge of $135 per tonne, increasing every year by 16%

  • This delivers just under $5 trillion in its first year of operation (Figure 1)

Fund

  • A democratically-operated Global Commons Fund (GCF) with money raised from the charge

  • The GCF would invest in a green, just transition and build sustainable, intergenerational wealth

  • At least $1 trillion annually to climate grants for mitigation, adaptation and loss and damage for developing countries and MAPA1 communitie

Share

  • Dividends from the GCF are paid to all citizens of the world as a Universal Basic Income

  • This could eliminate global poverty by 2050 and help individ

Cap and Share makes it easier to end extraction, reduce emissions, end dependency on fossil fuels and keep us on a pathway to 1.5° with no offsets, credits, trading, geoengineering or other false solutions.

Cap and Share redistributes wealth to countries and people in the Global South and would act as reparation for centuries of climate debt, colonial exploitation and unequal exchange.

The Global Commons Fund would build intergenerational wealth for all people of the world, tackling inequality, building resilience within vulnerable communities and protecting future generations from global crises.

The Universal Basic Income paid by the GCF is a vital component of a just transition, supporting costs associated with workers moving out of the fossil fuel industry, households installing renewables, and compensating for loss, damage and displacement.

Cap and Share is more powerful than Cap and Trade (and similar policies):

Cap and Share taxes all fossil fuel extraction, not just any amount over the ‘cap’

The cap in Cap and Share is legally binding, rather than just a charge when companies go over it

In Cap and Share, no offsets, trades or swaps of pollution or emissions credits are allowed, and the cap would progressively decline until no new fossil fuel is extracted

Cap and Share involves direct distribution of the carbon charge proceeds to citizens (there is no inherently distributive element to Cap and Trade)

Cap and Share can be integral to achieving the aims of the Paris Climate Agreement and supporting the framework for the New Collective Quantified Goal (NCQG).

It moves the conversation on climate finance beyond countries’ contributions, extends the burden of cost to polluters, directs trillions to the Global South, and ensures all countries benefit from cash payments and investments in the Green Economy.

Make Cap and Share happen.

This is a global vision, but a union of two or more countries, which agree to levy a charge on fossil fuel extraction or imports and share the proceeds in a bilateral fund, could also work. This would be best implemented between Global North and Global South countries (for example, Denmark and Colombia) to address climate debt and provide climate finance. This would be an important step towards full Cap and Share.

Cap and Share is a bold and ambitious proposal, but no less than what we need to achieve climate justice. Help us make it happen. View our full policy document here.

'How to fund climate justice' paper and ‘Cap and Share Climate Alliance’ launch

Launch of the new Cap and Share Climate Alliance, followed by a presentation and discussion on the Equal Right paper "Climate Justice Without Borders".

Our work on cap and share is carried out alongside partners via the Cap and Share Climate Alliance. To find out more or work with us please email Syd Chisi climate@equalright.org  or the wider team info@capandsharealliance.org

Keeping fossil fuels
​in the ground

Fossil fuels are the primary cause of climate change. To have any chance of keeping global temperatures at safe levels, we need to keen most remaining fossil fuels in the ground.

In a cap and share system, the 'cap' is a legal limit on fossil fuel extraction which shrinks every year towards zero. Fossil fuel extraction companies would be required to apply for (and pay for) a licence for every tonne of coal, barrel of oil or cubic metre of gas they extract. The amount of available licences would shrink each year (we model shrink rates of 5%, 10% and 15%), so more and more licence applications would be refused. This would gradually force the closure of coal mines and oil wells, starting with the most unethical and polluting sites.

By targeting extraction, the cap would ensure that most fossil fuels never enter the economy, so could not become the source of carbon emissions. This is the simplest and safest way to ensure that carbon emissions drop to safe levels - keeping fossil fuels in the ground.

A global green new deal

To replace fossil fuel energy, we need a massive scale-up in renewables, as well as transformations in how me manage our construction, transport and food systems. A global Green New Deal will be vital - massive public spending in every country to create the infrastructure for a green economy.

  • Cap and share could provide a key part of the answer. In our proposed cap and share system, the trillions of dollars raised each year through fossil fuel licence fees would land in a people-owned international fund. This fund would invest the money in a global Green New Deal, via concessional lending and direct investment in green infrastructure. Democratically-designed prioritisation criteria would ensure that the countries most in need of investment would be first in line.

A global Green New Deal, funded in this way, would provide millions of new green jobs for people all over the world. It would also ensure that our new energy system, and much of our wider economy, is owned by the people and directed to the public good. People's ownership of the fund and its investments would also mean that any profits made are returned to us all, as equal global citizens, reducing global inequality and providing basic income security for people everywhere.

To find out more about how an international people's fund could enable a global Green New Deal, see our paper.

Economic justice ​for the people

Climate change is an emergency largely because of how it is experienced by people, and the extreme losses and hardships that many are suffering as a result. Economic justice is therefore a key aspect of climate justice: activists demand reparations from the countries, companies and people that have caused the crisis, and redistribution of wealth and income to ensure that the green transition is just and equitable.

The 'share' aspect of our cap and share proposal aims to respond to these demands. Once money has been collected as licence fees from fossil fuel companies, and then invested in a global Green New Deal via our people-owned fund, several trillion dollars will be available every year. This money would be shared with the people of the world in two ways:

  • Firstly, a climate grants fund of at least $1 trillion per year would be established, to provide reparations to the Most Affected People and Areas (MAPA) in the form of community and project grants. This ensures that climate funding for these communities is provided as grants, not loans, and would enable people to choose and develop the infrastructure and services that they most need in the face of the crisis.

  • The rest of the money would be redistributed directly to the global grassroots, via a monthly cash dividend to every adult and child in the world (or to people in participating countries, when the system is applied by a few countries or regions acting together). These dividends would provide basic income security for people everywhere, end extreme income poverty permanently, and significantly reduce global inequality.