Valuing Climate Liabilities: Calculating the Cost of Countries' Historical Damage from Carbon Emissions
This paper proposes an approach for calculating financial climate liabilities for each country based on their historical CO2 emissions. The authors use the idea of an externality, a social cost that has not been borne by the agent whose actions produced it. The paper updates earlier work on calculating carbon debts and adjusts for awareness, calculating the accruing of liabilities only from the time that countries knew that their emissions were harmful. The main scenario produces a clearly quantified liability for each country and a total carbon liability to the world of $34 trillion, or $4,500 per capita. If this liability was used to set climate finance goals, it would suggest OECD countries would need to contribute $190 billion a year to 2100. The analysis also highlights that other individual countries and regions may have higher or lower liabilities, depending on their historical emissions and the assumptions used.
