This paper proposes an objective way of estimating and allocating “differentiated” responsibilities for carbon emissions across countries. These responsibilities translate into specific obligations and incentives for future emission reductions and support for adaptation, mitigation, and development. The proposals in this paper should be seen as a starting point for an informed and productive debate. Under the Global Carbon Reduction Incentive, every country that emits more than the per capita global average pays into a global incentive fund. This annual payment will be calculated based on the “excess” emissions per capita, the country’s population, and a dollar amount called the Global Carbon Incentive. Countries below the global per capita average would receive a payout commensurate with their “under-emission.” The United States and China are the two biggest emitters and, assuming a Global Carbon Incentive of $10, they jointly would contribute more than $70 billion to the fund, from which nations such as India, Nigeria, Pakistan, Bangladesh, and Indonesia would be the major recipients.
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