Jiahua Pan and Ying Chen Research Centre for Sustainable Development, Chinese Academy of Social Sciences

Carbon budget is defined as per capita cumulative emissions during a certain period of time for evaluation or an annual average during an evaluation period. Carbon Budget Proposal (CBP) establishes a threshold for per capita cumulative emissions, which would meet a long-term goal and reflect the differential conditions between countries. Given the fact that some people have already used up their budget while others have substantial surpluses, payment transfer of carbon budget is possible to meet the basic needs for those with deficit and to generate financial resources for low carbon development. Therefore, effective emissions trading would lead to win-win solutions in the fighting against climate change. In this report global target for a 50% reduction by 2050 is used as the absolute limit for global carbon budgeting. Developed countries have already used up all their budget in the past and in the future they will have to rely on transfer payment of carbon budget from the surpluses by their developing counterparts. Developing countries in general have budget surpluses, which can be used as an asset for balancing emissions demand at global level. Such surplus budget can be transferred to the developed countries and in return financial support can be availed for low carbon development. For building an equitable and sustainable global climate regime, the basic elements of this carbon budget proposal can be a sound basis for meeting the long term stabilization target and development needs through international cooperation. CBP methodology can be further elaborated. For instance, diminishing global warming potential of CO2 emitted in the past should be taken into account. The selection of some parameters such as long term target of global mitigation, base year for calculating historical emissions, baseline for developing countries, etc may be subject to political negotiation, but this does not mean that analytical work should wait for the instruction from politicians or negotiators.