Why the Climate Moonshot framework
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to create the political will for transformational climate change mitigation
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to align climate action with the national interest and short-term focused political agendas
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to create an international carbon price signal without carbon taxes or emission trading
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to make effective use of governments' broad range of policy tools for mitigation
How the global framework works
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An emission baseline is established for each country. Not binding limits or commitments, only baselines
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A price for carbon saving is established. An example could be $50/t CO2e
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Countries emitting less carbon than their baseline in any year receive a cash payment for every ton saved
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An international fund is created to make these payments, which borrows from private investors for the long-term
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This international fund is backed by participating countries and repays its liabilities through their future financial contributions. The allocation of future liabilities among countries is based on a pre-agreed percentage or formula
Advantages
Aligning climate action with the interest of decision-makers
Decoupling costs from taking action transforms countries’ incentives from free riding to maximising gains
Aligning climate action with the time horizon of decision-makers
The financial burden is pushed into the future, increasing the prospects for action now
Raising capital from private investors to finance the transition
Capital raised by the fund is distributed to countries and helps finance the decarbonisation of their economy
Much stronger political commitment and government action
Governments will be much more likely to act thanks to the short-term financial incentive
Full domestic political and policy flexibility to achieve emission cuts
This is politically attractive and fosters policy innovation
Flexibility of roll-out schedule with countries joining in stages
No need for a simultaneous agreement among all countries, which reduces the risk of delays
No need for an international enforcement mechanism
Countries reducing emissions receive payments, others do not
HFC Facility
The pilot scheme focuses on Hydrofluorocarbon (HFC) emissions
Can demonstrate the viability and benefits of the framework through faster and more straightforward implementation
HFC emissions represent an ideal area for a pilot scheme
Thanks to strong political commitment to reduce HFC emission; to caps under the Kigali Amendment, which could serve as benchmarks for the incentive payments; and to HFC reductions being a very cost-efficient way of reducing greenhouse gas emissions
The pilot scheme could deliver very significant climate benefits
Accelerating HFC reductions beyond the achievements of the Kigali Amendment could cut emissions by the gigatons or tens of gigatons of CO2e by 2050
Limited scope and cost-efficiency curbs financing requirements
Lower financing requirement facilitates implementation and enables a financing solution relying on unilateral donations and investments
