Applying fairness in subnational carbon budget allocations.

Limiting global warming to well below 2 °C requires that countries and subnational regions align their net-zero targets with coherent carbon budgets. While the fair division of the global carbon budget across nations is well studied, we develop a distributive justice framework for allocating a national carbon budget among subnational regions. Grounded in individuals' equal claims to well-being benefits from emissions-generating activities, our framework distinguishes between consumption- and production-based emissions budgets. For consumption-based emissions, we propose a qualified equal-per-capita allocation that accounts for regional basic needs, historical responsibility, and benefits from past emissions. For production-based emissions, we introduce the Equal Transition Opportunity Production-Based Allocation (ETOPA) mechanism, which accounts for heterogeneous regional economic structures and transition risks. Applying our framework to the European Union, we quantify subnational distributions of production- and consumption-based emissions budgets and reflect on their potential to inform political processes and guide equitable carbon-neutral transformations.