"The successor to the Kyoto Protocol should impose national ceilings on rich countries' greenhouse gas emissions and promote voluntary abatement by developing countries. Our proposal gives signatories the option of exercising an escape clause that relaxes their requirement to abate. This feature helps to solve the participation and compliance problems that have weakened the Protocol. We support the use of carefully circumscribed trade restrictions in order to reduce the real or perceived problem of carbon leakage."
This paper proposes a design for a post-2012 international climate agreement (Kyoto II) to follow the Kyoto Protocol. The proposed design would impose national limits on rich countries' greenhouse gas emissions and promote voluntary abatement by developing countries. It includes two new features aimed at promoting participation and compliance and addressing concerns about carbon leakage: (1) an escape clause that would give signatories the option to reduce their abatement requirements in exchange for a penalty and (2) the use of trade restrictions.