"Designing the Next International Climate Agreement"
Op-Ed, RFF Weekly Policy Commentary
September 24, 2007
Authors: Joseph E. Aldy, Faculty Affiliate, Harvard Project on Climate Agreements, Robert N. Stavins, Albert Pratt Professor of Business and Government; Member of the Board; Director, Harvard Project on Climate Agreements
What form should the next international climate policy agreement take? What form can it take? These questions are being hotly debated right now: this week, the UN General Assembly holds a special high-level meeting on climate change and the White House hosts a meeting of 15 developed and developing countries to discuss the post-2012 climate policy framework. The challenge our leaders face lies in creating a robust, long-living policy architecture that can promote broad participation and achieve substantial mitigation of climate change risks in a cost-effective manner. There are valuable lessons to be learned from our experience in designing and implementing the Kyoto Protocol.
Clear strengths and weaknesses have emerged: Kyoto created market-oriented institutions and rules--including international emission trading, broad coverage of emissions sources and sinks, and some temporal flexibility in complying with emissions commitments--that promote cost-effective attainment of emission goals. However, the Protocol provides very weak incentives for participation. The environmental benefits and potential gains from trade are limited because several major emitters either do not have commitments (China and India) or have rejected the agreement (the United States). Requiring developed countries to lead, however, conforms to several notions of equity, including responsibility for climate damage and ability to pay. Finally, the primary focus on emissions abatement may forego some low-cost risk reduction opportunities through coordinated R&D efforts and adaptation policy.
In a 2006 workshop that we held to explore how to design the post-Kyoto policy architecture, six international policy architecture proposals emerged. These form the backbone of our new book Architectures for Agreement: Addressing Global Climate Change in the Post-Kyoto World (published this fall by Cambridge University Press). In our synthesis and review of these proposals, we identified several key themes that should inform the design of the successor to Kyoto.
First, international policy should focus on all avenues of reducing the risks of climate change. A successful climate policy architecture should provide appropriate incentives for countries to carry out risk mitigation through emission abatement, adaptation, and R&D. While there was broad support for market-based implementation of emission abatement goals, especially through cap-and-trade, the question of whether this should be pursued primarily through national and regional efforts or through a global emission trading regime remains open to debate.
Adaptation strategies should center on integrating development efforts and facilitating the transfer of technologies to developing countries that are likely to bear greater damages from a changing climate than the United States. Developing countries could be more inclined to progressive emission commitments in the future if they perceive a stronger connection between climate policy and their economic development.
R&D policies should promote the development of long-term, zero-carbon technologies as well as consideration of geo-engineering solutions, such as deflecting some incoming solar radiation with particles in the upper atmosphere. The results from such research would be a valuable insurance policy if, two or three decades from now, we learn that the climate science of today was wrong - that climate change is much, much worse than we ever thought it could be.
Second, broader participation, especially among the major emitters in the world, must be a high priority in developing the next international climate agreement. The form of participation can and should vary significantly - the Kyoto approach of setting targets as a fraction of 1990 levels will not work for developing countries. In our view, two problems must be addressed before significant progress can be made. Establishing a broader range of commitments on goals and policies--including intensity goals, land-use reform to halt deforestation, and eliminating fossil fuel subsidies as well as emission caps--will encourage participation by allowing countries to acknowledge domestic political constraints. Also, attention must be paid to establishing and/or strengthening institutions for evaluating the comparability of effort across these varying forms of goals. Feasible and politically acceptable steps are necessary because international institutions do not exist to coerce participation and compliance.
Third, an effective climate policy architecture should be flexible enough to adapt to new information about climate science, as well as development, and other economic and technological factors. Continued research on climate science and economics can inform the stringency of policies, and learning about the effectiveness and costs of various policy mechanisms can inform subsequent policy design. This flexible policy framework might also provide the opportunity for fruitful linkages with trade, development, and other policy agendas that could promote broader participation.
The world's first step to address global climate change, in the Kyoto Protocol, was not perfect. The next step does not need to be perfect either, but it ought to be an improvement. To contribute to the effort in designing the next step, we have just launched the Harvard Project on International Climate Agreements. This initiative will draw upon leading thinkers from academia, private industry, government, and non-governmental organizations from around the world to identify key design elements and construct a small set of promising policy frameworks, and then disseminate and discuss the design elements and frameworks with decisionmakers in the United States, Europe, and around the world.
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