DISCUSSION PAPERS
October 2008
"The Case for Charges on Greenhouse Gas Emissions"
"The proposal discussed in this paper is to levy a common charge on all emissions of greenhouse gases, worldwide. All countries would be covered in principle, but the proposal could be implemented with a much smaller number of countries, provided they covered most of the emissions. While all greenhouse gases should in principle be covered, this paper will address mainly carbon dioxide, quantitatively the most important greenhouse gas; extensions to other greenhouse gases could be made with little or (in the case of methane) much difficulty. The charge would be internationally adjusted from time to time, and each country would collect and keep the revenue it generated...."
October 2008
"Sharing the Burden of GHG Reductions"
By Henry D. Jacoby, Mustafa H. Babiker, Sergey Paltsev and John M. Reilly
"The G8 countries propose a goal of a 50% reduction in global emissions by 2050, in an effort that needs to take account of other agreements specifying that developing countries are to be provided with incentives to action and protected from the impact of measures taken by others. To help inform international negotiations of measures to achieve these goals, we develop a technique for endogenously estimating the allowance allocations and associated financial transfers necessary to achieve predetermined distributional outcomes and apply it in the MIT Emissions Prediction and Policy Analysis (EPPA) model. Possible burden sharing agreements are represented by different allowance allocations (and resulting financial flows) in a global cap-and-trade system. Cases studied include agreements that allocate the burden based on simple allocation rules found in current national proposals and alternatives that specify national equity goals for both developing and developed countries...."
October 2008
"An Elaborated Proposal for Global Climate Policy Architecture: Specific Formulas and Emission Targets for All Countries in All Decades"
By Jeffrey Frankel, James W. Harpel Professor of Capital Formation and Growth
This paper offers a detailed plan to set quantitative national limits on emissions of greenhouse gases, building on the foundation of the Kyoto Protocol. It attempts to fill in the most serious gaps: the absence of targets extending as far as 2100, the absence of participation by the United States and developing countries, and the absence of reason to think that countries will abide by commitments. The plan elaborates on the idea of a framework of formulas that can assign quantitative limits across countries, one budget period at a time. Unlike other proposals for century-long paths of emission targets that are based purely on science (concentration goals) or economics (cost-benefit optimization), this plan is based partly on politics.
October 2008
"Setting Priorities in Energy Innovation Policy: Lessons for the UK"
By Jim Watson
This paper analyzes the role of governments in supporting a transition towards more sustainable, low carbon societies, drawing on experience from Europe, the USA and Japan. The paper concludes with five implications for energy innovation policy that are aimed at UK policy, but are also relevant to other countries.
September 2008
"Revised Emissions Growth Projections for China: Why Post-Kyoto Climate Policy Must Look East"
By Geoffrey J. Blanford, Richard G. Richels and Thomas F. Rutherford
Recent growth in carbon dioxide emissions from China's energy sector has exceeded expectations. In a major US government study of future emissions released in 2007, participating models appear to have substantially underestimated the near-term rate of increase in China's emissions. We present a recalibration of one of those models to be consistent with both current observations and historical development patterns. The implications of the new specification for the feasibility of commonly discussed stabilization targets, particularly when considering incomplete global participation, are profound. Unless China's emissions begin to depart soon from their (newly projected) business-as-usual path, stringent stabilization goals may be unattainable. The current round of global policy negotiations must engage China and other developing countries, not to the exclusion of emissions reductions in the developed world and possibly with the help of significant financial incentives, if such goals are to be achieved. It is in all nations' interests to work cooperatively to limit our interference with the global climate.
September 2008
"Linkage of Tradable Permit Systems in International Climate Policy Architecture"
By Judson Jaffe and Robert N. Stavins, Albert Pratt Professor of Business and Government; Member of the Board; Director, Harvard Project on International Climate Agreements
Cap-and-trade systems have emerged as the preferred national and regional instrument for reducing emissions of greenhouse gases throughout the industrialized world, and the Clean Development Mechanism — an international emission-reduction-credit system — has developed a substantial constituency, despite some concerns about its performance. Because linkage between tradable permit systems can reduce compliance costs and improve market liquidity, there is great interest in linking cap-and-trade systems to each other, as well as to the CDM and other credit systems. We examine the benefits and concerns associated with various types of linkages, and analyze the near-term and long-term role that linkage may play in a future international climate policy architecture.
September 2008
"Industrialized-Country Mitigation Policy and Resource Transfers to Developing Countries: Improving and Expanding Greenhouse Gas Offsets"
By Andrew G. Keeler and Alexander Thompson
"The role of developing country commitments and actions to mitigate greenhouse gas emissions is central to worldwide progress in reducing the risks of anthropogenic climate change. Industrialized-country governments and publics are increasingly concerned that their emissions reduction commitments are unrequited by action in some of the world's largest emitters, especially India and China. Developing countries respond by pointing to the historical responsibility of the global North and stressing their desire to avoid measures that could undermine economic development. This paper offers a proposal for partially resolving this impasse by enhancing existing mechanisms for greenhouse gas offsets, which allow rich countries to finance developing country actions and thereby transfer resources to poorer ones...."
September 2008
"Justice and Climate Change"
By Eric A. Posner and Cass R. Sunstein
"Climate change raises complex issues of science, economics, and politics; it also raises difficult issues of justice. Poor nations are especially vulnerable to rising temperatures, in part because they are poor. Wealthy nations have less at risk, in part because they are wealthy. It is both tempting and plausible to suggest that for either emissions reductions or adaptation, wealthy nations owe special obligations to poor ones. In this paper, we address this general question by focusing on a much narrower one: how should permits be allocated in a global cap-and-trade system?"
September 2008
"A Proposal for the Design of the Successor to the Kyoto Protocol"
By Larry Karp and Jinhua Zhao
"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."
August 2008
"The EU Emission Trading Scheme: A Prototype Global System?"
"The European Union's Emission Trading Scheme (EU ETS) is the world's first multinational cap-and-trade system for greenhouse gases. As an agreement between sovereign nations with diverse historical, institutional, and economic circumstances, the EU ETS can be seen as a prototype of an architecture for an eventual global climate regime."
