Transcript After the Cancun Agreements: What is the Politically Feasible Path to Comprehensive Targets for Greenhouse Gas Emissions? Jeffrey Frankel Harpel Professor, Harvard Kennedy School Lecture, Boston.

After the Cancun Agreements:
What is the Politically Feasible Path
to Comprehensive Targets
for Greenhouse Gas Emissions?
Jeffrey Frankel
Harpel Professor, Harvard Kennedy School
Lecture, Boston College, March 28, 2011
•
The recent Cancun Conference of the Parties to
the UN Framework Convention on Climate Change
(Dec. 2010) was considered a success,
in part because expectations had been so low.
•
The preceding year’s Copenhagen meeting
(Dec. 2009) was considered a failure, because
expectations had been so high.
2
What is the definition of progress?
It is useless to evaluate negotiations
by whether they produce
a sweeping communiqué,
– such as Bali or G8 agreement
to limit warming to 2°C
• at L’Aquila, Italy, in 2009:
• They are just words.
– Modest targets, if short-term & credible,
are worth far more than aggressive targets,
if long-term & non-credible.
3
Definition of progress?
• Keep in mind the Herculean tasks of bridging
• the gap between rich countries & poor,
• the gap between environmental aspirations
& economic costs that people are willing to pay,
• the gap between what leaders say, &
what commitments are enforceable/credible.
–
• Progress ≡ steps toward specific credible
commitments by a large number of countries.
4
Assume that the climate regime
will continue to follow Kyoto
• Features of the Kyoto Protocol worth building on -– Politics: Quantitative limits maximize national sovereignty
– Economics: Market mechanisms, esp. international permit trading
– Thus (2001) “You’re Getting Warmer: The Most Feasible Path
for Addressing Global Climate Change Does Run Through Kyoto.”
• What was sorely missing from Kyoto:
– Participation by US, China, & other developing countries
– A mechanism for setting targets further into the future, past 2012
– Any reason to expect compliance.
5
Progress
• Most countries (>80) responded to the Copenhagen Accord
in 2010 by submitting plans for reducing emissions.
• By the time of Cancun, 21 countries had
associated themselves with specific quantitative targets
• counting the EU27 as one
• and including 7 big non-Annex-I countries.
• Of course some, like China or US, are vague
• about seriousness of commitment.
• Also India & China’s 2020 target ≈ BAU (Business as Usual).
• But that is not a problem.
6
My Proposal:
formulas for pragmatic targets,
based on what emission paths are possible politically:
• unlike other approaches based purely on:
– Science
(concentration goals),
– Ethics
(equal emission rights per capita),
– or Economics
(cost-benefit optimization).
• Why the political approach?
– Countries will not accept burdens they view as unfair.
– Above certain thresholds for economic costs, they will drop out.
7
“An Elaborated Proposal For Global Climate Policy
Architecture: Specific Formulas and Emission
Targets for All Countries in All Decades” (2009)
suggested a framework
of formulas that produce precise
numerical targets for CO2 emissions in
all regions for the rest of the century,
subject to political constraints:
No country suffers loss (PDV) > Y=1% GDP, by signing up ex ante,
nor in any one period suffers a loss > X=5% GDP, by abiding ex post.
8
“Is it economics?”
• Define economics as maximization
of objectives subject to constraints.
• That applies not just to private agents maximizing
expected utility subject to budget constraints,
• but also to how policy-makers can maximize
objectives subject to political constraints.
• Not the same as what other climate modelers do:
– cost-benefit analysis (Integrated Assessment models),
– or minimizing economic costs subject to
the constraint of attaining a given environmental goal.
9
Maximizing the credibility of agreement,
for any given environmental goal
Credibility of
an agreement,
Vs. probability
that it will unravel because
(e.g.) some key
players find
that complying
imposes huge
economic costs,
relative to
dropping out.
Frankel (2009)
•
•
•
Bosetti & Frankel (2010)
Some proposals
500 ppm
|
450 ppm
|
•
350 ppm
|
Aggressiveness of targeted cut in CO2 concentrations by 2100
10
•
Proposal
Stage 1:
• Advanced countries commit to the post-2012 targets
that their leaders have already announced.
• Others commit immediately not to exceed BAU.
•
Stage 2:
When the time comes for developing country cuts,
targets are determined by a formula incorporating
3 elements, designed so each is asked only to take actions
analogous to those already taken by others:
– a Progressive Reduction Factor,
– a Latecomer Catch-up Factor, and
– a Gradual Equalization Factor.
11
The three factors in the formulas
• Progressive Reduction Factor:
– For each 1% difference in income/cap =>
target is γ % greater emissions abatement from BAU.
• Latecomer Catch-up Factor:
– Gradually close the gap between the latecomer’s starting point
& its 1990 emission levels at λ per year.
(Goal: avoid rewarding latecomers for ramping up emissions).
– Baseline probably now moved from 1990 to 2005.
• Gradual Equalization Factor:
– In the long run, rich & poor countries’ targets converge
in emissions per capita at δ per year. (Goal: equity)
12
Where do the parameters come from?
• They would be negotiated.
• But a good start is to use parameters implicit
in targets that have already been agreed.
• The degree of progressivity in the PRF
can be estimated from observed pattern
– in allocations among countries already agreed (γ=.14).
• We estimated Latecomer Catch-up parameter from the speed
with which US targets close the gap: current vs. 1990 emission levels
– in Lieberman-Warner (2008) & Waxman-Markey bills (2009) => λ =.3 per 5-yr. period.
• Initially we set speed of Gradual Equalization δ=.1, per 5-yr. budget period
(which comes to dominate per capita targets toward the end of the century).
13
Cuts ↑
Percent reduction from 2010 business-as-usual .
The targeted reductions from BAU agreed to at Kyoto
in 1997 were progressive with respect to income.
50%
40%
30%
20%
10%
γ =.14
0%
-10%
-20%
-30%
500
2.699
1,000
2,000
5,000
10,000
20,000
3.699
1996 GDP per capita (1987 US dollars, ratio scale)
50,000
4.699
Incomes →
14
This is how we set the parameter in the Progressive Reductions Factor
The resultant paths for emissions targets,
permit trading, the price of carbon,
GDP costs, & environmental effects
are estimated by means of
the WITCH model of FEEM, Milan,
co-authored & applied by Valentina Bosetti.
15
◙ In 2009 version, CO2 concentrations level off
at 500 ppm in the latter part of the century.
◙ Constraints are satisfied:
-- No country in any one period suffers
a loss as large as 5% of GDP by participating.
-- Present Discounted Value of loss < 1% GDP.
W orld Industrial Carbon Emissions
25
bau
15
10
Sim ulated
Em is s ions
5
0
20
05
20
20
20
35
20
50
20
65
20
80
20
95
GtC
20
Global peak
date ≈ 2035
16
The last completed paper (2010)
co-authored with Valentina Bosetti
was an attempt to see if we could
hit CO2 concentrations = 450 ppm
– by assuming more aggressive parameters in the formulas.
17
Latest study, currently underway (2011)
• updates all the estimates
• to reflect recent developments in
the economy, environment, & negotiations,
– particularly the Copenhagen-Cancun country targets,
– and to reflect new technologies, including
• Wind, separate from solar
• Carbon Capture & Storage (CCS) for gas
• Bio-energy (BE) with CCS in most runs .
• and again tries to attain more aggressive targets.
• “A Politically Feasible Architecture
for Global Climate Policy: Specific Formulas and Emission
Targets to Build on Copenhagen & Cancun”
– with Bosetti
– for the UN.
18
EU27 + 20 other countries
Country
Pledge at COP15
Australia 1, 3
Belarus
Canada
Croatia
Euro 27
Iceland
Greenhouse Gases Emissions (GT CO2-eq) 11
Copenhagen Pledges 12
Excluding LULUCF
LULUCF
Total
1990 2005 2020
1990 2005 2020
1990 2005 2020
LC
HC
LC
HC
LC
HC
LC
HC
0.02
0.00
0.02
0.00
0.02
0.00
0.02
0.00
0.00
0.00
0.06
0.00
0.00
0.07
0.89
0.44
0.14
0.62
0.03
5.59
0.00
1.29
0.36
0.06
0.05
3.38
0.05
0.93
6.18
1.61
0.48
0.13
0.65
0.03
4.47
0.00
0.98
0.31
0.06
0.03
2.83
0.04
0.74
5.90
1.68
0.37
0.13
0.65
0.03
3.91
0.00
0.98
0.31
0.05
0.03
2.50
0.04
0.74
5.90
1.61
11%
-6%
6%
-5%
-20%
-30%
-24%
-16%
-9%
-32%
-16%
-23%
-20%
-5%
4%
-15%
-11%
6%
-5%
-30%
-30%
-24%
-16%
-19%
-42%
-26%
-32%
-20%
-5%
0%
-11%
56%
-16%
-2%
-13%
-36%
-29%
29%
-28%
-36%
31%
-22%
75%
-17%
-34%
-32%
48%
-16%
-2%
-24%
-36%
-29%
29%
-36%
-46%
16%
-31%
75%
-17%
-37%
-23%
29%
-26%
-20%
-27%
-44%
-38%
18%
-37%
-44%
22%
-32%
44%
-28%
-37%
-41%
22%
-26%
-20%
-36%
-44%
-38%
18%
-44%
-52%
8%
-40%
44%
-28%
-40%
-26%
-6%
-34%
19
-30%
-41%
-30%
-34%
-30%
Brazil
-0.97 / -1.05 GtCO2-eq wrt BaU
China
2, 6
reduce carbon intensity of output
by 40-45% wrt 2005
3.72 7.61 10.75
0.04 0.03 -0.28
3.76 7.64 10.47
10.47 10.47
179% 179%
37% 37%
2, 8
reduce carbon intensity of output
by 20-25% wrt 2005
1.33 2.05 2.59
0.05 0.04 0.01
1.38 2.09 2.60
2.60 2.60
89% 89%
24% 24%
Indonesia 1
Mexico 1
South Africa 1
South Korea 1
-26% / -41% wrt BaU
0.45
0.45
0.34
0.30
0.41
0.03
0.00
0.00
0.86
0.48
0.35
0.30
1.20
0.82
0.34
0.55
40%
71%
-2%
84%
-24%
26%
-23%
-18%
-17% wrt 2005
-5% wrt 1990
-20% / -30% wrt 1990
-30% wrt 1990
1
-25% wrt 1990
Japan
Kazakhstan 4
New Zealand 1
Norway
Russian Federation
Switzerland
Ukraine
United States
India
-15% wrt 1992
-10% to -20% wrt 1990
-30% / -40% wrt 1990
1
-15% / -25% wrt 1990
-20% / -30% wrt 1990
-20% wrt 1990
-17% wrt 2005
-51 Mt CO2-eq / -30% wrt BaU
-34% wrt BaU
-30% wrt BaU
0.73
0.61
0.44
0.67
1.13
0.84
0.51
0.79
0.02
0.00
0.04
0.00
0.01
0.00
0.02
0.00
0.00
0.00
0.04
0.00
0.00
0.03
1.45
0.84
0.04
0.00
0.00
0.01
0.00
0.04
0.00
0.02
0.00
0.02
0.00
0.00
0.00
0.01
0.00
0.00
0.00
1.13
0.49
0.03
0.00
0.00
0.54
0.09
0.77
0.03
5.13
0.00
1.38
0.24
0.08
0.05
2.16
0.05
0.42
7.13
2.56
1.57
0.65
0.44
0.67
0.63
0.10
0.88
0.04
6.15
0.00
1.57
0.26
0.09
0.06
2.32
0.06
0.52
8.23
2.66
wrt 2005 (%)
1, 7
-5% / '-10% wrt 1990
0.62
0.10
0.83
0.04
6.13
0.00
1.54
0.26
0.09
0.06
2.31
0.06
0.52
8.23
1.53
wrt 1990 (%)
0.42
0.14
0.59
0.03
5.57
0.00
1.27
0.36
0.06
0.05
3.32
0.05
0.93
6.11
0.72
-5%, -15% to -25% wrt 2000
0.53
0.08
0.73
0.03
5.12
0.00
1.35
0.24
0.08
0.05
2.12
0.05
0.42
7.10
1.11
Target
2011
1.62
0.87
0.51
0.79
0.96
0.61
0.34
0.55
12%
27%
-2%
84%
-39%
-6%
-23%
-18%
wrt BaU (%)
Progressivity in the Cancun numbers
2011
setting “hot air” to 0 for 6 FSU countries
% cut wrt baseline
Cuts ↑
The implicit progressivity coefficient is almost exactly
the
same as the one we had been using: .13 ≈ .14 !
60%
=> external validation of the political economy of approach
a
50%
40%
30%
a
γ =.13
t =3.9
20%
Emissions 10%
targets
for 2020
expressed 0%
vs. BAU
500
R2=.44
Regression line
5,000
50,000
(WITCH model)
GDP per capita
20
Our 11 regions:
• EUROPE =
– Old Europe
– New Europe
+
• US = The United States
• KOSAU = Korea & S. Africa
& Australia (3 coal-users)
• CAJAZ = Canada, Japan &
New Zealand
• TE = Russia & other
Transition Economies
• MENA = Middle East
& North Africa
• SSA = Sub-Saharan Africa
• SASIA= India +
the rest of South Asia
• CHINA = PRC
• EASIA = Smaller countries
of East Asia
• LAC = Latin America
& the Caribbean
21
Figure 2: Global emission targets
resulting from the formulas & parameters
under the 500 ppm goal
Using Cancun targets, near-term cuts are bigger than in our earlier work.
80.00
70.00
BaU
60.00
50.00
40.00
Proposed
Architecture no
BECCS
30.00
20.00
10.00
0.00
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
2055
2060
2065
2070
2075
2080
2085
2090
2095
2100
Energy related CO2 Emission (Gton CO2)
90.00
22
Fig.3: Targets & emissions by OECD countries
under the 500 ppm goal
20.00
BaU
Actual Emissions
15.00
Assigned Amount
10.00
5.00
}
Predicted actual
emissions exceed
caps, by permit
purchases.
0.00
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
2055
2060
2065
2070
2075
2080
2085
2090
2095
2100
Energy related CO2 Emission (Gton CO2)
25.00
23
Fig.4: Targets & emissions, developing countries
under the 500 ppm goal
60.00
50.00
BaU
Actual Emissions
40.00
Assigned Amount
30.00
20.00
}
Predicted actual
emissions fall
short of caps,
by permit sales.
10.00
0.00
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
2055
2060
2065
2070
2075
2080
2085
2090
2095
2100
Energy related CO2 Emission (Gton CO2)
70.00
24
Figure 8: Effect on energy prices,
under 500 ppm goal
400
350
300
250
200
Carbon price climbs steeply in 2nd half of century,
but < earlier estimates, presumably due to new technologies.
Carbon Price per ton CO2
(LHS axis)
3
2.5
$ per gallon motor
gasoline (RHS axis)
2
1.5
150
1
100
0.5
50
0
2000
3.5
0
2020
2040
2060
2080
2100
25
Figure 5: Global economic costs (% of income)
500 ppm goal (without BE-CCS)
2100
2095
2090
2085
2080
2075
2070
2065
2060
2055
2050
2045
2040
2035
2030
2025
2020
2015
2010
2005
Global cost < 1% of income
0.5%
0.0%
GWP Losses
-0.5%
-1.0%
-1.5%
Economic losses
Contemporaneous
Series1 value
Series2
Discounted at 5%
-2.0%
-2.5%
-3.0%
-3.5%
26
Economic cost to each country/region
(Net Present Value of income losses)
• Regional Cost
measured with respect to baseline (no global climate policy)
USA EU KoSAu CaJaZ TE MENA SSA SAsia China EAsia LAm India
0.7% 0.3% 0.7% 0.9% 1.6% 3.1% -0.2% -0.3% 1.2% 0.5% 0.8% 0.2%
• Regional Cost measured with respect to case where
individual country free rides, but coalition continues.
USA EU KoSAu CaJaZ TE MENA SSA SAsia China EAsia LAm India
0.8% 0.4% 0.9% 0.7% 1.2% 1.2% -0.2% 0.1% 1.2% 0.9% 0.7% 0.5%
Cost is particularly high to oil producers – even if they drop out.
But it is almost down to 1% even for them.
27
Figure 7a: Economic losses of each region,
relative to dropping out alone
(% of income) under 500 ppm goal, 2010-2045
0.40%
0.20%
USA
0.00%
EU
-0.20%
2005 2010 2015 2020 2025 2030 2035 2040 2045
KOSAU
-0.40%
CAJAZ
-0.60%
TE
-0.80%
MENA
-1.00%
SSA
-1.20%
-1.40%
Costs stay under 2% of income
during the 1st half of the century.
SASIA
CHINA
-1.60%
EASIA
-1.80%
28
Figure 7b: Economic losses of each region,
relative to dropping out alone
(% of income) under 500 ppm goal, 2050-2090
3.00%
USA
2.00%
EU
1.00%
KOSAU
0.00%
-1.00%
CAJAZ
2050 2055 2060 2065 2070 2075 2080 2085 2090
MENA
-2.00%
SSA
-3.00%
SASIA
-4.00%
-5.00%
-6.00%
TE
CHINA
For every country in every year,
costs stay under 5% of income.
EASIA
29
Figure 11: Path of concentrations
hits the 500 ppm CO2 goal
800
600
500
400
300
200
BaU
Proposed Architecture
with BECCS
100
0
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
2055
2060
2065
2070
2075
2080
2085
2090
2095
2100
CO2 concentrations (ppm)
700
First environmental goal is achieved
30
Figure 12: Rise in Temperature
under the 500 ppm CO2 goal
4.00
3°C vs. 4° C under BAU
3.50
3.00
2.50
BaU
2.00
1.50
Proposed Architecture
with BECCS
1.00
0.50
0.00
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
2055
2060
2065
2070
2075
2080
2085
2090
2095
2100
Temperature increase above preindustrial levels (°C)
4.50
31
Summary
• Our framework allocates emission targets across countries
in such a way that every country feels it is doing its fair share:
– corresponding to what others have done before it,
• taking due account of differences in income,
– and avoiding that any country will bear a cost above threshold.
• Specifically, every country expects cost < 5% GDP in every year,
– and PDV of costs of participating (almost) < 1% of GDP.
• Otherwise, announcements of distant future goals
would not be credible, will not have the desired effects.
– This framework—in providing for a decade-by-decade sequence of emission
targets, each determined on the basis of a few principles and formulas—
– is flexible enough to accommodate changes in circumstances
during the century, by changes in the formula parameters
• as more is learned about climate, economic growth, & technology.
32
Papers available at: http://ksghome.harvard.edu/~jfrankel/currentpubsspeeches.htm On Climate Change
Appendix 3:
More on the current results (2011)
• Details on updating
• Details on the 500 ppm case
• A more aggressive climate mitigation goal
– ≈ 440 ppm
34
Revisions in the WITCH model
• OIL MARKET: is now fully represented.
This increases the cost for oil exporters, & so globally.
• TECHNOLOGIES:
– Gas with CCS is now a technological option,
– Wind is now modeled given latest numbers,
– Bioenergy with CCS can be included.
• DATA: The model has been recalibrated to reproduce
most updated dataset for economy & technology.
• CLIMATE: The climate module has been updated.
– We account better for aerosols.
35
Progressivity in the Cancun numbers
2011
letting the 6 FSU countries keep their “hot air”
Cuts ↑
60%
a
40%
% cut wrt baseline
γ =.16
Emissions
targets
for 2020
expressed
vs. BAU
(WITCH model)
20%
t =3.7
a
R2=.42
0%
500
Regression line
5,000
50,000
-20%
-40%
-60%
GDP per capita
36
How targets are assigned (500 ppm case)
2020
2011
2050
EU
.-30% below 1990 emissions
progress to a 50% below 1990
USA
.-17% below2005
.-83% below 2005
Australia, SAf & SK
.-34% below baseline
.-50% below baseline
Japan, NZ & Canada)
.-25% below 1990
as before
TE
.min(-25% below 1990 or BAU)
.min(-50% below 1990 or BAU)
LAM
BAU
Cap based on parameters
India
BAU
BAU
EASIA
BAU
Cap based on parameters
SASIA
BAU, with REDD
BAU
CHINA
.-8.5% wrt BAU
Cap based on parameters
SSA
BAU, with REDD
BAU
MENA
BAU
Cap based on parameters
37
Figure 6: Global economic costs (% of income)
2011
under 500 ppm goal (with BE & CCS)
-0.5%
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
2055
2060
2065
2070
2075
2080
2085
2090
2095
2100
0.0%
GWP Losses
-1.0%
-1.5%
-2.0%
Present value Losses
Discounted Losses (5%)
-2.5%
-3.0%
-3.5%
38
Figure 10: Global emissions
if only one country drops out,
but cooperation otherwise continues
50
2011
Full Cooperation
45
USA
EU
40
OLDEURO
35
NEWEURO
30
KOSAU
CAJAZ
25
TE
MENA
20
SSA
15
SASIA
10
CHINA
EASIA
5
LACA
0
INDIA
2005 2010 2015 2020 2025 2030 2035 2040 2045 2050 2055 2060 2065 2070 2075 2080 2085 2090 2095
39
2011
How targets are assigned in the aggressive case
(to attain CO2 concentrations of 450 ppm)
2020
2050
EU
.-30% below 1990 emissions
progress to 50% below 1990
USA
.-17% below2005
.-83% below 2005
Australia, SA and SK
.-34% below baseline
.-50% below baseline
Japan, NZ & Canada
.-25% below 1990
as before
TE
.min(-25% below 1990 or BAU)
.min(-50% below 1990 or BAU)
LAM
BAU
Cap based on parameters
India
BAU
Cap based on parameters
EASIA
BAU
Cap based on parameters
SASIA
BAU, with REDD
Cap based on parameters
CHINA
.-8.5% wrt BAU
Cap based on parameters
SSA
BAU, with REDD
BAU
MENA
BAU
Cap based on parameters
40
2011
Figure 15: Global emission targets
under the more stringent goal
120.00
All GHG Emissions Gton CO2 eq
100.00
80.00
60.00
BaU
Proposed Architecture
40.00
20.00
0.00
2005 2015 2025 2035 2045 2055 2065 2075 2085 2095
41
Figure 13: Targets & emissions
among OECD countries
2011
under the more stringent goal
20.00
BaU
15.00
Actual Emissions
10.00
Assigned Amount
5.00
0.00
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
2055
2060
2065
2070
2075
2080
2085
2090
2095
2100
Energy related CO2 Emission (Gton CO2)
25.00
42
Figure 14: Targets & emissions
among developing countries
2011
under the more stringent goal
80.00
70.00
60.00
BaU
Actual Emissions
50.00
Assigned Amount
40.00
30.00
20.00
10.00
0.00
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
2055
2060
2065
2070
2075
2080
2085
2090
2095
2100
Energy related CO2 Emission (Gton CO2)
90.00
43
2011
Figure 16: Emissions in per capita terms,
country by country, period by period
USA
OLDEURO
NEWEURO
20
KOSAU
CAJAZ
15
TE
MENA
10
SSA
SASIA
5
CHINA
EASIA
0
2095
2085
2075
2065
2055
2045
2035
2025
2015
LACA
2005
Per capita Emissions (ton CO2eq per
capita)
25
INDIA
44
2011
Figure 19: Energy costs in stringent case
1400
12
1200
10
1000
8
800
6
Proposed Architecture
without BECCS
4
$ per gallon motor
gasoline RX-Axes
600
400
200
2
0
0
1
3
5
7
9 11 13 15 17 19
45
2011
Figure 17: Global economic costs (% of income)
with BE & CCS
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
2055
2060
2065
2070
2075
2080
2085
2090
2095
2100
under stringent goal
1.0%
0.0%
GWP Losses
-1.0%
-2.0%
Present Values Losses
Discounted Losses (5%)
-3.0%
-4.0%
-5.0%
-6.0%
46
2011
Fig.18a: Economic losses of each region
(% of income) under stringent goal, 2010-2045
2.00%
USA
0.00%
EU
-2.00%
2005
2010
2015
2020
2025
2030
2035
2040
2045
KOSAU
CAJAZ
-4.00%
TE
-6.00%
MENA
-8.00%
SSA
-10.00%
-12.00%
SASIA
CHINA
EASIA
-14.00%
LAM
-16.00%
INDIA
-18.00%
47
2011
Figure 18b: Economic losses of each region,
(% of income) under stringent goal, 2050-2090
20.00%
USA
15.00%
EU
KOSAU
10.00%
CAJAZ
5.00%
TE
0.00%
-5.00%
-10.00%
-15.00%
MENA
2050
2055
2060
2065
2070
2075
2080
2085
2090
SSA
SASIA
CHINA
EASIA
-20.00%
LAM
-25.00%
INDIA
-30.00%
48
Figure 21a: Concentrations of CO2
2011
under the more stringent goal
(including Bioenergy with Carbon Capture & Storage)
800
BaU
600
Proposed Architecture
with BECCS
500
400
300
200
100
2010
2015
2020
2025
2030
2035
2040
2045
2050
2055
2060
2065
2070
2075
2080
2085
2090
2095
2100
0
2005
CO2 Concentrations (ppm)
700
49
Fig.21b: Concentrations of all 6 greenhouse
gases under the more stringent goal
(including Bioenergy and Carbon Capture & Storage)
1000
800
BaU
Proposed Architecture
with BECCS
600
400
200
0
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
2055
2060
2065
2070
2075
2080
2085
2090
2095
2100
GHGs Concentrations (ppm)
1200
50
2011
Figure 22: Rise in Temperature
under stringent concentrations goal, with BE & CCS
4.50
3.50
3.00
2.50
2.00
1.50
BaU
1.00
0.50
Proposed Architecture with
BECCS
0.00
2005
2010
2015
2020
2025
2030
2035
2040
2045
2050
2055
2060
2065
2070
2075
2080
2085
2090
2095
2100
Temperature Increase
4.00
51
Fig. 20: Size of the international emission permit
market
6.00
8.00
7.00
5.00
6.00
4.00
5.00
3.00
4.00
3.00
2.00
2.00
1.00
Carbon market size
(GtCO2)
Carbon market value
(US$ Trillion) RX axis
1.00
2095
2085
2075
2065
2055
2045
2035
2025
2015
0.00
2005
0.00
52
Fig.20b: Permit trade never exceeds
1/3 of baseline for any country,
a desirable property
35%
30%
USA
OLDEURO
25%
NEWEURO
KOSAU
20%
CAJAZ
TE
15%
MENA
SASIA
10%
CHINA
LACA
5%
INDIA
0%
20052010201520202025203020352040204520502055206020652070207520802085209020952100
53
Appendix 4: Future research
• Most important extension: introduce uncertainty, re:
– Economic growth rates
– Technological progress (carbon intensity at a given price)
– Weight placed by political process on enviro objective
• Robustness in design of framework regarding losses:
– Periodic renegotiation of parameters
– & within-decade indexation of numerical targets to GDP.
• Show that the approach is desirable even if the model’s
cost estimates turn out to be too pessimistic
– (or too optimistic),
– because early steps will be very similar regardless.
54
Appendix 5:
Trade
•
Will the global climate regime
collide with the global trade regime?
55
Leakage and lost competitiveness
= what “unfairness” means in rich countries
Could border measures (tariffs, permit requirements for
imports…) give non-participants an incentive to join, and
level the playing field in the meantime?
– Yes, in theory.
– If properly designed, they could even be WTO-consistent,
• building on precedents: Montreal Protocol, shrimp-turtle decision, Brazil
tires, and D-G Lamy speeches (2 Nov., 2009).
– In practice, however, border measures written
by politicians will almost certainly be discriminatory,
WTO-inconsistent, and undermining of climate goals.
56
What form should border measures take?
1. Best choice: multilateral sanctions. (Not likely.)
2. Next-best: national sanctions
adopted under multilateral guidelines
1. Penalties can only be applied by participants-in-good standing
2. Judgments to be made by technical experts, not politicians
3. Penalties only in 6 or 8 of the most relevant sectors (aluminum…).
3. Third: No border measures.
4. Each country chooses carbon tariffs as it sees fit.
5. Worst choice: national measures are subsidies
(e.g., free permits) to adversely affected firms.
57