Transcript The Future of Mitigation Commitments

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Beyond Kyoto
Climate Commitments:
Assessing the Options
Prepared for the Pew Center on Global
Climate Change by
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Daniel Bodansky
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Why commitments?
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Climate change mitigation is a collective
action problem
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– Climate change mitigation provides a public
good: benefits shared by everyone
– But the country undertaking mitigation gets
only small fraction of benefits
> No incentive to act unilaterally
– Action makes sense only if reciprocated by
other states
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The role of commitments
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• Commitments provide some assurance
that others will act
• Even in absence of any “enforcement,”
countries feel pressures to comply with
commitments
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– Internalization of commitments: domestic
legal and political pressure to comply
– External pressure:
•Reputation internationally
•Public opinion
The Three W’s:
What, When and Who?
• What should be the commitments?
• Who should be subject to commitments?
• When should commitments apply?
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What? – Legal form
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• Binding vs. non-binding
– Non-binding “commitments”
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•Example: UNFCCC art. 4.2
– One-way (“no lose”) “commitments”
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•Analogy: CDM baselines
– Legally-binding commitments
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•Example: Kyoto targets and timetables
– Enforceable commitments
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What?: Substantive content
Types of Policy Instruments
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• Emission targets
(“obligations of result”)
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Absolute targets
Dynamic targets
Conditional targets
Sectoral targets
• Policies and measures
(“obligations of
conduct”)
– Technology and
performance standards
– Taxes
– Subsidy removal
– Emissions trading
– Technology R & D and
incentives
What?: Examples
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Targets
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Policy Instrument
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Absolute
Dynamic
Conditional
Sectoral
PAMs
UNFCCC
target
Kyoto
targets
Kyoto, Art. 2
Tech standards
Taxes
Subsidies
ET
R&D
Non-binding
commitments
One-way
Legallybinding
Enforceable
Non-binding vs. binding
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When?
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• When will commitment period begin?
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– If too far in future, lacks credibility
– If too near-term, then inefficient: premature
capital retirement
• How long will commitment period last?
– Indefinite duration: continues until modified
or terminated
– Fixed duration
•Example: Kyoto: 5 years
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Who?
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• Ways to differentiate
commitments
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– Different stringency
– Different time frames
– Binding vs. nonbinding
– Fixed vs. conditional
• Bases for
differentiation
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Current emissions
Historical emissions
Wealth/capacity
Like-minded states
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Assessment criteria
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• Policy
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– Environmental effectiveness • Leakage
• Effect on
– Cost effectiveness
technology
– Equity
change
– Dynamic flexibility / scalability • Education,
public
– Complementarity
• Politics
– Negotiability
– Enforceability
awareness
• Enforceability
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Assessment criteria
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• Policy
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– Environmental effectiveness
– Cost effectiveness
– Equity
– Dynamic flexibility / scalability
– Complementarity
• Politics
– Negotiability
– Enforceability
•Market based
approaches
•Flexibility:
•Where
•When
•What
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Assessment criteria
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• Policy
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– Environmental effectiveness
•Equity both
•End in itself
– Cost effectiveness
•Important
– Equity
factor in what
– Dynamic flexibility / scalability
is politically
acceptable
– Complementarity
• Politics
– Negotiability
– Enforceability
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Assessment criteria
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• Policy
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– Environmental effectiveness
– Cost effectiveness
– Equity
– Dynamic flexibility / scalability
– Complementarity
• Politics
– Negotiability
– Enforceability
•Ease of revision
in light of new
scientific and
economic
information
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Assessment criteria
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• Policy
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– Environmental effectiveness
•Possibility of
– Cost effectiveness
fragmented
– Equity
regime
– Dynamic flexibility / scalability •Potential
linkages between
– Complementarity
• Politics
– Negotiability
– Enforceability
systems
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Assessment criteria
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• Policy
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– Environmental effectiveness
– Cost effectiveness
• Continuity with
Kyoto
– Equity
• Economic
– Dynamic flexibility / scalability predictability
• Compatibility with
– Complementarity
• Politics
– Negotiability
– Enforceability
development
priorities
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Assessment criteria
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• Policy
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– Environmental effectiveness
– Cost effectiveness
– Equity
– Dynamic flexibility / scalability
– Complementarity
• Politics
– Negotiability
– Enforceability
• Ease of
monitoring
• Adequacy of
domestic legal
system
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Specific options
• Kyoto-like targets
• Dynamic national targets
• Sectoral targets
• Hybrid targets
• Non-binding targets for
developing countries +
graduation criteria
• Efficiency, technology
standards
•R&D
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Specific options: Kyoto targets
• Kyoto-like targets
• Dynamic national targets
• Sectoral targets
• Hybrid targets
• Non-binding targets for
developing countries +
graduation criteria
• Efficiency, technology
standards
•R&D
Pros
 Environmental
effectiveness
 Cost-effectiveness
 Equity
 Scalability
 Continuity
Cons
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Economic uncertainties
Rigidity
Negotiability
Incompatibility with
development
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Specific options: Dynamic targets
• Kyoto-like targets
• Dynamic national targets
• Sectoral targets
• Hybrid targets
• Non-binding targets for
developing countries +
graduation criteria
• Efficiency, technology
standards
•R&D
Compared to Kyoto:
Pros
 Greater flexibility
 Easier to negotiate
Cons
 Less environmental
certainty
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Specific options: Sectoral targets
• Kyoto-like targets
• Dynamic national targets
• Sectoral targets
• Hybrid targets
• Non-binding targets for
developing countries +
graduation criteria
• Efficiency, technology
standards
•R&D
Compared to Kyoto
Pros
 Incremental > easier
to negotiate
 Easier to monitor
Cons
 Less efficient
 Competitiveness,
equity concerns
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Specific options: Safety valve
• Kyoto-like targets
• Dynamic national targets
• Sectoral targets
• Hybrid targets: safety valve
• Non-binding targets for
developing countries +
graduation criteria
• Efficiency, technology
standards
•R&D
Compared to Kyoto
Pros
 Greater economic
certainty
 Could generate
development funds
Cons
 Less environmental
certainty
 Looks like a tax >
politically
unacceptable?
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Specific options: Non-binding targets
• Kyoto-like targets
• Dynamic national targets
• Sectoral targets
• Hybrid targets
• Non-binding targets for
developing countries +
graduation criteria
• Efficiency, technology
standards
•R&D
Attractive first step for
developing countries??
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Specific options: Tech standards
• Kyoto-like targets
• Dynamic national targets
• Sectoral targets
• Hybrid targets
• Non-binding targets for
developing countries +
graduation criteria
• Efficiency, technology
standards
•R&D
Pros
 Don’t need universal
acceptance
 Self-enforcing
 Easy to monitor
Cons
 Limit flexibility
 Less efficient
 Potential lock-in of
inefficient
technologies
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Specific options: R & D
• Kyoto-like targets
• Dynamic national targets
• Sectoral targets
• Hybrid targets
• Non-binding targets for
developing countries +
graduation criteria
• Efficiency, technology
standards
•R&D
 Government track
record on R & D mixed
 But useful add-on to
other commitments
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Conclusions
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• One size may not fit all
• If commitments variegated, they should
be as complementary as possible
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– Ensure adequate level of effort overall
– Mix of commitments should be, broadly
speaking, equitable
– Promote linkages between systems