The emerging pledge and review approach to international climate policy provides countries with substantial discretion in how they craft their intended emission mitigation contributions. The resulting heterogeneity in mitigation pledges places significant demands for a well-functioning transparency and review mechanism. In particular, the specific forms of intended contributions necessitate economic analysis in order to estimate the aggregate effects of these contributions as well as to permit "apples-to-apples" comparisons of mitigation efforts. This paper discusses the tools that can inform such analyses as well as the institutional needs of climate transparency.

In the absence of an effective global agreement to reduce carbon emissions, some industrialized countries have taken unilateral action to reduce emissions. However, unilateral carbon policy can lead to leakage of carbon emissions and precludes abating emissions where such abatement would be least expensive (possibly in other countries). Border carbon adjustment (BCA) is one policy option to mitigate these two disadvantages of unilateral action, but the effectiveness of these measures remains unclear. Comparing the results of simulated carbon policy and BCA in multiple computable general equilibrium (CGE) models of the global economy offers several estimates of the effectiveness of BCA.

Emitting carbon dioxide (CO2 )—and other greenhouse gases—imposes a cost on society because it contributes to damages from climate change. This "social cost" is also known as an "externality," in that the emitter does not bear this cost. The "Social Cost of Carbon" (SCC), then, is the "marginal monetized externality value" of damages from CO2 emissions, where "marginal" refers to the next incremental unit of emissions. As damages from climate change become more evident, it becomes increasingly useful in formulating public policy (especially in connection with attendant benefit-cost analysis of that policy) to employ an SCC—that is, a numerical, non-zero value for climate damages. This paper examines the process in the U.S. government of specifying an SCC.

It is difficult for finance ministers to raise revenue by taxing a firm's mobile capital assets because the costs of relocating that capital in response to tax pressure have been reduced by globalization. Countries compete for this capital by reducing their capital tax rates. Governments are still pressured to provide welfare-enhancing public infrastructure investments despite resulting reductions in revenue.

Carbon taxes are a way to raise revenue without chasing firms abroad because carbon assets are not mobile or evenly distributed geographically. A tax on carbon imports cannot be avoided by relocation as easily as a tax on mobile capital. As a result, finance ministers who may not otherwise care about the environment may favor a carbon tax as a way to finance welfare-improving public investment.

This paper analyses a set of new scenarios for energy markets in Europe to evaluate the consistency of economic incentives and climate objectives. It focuses in particular on the role of natural gas across a range of climate policy scenarios (including the Copenhagen Pledges and the EU Roadmap) to identify whether current trend and policies are leading to an economically efficient and, at the same time, climate friendly, energy mix.

The ability to compare the aspirations and effectiveness of domestic actions to mitigate global climate change is vital to the success of international climate agreements. The current research explores a variety of potential metrics that might facilitate comparison of mitigation effort—and how transparency in policy design can contribute to comparability, accountability, and hence the effectiveness of an international agreement.

During the last ten years, a number of countries and sub-national jurisdictions have started greenhouse-gas emissions trading systems (ETSs), and a number of others are in planning and preparation. There is increasing interest in linking these systems, both directly and indirectly via connections to emissions-reduction-credit (ERC) systems, the largest of which is the Clean Development Mechanism (CDM) under the Kyoto Protocol. This research reviews the evidence of the past decade and finds a number of economic, political, and strategic factors influencing policy decisions about whether or not to link. Because the number of proposed and existing linkages is too small to permit a statistical analysis, we qualitatively identify the determinants of policy decisions involving linkage.

A central question in climate policy is whether early investments in low-carbon technologies are a useful first step towards a more effective climate agreement in the future. We introduce a climate cooperation model with endogenous R&D investments where countries protect their international competitiveness via border carbon adjustments (BCA). BCA raises the scope for cooperation and leads to a non-trivial relation between countries' prior R&D investments and participation in the coalition. We find that early investments in R&D render free-riding more attractive. Therefore, with delayed cooperation on emission abatement and ex-ante R&D investments, the outcome is often characterized by high participation but inefficiently low technology investments and abatement.

Keohane and Victor use the term 'regime complex' to describe the loosely coupled set of regulatory regimes that currently governs international efforts to address climate change. There are functional, strategic, and organizational reasons why a single, unified approach to reducing global greenhouse-gas emissions has failed to emerge thus far and is likely to remain out of reach for the foreseeable future. In this context, a regime complex may be preferable to the next realistic alternative and may even offer advantages in terms of flexibility and adaptability. To be effective, however, a regime complex needs to meet certain functional criteria, which are not being satisfied by the array of climate-change arrangements and institutions that exists today.