Designing Post-2012 International Climate Change Policy

The 2007 UN-sponsored climate change negotiations opened in Bali, Indonesia this week. By the end of the conference on December 14, the world community may agree to a two-year "roadmap,"as called for by the UN Secretary-General, for negotiating an agreement to guide climate change mitigation efforts after the end of the Kyoto Protocol's 2008–2012 commitment period. A number of academics, analysts, nongovernmental organizations and related processes have proposed various ways of moving forward with international climate change policy, including the Pew Center on Global Climate Change’s Dialogue at Pocantico, the UN Foundation and the Club of Madrid’s Global Leadership for Climate Action, and the Centre for Global Studies' L20 concept of engaging the most important developed and developing countries on this issue, which is similar to the Bush Administration's Big Economies process.

Rob Stavins of the John F. Kennedy School of Government and I are leading the Harvard Project on International Climate Agreements to complement these other efforts and to help identify key design elements of a scientifically sound, economically rational, and politically pragmatic post-2012 international policy architecture for global climate change. This project, funded as a part of the Doris Duke Charitable Foundation’s Climate Policy Initiative, builds on the book we co-edited and recently published by Cambridge University Press, Architectures for Agreement: Addressing Global Climate Change in the Post-Kyoto World. The book provides six proposals for international climate policy architectures that span much of the policy space from centralized, top-down regimes akin to the Kyoto agreement to decentralized, bottom-up pledge and review approaches. Summaries of these proposals can be found at the Harvard Project website. The Harvard Project will undertake more analysis and research over the coming year to develop a small menu of promising frameworks and design principles and conduct outreach to inform relevant policymakers in the United States and around the world in late 2008 and 2009. Through the project, we will commission work from scholars in a variety of disciplines, including political science, law, economics, international relations, and the natural sciences from the developed and developing world.

Our focus on delivering new ideas over 2008 reflects the expectation that Bali will simply provide a framework to initiate a new negotiation. The Bali framework will focus efforts to craft a successor to the Kyoto Protocol by the 2009 UN climate change negotiations in Copenhagen. While I do not want to prejudge the outcome of our efforts through the Harvard Project, let me identify three objectives that I believe should be addressed on the road to Copenhagen.

1. The world has changed since 1992; so should our approach to differentiation. The Framework Convention on Climate Change and the Kyoto Protocol differentiate between two categories of countries: Annex I and Non-Annex I. The former, including most industrialized countries, have quantitative emission targets under the Kyoto Protocol, while the latter, primarily developing countries, do not. Many non-Annex I countries argue that they are too poor to take on commitments in the next agreement. But a review of the most recent data on per capita incomes (on a purchasing power parity basis from the Penn World Table ) shows that Romania, the poorest country with a target under Kyoto, now has lower income than more than 50 non-Annex I countries that don’t have targets. More than 110 countries in the world now have higher per capita incomes than the poorest country that agreed to join Annex I in the Framework Convention in 1990 (when the FCCC negotiation process began). The successor to Kyoto should reflect this changed world, and pursue a "variable geometry" of commitments. A more effective climate policy should break the two-class model and allow for greater gradation in commitments among countries.

2. We need to provide better incentives for participation and compliance. The status quo does not require four of the five largest emitting countries in the world to abate their emissions: the United States (1st in emissions) walked away from the Kyoto Protocol, China (2nd) and India (5th) do not have commitments under the agreement, and Russia (3rd) received such a lax target that it will not have to take any action to comply with its commitment. Moreover, there are clear signs now that a number of countries will have problems complying with their Kyoto commitments. Canada’s 2005 emissions of all greenhouse gases including land use change are a whopping 64% above its Kyoto target! Japan’s emissions are 14% above its Kyoto target, although many expect Japan to purchase credits and allowances through the global carbon market established under the agreement to ensure its compliance. The fast-growing periphery countries of the old EU-15 are well above their commitments, despite the generous reallocation within the EU-15 to give these countries more emission allowances. Spain (with an EU reallocated target of 1990+15%) is 39% above its target; Portugal (1990+27%) is 10% above its target; and Ireland (1990+13%) is also 10% above its target. With the large economies not required to abate greenhouse gas emissions and many other countries hard-pressed to comply with Kyoto, the next agreement needs to provide the right incentives for countries to participate more fully and, once they agree to participate, to undertake policies and actions necessary to ensure their compliance.

3. The goal of climate change policy should be to mitigate risks of global climate change. The Kyoto Protocol focuses primarily on emission mitigation. While it is laudable to aim to prevent climate change risks from occurring, we should also pursue policies that recognize that the climate is already changing and will continue to change even with ambitious emission abatement efforts. This suggests that we should also mitigate climate change risks through adaptation, i.e., we need to get used to some climate change. Efforts should be undertaken to facilitate adaptation in the most vulnerable developing countries that lack the resources and capacity to adapt to climate change without such assistance. In some cases, the best form of adaptation may be economic development. In other cases, more focused policies to promote climate-related adaptation may be merited.

An agreement that can address these issues could constitute a meaningful and productive next step after the Kyoto Protocol's first commitment period.