Success in upcoming climate negotiations will require a clear-eyed view of the relationship between emissions targets and equity goals.  This paper uses the MIT Emissions Prediction and Policy Analysis (EPPA) model to estimate the welfare and financial implications of various distributional and emissions reduction outcomes.  The results indicate that a target of reducing global emissions by 50% by 2050 while meeting equity targets is extremely ambitious, and would require large financial transfers from developed to developing countries.

This proposal builds on the foundations of the Kyoto Protocol, but strengthens it in important ways. It attempts to solve the most serious deficiencies of Kyoto: the absence of long-term targets, the absence of participation by the United States and developing countries, and the lack of motivation for countries to abide by their commitments. Although there are many ideas to succeed Kyoto, virtually all the existing proposals are based either on science (e.g., capping global concentrations at 450 ppm) or on the economics (weighing the economic costs of aggressive short-term cuts against the long-term environmental benefits). This plan for emissions reductions is more practical because it is partly based on politics, in addition to science and economics.

This paper presents updated global emissions projections after taking into account recent trends in China. The results suggest that even the most up-to-date international forecasts may still underestimate potential emissions growth, especially among developing countries.

Developing country participation is an increasingly contentious issue—and a potential deal-breaker—in current efforts to forge new international agreements for addressing climate change. Emissions offsets, which allow rich countries to finance mitigation actions in developing countries, may offer a partial solution to the current impasse. This paper proposes a more expansive approach to offsets that would meet the different objectives of industrialized and developing countries while providing substantial support for long-term investments and policy changes to reduce greenhouse gas emissions in the developing world.

Climate change raises difficult issues of justice, particularly with respect to the distribution of burdens and benefits among poor and wealthy nations. To illuminate these issues, this paper focuses on the narrower question of how to allocate greenhouse gas emission rights within a future international cap-and-trade system. In particular, it highlights shortcomings in an approach that is often advanced on fairness grounds: a per capita allocation in which emissions permits are distributed to nations on the basis of population.

This paper proposes a design for a post-2012 international climate agreement (Kyoto II) to follow the Kyoto Protocol. The proposed design would impose national limits on rich countries' greenhouse gas emissions and promote voluntary abatement by developing countries. It includes two new features aimed at promoting participation and compliance and addressing concerns about carbon leakage: (1) an escape clause that would give signatories the option to reduce their abatement requirements in exchange for a penalty and (2) the use of trade restrictions.

As the world's first multi-national cap-and-trade system for regulating greenhouse gas (GHG) emissions, the European Union's Emission Trading Scheme (EU ETS) can be seen as a prototype for an eventual global climate regime. This paper draws on the first four years of experience with the EU ETS to develop insights about the challenges that can be expected to emerge in a broader program and to suggest potential solutions.

A successful climate change regime must secure sufficient participation, achieve agreement on meaningful rules, and establish mechanisms for compliance. Moreover, it must do so in a political environment of sovereign states with differing preferences and capabilities. Section I addresses the trade-off between participation and strictness of rules by proposing an "economy of esteem for climate change," in which participation is encouraged by a system of prizes for politicians who take leadership on this issue. The bulk of the paper focuses on compliance, arguing that contrary to current provisions in the Kyoto Protocol, only a system of buyer liability (rather than seller or hybrid liability) is consistent with existing political realities. Drawing analogies to international bond markets, we propose a system of buyer liability that would endogenously generate market arrangements, such as rating agencies and fluctuations in the price of emissions permits according to perceived risk. These features would in turn create incentives for compliance without resorting to ineffective inter-state punishments.