Sustainable Cooperation in Global Climate Policy: Specific Formulas and Emission Targets to Build on Copenhagen and Cancun

Abstract

We offer a framework to assign quantitative allocations of emissions of greenhouse gases (GHGs), across countries, one budget period at a time. Under the two-part plan: (i) China, India, and other developing countries accept targets at Business as Usual (BAU) in the coming budget period, the same period in which the US first agrees to cuts below BAU; and (ii) all countries are asked in the future to make further cuts in accordance with a common numerical formula to all. The formula is expressed as the sum of a Progressive Reductions Factor, a Latecomer Catch-up Factor, and a Gradual Equalization Factor. This paper builds on our previous work in many ways. First we update targets to reflect pledges made by governments after the Copenhagen Accord of December 2010 and confirmed at the Cancun meeting of December 2011. Second, the WITCH model, which we use to project economic and environmental effects of any given set of emission targets, has been refined and updated to reflect economic and technological developments. We include the possibility of emissions reduction from bio energy (BE), carbon capture and storage (CCS), and avoided deforestation and forest degradation (REDD+) which is an important component of pledges in several developing countries. Third, we use a Nash criterion for evaluating whether a country's costs are too high to sustain cooperation.

This paper extends earlier research by Bosetti and Frankel published in two Harvard Project on Climate Agreements Discussion Papers: "Global Climate Policy Architecture and Political Feasibility: Specific Formulas and Emission Targets to Attain 460 PPM CO2 Concentrations" and "An Elaborated Proposal for Global Climate Policy Architecture: Specific Formulas and Emission Targets for All Countries in All Decades."

In pursuit of a workable successor to the Kyoto Protocol on Global Climate Change, this study offers a framework of formulas that produce precise numerical targets for emissions of carbon dioxide (CO2) and other greenhouse gases, in all regions of the world in all decades of this century. The formulas are based on pragmatic judgments about what kind of cooperation is sustainable. The reason for this approach is the authors‘ belief that many of the usual science-based, ethics-based, and economics-based paths are not viable in practice. Successor governments will not be able politically to abide by the commitments that today's leaders make, if those commitments become excessively costly relative to a strategy of dropping out.

If unraveling in a future decade is foreseeable at the time that long-run commitments are made, then those commitments will not be credible from the start. Firms, consumers, and researchers base their current decisions to invest in plant and equipment, consumer durables, or new technological possibilities on the expected future price of carbon: If government commitments are not credible from the start, then they will not raise the expected future carbon price....

Valentina Bosetti, Fondazione Eni Enrico Mattei

Jeffrey Frankel, Harvard Kennedy School