Research

The authors explore several approaches to an ambitious climate agreement in Paris in late 2015—including through carbon pricing.

Economics are an essential part of understanding climate change and for developing solutions to it. Robert Stavins and Rohini Pande focused on that idea at a Harvard Kennedy School "IDEASpHERE" event titled "Harnessing Market Forces to Protect the Climate."

The outcome of the December 2011 United Nations climate negotiations in Durban, South Africa, provides an important new opportunity to move toward an international climate policy architecture that is capable of delivering broad international participation and significant global CO2 emissions reductions at reasonable cost. This paper addresses an important component of potential climate policy architecture for the post-Durban era: links among independent tradable permit systems for greenhouse gases.

"A successful international climate policy framework will have to meet two conditions, build a coalition of countries that is potentially effective and give each member country sufficient incentives to join and remain in this coalition. Such coalition should be capable of delivering ambitious emission reduction even if some countries do not take mitigation action. In addition, it should meet the target without exceedingly high mitigation costs and deliver a net benefit to member countries as a whole. The novel contribution of this paper is mostly methodological, but it also adds a better qualification of well-known results that are policy relevant."

In pursuit of a workable successor to the Kyoto Protocol, this study offers a framework of formulas that produces 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....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.

This paper proposes a new architecture for international climate policy that might usefully be considered by delegates at COP 17 in Durban. It highlights a top-down approach that is designed to produce a fair distribution of burdens across countries, while achieving objectives of: (a) economic development; (b) decreasing wealth inequality; and (c) emission reductions consistent with holding the expected increase in global average temperature to 2 degrees Celsius. In addition, this discussion paper discusses several key design elements that will be important, especially from the perspective of developing countries, to the success of COP 17 and subsequent international climate negotiations. These design elements include agreements on burden sharing, choice of policy instruments, financial mechanisms and technology transfer, penalties for noncompliance, and linkages between trade and climate change.

Expanding energy access to the rural population of India presents a critical challenge for its government. The presence of about 364 million people without access to electricity and about 726 million who rely on biomass for cooking indicate both the failure of past policies and programs, and the dire need is for a radical redesign of the current system that will address the need to expand energy access for these people.