Reports & Papers

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.

A successful global effort to mitigate global climate change will require substantial cooperation between developed and developing countries. Even as the bulk of the developed world is at some stage of enacting significant domestic regulations to meet global stabilization goals, growth in developing country emissions will easily thwart those goals unless a cooperative solution is found. We argue that there is a wide range of options that should be pursued, including domestic policy reforms in developing countries, expanded financing mechanisms to address incremental costs, and diplomatic efforts in a variety of forums, all aimed at increasing developing country mitgation efforts over time.