Prospects for the joint implementation of sulphur emission reductions in Europe

Abstract

Joint implementation of sulphur emission reductions may offer parties to the 1994 Oslo Protocol on Further Reductions of Sulphur Emissions the opportunity to meet the obligations contained in the Protocol in a more flexible manner. Sulphur pollution in Europe is characterized by an important spatial dimension and this paper examines how this spatial dimension influences the design of a joint implementation system for sulphur emission reductions in Europe. An original example of a joint implementation system based around emission exchange rates is used to illustrate the difficulties of incorporating the spatial component into an emission exchange system. Simulations of possible transactions support the finding that there is likely to be a trade off between the scope for cost savings and the level of environmental protection offered by joint implementation of sulphur emission reductions in Europe. The paper suggests that a joint implementation system where countries negotiate each transaction on a case by case basis is more likely to be acceptable to all parties to the protocol. This approach offers the greatest flexibility of meeting the interests of the two trading countries and third party nations who may be affected by the transaction. However, it is concluded that the long-term environmental objectives of the protocol and the administrative complexity of such a system may limit the scope for joint implementation of sulphur emission reductions in Europe.