International Climate Negotiations Research Articles

China, the United States and Technology Cooperation on Climate Control

The U.S. and China are the world's largest and second largest CO2 emitters, respectively, and to what extent the U.S. and China get involved in combating global climate change is extremely important both for lowering compliance costs of climate mitigation and adaptation and for moving international climate negotiations forward. While it is unavoidable that China will take on commitments at some specific point of time in the future, this paper has argued that the proposal for joint accession by the U.S. and China is not a way forward. For various reasons, such a proposal is in the U.S. interest, but is not in the interest of China. Given the U.S. political reality and institutional settings on the one hand and China's over-riding concern about economic growth and poverty reduction on the other, the two countries are unlikely to take on emissions caps under an international regime, at least for the time being. Therefore, we need to explore the area where cooperation between the two countries to address climate change seems best. The research, development and deployment of clean technology is the area that is in the best interests of the two countries. The U.S. has adopted a technology-oriented approach to climate issues, and has launched the four multilateral initiatives on technology cooperation and the Asia Pacific Partnership for Clean Development and Climate (APP). China has participated all these U.S.-led initiatives, and is a partner to the APP. Strengthened technology cooperation between the two countries through these initiatives and the APP has led some tangible benefits. However, it should be pointed out that while technology is a critical ingredient in a climate policy package, efforts such as the APP can only be part of the solution. They alone cannot ensure that best available technologies are always deployed in the marketplace, and that new technologies will roll out at the pace and on the scale that we need. In order to have such technology-oriented approach to play a full role, we do need a coordinated policy framework agreed via the Kyoto Protocol or a follow-up regime or the parent United Nations Framework Convention.

On the importance of equity in international climate policy: An empirical analysis

Based on unique data from a world-wide survey of people involved in international climate policy, this paper empirically analyzes the importance of equity in this field. We find that equity issues are considered highly important in international climate negotiations and that the polluter-pays rule and the accompanying poor losers rule are the most widely accepted equity principles. Our econometric analysis shows a strong influence of the economic or emission performance of the respondents’ country on the importance of equity issues and principles: (i) Equity issues are seen as more important by individuals from G77/China countries or from countries with less current per capita GDP and less future per capita CO 2 emissions. (ii) Persons from richer countries are less in favor of incorporating the polluter-pays and the ability-to-pay principle in future international climate agreements. (iii) The poor losers rule is more strongly supported by individuals from G77/China countries or by individuals from countries with less current per capita GDP. While these results are compatible with pure economic self-interest, the support for the egalitarian principle runs contrary to economic intuition: In the long-run, persons from richer countries are more in favor of incorporating the egalitarian principle. Furthermore, the effect of the economic performance variables on the desired degree of incorporating the polluter-pays principle interestingly becomes less significant in the long-run. This indicates that future international climate agreements could possibly be based on a combination of the polluter-pays, the egalitarian, and the poor losers rule.

A Report on the International Conference on Climate Policy After Marrakech: Towards Global Participation

The East-West Center convened the international conference on climate policy in Honolulu, Hawaii, on September 4-6, 2003. Sponsored by the Dutch Ministry of Housing, Spatial Planning and the Environment, the Japanese Ministry of the Environment, Industrial Technology Research Institute (Taiwan), and Institute for Global Environmental Strategies (Japan), this major event covered almost every important issue and featured perspectives from the most important parties and stakeholders in formulating and implementing climate policies and taking international climate negotiations further. It brought together a remarkable cross-section of world opinion on climate policy after Kyoto. This report provides a summary of each presentation and highlights discussions organized under the following six session headings: Session 1: Climate Change in Focus - From Science to Policy; Session 2: U.S. Climate Policy and Perspectives; Session 3: European Union Climate Policy and Perspectives; Session 4: Challenges for other Major Industrialized Countries; Session 5: Issues Related to Developing Countries; and Session 6: Panel Discussions: Where Do We Go from Here?.

A Report on the International Conference on Climate Policy after Marrakech: Towards Global Participation

The East-West Center convened the international conference on climate policy in Honolulu, Hawaii, on September 4–6, 2003. Sponsored by the Dutch Ministry of Housing, Spatial Planning and the Environment, the Japanese Ministry of the Environment, Industrial Technology Research Institute (Taiwan), and Institute for Global Environmental Strategies (Japan), this major event covered almost every important issue and featured perspectives from the most important parties and stakeholders in formulating and implementing climate policies and taking international climate negotiations further. It brought together a remarkable cross-section of world opinion on climate policy after Kyoto. This report provides a summary of each presentation and highlights discussions organized under the following six session headings: Session 1: Climate Change in Focus – From Science to Policy; Session 2: U.S. Climate Policy and Perspectives; Session 3: European Union Climate Policy and Perspectives; Session 4: Challenges for other Major Industrialized Countries; Session 5: Issues Related to Developing Countries; and Session 6: Panel Discussions: Where Do We Go from Here?.

On the Importance of Equity in International Climate Policy: An Empirical Analysis

Based on unique data from a world-wide survey of agents involved in international climate policy, this paper empirically analyzes the importance of equity in this field. We find that equity issues are considered highly important in international climate negotiations and that the polluter-pays rule and the accompanying poor losers rule are the most widely accepted equity principles. Our econometric analysis shows a strong influence of the economic or emission performance of the agents' country on the importance of equity issues and principles: (i) Equity issues are seen as more important by individuals from G77/China countries or from countries with less current per capita GDP and less future per capita CO2 emissions. (ii) Agents from richer countries are less in favor of incorporating the polluter-pays and the ability-to-pay principle in future international climate agreements. (iii) The poor losers rule is more strongly supported by individuals from G77/China countries or by individuals from countries with less current per capita GDP. While these results are consistent with pure economic self-interest, the support for the egalitarian principle runs contrary to economic intuition: In the long-run, agents from richer countries are more in favor of incorporating the egalitarian principle. Furthermore, the effect of the economic performance variables on the desired degree of incorporating the polluter-pays principle interestingly becomes less significant in the long-run. This indicates that future international climate agreements could possibly be based on a combination of the polluter-pays, the egalitarian, and the poor losers rule.

On the climate change effects of high oil prices

Some commentators claim that the oil market has achieved within a few months what international bureaucrats have struggled to obtain in a decade of international climate negotiations. The fallacy of the oil price argument is that substitutions and income effects that would result from higher oil prices are not considered. Using a computable general equilibrium model, we show that high oil prices cannot serve as substitutes for effective climate policies.

Development assistance and the CDM – how to interpret ‘financial additionality’

International climate negotiations have specified that projects under the Clean Development Mechanism (CDM) should not lead to a ‘diversion’ of official development assistance (ODA). It is however unchallenged that ODA can be used in capacity building for the CDM. Diversion can be interpreted in purpose, sectoral, and regional terms. There are possibilities to use ODA benchmarks to define diversion such as the UN 0.7 per cent target but they are unlikely to be politically acceptable. On the project level, three main options exist but none of them is perfect. The Development Assistance Committee of OECD endorses deduction of the value of emissions credits (CERs) from ODA. This however leads to a long-term pressure on the ODA level. Differentiating an ODA-financed baseline project and a ‘piggyback’ CDM option is likely to be arbitrary in many circumstances. Even if CERs do not accrue for the ODA share of the investment, still private CDM projects are crowded out due to the subsidizing of CDM projects.

Parallel Climate Blocs: Incentives to Cooperation in International Climate Negotiations

There are increasing signals that countries that negotiate on GHG emission control are unlikely to sign and ratify a single climate protocol, even though almost all countries have subscribed the UNFCCC convention that sets the framework of international climate cooperation. In addition to the US decision not to ratify the Kyoto Protocol, New Zealand and Australia recently led to the formation of a new alliance in which technological cooperation is the main tool to achieve GHG emission control. In the U.S., some States on the Eastern coast are negotiating to adopt emission reduction targets and to establish a permit market despite the opposition of the federal government. Cooperation on climate policy is also the objective of recent negotiations between ASEAN countries. Given this background, this paper aims at examining whether the aforementioned events are simply the noise of a political process leading to a global agreement on climate change control or are instead consistent with some basic economic incentives that are pushing countries towards the formation of two (or more) parallel climate blocs. To this aim, this paper uses a well known integrated assessment climate-economy model to evaluate the incentives to cooperation in climate negotiations for the main world countries. A game-theoretic framework is adopted to analyse a country’s incentive to belong to a climate coalition. In our setting, a given country can either join one of the existing climate coalitions or can propose a new one or can decide to free-ride on the other countries’ cooperative abatement effort. We then analyse the characteristics of the main possible outcomes and assess which outcomes are most likely to prevail in future negotiations, at least as far as economic incentives are concerned.

Graduation and Deepening: An Ambitious Post-2012 Climate Policy Scenario

In the second commitment period 2013–2017, the Kyoto Protocol structure is strengthened considerably. The current Annex B countries agree to reduction targets averaging 23% reductions from 1990 level. This induces non-Annex B countries to take up emissions targets according to a multi-tiered graduation system. Graduation is undertaken according to thresholds defined by per capita GDP and emissions. Compared to the current Annex B, coverage of emissions by absolute caps would increase by about 25%; large low-income countries such as India and China do not graduate. Therefore, large emitters above 50 million t. p.a. can utilise a policy-based Clean Development Mechanism. Sinks of all types – terrestrial, marine and geological can be used. To achieve this policy scenario, voter pressure due to extreme meteorological events and a coordination of all progressive forces in the international climate negotiations are necessary. Moreover, a judicious combination of carrots and sticks has to be developed to entice Non-Annex B countries to graduate.

Greenhouse gas emissions caused by the international climate negotiations

Greenhouse gas emissions caused by the international climate negotiations

The role of technological development and policies in a post-Kyoto climate regime

This article discusses various aspects of international technology collaboration and transfer before discussing technology in the climate negotiations themselves. While ‘technology agreements’ alone could not be expected to deliver the fundamental changes in energy production and use necessary in order to achieve the Convention's objective, they could help in goading developing countries into mitigation action. Other options to speed the diffusion of climate-friendly technologies are considered, although it is unclear whether international climate negotiations offer the best forum. Finally, technology issues should not divert attention from the value of establishing a global emissions trading regime through various options, as this might be a powerful carrier for climate-friendly technologies.

On the Integration of Carbon Capture and Storage into the International Climate Regime

As GHG emissions did not decline as anticipated early of the 1990ties Carbon Capture and Storage (CCS) recently gained more and more attention as a climate change mitigation option. However, CO2 suppressed in geological reservoirs is likely to lead to future releases of the CO2 stored. This ?non-permanence? must be considered if an environmentally sound policy is desired. Against this background, the present article analyses a potential integration of CCS in the international climate regime. It is based on existing rules and modalities regarding non-permanence of sequestration in the Land use, Land-use change and Forestry (LULUCF) sector. Interestingly, the experience from LULUCF has almost completely been neglected during the discussion on CCS. We argue that CCS can only be accounted for in a transparent and comprehensive way, if it is considered a ?removal? (or ?sink?) activity. This is, however, incompatible with the current UNFCCC rules and definitions. Consequently, they would have to be changed. Accounting and problems of cross-border projects are discussed. They arise due to the potential geographical separation of capture and storage site. Furthermore, an economic analysis is conducted considering the consequences of non-permanent storage. We apply the tCER approach for LULUCF projects which has already been agreed upon during the international climate negotiations. It may thus form the basis for CCS, too. The study suggests that CCS is probably not as attractive as widely claimed.

Economic approach to climate policies and stakes of international negotiations

This article deals with the different modalities that exist to manage a problem of collective action facing the climate change problem, which could affect the living conditions and economic activities of all the regions of the world. Economists are doubly concerned by this danger, first, in terms of defining response policies, second by the way of producing a public good. In the first part are reviewed some of the principles and methods of the economic approach to these subjects: (i) the debate between Cost-Benefit Analysis and Cost-Effectiveness Analysis, (ii) regulation by prices or quantities and the way models use environmental economics tools that are taxes, tradable permits, norms and standards and hybrid instruments like standards and charges or safety valve, (iii) use and limit of economic models in international climate negotiation. The second part uses the concepts of the International Political Economy for studying the process of organising joint action at the global level that is finding a governance model for the global environment. It uses the concepts of international regime and of leadership and defines the principal rules and institutions of the existing international agreements, with their achievements and weaknesses. It finally identifies four scenarios for the future of collective action.

Islands in the storm

People like living near the sea. From early human settlements to many of today's great cities, proximity to the oceans and estuaries of the world has brought advantages such as trade, transport, and easy access to marine resources. Coastal areas have also long been favorite holiday destinations, with resorts and homes with sea views lining beaches and cliffs everywhere. However, people living along coasts will be among the first to be affected by the rising sea levels and increasingly frequent severe storms that are predicted consequences of global climate change. Although no definite link exists between global warming and the trio of hurricanes that caused so much destruction and loss of life in the Caribbean and southern US this year, they are a portent of things to come. Even the most skeptical governments now recognize, albeit reluctantly, that global climate change is real, and that it is no longer a question of if, but of when, and how much. Large, wealthy countries have already begun to plan for these contingencies. They have the luxury of being able to build at higher elevations, of moving populations away from high-risk areas, and of diverting huge sums of money and manpower to disaster relief and the rebuilding of ravaged areas. Small island nations are generally not so fortunate. Many are low-lying or have uninhabitable interiors, so that the people, infrastructure, and agriculture are concentrated in coastal zones. This, combined with the tendency of small islands to be economically and ecologically fragile, makes them particularly vulnerable to the effects of global climate change. In January 2005, small island nations will join with donor and other countries at a meeting in Mauritius, to discuss the many challenges they face. A key item on the agenda will be climate change. An alliance of 43 small island developing States (SIDS), created prior to the 1992 Earth Summit in Rio, persuaded the United Nations to call a Global Conference on the Sustainable Development of Small Island Developing States, in Barbados in 1994. Now, 10 years later, an international meeting will review the implementation of the Barbados Program of action. There will undoubtedly be calls for developed nations to renew their pledges of financial assistance since, according to a recent report by UN Secretary-General Kofi Annan, foreign aid represented only 1% of small islands' gross national income in 2002, compared to 2.6% in 1990. But help is also needed in advance planning and coastal management, as well as advice on the cheapest, most effective methods for preventing coastal erosion – not the large-scale, large-investment infrastructure projects that a developed country would use, but simple, affordable measures such as maintaining sufficient space between houses and the shoreline, and preserving wetlands, mangroves, and other natural buffers against storms. The international community should provide the financial and technical resources to help these at-risk nations develop and implement the response strategies they will need to protect themselves as much as possible from the impacts of climate change. At the opening General Assembly, held in New York in September, the representatives of the small island nations called on the developed world to go a big step further – to reduce the levels of greenhouse gases, particularly CO2, that are the root cause of global warming. By the time the world's biggest polluting nations have finished arguing about carbon credits, deadlines, and percentage reduction levels, the small island nations fear it will be too late. Russia's ratification of the Kyoto Treaty, announced this September, is predicted to re-energize international climate negotiations. Klaus Toepfer, Executive Director of the UN Environment Programme, called on “other nations, some of whom, like Russia, may have been…reluctant to ratify [the Treaty], to now join us in this truly global endeavor”. At the time of writing, the US has not yet gone to the polls for the 2004 Presidential elections. Yet, whatever the outcome, as Rep. Tom Udall pointed out in this column last month, environmental issues should be tackled in a bipartisan spirit. Although some cities and states across the country are introducing measures to reduce CO2 emissions, the US is still one of the world's top CO2-producing countries. It is therefore at the Federal level that action is required, with the US returning to the negotiating table, for the sake of its own citizens as well as those of other nations. As Mr Fradique Bandeira De Melo De Menezes, President of Sao Tome and Principe, so eloquently told the UN General Assembly, “Is my small country to end up nothing but a tiny volcanic peak sticking up above the waves, with the last of our people clinging to the land left unclaimed by the rising sea? The Kyoto Protocol must be implemented by all, for the benefit of all.” Dr Sue Silver, Editor-in-Chief

Can the Eu Persuade the Us to Rejoin the Kyoto Agreement?

The aim of this work is to identify a clear policy proposal for how the EU may persuade the US to rejoin the Kyoto agreement. Accordingly the US' three major concerns in The Hague about the Kyoto Protocol have been investigated with the following result. Firstly, the EU should scrap the supplementarity principle of 50% domestic reduction or at least reduce it considerably. This would lower costs particularly by enhancing more free trade with emission permits. Secondly, the EU should support the US proposal to incorporate carbon sinks into the Protocol. Thirdly, the developing countries should be persuaded to make binding commitments preventing any carbon leakage which is harmful to the American economy. Together these measures should minimize US compliance costs, and ensure for the US a positive net gain from participation and thereby provide an incentive to rejoin. The overall result is that the EU necessarily has to make concessions to persuade the World's largest CO2 emitter to join international climate negotiations again. This would ensure environmental improvement and co-operation in contrast to the present situation of US refusal to participate.

Fighting Windmills: The Coalition of Industrialists and Environmentalists in the Climate Change Issue

This paper extends the political economy idea developed by Ackerman and Hassler [Clean Coal/Dirty Air, or How the Clean Air Act became a Multibillion-Dollar Bail-out for High Sulfur Coal Producers and What Should Be Done About It. New Haven: Yale University Press], which suggested that a coalition of environmentalists and industrialists successfully lobbied the US Congress. More strict technology-based standards for new emitting sources than for existing sources was the resulting policy outcome serving the common interest of the coalition because it offered both a barrier to entry for new firms and improved environmental quality. We focus on the case of international climate negotiations and the promotion of wind-based energy. Along the lines of the Ackerman and Hassler approach, we suggest that one reason for EU eagerness to push forward ambitious reduction target levels (and thereby promote new green industries) could be a similar coalition between industrialists and environmentalists. Such a strategy can be seen in the context of the Bootleggers and Baptist theory developed by Yandle [‘Bootleggers and Baptists: the Education of a Regulatory Economist,’ Regulation, 7, 12–16], where the Baptists (in our case the environmentalists) demand changes in behaviour on moral grounds. In contrast, the Bootleggers (the producers of renewable energy), who profit from the very regulation, keep a low profile. The actual heavy subsidisation of renewable energy sources, such as wind energy, can be viewed as a successful policy outcome for the coalition of industrialists and environmentalists offering both market protection and improved environmental quality. Solving the current dead-lock in international climate negotiations may well imply fighting the strong coalition of industrialists and environmentalists. Such a political battle may turn out to be just as tough as fighting windmills and needs to be addressed in future and more rigorous empirical research. At the end of the day, transparent incentives of relevant stakeholders in the climate change issue are necessary preconditions for progress in the climate change negotiations.

Development Aid and the CDM - How to Interpret 'Financial Additionality'

International climate negotiations have specified that projects under the Clean Development Mechanism (CDM) should not lead to a of official development assistance (ODA). It is however unchallenged that ODA can be used in capacity building for the CDM. Diversion can be interpreted in financial, sectoral and regional terms. There are possibilities to use ODA benchmarks to define diversion such as the UN 0.7% target but they are unlikely to be politically acceptable. On the project level, three main options exist but none of them is perfect. The value of emissions credits (CERs) could be deducted from ODA. This however leads to a long-term pressure on the ODA level. Differentiating an ODA-financed baseline project and a piggyback CDM option is likely to be arbitrary in many circumstances. Even if CERs do not accrue for the ODA share of the investment, still private CDM projects are crowded out due to the subsidising of CDM projects.

Avoiding perverse effects of baseline and investment additionality determination in the case of renewable energy projects

As part of the international climate negotiations there is a lot of discussion about methodologies for quantifying emission reductions of greenhouse gas reduction projects (baseline discussion) and about granting emission reduction credits only to projects that are additional (investment additionality discussion). So far this discussion has been fairly general and has not systematically analysed the impacts on investor decisions. We analyse these impacts for the case of renewable energies and show that the approaches under discussion can all give perverse incentives to invest at unfavourable sites. Thus, higher CO 2 abatement costs than without any crediting system might be realised resulting in inefficiencies in climate policy. To overcome this problem we introduce a new investment additionality concept and propose to have only one emission reduction factor for each electricity grid

CARBON SINKS IN TEMPERATE FORESTS

▪ Abstract In addition to being scientifically exciting, commercially important, and environmentally essential, temperate forests have also become a key diplomatic item in international climate negotiations as potential sinks for carbon. This review presents the methods used to estimate carbon sequestration, identifies the constraints and opportunities for carbon sequestration in temperate forests, addresses the issues raised by the monitoring of carbon sequestration, and analyzes uncertainties pertaining to the sequestration of carbon by temperate forests. This review serves a dual purpose: It aims at informing policy makers about carbon sequestration in temperate forests and at making forest ecologists, biogeochemists, and atmospheric scientists aware of the structure of an international agreement to reduce CO2 and other greenhouse gas emissions and some of the real, still answered scientific questions that it poses.

China's Climate Change Positions: At a Turning Point?

The purpose of this article is to discuss major concerns and perceptions underlying Chinese positions in the international climate negotiations. China has asserted that concrete action on the part of developed countries is a precondition for any developing country action. It has been sceptical of the Kyoto Mechanisms and has consistently refused to discuss quantified emission limits for developing countries. China's position regarding the Clean Development Mechanism has, however, developed from scepticism towards a more pragmatic focus on maximising benefits. The dynamics of China's positioning can partly be explained by perceptions of costs, but also ‘high politics’, and tactical considerations. However, in light of the external and internal forces for change, it is worth asking how long it will be in China's interest to stick to its present position.