Towards a Workable and Effective Climate Regime

548 Pages·2015·5.187 MB·English

by  Scott Barrett , Carlo Carraro, Jaime de Melo

Publication of this eBook, incorporating 35 separate chapters, was timed to coincide T Towards a Workable
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with the 21st Conference of the Parties to the United Nations Framework Convention w
on Climate Change. As negotiators prepare for Paris, hopes are running high that a a
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new climate agreement will be adopted. But these hopes are tempered by historical d
experience. For the past 25 years, countries have tried, and failed, to come up with s and Effective Climate
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a cooperative arrangement capable of putting the world on a path to limit climate
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change.
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Will Paris be any different? It is too soon to tell, but it seems that Paris will at least k
a Regime
provide a foundation upon which the world can build effective action. The new Paris
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Agreement – assuming one is adopted – will likely reaffirm the global goal of limiting le
climate change. It will probably create a platform for revealing the actions and targets a
n
that countries have pledged to undertake voluntarily. And it will likely track progress
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towards meeting the collective goal.
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The big question is what all of this will add up to. As argued in this eBook, whether fe Edited by Scott Barrett, Carlo Carraro and
Paris ultimately succeeds will depend on whether it gets countries to establish an c
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explicit or implicit carbon price, whether it supports a massive increase in energy R&D, ve Jaime de Melo
whether it finances a transformation in the world’s energy system, and whether it
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helps the world’s most vulnerable countries and peoples to adapt. If Paris succeeds, l
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25 years from now, global emissions should be a lot lower than today, and trending
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further downwards. t
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“A few days before the launch of the COP21 climate conference in Paris, this book g
i
m
appears as an indispensable reference for the multiple global warming agenda
e
issues to be discussed there and in the years to come. It provides a rigorous, lucid and
exhaustive account of the unprecedented challenges faced by the world in addressing
the climate risk as a true global community, but also of the effective and politically
agreeable policies for achieving that goal.“
François Bourguignon, Professor, Paris School of Economics and former Chief
Economist of the World Bank
“Even if the Paris COP21 proves to be successful in yielding a successor agreement to
the Kyoto Protocol, it will still be necessary to do much more than what conceivably
would be enshrined in that instrument. This volume is an important contribution
for thinking about those additional steps and the substantial predicaments that
policymakers are bound to confront as they persevere – as they must – in dealing
with climate change. Bravo for the timing and content of this book!“
Ernesto Zedillo Ponce de León, Former President of Mexico and Director of the Yale
Center for the Study of Globalization
ISBN 978-1-907142-95-6
Centre for Economic Policy Research
A VoxEU.org Book
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Towards a Workable and
Effective Climate Regime
A VoxEU.org eBook
CEPR Press
Centre for Economic Policy Research
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Tel: [phone]
Email: [email protected]
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Ferdi
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63, boulevard François-Mitterrand
63000 Clermont-Ferrand
France
ISBN: 978-1-907142-95-6
© CEPR Press and Ferdi, 2015
Towards a Workable and
Effective Climate Regime
A VoxEU.org eBook
Edited by Scott Barrett, Carlo Carraro and
Jaime de Melo
CEPR Press
Centre for Economic Policy Research (CEPR)
The Centre for Economic Policy Research (CEPR) is a network of over 900 research
economists based mostly in European universities. The Centre’s goal is twofold: to
promote world-class research, and to get the policy-relevant results into the hands of
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CEPR research may include views on policy, but the Trustees of the Centre do not give
prior review to its publications. The opinions expressed in this report are those of the
authors and not those of CEPR.
Chair of the Board Sir Charlie Bean
President Richard Portes
Director Richard Baldwin
Research Director Kevin Hjortshøj O’Rourke
Fondation pour les études et recherches sur le
développement international
The Fondation pour les études et recherches sur le développement international (FERDI)
was created in 2003 at the initiative of CERDI (Centre d’études et de recherches sur
le développement international, University of Auvergne and CNRS). Its mission is to
promote a fuller understanding of international economic development and the factors
that influence it.
With its network of over 150 experts, FERDI supports research activities that use the
most directly relevant instruments and methods to study development and seeks to
strengthen the potential of the French-speaking world in this area. FERDI endeavours
to promote the contribution of French and European work to the international debate
on major development issues, in particular on how Southern and Northern economic
policies can best assist development by broadening the capacity for individual choice
and by developing equality of opportunity among nations. FERDI wishes to contribute
to improving these policies and providing information for companies whose business
depends on world markets and their outlook.
President Patrick Guillaumont
Head of Strategy Christophe Angely
Scientific adviser Jaime de Melo
Contents
List of Abbreviations viii
Acknowledgements x
Foreword xi
1 Introduction 1
Scott Barrett, Carlo Carraro and Jaime de Melo
PART I: The Challenge
2 Implications of climate science for negotiators 31
Thomas F. Stocker
3 Beyond the 2°C limit: Facing the economic and institutional
challenges 49
Ottmar Edenhofer, Susanne Kadner, Christoph von Stechow
and Jan Minx
4 The state of climate negotiations 69
Brian P. Flannery
PART II: Views from Different Parts of the World
5 A view from Africa 85
Alemu Mekonnen
6 A view from China 99
Teng Fei
7 A view from India 107
E. Somanathan
8 The view from different parts of the world: A view from Japan 115
Mitsutsune Yamaguchi and Keigo Akimoto
9 A view from Europe 131
Roger Guesnerie
10 A view from the United States 143
Matthew J. Kotchen
PART III: Architecture and Governance
11 Legally binding versus non-legally binding instruments 155
Daniel Bodansky
12 Comparing emission mitigation pledges: Metrics and institutions 167
Joseph E. Aldy and William A. Pizer
13 Towards an effective system of monitoring, reporting, and
verification 183
Jonathan B. Wiener
14 After the failure of top-down mandates: The role of experimental
governance in climate change policy 201
Robert O. Keohane and David G. Victor
15 A building blocks strategy for global climate change 213
Richard B. Stewart, Michael Oppenheimer and Bryce Rudyk
16 Climate change policies and the WTO: Greening the GATT,
revisited 225
Petros C. Mavroidis and Jaime de Melo
PART IV: Policy Options
17 The regulatory approach in US climate mitigation policy 239
Dallas Burtraw
18 Pricing carbon: The challenges 251
Thomas Sterner and Gunnar Köhlin
19 Taxing carbon: Current state of play and prospects for future
developments 267
Xueman Wang and Maja Murisic
20 Linkage of regional, national, and sub-national policies in a
future international climate agreement 283
Robert N. Stavins
21 Options for avoiding carbon leakage 297
Carolyn Fischer
PART V: Technology Options
22 International cooperation in advancing energy technologies
for deep decarbonisation 315
Michael Toman
23 The role of renewables in the pathway towards decarbonisation 327
Valentina Bosetti
vi
24 Carbon capture and storage: Promise or delusion? 343
Massimo Tavoni
25 The alternatives to unconstrained climate change: Emission
reductions versus carbon and solar geoengineering 353
Scott Barrett and Juan Moreno-Cruz
PART VI: Burden Sharing and Development
26 Poverty and climate change: Natural disasters, agricultural
impacts and health shocks 369
Stephane Hallegatte, Mook Bangalore, Laura Bonzanigo, Marianne
Fay, Tamaro Kane, Ulf Narloch, Julie Rozenberg, David Treguer and
Adrien Vogt-Schilb
27 Policy options in low-income countries: Achieving socially
appropriate climate change response objectives 391
Alice Akinyi Kaudia
28 REDD+: What should come next? 405
Arild Angelsen
29 Curbing carbon without curbing development 423
Paul Collier
30 Towards resilient and low-carbon cities 435
Anthony G. Bigio
31 Meaningful technology development and transfer: A necessary
condition for a viable climate regime 451
Heleen de Coninck and Shikha Bhasin
PART VII: Climate Finance
32 The macroeconomics of climate policy: Investments and financial
flows 467
Emanuele Massetti
33 Pros and cons of alternative sources of climate change financing
and prospects for ‘unconventional finance’ 483
Barbara Buchner and Jane Wilkinson
34 Harnessing the animal spirits of finance for a low-carbon
transition 497
Jean-Charles Hourcade
35 Measuring vulnerability to climate change for allocating funds to
adaptation 515
Patrick Guillaumont
vii
List of Abbreviations
3E+S economy, energy security, environment, and safety
A&R assessment and review
AB Appellate Body
AfDB African Development Bank
AGN African Group of Negotiators
AIIB Asian Infrastructure Investment Bank
APP Asian Pacific Partnership
AR5 IPCC Fifth Assessment Report
BAU business as usual
BCA border carbon adjustment
BNEF Bloomberg New Energy Finance
C2ES Center for Climate and Energy Solutions
CAT cap and trade
CBDR common but differentiated responsibilities
CCS carbon capture and storage
CDM Clean Development Mechanism
CEA Council of Economic Advisors
CIFs Climate Investment Funds
CO carbon dioxide
2
COP Conference of the Parties
DRC Democratic Republic of Congo
EIA US Energy Information Administration
EITE energy-intensive, trade-exposed
EPA Environmental Protection Agency
ERC emission reduction credits
ETPC Emission Tax Payment Credits
ETS emissions trading system
EU ETS European Union Emission Trading Scheme
FCCC Framework Convention on Climate Change
FDRE Federal Democratic Republic of Ethiopia
FiT feed-in tariff
GCF Green Climate Fund
GDP gross domestic product
GEF global environmental facility
GGKP Global Green Growth Knowledge Platform
GHG greenhouse gas
GIEC Groupe d’experts intergouvernemental sur l’évolution du climat
GNI gross national income
GRICCE Grantham Research Institute on Climate Change and the Environment
GSEP Global Superior Energy Performance Partnership
IAMs integrated assessment models
ICAO International Civil Aviation Organization
viii