Instruments for Climate Policy

Instruments for Climate Policy

Limited versus Unlimited Flexibility

New Horizons in Environmental Economics series

Edited by Johan Albrecht

Instruments for Climate Policy focuses on economic and political aspects related to the recent proposals and the debate on limits in flexibility, and discusses EU and US perspectives on climate policy instruments and strategies. This is followed by chapters on economic efficiency and the use of flexible instruments as well as contributions to the debate on ‘when flexibility’, on the arguments behind the EU ceilings proposal and on voluntary approaches to climate policy. One of the main conclusions reached with respect to proposals for limiting flexibility is the need to evaluate simultaneously their economic, ecological and international political consequences. The authors include both important policymakers and leading academics in the area.

Chapter 1: Introduction

Johan Albrecht

Subjects: economics and finance, environmental economics, environment, climate change, environmental economics


Johan Albrecht The Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNFCCC) introduced a number of important innovations into climate policy. When the Convention was opened for signature at the United Nations Conference on Environment and Development or Earth Summit in Rio de Janeiro in 1992, only a legally non-binding voluntary pledge to reduce greenhouse gas (GHG) emissions to their 1990 level by the year 2000 was formulated. As the goal of the Convention has been defined as ‘stabilizing greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic inference with the climate system’ (UNFCCC, 2000), voluntary reductions were in fact seen as a first step to realize this ambition. It became apparent in the middle of the 1990s, however, that this goal would not be realized by most industrial nations. Global emissions continued to increase. At the First Conference of the Parties (CoP1) in 1995, the international community therefore decided to enter into negotiations on a protocol to establish legally binding limitations on GHG emissions. In December 1997, almost 40 industrialized nations and economies in transition – the Annex II group – agreed on a binding treaty to limit their greenhouse gas emissions by at least 5 per cent below 1990 levels. Voluntary efforts at national levels have been definitively replaced by the Kyoto Protocol, the first binding reduction agreement. This important shift has been made possible by the introduction of international emission reduction mechanisms that are expected to offer lowcost reduction...

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