Climate and Trade Policy

Climate and Trade Policy

Bottom-up Approaches Towards Global Agreement

ESRI Studies Series on the Environment

Edited by Carlo Carraro and Christian Egenhofer

The difficulty of achieving and implementing a global climate change agreement has stimulated a wide range of policy proposals designed to favour the participation of a large number of countries in a global cooperative effort to control greenhouse gas emissions. This significant book analyses the viability of controlling climate change through a set of regional or sub-global climate agreements rather than via a global treaty.

Chapter 1: Bottom-up Approaches Towards a Global Climate Agreement: An Overview

Carlo Carraro, Christian Egenhofer and Noriko Fujiwara

Subjects: asian studies, asian economics, economics and finance, asian economics, environmental economics, environment, asian environment, climate change, environmental economics, environmental law, law - academic, environmental law


Carlo Carraro, Christian Egenhofer and Noriko Fujiwara Despite almost 15 years of negotiations to achieve and implement a global climate change agreement, the international community appears to be still some way from a breakthrough. Largely diverging views on a fair and politically feasible and yet effective agreement continue to lurk under the surface of the United Nations Framework Convention on Climate Change (UNFCCC) negotiations, but have also become apparent during the implementation of the Kyoto Protocol and domestic climate change policies. While it is true that other international agreements – witness the difficulties multilateral trade negotiations have encountered – and multilateral environmental agreements in particular tend to face similar complications, a global climate change agreement features a number of peculiarities that make an agreement especially thorny. Carraro and Galeotti (2003) have identified seven peculiar features that distinguish a global climate change agreement from any other multilateral environmental agreement. The problem is global; this implies that climate change control is a public good, providing a strong motivation for free-riding.1 The long-term nature of climate change necessitates taking into account not only long periods – sometimes stretching over half a decade or even beyond – but also dealing with intergenerational transfers that any regulation implies. There exist no narrowly defined technological solutions as in the case of the Montreal Protocol to phase out ozone-depleting substances. Greenhouse gas (GHG) emissions and their reductions affect in a fundamental way all economic activities including agriculture, transport, manufacturing and services, and by extension our lifestyles....

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