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 2: Regional and Sub-Global Climate Blocs: A Cost–Benefit Analysis of Bottom-up Climate Regimes

Barbara Buchner and Carlo Carraro

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

Extract

2. Regional and sub-global climate blocs: a cost–benefit analysis of bottom-up climate regimes1 Barbara Buchner and Carlo Carraro Climate negotiations are a complex dynamic process. Climate change control, being a global public good, can hardly be attained on a voluntary basis. At the same time, there is no supranational authority that can impose an effective international climate policy. Therefore, an international cooperative and voluntary agreement to curb global greenhouse gas (GHG) emissions seems to be the only way to combat climate change. However, because of free-riding incentives and strong economic and environmental asymmetries, it is unlikely that an international climate agreement will be signed by a large number of countries (Carraro and Siniscalco, 1993; Botteon and Carraro, 1997), unless its goals are not significantly different from those of a non-cooperative, business-as-usual, domestic policy (Barrett, 1994). Nonetheless, since the signing of the Kyoto Protocol in 1997, the diplomacy of climate policy has made considerable progress. International climate policy has recently enjoyed its first noteworthy success. The Kyoto Protocol came into force on 16 February 2005 and countries worldwide have already started discussions on a possible, better designed, post-2012 climate agreement. However, the US defection from the Kyoto Protocol and the lack of explicit abatement targets for the main developing countries – China and India above all – have largely reduced the environmental effectiveness of the Kyoto Protocol, which remains far from achieving the objective of stabilizing GHG concentrations at about 500–550 ppmv. Therefore, several policy proposals...

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