Suggestions for the Road to Copenhagen
AbstractWe provide a unified discussion of the issues that confront negotiators of the next international climate agreement. We offer a novel proposal that entitles countries to discharge their treaty obligations by paying a “fine”. This escape clause provides cost insurance, simplifies the problem of enforcing compliance, and increases incentives to participate in the agreement. We explain why developed country obligations should rely on a cap and trade commitment rather than carbon taxes. A Central Bank maintains stability of carbon prices by defending a price ceiling and floor. An so-called intensity target is not a good alternative to an emissions cap. Modest trade restrictions, consistent with WTO law, will form an important part of the next agreement. Developed and developing countries have differentiated responsibilities. Developing countries do not adopt binding targets at the next round of negotiations, but they accept the principle of binding targets in the subsequent agreement, beginning in the early 2020s. Developed country participation relies on a reformed CDM and sectoral agreements that are financed by the sale of emissions permits.
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Bibliographic InfoPaper provided by University of California at Berkeley, Department of Agricultural and Resource Economics and Policy in its series CUDARE Working Paper Series with number 1085.
Length: 95 pages
Date of creation: May 2009
Date of revision:
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Postal: University of California, Giannini Foundation of Agricultural Economics Library, 248 Giannini Hall #3310, Berkeley CA 94720-3310
Other versions of this item:
- Karp, Larry & Zhao, Jinhua, 2009. "Suggestions for the Road to Copenhagen," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt3nj4h7k2, Department of Agricultural & Resource Economics, UC Berkeley.
- Karp, Larry & Zhao, Jinhua, 2009. "Suggestions for the road to Copenhagen," CUDARE Working Paper Series 1085, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
- Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters
- Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
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- De Cian, Enrica & Tavoni, Massimo, 2012. "Do technology externalities justify restrictions on emission permit trading?," Resource and Energy Economics, Elsevier, vol. 34(4), pages 624-646.
- de Melo, Jaime & Mathys, Nicole Andréa, 2010. "Trade and Climate Change: The Challenges Ahead," CEPR Discussion Papers 8032, C.E.P.R. Discussion Papers.
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