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The Economics of a Lost Deal : Kyoto - The Hague - Marrakesh

Author

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  • Jean Charles Hourcade

    (CIRED - centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

  • Frédéric Ghersi

    (CIRED - centre international de recherche sur l'environnement et le développement - Cirad - Centre de Coopération Internationale en Recherche Agronomique pour le Développement - EHESS - École des hautes études en sciences sociales - AgroParisTech - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique)

Abstract

This paper examines prospects for compromise between competing perspectives on four key climate change issues: costs, level of domestic action, nvironmental integrity, and developing world involvement. It focuses on the policy issues stemming from the uncertainty about abatement costs. Based on extensive simulations of a model integration tool, SAP12 (Stochastic Assessment of Climate Policies, 12 models), the analysis considers options for fine-tuning the Kyoto Protocol, such as concrete ceilings or levies on carbon imports; "environmental restoration payments" to be made on excess emissions; and credits for equestration activities in Annex B countries. It demonstrates that the restoration payment (implemented through a safety valve) emerges as a superior means of addressing the cost uncertainty issue. The paper concludes that had this approach been taken at the COP6 climate negotiations, there would have been substantial room for compromise on payments of $35 to $100 per ton of carbon. Examining the Marrakech climate accord, it derives some lessons for attempts at completing Kyoto's unfinished business or at moving on to a new framework.

Suggested Citation

  • Jean Charles Hourcade & Frédéric Ghersi, 2002. "The Economics of a Lost Deal : Kyoto - The Hague - Marrakesh," Post-Print halshs-00009838, HAL.
  • Handle: RePEc:hal:journl:halshs-00009838
    Note: View the original document on HAL open archive server: https://shs.hal.science/halshs-00009838
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    Cited by:

    1. Jean Charles Hourcade & P.-R. Shukla & Sandrine Mathy, 2005. "Cutting the Climate-Development Gordian Knot - Economic options in a politically constrained world," Working Papers hal-00866572, HAL.
    2. Lecuyer, Oskar & Quirion, Philippe, 2013. "Can uncertainty justify overlapping policy instruments to mitigate emissions?," Ecological Economics, Elsevier, vol. 93(C), pages 177-191.
    3. Jean Charles Hourcade & Frédéric Ghersi & Patrick Criqui, 2003. "Viable Responses to the equity-responsability dilemna : a consequentialist view," Working Papers halshs-00000965, HAL.
    4. Abrell, Jan & Rausch, Sebastian, 2017. "Combining price and quantity controls under partitioned environmental regulation," Journal of Public Economics, Elsevier, vol. 145(C), pages 226-242.
    5. Jan Abrell & Sebastian Rausch & Hidemichi Yonezawa, 2019. "Higher Price, Lower Costs? Minimum Prices in the EU Emissions Trading Scheme," Scandinavian Journal of Economics, Wiley Blackwell, vol. 121(2), pages 446-481, April.
    6. J. Hourcade & B. Perrissin Fabert & J. Rozenberg, 2012. "Venturing into uncharted financial waters: an essay on climate-friendly finance," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 12(2), pages 165-186, May.
    7. Jean Charles Hourcade & Franck Lecocq, 2003. "Equitable Provision of Long-Term Public GoodsThe role of Negotiation Mandates," CIRED Working Papers halshs-00000968, HAL.
    8. Fr�d�ric Ghersi & Jean-Charles Hourcade & Patrick Criqui, 2003. "Viable responses to the equity-responsibility dilemma: a consequentialist view," Climate Policy, Taylor & Francis Journals, vol. 3(sup1), pages 115-133, November.
    9. Khalil Helioui, 2006. "Coordination internationale des politiques climatiques : quelle efficacité ?," Working Papers hal-00866433, HAL.
    10. Franck Lecocq & Jean-Charles Hourcade, 2016. "Unspoken Ethical Issues in the Climate Affair: Insights from a Theoretical Analysis of Negotiation Mandates," Studies in Economic Theory, in: Graciela Chichilnisky & Armon Rezai (ed.), The Economics of the Global Environment, pages 311-340, Springer.
    11. Haar, Laura N. & Haar, Lawrence, 2006. "Policy-making under uncertainty: Commentary upon the European Union Emissions Trading Scheme," Energy Policy, Elsevier, vol. 34(17), pages 2615-2629, November.
    12. Jean Charles Hourcade & Michel Aglietta & Baptiste Perrissin-Fabert, 2014. "Transition to a Low-Carbon society and sustainable economic recovery, a monetary-based financial device," Post-Print hal-01692593, HAL.
    13. VAN STEENBERGHE, Vincent, 2003. "CO2 abatement costs and permits price : Exploring the impact of banking and the role of future commitments," LIDAM Discussion Papers CORE 2003098, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    14. Khalil Helioui, 2006. "Coordination internationale des politiques climatiques : quelle efficacité ?," CIRED Working Papers hal-00866433, HAL.
    15. Zou Ji & Fu Sha, 2015. "The challenges of the post-COP21 regime: interpreting CBDR in the INDC context," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 15(4), pages 421-430, November.
    16. Quirion, Philippe, 2010. "Complying with the Kyoto Protocol under uncertainty: Taxes or tradable permits?," Energy Policy, Elsevier, vol. 38(9), pages 5166-5173, September.

    More about this item

    Keywords

    climate negotiations; 2010 carbon markets; uncertainty about abatement costs;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General

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