IDEAS home Printed from https://ideas.repec.org/p/apu/wpaper/2006-03.html
   My bibliography  Save this paper

The Global Warming Potential Paradox: Implications for the Design of Climate Policy

Author

Listed:
  • Stéphane De Cara
  • Elodie Debove
  • Pierre-Alain Jayet

Abstract

We address the issue of the design of climate policy in a dynamic, multi-greenhouse gas context. Despite well-established shortcomings, the Global Warming Potential (GWP) is the most commonly used index to compare greenhouse gases. We first review the shortcomings of the GWP from an economic perspective and examine some of the possible reasons for its success in the climate negotiations so far.We then examine the analytical properties of a second-best GWP-based emission target and compare the resulting second-best abatement paths with the first-best ones. We particularly show that the second-best CO2-equivalent target must exceed the CO2 equivalence of first-best abatements in order to reduce the bias induced by the GWP.

Suggested Citation

  • Stéphane De Cara & Elodie Debove & Pierre-Alain Jayet, 2006. "The Global Warming Potential Paradox: Implications for the Design of Climate Policy," Working Papers 2006/03, INRA, Economie Publique.
    • Handle: RePEc:apu:wpaper:2006/03
    as

    Download full text from publisher

    File URL: https://www6.versailles-grignon.inra.fr/economie_publique/Media/fichiers/Working-Papers/Working-Papers-2006/WP_2006_03
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Stéphane Cara & Martin Houzé & Pierre-Alain Jayet, 2005. "Methane and Nitrous Oxide Emissions from Agriculture in the EU: A Spatial Assessment of Sources and Abatement Costs," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 32(4), pages 551-583, December.
    2. Michaelis, P., 1999. "Sustainable greenhouse policies: the role of non-CO2 gases," Structural Change and Economic Dynamics, Elsevier, vol. 10(2), pages 239-260, June.
    3. S. De Cara & Gilles Rotillon, 2003. "Multigreenhouse gas international agreements," THEMA Working Papers 2003-13, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
    4. Fearnside, Philip M., 2002. "Time preference in global warming calculations: a proposal for a unified index," Ecological Economics, Elsevier, vol. 41(1), pages 21-31, April.
    5. Kandlikar, Milind, 1996. "Indices for comparing greenhouse gas emissions: integrating science and economics," Energy Economics, Elsevier, vol. 18(4), pages 265-281, October.
    6. Kandlikar, Milind, 1995. "The relative role of trace gas emissions in greenhouse abatement policies," Energy Policy, Elsevier, vol. 23(10), pages 879-883, October.
    7. H. Aaheim, 1999. "Climate Policy with Multiple Sources and Sinks of Greenhouse Gases," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 14(3), pages 413-430, October.
    8. Schneider, Uwe A. & Kumar, Pushpam, 2008. "Greenhouse Gas Mitigation through Agriculture," Choices: The Magazine of Food, Farm, and Resource Issues, Agricultural and Applied Economics Association, vol. 23(1), pages 1-5.
    9. Weitzman, Martin L., 1998. "Why the Far-Distant Future Should Be Discounted at Its Lowest Possible Rate," Journal of Environmental Economics and Management, Elsevier, vol. 36(3), pages 201-208, November.
    10. Moslener, Ulf & Requate, Till, 2007. "Optimal abatement in dynamic multi-pollutant problems when pollutants can be complements or substitutes," Journal of Economic Dynamics and Control, Elsevier, vol. 31(7), pages 2293-2316, July.
    11. Richard Schmalensee, 1993. "Comparing Greenhouse Gases for Policy Purposes," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1), pages 245-256.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Marten, Alex L. & Newbold, Stephen C., 2012. "Estimating the social cost of non-CO2 GHG emissions: Methane and nitrous oxide," Energy Policy, Elsevier, vol. 51(C), pages 957-972.
    2. Johansson, Daniel J.A., 2009. "Economics vs. Physical-based Metrics for Relative Greenhouse Gas Valuations," Working Papers in Economics 363, University of Gothenburg, Department of Economics.
    3. Waldhoff, Stephanie & Anthoff, David & Rose, Steven K. & Tol, Richard S. J., 2014. "The marginal damage costs of different greenhouse gases: An application of FUND," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 8, pages 1-33.
    4. Baumgärtner, Stefan & Jöst, Frank & Winkler, Ralph, 2009. "Optimal dynamic scale and structure of a multi-pollution economy," Ecological Economics, Elsevier, vol. 68(4), pages 1226-1238, February.
    5. Tol, Richard S. J. & Berntsen, Terje K. & O'Neill, Brian C. & Fuglestvedt, Jan S. & Shine, Keith P. & Balkanski, Yves & Makra, Laszlo, 2008. "Metrics for Aggregating the Climate Effect of Different Emissions: A Unifying Framework," Papers WP257, Economic and Social Research Institute (ESRI).
    6. Moslener, Ulf & Requate, Till, 2009. "The dynamics of optimal abatement strategies for multiple pollutants--An illustration in the Greenhouse," Ecological Economics, Elsevier, vol. 68(5), pages 1521-1534, March.
    7. Gallo, Mariano, 2011. "A fuel surcharge policy for reducing road traffic greenhouse gas emissions," Transport Policy, Elsevier, vol. 18(2), pages 413-424, March.
    8. Jessica Strefler & Gunnar Luderer & Tino Aboumahboub & Elmar Kriegler, 2014. "Economic impacts of alternative greenhouse gas emission metrics: a model-based assessment," Climatic Change, Springer, vol. 125(3), pages 319-331, August.
    9. Ancuta Isbasoiu & Pierre-Alain Jayet & Stéphane De Cara, 2021. "Increasing food production and mitigating agricultural greenhouse gas emissions in the European Union: impacts of carbon pricing and calorie production targeting," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 23(2), pages 409-440, April.
    10. Kuosmanen, Timo & Laukkanen, Marita, 2009. "(In)Efficient Management of Interacting Environmental Bads," Discussion Papers 54287, MTT Agrifood Research Finland.
    11. Reeling, Carson & Garnache, Cloé & Horan, Richard, 2018. "Efficiency gains from integrated multipollutant trading," Resource and Energy Economics, Elsevier, vol. 52(C), pages 124-136.
    12. De Cara, Stéphane & Jayet, Pierre-Alain, 2011. "Marginal abatement costs of greenhouse gas emissions from European agriculture, cost effectiveness, and the EU non-ETS burden sharing agreement," Ecological Economics, Elsevier, vol. 70(9), pages 1680-1690, July.
    13. Ralph Winkler, 2008. "Optimal compliance with emission constraints: dynamic characteristics and the choice of technique," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 39(4), pages 411-432, April.
    14. Heidi K. Edmonds & Julie E. Lovell & C. A. Knox Lovell, 2017. "A New Composite Index for Greenhouse Gases: Climate Science Meets Social Science," Resources, MDPI, vol. 6(4), pages 1-16, October.
    15. M. Lund & T. Berntsen & J. Fuglestvedt & M. Ponater & K. Shine, 2012. "How much information is lost by using global-mean climate metrics? an example using the transport sector," Climatic Change, Springer, vol. 113(3), pages 949-963, August.
    16. Wang, Wen, 2015. "Intégrer l'agriculture dans les politiques d'atténuation chinoises," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/14999 edited by Perthuis, Christian de.
    17. Isabel Teichmann, 2015. "An Economic Assessment of Soil Carbon Sequestration with Biochar in Germany," Discussion Papers of DIW Berlin 1476, DIW Berlin, German Institute for Economic Research.
    18. Goulder, Lawrence H. & Pizer, William A., 2006. "The Economics of Climate Change," RFF Working Paper Series dp-06-06, Resources for the Future.
    19. Christian Azar & Jorge García Martín & Daniel JA. Johansson & Thomas Sterner, 2023. "The social cost of methane," Climatic Change, Springer, vol. 176(6), pages 1-22, June.
    20. Richard S. J. Tol & Seán Lyons, 2008. "Incorporating GHG Emission Costs in the Economic Appraisal of Projects Supported by State Development Agencies," Papers WP247, Economic and Social Research Institute (ESRI).

    More about this item

    Keywords

    Global Warming Potential; climate change; climate policy; Multi-greenhouse gas agreements;
    All these keywords.

    JEL classification:

    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:apu:wpaper:2006/03. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Régis Grateau (email available below). General contact details of provider: https://edirc.repec.org/data/epinrfr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.