Post-Kyoto Climate Regimes: Per Capita Cumulative CO2 Emissions verses Contraction and Convergence of CO2 Emissions

The Copenhagen Accord sets the target for the post-Kyoto international climate framework that limits global temperature increase below 2 degree Celsius above pre-industrial levels. In order to achieve this target, the allocation of emission quotas among countries is discussed. In this paper, we construct a dynamic computable general equilibrium model, and, analyse the economic effects of two methods of allocating emissions quotas across countries under the post-Kyoto international climate framework. The two types of carbon dioxide emission quotas are considered: “Historical responsibility” (HR) which allocates emissions quotas so that the per capita cumulative CO2 emissions from 1950 to 2050 are equalised across countries and “Contraction and Convergence of CO2 emissions”(C&C) which allocates emissions quotas so that the per capita CO2 emissions in 2050 is equalised across countries. Meinshausen et al (2009) states that limiting cumulative CO2 emissions over 2000 to 2050 to 1440 Gt CO2 yields a 50 % probability of worming exceeding 2 degree Celsius relative to pre-industrial levels. This paper assumes that the Global cumulative CO2 emissions from 2000 to 2050 are1440 Gt CO2. It is shown that the rates of decrease in GDP of developing countries in HR is smaller than in C&C and the rates of decrease in GDP of industrialised countries in C&C is smaller than in HR. China becomes the importer of emission rights in the long run, Even under the scenario HR whose allocation method is based on cumulative CO2 emissions. GDP loss in China increases over time (GDP losses in China worsen off over time).