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Global Climate Policy Architecture and Political Feasibility: Specific Formulas and Emission Targets to Attain 460 ppm CO2 Concentrations

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  • Valentina Bosetti

    (Fondazione Eni Enrico Mattei)

  • Jeffrey Frankel

    (Harvard University)

Abstract

Three gaps in the Kyoto Protocol most badly need to be filled: the absence of emission targets extending far into the future, the absence of participation by the United States, China, and other developing countries, and the absence of reason to think that members will abide by commitments. To be politically acceptable, any new treaty that fills these gaps must, we believe, obey certain constraints regarding country-by-country economic costs. We offer a framework of formulas that assign quantitative allocations of emissions, across countries, one budget period at a time. The two-part plan: (i) China and other developing countries accept targets at BAU in the coming budget period, the same period in which the US first agrees to cuts below BAU; and (ii) all countries are asked in the future to make further cuts in accordance with a formula which sums up a Progressive Reductions Factor, a Latecomer Catch-up Factor, and a Gradual Equalization Factor. An earlier proposal for specific parameter values in the formulas – Frankel (2009), as analyzed by Bosetti, et al (2009) – achieved the environmental goal that concentrations of CO2 plateau at 500 ppm by 2100. It succeeded in obeying our political constraints, such as keeping the economic cost for every country below the thresholds of Y=1% of income in Present Discounted Value, and X=5% of income in the worst period. In pursuit of more aggressive environmental goals, we now advance the dates at which some countries are asked to begin cutting below BAU, within our framework. We also tinker with the values for the parameters in the formulas. The resulting target paths for emissions are run through the WITCH model to find their economic and environmental effects. We find that it is not possible to attain a 380 ppm CO2 goal (roughly in line with the 2°C target) without violating our political constraints. We were however, able to attain a concentration goal of 460 ppm CO2 with looser political constraints. The most important result is that we had to raise the threshold of costs above which a country drops out, to as high as Y =3.4% of income in PDV terms, or X =12 % in the worst budget period. Some may conclude from these results that the more aggressive environmental goals are not attainable in practice, and that our earlier proposal for how to attain 500 ppm CO2 is the better plan. We take no position on which environmental goal is best overall. Rather, we submit that, whatever the goal, our approach will give targets that are more practical economically and politically than approaches that have been proposed by others.

Suggested Citation

  • Valentina Bosetti & Jeffrey Frankel, 2009. "Global Climate Policy Architecture and Political Feasibility: Specific Formulas and Emission Targets to Attain 460 ppm CO2 Concentrations," Working Papers 2009.92, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2009.92
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    References listed on IDEAS

    as
    1. Jeffrey A. Frankel, 2009. "An Elaborated Global Climate Policy Architecture: Specific Formulas and Emission Targets for All Countries in All Decades," NBER Working Papers 14876, National Bureau of Economic Research, Inc.
    2. Manne, Alan & Mendelsohn, Robert & Richels, Richard, 1995. "MERGE : A model for evaluating regional and global effects of GHG reduction policies," Energy Policy, Elsevier, vol. 23(1), pages 17-34, January.
    3. Sheila M. Olmstead & Robert N. Stavins, 2006. "An International Policy Architecture for the Post-Kyoto Era," American Economic Review, American Economic Association, vol. 96(2), pages 35-38, May.
    4. Joseph E. Aldy & Scott Barrett & Robert N. Stavins, 2003. "Thirteen plus one: a comparison of global climate policy architectures," Climate Policy, Taylor & Francis Journals, vol. 3(4), pages 373-397, December.
    5. Enrica De Cian & Valentina Bosetti & Alessandra Sgobbi & Massimo Tavoni, 2009. "The 2008 WITCH Model: New Model Features and Baseline," Working Papers 2009.85, Fondazione Eni Enrico Mattei.
    6. William A. Pizer, 2006. "The Evolution of a Global Climate Change Agreement," American Economic Review, American Economic Association, vol. 96(2), pages 26-30, May.
    7. Warwick McKibbin & Adele Morris & Peter Wilcoxen, 2008. "Expecting The Unexpected: Macroeconomic Volatility And Climate Policy," CAMA Working Papers 2008-35, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    8. Valentina Bosetti, Carlo Carraro, Marzio Galeotti, Emanuele Massetti, Massimo Tavoni, 2006. "A World induced Technical Change Hybrid Model," The Energy Journal, International Association for Energy Economics, vol. 0(Special I), pages 13-38.
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    Cited by:

    1. Emanuele Massetti, 2011. "Carbon tax scenarios for China and India: exploring politically feasible mitigation goals," International Environmental Agreements: Politics, Law and Economics, Springer, vol. 11(3), pages 209-227, September.
    2. Sheila M. Olmstead & Robert N. Stavins, 2012. "Three Key Elements of a Post-2012 International Climate Policy Architecture," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 6(1), pages 65-85.
    3. Stefan P. Schleicher & Angela Köppl, 2012. "Scanning for Global Greenhouse Gas Emissions Reduction Targets and their Distributions," Working Papers 2012.36, Fondazione Eni Enrico Mattei.
    4. Menz, Tobias & Welsch, Heinz, 2010. "Population aging and environmental preferences in OECD countries: The case of air pollution," Ecological Economics, Elsevier, vol. 69(12), pages 2582-2589, October.
    5. Mattoo, Aaditya & Subramanian, Arvind, 2012. "Equity in Climate Change: An Analytical Review," World Development, Elsevier, vol. 40(6), pages 1083-1097.

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    Keywords

    International Climate Agreements;

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • Q40 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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