IDEAS home Printed from https://ideas.repec.org/p/nbr/nberwo/15370.html
   My bibliography  Save this paper

Level versus Equivalent Intensity Carbon Mitigation Commitments

Author

Listed:
  • Huifang Tian
  • John Whalley

Abstract

Large population / rapidly growing economies such as China and India have argued that in the upcoming UNFCCC negotiations in Copenhagen, any emission reduction targets they take on should be based on their intensity of emissions (emissions/$GDP) on a target date not the level of emissions. They argue that this will allow room for their continued high growth, and level commitments in the presence of sharply differential growth between OECD and non-OECD economies represent asymmetric and unacceptable arrangements. Much of the policy literature agrees with this position, also arguing that while there is equivalence between commitments if growth rates are certain, where growth rates are uncertain equivalence breaks down. However, no explicit models or experimental design are used to support this claim. Here we use a modeling framework in which countries face a business as usual (BAU) growth profile under no mitigation, and can mitigate (reduce consumption) and lower temperature change but with a utility loss. International trade enters through trade in country differentiated goods, and the impact of mitigation on country welfare depends critically on the assumed severity of climate related damage. We then consider cases where country growth rates are uncertain, and compare the impacts of levels versus intensity commitments, with the latter made equivalent in the sense that expected emissions are the same. There are different senses of this equivalence; global equivalence with differing country impacts, or strict country by country equivalence. Under intensity commitments there is more variation in both consumption and emissions than is the case with level commitments, and we show cases where level commitments are preferred to intensity commitments by all countries. Whether this is the case also depends upon how growth rate uncertainty is specified. We are also able to consider packages of mixed level and intensity commitments by country which might be the outcome of UNFCCC negotiations. Outcomes can thus be opposite to prevailing opinion, but it depends on how the equivalent targets are specified.

Suggested Citation

  • Huifang Tian & John Whalley, 2009. "Level versus Equivalent Intensity Carbon Mitigation Commitments," NBER Working Papers 15370, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:15370
    Note: EEE
    as

    Download full text from publisher

    File URL: http://www.nber.org/papers/w15370.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Huifang Tian & John Whalley, 2008. "China's Participation in Global Environmental Negotiations," NBER Working Papers 14460, National Bureau of Economic Research, Inc.
    2. Henry D. Jacoby & Richard S. Eckaus & A. Denny Ellerman & Ronald G. Prinn & David M. Reiner & Zili Yang, 1997. "CO2 Emissions Limits: Economic Adjustments and the Distribution of Burdens," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 31-58.
    3. Newell, Richard G. & Pizer, William A., 2003. "Regulating stock externalities under uncertainty," Journal of Environmental Economics and Management, Elsevier, vol. 45(2, Supple), pages 416-432, March.
    4. Barros, Vincente & Grand, Mariana Conte, 2002. "Implications of a dynamic target of greenhouse gases emission reduction: the case of Argentina," Environment and Development Economics, Cambridge University Press, vol. 7(03), pages 547-569, July.
    5. Cai, Yuezhou & Riezman, Raymond & Whalley, John, 2013. "International trade and the negotiability of global climate change agreements," Economic Modelling, Elsevier, vol. 33(C), pages 421-427.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marschinski, Robert & Edenhofer, Ottmar, 2010. "Revisiting the case for intensity targets: Better incentives and less uncertainty for developing countries," Energy Policy, Elsevier, vol. 38(9), pages 5048-5058, September.
    2. repec:eee:rensus:v:75:y:2017:i:c:p:855-867 is not listed on IDEAS
    3. repec:spr:annopr:v:255:y:2017:i:1:d:10.1007_s10479-015-1927-0 is not listed on IDEAS
    4. Jiang, Jingjing & Xie, Dejun & Ye, Bin & Shen, Bo & Chen, Zhanming, 2016. "Research on China’s cap-and-trade carbon emission trading scheme: Overview and outlook," Applied Energy, Elsevier, vol. 178(C), pages 902-917.

    More about this item

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F18 - International Economics - - Trade - - - Trade and Environment

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:nbr:nberwo:15370. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (). General contact details of provider: http://edirc.repec.org/data/nberrus.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.