Possible criteria for differentiated commitments: Fair or feasible?

This paper discusses the notion of differentiated commitments or burden sharing in the ongoing negotiations on emissions reductions of greenhouse gases. The negotiations, which takes place in the Ad Hoc Group on the Berlin Mandate (AGBM) under the Framework Convention on Climate Change (FCCC), is leading up to the third Conference of the Parties (COP-3), which is scheduled to take place in Kyoto in December later this year. The paper briefly surveys some of the main issues in the negotiations and argues that the question of differentiated commitments or burden sharing is only one among many difficult topics on the negotiating table. Based on some proposed principles of ‘fairness’, a few central indicators are identified and we provide data on these for a group of OECD countries. We outline some of the propositions for differentiated commitments in the current negotiations, and concludes that within the framework of the OECD countries, burden sharing is only possible if countries outside of the European Union (EU) can compensate USA for the additional greenhouse gas reductions needed to allow high cost countries to commit to lower abatement than the average reduction level. However, an attractive option, not explored in this paper, is for the group of countries outside EU and USA to make a deal with countries with economies in transition, as these countries generally are expected to have relatively low marginal reduction costs. Further studies of such ‘east-west’ deals are clearly warranted

The use of PPP or MER in the construction of emission scenarios is more than a question of "metrics"

The Intergovernmental Panel on Climate Change (IPCC)’s Special Report on Emissions Scenarios (SRES, IPCC, 2000) has been a matter of debate since Ian Castles and David Henderson claimed that the scenarios were based on unsound economics giving rise to improbably high emission growth. A main point in their critique was that the scenario-makers converted national GDP data to a common measure using market exchange rates (MER) rather than purchasing power parity rates (PPP). IPCC responded to the critique by claiming that the use of PPP or MER based measures is just a question of “metrics”, as important as the “switch from degrees Celsius to Fahrenheit”. This paper addresses both the critique from Castles and Henderson and the response from the IPCC. It builds on our earlier argument that the use of MER-based measures, although misleading in some respects, probably have not given rise to seriously exaggerated emission forecasts because comparing regional income levels by the use of MER has two types of implications that draw in different directions and effectively neutralize one another. Nevertheless, we argue that the choice between MER or PPP in the construction emission scenarios is far more than just a question of metrics. Finally, we discuss whether the SRES scenario with the lowest cumulative emissions is a reasonable lower limit with respect to global emission growth

Klima og klimapolitikk i Europa og Norge : ny teknologi kan løse klimaproblemene

Løsningen på klimaproblemet ligger i utvikling av ny teknologi. Klimapolitiske tiltak bør derfor ha som hovedmål å sikre utvikling av klimavennlig teknologi slik at denne kan tas i bruk i stor skala mot midten av dette århundret. Norsk og europeisk klimapolitikk de siste 10-15 årene har vært preget av store ord om hvor viktig det er å finne tiltak i forhold til klimaproblemene. Mye er likevel uavklart når det gjelder utformingen av tiltak og virkemidler

A Comment on the Copenhagen Accord- Feasibility and Cost

The Copenhagen Accord has been followed up by national pledges of greenhouse gas emissions reductions in the year 2020 without specifying measures to enforce actions. As a consequence, the capacity of parties to fulfil their obligations is of basic interest. This article outlines the effects of full compliance with pledges on greenhouse gas emissions, economic growth, and trade. The study is based on the global computable general equilibrium model GRACE distinguishing between fossil and non-fossil energy use. Global emissions from fossil fuels in 2020 turn out to be 15% lower than in a business as usual (BAU) scenario and 3% below the global emissions from fossil fuels in 2005. China and India increase their emissions in 2020 to 1 and 5 per cent above BAU levels in 2020, respectively. We find some carbon leakage towards India, China and Russia within the energy intensive industries steel and cement.

Benefits of climate policies: Some tentative calculations

Consequences for the Norwegian economy of an active policy against anthropogenic climate change can be analyzed by use of an economic model evaluating the differences between a reference scenario without control policies and alternative paths using economic incentives to reduce emissions of greenhouse gases. In traditional economic models the effect of the new taxes usually appears as reduced growth in macroeconomic indicators such as GDP, gross production and private consumption. When measures against climate change nevertheless are contemplated, it is due to a belief that the benefits of a policy more than outweighs the costs. Many benefits are hard to quantify. This is true for instance for the effects associated with the general welfare of people under different climatic conditions. However, it is possible to associate some tentative figures with some of the benefits likely to emerge from an introduction of a vigorous climate policy. In this paper we try to evaluate some usually neglected benefits associated with an introduction of a carbon tax. The benefits emerge from reduction in local pollution levels and the ensuing reduction in environmental damages to forests and lakes, health damages and damages to certain types of materials. In addition, benefits accruing from reduced traffic congestion, road damage, traffic accidents and noise levels are quantified. We find that the benefits thus accounted for go a long way toward compensating the economic loss measured as a reduction in GDP by the macroeconomic model MODAG. The uncertainty in the estimates of the benefits is assessed, and distributional consequences of the carbon tax are analyzed

PPP-correction of the IPCC emission scenarios - does it matter?

Abstract: Ian Castles and David Henderson have criticized IPCC’s Special Report on Emissions Scenarios (SRES) (IPCC, 2000) for using market exchange rates (MER) instead of purchasing power parities (PPP) when converting regional GDP into a common denominator. The consequence is that poor countries generally appear to be poorer than they actually are. An overstated income gap between rich and poor countries in the base year gives rise to projections of too high economic growth in the poor countries because the scenarios are constructed with the aim of reducing the income gap. Castles and Henderson claim that overstated economic growth means that greenhouse gas emissions are overstated as well. However, because closure of the emission intensity gap between the rich and the poor parts of the world is another important driving force in the scenarios, we argue that the use of MER in the SRES scenarios has not caused an overestimation of the global emission growth because the two types of errors effectively neutralize one another