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Post Kyoto
By Catrinus J. Jepma
When building a house, as a rule of thumb, about 10% of the total amount to be spent on it should be reserved for the architecture. After all, if the overall construction and design are not carefully thought through, you risk much frustration once you live in the house, or even worse, it may be necessary to repair or even reconstruct parts of the house. Theoretically, the same applies to the international climate policy regime.
Of course, working out the details is important because also in covering the details things can go wrong (e.g. the fact that KP’s cornerstone, the CDM, seems to become “tangled in red tape” (to paraphrase Sir John Browne, BP Group’s CEO in Foreign Affairs, July/August 2004) a.o. due to the fact that a so-called technical but in fact strategic aspect like project methodology assessment is to a large extent left to a panel that is not subject to public or political control). On the whole, however, the overall design is what matters most, and most experts would probably agree, that the amount of time spent to agree upon the KP’s basic design – a strong focus on cap-and-trade at the national level with a weak compliance regime and no serious commitments for the developing countries – has with hindsight been rather limited indeed.
As it seems now, this mistake is probably not going to be made again in the discussions on a post-Kyoto regime: several reports have been published in the meantime containing various ideas about how to take next steps seriously and realistically. These reports are well in advance of the actual negotiations, which are scheduled to start in 2005 and - hopefully - will be finalised by the end of 2007.
Currently, a number of ideas on regime design are floating around. In my view, many of these ideas are promising in that they create flexibility, are realistic, and seem to be an improvement compared to the KP design; others seem less appealing, though (for a good overview, see Cicero, 2004).
Among the good ideas are the following:
No absolute, fixed emissions cap:
Why would predetermined national GHG emissions caps be the only legally acceptable commitment? First, if during the commitment period the economy turns out to be booming and the cap turns out to be a serious constraint, Parties may either try to delay compliance, search for tricks to relax the constraint, or eventually not at all be prepared to stay within the coalition (see USA). Second, if, instead, the economic growth turns out to be unexpectedly low, the commitment is not at all a constraint and the system even generates a rather odd bonus (see Russian hot air), which effectively inflates the collective cap. So, ideas to have emission caps indexed, e.g. linked to variables such as emissions per unit of GDP, are attractive because they allow commitments to go up and down with the inherently unpredictable waves of the economy. This would avoid the foreseeable frustration under an absolute cap regime. (In fact, we could learn a similar lesson from the recent and ongoing European struggle with predetermined and fixed targets in the EU Stability and Growth Pact).
Different types of commitments:
Why would national caps be the only legally acceptable type of commitment? After all, national caps are rather rigid and tough, especially because a priori costs of compliance are unknown. Wealthy industrialised countries could be ‘condemned’ to such types of commitments – they can afford it – but would it be fair to impose similar instruments for poorer developing countries (as some post-Kyoto articles suggest)? The answer is clear: no. At the same time, it would be unfair and ineffective to have developing countries sit back and do nothing about their (sometimes rapid) emissions growth. Wouldn’t it be an obvious way out to adopt different types of commitments depending on national welfare levels and other country indicators (e.g. energy efficiency improvement) ranging from national commitments to well-defined and agreed sets of policies and measures (with some plausible emission reduction impact)?
Not only unconditional commitments:
Why should commitments be unconditional? It may be more realistic to accept that in the period towards the commitment period many unexpected events can take place that make, with hindsight, commitments unreasonably though or unreasonably lenient. After all, in the CDM and JI baseline procedure it is a well-accepted practice that baselines for particular project types are adjusted in the course of time on the basis of new information. So, a baseline for a project initiated in 2005 could significantly differ from a baseline for a comparable project initiated in, say, 2008. So, why wouldn’t it be an acceptable practice to allow countries to accept commitments in one way or another, but make their stringency conditional upon a set of well-defined criteria (e.g. with regard to technology development, economic development, population growth, or, for that matter, new scientific insight in climate change and its impact) so that new information may allow for adjustments towards either stricter or more relaxed commitments?
Many other design suggestions have been forwarded (see also the contribution by Goldberg and Baumert in this issue), but the three mentioned here have in common that they create flexibility and realism, and may therefore succeed in eventually broadening the group of countries willing to cooperate and adopt commitments.
Catrinus J. Jepma
Chief editor
Previous Notes from the Editor
July 2004
March 2004
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