Abstract
In the current political environment, it is highly unlikely that all countries will agree to take on immediate commitments to reduce their greenhouse gas emissions. In particular, developing countries will look to their wealthier neighbors to be the “first movers.” In this paper, we assume that developing countries will eventually accede to an international emission reductions regime under two alternative scenarios. In the first, the decision on the part of developing countries to join the coalition is not made until just before accession. There is no planning to reconfigure their capital stock in advance of joining the coalition. In the second, we assume that developing countries commit to prespecified reductions beginning at an agreed upon date in the future; that is, they anticipate accession. We find that with an agreement now to future reductions, developing countries will modify their technology investment decisions in advance of accession to avoid being saddled with costly stranded assets, substantially reducing their GDP losses. Developed countries also benefit from not having to make as drastic reductions in the near-term to preserve the feasibility of stringent stabilization goals.
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This note builds upon our earlier work for the Energy Modeling Forum (EMF) 22 Study on transition scenarios for international climate policy. The authors benefited from discussions with Francisco de la Chesnaye, Leon Clarke, Steven Rose, Massimo Tavoni and John Weyant. Although this work was supported by the Electric Power Research Institute (EPRI), the views are solely those of the authors and do not necessarily represent those of EPRI or its members.
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Richels, R.G., Blanford, G.J. & Rutherford, T.F. International climate policy: a “second best” solution for a “second best” world?. Climatic Change 97, 289–296 (2009). https://doi.org/10.1007/s10584-009-9730-z
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DOI: https://doi.org/10.1007/s10584-009-9730-z