Environmental and Resource Economics

, Volume 65, Issue 1, pp 81–107 | Cite as

Incentives and Effects of No-Lose Targets to Include Non-Annex I Countries in Global Emission Reductions

Article

Abstract

We analyze the potential of no-lose targets used as an instrument to integrate non-Annex I countries in global emission reduction efforts. We set up a game-theoretical model to derive the participation conditions for a non-Annex I country and evaluate the effect of a no-lose target on the reduction of global emissions. Our analyses show that meaningful contributions from non-Annex I countries are possible, but their contribution to global emission reductions is limited and depends on several factors. Ambitious targets for the Annex I countries are a precondition. Further determining factors are differences in the abatement potentials between Annex I and non-Annex I countries, and market power on the certificate market. Nonetheless, in contrast to other funding mechanisms, no-lose targets, rather than requiring additional funding, can actually reduce costs for the Annex I countries.

Keywords

No-lose targets Profitability Non-Annex I countries Post-Kyoto  Emissions trading 

References

  1. Barrett S (1994) Self-enforcing international environmental agreements. Oxf Econ Pap 46:878–894Google Scholar
  2. Bodansky D (2003) Climate commitments: assessing the options. In: Beyond Kyoto: advancing the international effort against climate change. Pew Center on Global Climate Change, pp 37–60Google Scholar
  3. Carraro C, Siniscalco D (1993) Strategies for the international protection of the environment. J Pub Econ 52(3):309–328CrossRefGoogle Scholar
  4. Coase RH (1960) The problem of social cost. J Law Econ 3:1–44CrossRefGoogle Scholar
  5. Criqui P (2009) The POLES model—POLES state of the art LEPII-EPE. Tech. rep, CNRS Grenoble and EnerdataGoogle Scholar
  6. DECC 2012 Updated short-term traded carbon values used for UK public policy appraisal. Tech. rep., Department of Energy and Climate ChangeGoogle Scholar
  7. Duscha V, Schleich J (2013) Can no-lose targets contribute to a 2\(^\circ \)c target? Clim Policy 13:305–327CrossRefGoogle Scholar
  8. Ellerman AD, Wing IS (2003) Absolute versus intensity-based emission caps. Clim Policy 3(Supplement 2):S7–S20CrossRefGoogle Scholar
  9. Finus M (2002) Game theory and international environmental cooperation: any practical application? In: Boehringer C, Finus M, Vogt C (eds) Controlling global warming—perspectives from economics, game theory and public choice. Edward Elgar Publishing Ltd, Cheltenham, pp 9–104Google Scholar
  10. Hahn RW (1984) Market power and transferable property rights. Q J Econ 99:753–765CrossRefGoogle Scholar
  11. Hoehne N, Michelsen C, Moltmann S, Ott HE, Sterk W, Thomas S, Watanabe R, Lechtenboehmer S, Schallaboeck KO (2008) Proposals for contributions of emerging economies to the climate regime under the UNFCCC post 2012. Climate Change 15/08Google Scholar
  12. Hofmann MF (2010) Sector no lose targets in the context of a post-2012 climate agreement. Carbon Clim Law Rev 4(1):30–41Google Scholar
  13. Hovi J, Sprinz DF, Underdal A (2009) Implementing long-term climate policy: time inconsistency, domestic politics, international anarchy. Glob Environ Polit 9:20–39CrossRefGoogle Scholar
  14. IEA (2007) World Energy Outlook 2007. Tech. rep, International Energy AgencyGoogle Scholar
  15. IEA (2010) World energy outlook 2010. Tech. rep, International Energy AgencyGoogle Scholar
  16. Intergovernmental Panel on Climate Change (2014) Climate change 2014: synthesis report. In: Contribution of working groups I, II and III to the fifth assessment report of the intergovernmental panel on climate change (Core Writing Team, Pachauri RK, Meyer LA (eds)]. IPCCGoogle Scholar
  17. IPTS (2010) Prospective outlook on long-term energy systems—POLES manual version 6.1. Tech. rep., Institute for Prospective Technological Studies, European Joint Research CentreGoogle Scholar
  18. Jaeger CC, Jaeger J (2011) Three views of two degrees. Reg Environ Change 11:815–826CrossRefGoogle Scholar
  19. Karjta S, Athanasiou T, Baer T (2012) What next volume III: climate, development and equity. In: Haellstroem N (ed) The North–South divide, equity and development—the need for trust-building for emergency mobilisation. Dag Hammarskjöld Foundation and the What Next Forum, UppsalaGoogle Scholar
  20. Kitous A, Criqui P, Bellevrat E, Chateau B (2010) Transformation patterns of the worldwide energy system—scenarios for the century with the POLES model. Energy J 31:40–82CrossRefGoogle Scholar
  21. Lessmann K, Marschinski R, Finus M, Kornek U, Edenhofer O (2013) Emissions trading with non-signatories in a climate agreement—an analysis of coalition stability. The Manchester School. doi: 10.1111/manc.12045
  22. Marschinski R, Edenhofer O (2010) Revisiting the case for intensity targets: better incentives and less uncertainty for developing countries. Energy Policy 38(9):5048–5058CrossRefGoogle Scholar
  23. McKinsey & Company (2009) China’s green revolution: prioritizing technologies to achieve energy and environmental sustainability, reportGoogle Scholar
  24. Metz B, Davidson OR, Bosch PR, Dave R, Meyer LA (eds) (2007) Climate change 2007: mitigation. In: Contribution of working group III to the fourth assessment report of the intergovernmental panel on climate change. Cambridge University Press, CambridgeGoogle Scholar
  25. Philibert C (2000) How could emissions trading benefit developing countries? Energy Policy 28:947–956CrossRefGoogle Scholar
  26. Philibert C, Pershing J (2001) Considering the options: climate targets for all countries. Clim Policy 1:211–227CrossRefGoogle Scholar
  27. Quirion P (2005) Does uncertainty justify intensity emission caps? Resour Energy Econ 27:343–353CrossRefGoogle Scholar
  28. Schmidt RC, Marschinski R (2010) Can China benefit from adopting a binding emissions target? Energy Policy 38(7):3763–3770CrossRefGoogle Scholar
  29. Tol RSJ, Rehdanz K (2008) A no cap but trade proposal for emission targets. Clim Policy 8(3):293–304CrossRefGoogle Scholar
  30. WRI (2011) Climate analysis indicators tool (CAIT) version 8.0. World Resources Institute, WashingtonGoogle Scholar

Copyright information

© Springer Science+Business Media Dordrecht 2016

Authors and Affiliations

  1. 1.Fraunhofer Institute for Systems and Innovation ResearchKarlsruheGermany
  2. 2.Karlsruhe Institute of Technology, Institute ETSKarlsruheGermany

Personalised recommendations