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Environmental effectiveness and economic consequences of fragmented versus universal regimes: what can we learn from model studies?

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Abstract

A post-2012 regime aimed at reducing greenhouse gas (GHG) emissions could develop towards a universal or fragmented regime. The fundamental difference between a universal and a fragmented regime is that the first involves a single comprehensive climate regime in which all countries participate, whereas the second involves either multiple treaties or a single treaty in which not all countries participate. This study assesses the literature on a wide range of different model studies concerning the environmental effectiveness and economic consequences of various universal and fragmented climate regimes. The most important conclusions (e.g. relative position of regions in terms of costs) are generally consistent across different studies, despite the differences in methodology. We conclude that stabilising GHG concentrations at low levels is more costly with a fragmented regime than with a universal regime, because reduction targets must be achieved by a smaller number of countries or because fragmented treaties may prevent reducing GHGs where it is cheapest to do so. However, establishing a universal regime will be challenging due to cost differences between regions if emissions are allocated based on specific allocation rules and incentives to free-ride on a universal regime. Even though alternative behaviours such as responsibility, the implementation of transfer schemes or exclusive membership can increase the likelihood of achieving a universal regime, a fragmented regime seems more feasible. Therefore, a transitional fragmented ‘coalition of the willing’ could be established first, which could provide the basis for a larger, universal regime in the long term.

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Notes

  1. For a quantitative overview of all allocation studies for emission reductions only, we refer to den Elzen and Höhne (2008).

  2. The Integrated Model to Assess the Global Environment (IMAGE) is a dynamic integrated assessment modelling framework for global change. IMAGE aims at supporting decision−making by quantifying the relative importance of major processes and interactions in the society−biosphere−climate system. For more information see http://www.mnp.nl/image.

  3. ENV-Linkages is a global macro−economic general equilibrium model containing 26 sectors and 34 world regions and provides economic projections for multiple time periods.

  4. Not included in the table are the results by Manne et al. (1995), who analysed a very low carbon tax starting at $1 per tonne, increasing at 5% per year. Results are reported for five regions only and are very modest, as can be expected from such a low carbon tax.

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Acknowledgements

This report has been written as part of the ADAM project, co-funded by the European Commission within the Sixth Framework Programme (2002–2006). We are indebted to two anonymous referees for their detailed comments. (Bollen et al. 2004a; den Elzen et al. 2008)

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  1. Netherlands Environmental Assessment Agency, Global Sustainability and Climate, P.O. Box 303, 3720, AH Bilthoven, The Netherlands

    Andries F. Hof

  2. Netherlands Environmental Assessment Agency, P.O. Box 303, 3720, AH Bilthoven, The Netherlands

    Michel G. J. den Elzen & Detlef P. van Vuuren

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  1. Andries F. Hof
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Hof, A.F., den Elzen, M.G.J. & van Vuuren, D.P. Environmental effectiveness and economic consequences of fragmented versus universal regimes: what can we learn from model studies?. Int Environ Agreements 9, 39–62 (2009). https://doi.org/10.1007/s10784-008-9087-1

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