Saturday, January 23, 2010

Tol on Post-Kyoto Climate Policy

Richard S.J. Tol, a top climate economist, is somewhat surprisingly endorsing the extension of the Kyoto Protocol (here). His argument makes some sense - as he notes, the Protocol itself does not expire in 2012, only its emissions reduction targets do that. Still, I think the Protocol is fatally hampered by its overly ambitious emissions trading system and   offset mechanisms that really are nothing more than an elaborate system for transferring resources from rich countries to poor countries with no necessary impact on global emissions of greenhouse gases.

If some amount of mitigation is presently desirable (which I think it is, though others might reasonably disagree), then it would be far better to replace the Kyoto mitigation regime with something closer to the European Union's Emissions Trading Scheme, which limits the use of offsets and limits emissions trading to the most easily measured combinations of sources and greenhouse gases  - namely carbon dioxide emissions from four major emitting industries.

I suspect, however, that the international community will do more or less what Tol suggests - extend and expand on the Kyoto Protocol - if (but only if) the US adopts, as expected, an emissions trading scheme that is closer to the Kyoto model than the EU model.


  1. Note that the Kyoto Protocol only specifies the principles of international flexibility. There is nothing wrong with that.

    There are many issues with the way in which this is implemented in practice, but those regulations were developed later, are not part of the treaty, and are easier to change.

    The EU ETS, by the way, only works in well-developed legal and political systems. It is not suited for all countries, and I would indeed argue that Bulgaria, Cyprus and perhaps Italy are unsuited.

  2. Richard, thanks for the comment. I agree with your first point and your third point; emissions trading in general is not well suited for many countries for both institutional and technological reasons. If the EU ETS doesn't work well in Bulgaria, then Kyoto trading programs wouldn't either.

    I also agree that subsidiary regulations are, as a rule, easier to change than treaty provisions. However, given the interest groups that have emerged in support of JI and CDM, I think they have become part and parcel of the Protocol.


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