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Global Climate Change Digest
A Guide to Information on Greenhouse Gases and Ozone Depletion
Published July 1988 through June 1999

FROM VOLUME 9, NUMBER 1, JANUARY 1996

PROFESSIONAL PUBLICATIONS...
POLICY

Item #d96jan3

"The United Nations Climate Convention: Unattainable or Irrelevant," P.E. Kauppi (Finnish Forest Res. Inst., Unioninkatu 40A, Fin-00170 Helsinki, Finalnd), Science, 270(5241), 1454, Dec. 1, 1995.

The convention seeks "stabilization of greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system." This note argues that, based on the historical trend of CO₂ emissions and concentrations, and future emission scenarios, sufficiently low concentrations will be unattainable for at least 50 years. On the other hand, if climate model projections are wrong, there will be no need to control emissions and the convention is irrelevant. The more likely scenario is that the convention is relevant but unattainable.

Item #d96jan4

"The Equitable International Allocation of Tradable Carbon Emission Permits," W. Beckerman (Balliol College, Oxford, U.K.), J. Pasek, Global Environ. Change, 5(5), 405-413, Dec. 1995.

There has been considerable discussion recently of various "equitable" methods for allocating carbon emission permits among countries with widely conflicting interests. This paper argues that genuine considerations of equity will play little role in the development of any international allocations of emission permits, as already demonstrated by the 1995 Berlin conference of parties to the climate convention. The main reason is that no clear principles of distributive justice among nations exist. Suggests that an international agency should be allowed to sell or lease some of the total permits and to use the revenues to aid the most needy individuals in society, regardless of where they live. The remaining permits should be distributed among countries according to criteria that enjoy wide acceptability in negotiation situations involving mutual shares in collective burdens.

Item #d96jan5

"Creating a Global Warming Implementation Regime," L.D.D. Harvey (Dept. Geog., Univ. Toronto, 100 St. George St., Toronto ON M5S 1A1, Can.), ibid., 415-432.

Critiques international policy instruments that have been proposed previously, then proposes a unique, multiple approach which addresses the issues of equity, flexibility, cost minimization, and population growth. The key element combines annual tradable permits (based on population in a fixed year) with a small carbon tax on emissions in excess of permits. The plan has several advantages, but both developed and developing countries have to make an important compromise from their currently held positions. Developed countries must accept a permit allocation based on population, and developing countries accept that this allocation be based on population in a fixed year (subject to one future adjustment).

Item #d96jan6

"Methane Embodied in the International Trade of Commodities—Implications for Global Emissions," S. Subak (CSERGE, Univ. E. Anglia, Norwich NR4 7TJ, UK), ibid., 433-446.

Current methods of estimating the methane emissions of individual countries do not account for emissions released abroad in the production of imported agricultural products. Importation of the most methane-intensive agricultural goods—rice, meat and milk—for six major developed countries is equivalent to about 7% of livestock emissions within those importing countries. This amount could grow considerably as traditional subsidies and levies are removed, threatening the attainment of national targets for emissions. Trade should be considered when estimating national emissions, but the more practical and equitable approach is to extend greenhouse gas emissions targets to all countries, using some scheme for transferring resources where needed.

Item #d96jan7

"Dynamic Incentives of Environmental Regulations: The Effects of Alternative Policy Instruments on Technology Diffusion," A.B. Jaffe (Dept. Econ., Brandeis Univ., Waltham MA 02254), R.N. Stavins, J. Environ. Econ. & Mgmt., 29(3), S43-S63, Nov. 1995 Part 2.

Develops a framework for quantitatively comparing the effects of "market-based" and "command-and-control" approaches by estimating the economic penalty that businesses, through their actions, reveal to be associated with violation of environmental regulations. In the context of climate change, examines the effects of taxes, technology adoption subsidies, and technology standards. Employs state-level data on the diffusion of thermal insulation in new home construction, to compare the effects of energy prices, insulation cost, and building codes.

Item #d96jan8

"The Relative Role of Trace Gas Emissions in Greenhouse Abatement Policies," M. Kandlikar (Dept. Eng. & Public Policy, Carnegie Mellon Univ., Pittsburgh PA 15213), Energy Policy, 23(10), 879-883, Oct. 1995.

Representations of scientific and economic processes are combined in an integrated analysis to determine greenhouse gas indices for methane, nitrous oxide and HCFC-22. Suggests that greenhouse gas indices depend critically on the choice of discount rates, uncertainties in greenhouse gas lifetimes, and the degree of non-linearity in climate damages. Costs of carbon abatement and uncertainties in climate models are less important.

Item #d96jan9

"Transaction Costs and Tradeable Permits," R.N. Stavins (JFK Sch. Govt., Harvard Univ., Cambridge MA 02138), J. Environ. Econ. & Mgmt., 29(2), 133-148, Sep. 1995.

The current enthusiasm for tradeable emission permits is so great that policy action and implementation has, in some cases, exceeded the understanding of some fundamental issues. This paper treats an area that has received little attention: the effects of transaction costs on the performance of markets for pollution control. Claims made for the relative cost-effectiveness of tradeable-permit systems have often been exaggerated. Transaction costs may be significant in these markets, reducing trading levels and increasing abatement costs.

Item #d96jan10

"Econometric Modelling of International Carbon Tax Regimes," C. Smith (London Business Sch., Sussex Pl., Regents Pk., London NW1 4SA, UK), S. Hall, N. Mabey, Energy Econ., 17(2), 133-146, Apr. 1995.

Compares simulations of the impact of a number of possible carbon/energy tax agreements on CO₂ emissions generated by two models. One is an econometric model relating fossil fuel demand in eight OECD countries to GDP and prices. The other is a model of endogenous technical progress, which includes both price-induced innovation and structural change in the economy as determinants of energy consumption. In the long run, the magnitude of taxes required to stabilize or reduce emissions would be large, and there are important differences in price responses among the countries. These must be taken into account in international modeling and policy formulation.