Michel den Elzen, Paul Lucas and Marcel Berk National Institute of Public Health and the Environment (RIVM), The Nether

1. Michel den Elzen, Paul Lucas and Marcel Berk National Institute of Public Health and the Environment (RIVM), The Netherlands

2. Objective FAIR 2.0 • To explore and evaluate the environmental and abatement costs implications of possible future international climate policy regimes for differentiation of mitigation commitments • The model is not made to promote any particular regime, but to allow for comparing regimes in consistent and transparent way • NB: • Developed to support long-term policy development, but also used for analysing near-term policy issues • Developed to support Dutch climate policy, but used / available for other Parties as well.

3. Features of FAIR • Contents: • links “differentiation of commitments” to “adequacy of commitments • based on established science (IPCC) • includes many proposed regimes options • includes emission trading and costs • Form: • PC computer model • geographical user interface • relatively simple to use • Interactive

4. Some proposals for climate change regimes * Green = included in FAIR 2.0 • Brazilian Proposal(Brazil / RIVM)* • Multi-criteria (CICERO) • Multi-stage (RIVM)* • Contraction & Convergence (Global Commons Institute)* • Global Compromise (Benito Müller)* • Multi-Sector Convergence (ECN/Cicero) • (global) Triptych approach(UU)* • Technological convergence (Tol) • (Convergence in) Emission-Intensities (targets)* • Growth cap index (Ellerman, M IT) • Jacoby rule(ability to pay) (MIT)* • Soft landing (IEPE) • Sectoral commitments / sectoral CDM • SD-PAMs (University of Cape Town)

5. FAIR model versions • Strategy: different modelsfor different target groups • General Public: web model version: • aims: orientation on the issue / education / capacity building • conditions: for free; no commercial use; no technical support; no publications without consent RIVM • Policy Advisors: full model version (no access to code) • aim: support other Parties in policy analysis • conditions: on a case by case basis; licence agreement; limited support; no commercial use; no publication without consent RIVM • Research institutes: full model (access to code) • aim: co-development of the model; scientific analysis / publications • conditions: selected network partner; collaboration agreement; contribution to development of model; no commercial use

6. FAIR 2.0 model Global emission profile Global emission profile DATASETS CLIMATE MODEL Climate assessment model Historical emissions Global emission reduction objective Baseline scenario EMISSIONS ALLOCATION MODEL Multi-stage approach Brazilian Proposal Per capita Convergence emission intensity system Triptych approach Emissions profile Regional emissions targets MACs EMISSION TRADE & COST MODEL Mitigation costs & Emissions trade Regional GHG emissions after trade Abatement costs & permit price

7. Regions in FAIR 2.0

8. Datasets FAIR 2.0- internet version • Historical emissions (1765-1995): • CDIAC (only CO2) • EDGAR/HYDE (all non-CO2 GHGs) • Baseline scenario • IMAGE 2.2 IPCC SRES scenarios • IMAGE-POLES scenario • Emission profiles • two global GHG emission profiles (550 CO2-eq and 650 CO2-eq.) • Marginal Abatement Costs (MAC) curves • MACs CO2: energy model (TIMER 1.0 - IMAGE) • MACs non-CO2: GECS (European Commission)

9. Emissions allocation model of FAIR internet Global emission profile Global emission profile DATASETS CLIMATE MODEL Climate assessment model Historical emissions Global emission reduction objective Baseline scenario EMISSIONS ALLOCATION MODEL Multi-stage approach Brazilian Proposal Per capita Convergence emission intensity system Emissions profile Regional emissions targets MACs EMISSION TRADE & COST MODEL Mitigation costs & Emissions trade Regional GHG emissions after trade Abatement costs & permit price

10. Climate regimes included in FAIR 2.0 • Brazilian proposal approach * • Multi-Stage (RIVM) * • Contraction & Convergence (GCI) * • CSE convergence * • Global Compromise (Muller) * • Grandfathering * • Multi-criteria convergence • Jacoby rule (MIT) • Emissions Intensity Targets approach * • Triptych approach (Utrecht/NWS) * Included in FAIR internet version

11. Brazilian Proposal • distribute emission reductions Annex I based on regional contribution to temperature increase due to their historical emissions (from 1890) • Global application with participation threshold (per capita income levels, and/or per capita emissions) • Our implementation => Brazilian Proposal approach Policy choices (in FAIR 2.0 internet version ): • Participation threshold • Time frames: • start-date (1765, 1890, 1950, 1990)

12. Multi-Stage approach • Multi-stage Approach (RIVM): • a gradual increase in the number of Parties involved and their level of commitment according to participation and differentiation rules Berk and den Elzen (2001), Climate Policy • Four stages (for non-Annex I): • Stage 1. No constraint • Stage 2. Intensity targets (threshold 1) • Stage 3. Stabilisation emissions (threshold 2) • Stage 4. Emission reduction targets (Annex I) • Policy choices: • Threshold options: per capita income, per capita emissions • Stabilisation period • Burden-sharing options: income, emissions, per capita emissions/income, etc.

13. Multi-Stage approach Gradual participation and different type of commitments • Example for S550e: • threshold 1: 20% ’90 Annex I per capita income • threshold 2: 50% ‘90 Annex I per capita income • 5-year stabilisation emissions • contribution to reductions using burden-sharing key p.c. emissions

14. Costs model of FAIR internet version Global emission profile Global emission profile DATASETS CLIMATE MODEL Climate assessment model Historical emissions Global emission reduction objective Baseline scenario EMISSIONS ALLOCATION MODEL Multi-stage approach Brazilian Proposal Per capita Convergence emission intensity system Emissions profile Regional emissions targets MACs EMISSION TRADE & COST MODEL Mitigation costs & Emissions trade Regional GHG emissions after trade Abatement costs & permit price

15. Abatement costs model • Function: 1.To calculate abatement costs (multi-gas) 2.To calculate the buyers and sellers on the international permit market 3.To distribute the global emission reduction objective over the different regions, gases and sectors following a least-cost approach, making use of the flexible Kyoto mechanisms.

16. Methodology • on the basis of Marginal Abatement Cost curves (MAC): 6 GHGs, 11 sectors and 17 world regions; • MAC curves only represent direct costs, there is no direct link to GDP losses • Assumption is made of international emission trading: full trading in case regions participate; limited trading for non-participants (CDM)

17. Costs as % of GDP 550 CO2-eq vs. 650 CO2-eq. Example: • S550e leads to much higher abatement costs than the S650e (equivalent to 0.4% versus 0.05% of world GDP in 2025) • Costs are subject to considerable uncertainty (only baseline)

18. Regional costs under C&C 2050 (S550e) • Buyers and sellers on the market • India, Africa and China sellers; Rest buyers • Large differences costs • Low-income non-Annex I regions gains for most regimes (up to 2%)