1 / 9

Linking treaties to expand the market

Linking treaties to expand the market. Kristian Tangen and Henrik Hasselknippe A post-2012 Architecture Bonn June 12 2003. Merits and shortcomings of cap-and-trade. Merits Cost effectivness and price signals Large reduction at low prices TEETH! Shortcomings

nita-meyer
Download Presentation

Linking treaties to expand the market

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Linking treaties to expand the market Kristian Tangen and Henrik Hasselknippe A post-2012 Architecture Bonn June 12 2003

  2. Merits and shortcomings of cap-and-trade • Merits • Cost effectivness and price signals • Large reduction at low prices • TEETH! • Shortcomings • High prices: Politically impossible • Need other instruments for technological change • Create incentives for cap-and-trade • Develop supplementing instruments

  3. Challenges & Solutions • Negotiations of several treaties • GOOD: Fewer negotiation parties • BAD: Fewer trade-offs, package deals • Challenge • Weaker incentives for cap-and-trade? • Solution? • Linked multi-treaty system • Differentiated rights and duties • Graduation thresholds

  4. Linking rights and duties UNFCCC/KP/CDM Other treaties -Technology -Development Reporting Treaty Trading Treaty Support Treaty Rights: Only parties negotiate

  5. Reporting Treaty • Reporting: first step for effective policies • Rights • Gateway to Support and Trading treaties • Duties • Comply with reporting requirements • Reporting requirements • Kyoto-style reporting (art. 5,7 & 8) • For sectors or whole economy • Depends on developing level • E.g. only CO2 from energy

  6. Below threshold Duties Compliance with Reporting Treaty Rights Participation Capacity building Financial support Above threshold Duties Compliance with Trading Treaty Rights Participation Support Treaty

  7. Cap-and-trade Treaty • Duties • Caps for sectors, or the whole economy • Caps only sectors covered by Reporting Treaty • Rights • Full participation in emissions trading • Can be party to Support Treaty • Additional support for newcomers

  8. Caps • To be set by negotiations between parties to the Trading Treaty • Possibility, one of many • Caps set as reduction from BAU • BAU has to be approved by review team • Lower reductions for newcomers • Example • Newcomers: -0.1% from BAU • Veterans: -2% p.a. from BAU • With various levels in between?

  9. Possible first steps • Bottom-up processes • Trading countries (EU, Japan, Canada) • Should develop common currency • Discuss linking and future evolution • Reporting • Increase support for developing country reporting • Technology and innovation • Establish framework for international cooperation • Sensible also if KP does not enter into force

More Related