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Towards a Workable and Effective Climate Regime with the 21St Conference of the Parties to the United Nations Framework Convention on Climate Change

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Towards a Workable and Effective Climate Regime with the 21St Conference of the Parties to the United Nations Framework Convention on Climate Change Publication of this eBook, incorporating 35 separate chapters, was timed to coincide Towards a Workable and Effective Climate Regime with the 21st Conference of the Parties to the United Nations Framework Convention on Climate Change. As negotiators prepare for Paris, hopes are running high that a Towards a Workable new climate agreement will be adopted. But these hopes are tempered by historical experience. For the past 25 years, countries have tried, and failed, to come up with a cooperative arrangement capable of putting the world on a path to limit climate change. and Effective Climate Will Paris be any different? It is too soon to tell, but it seems that Paris will at least provide a foundation upon which the world can build effective action. The new Paris Agreement – assuming one is adopted – will likely reaffirm the global goal of limiting climate change. It will probably create a platform for revealing the actions and targets Regime that countries have pledged to undertake voluntarily. And it will likely track progress towards meeting the collective goal. The big question is what all of this will add up to. As argued in this eBook, whether Paris ultimately succeeds will depend on whether it gets countries to establish an Edited by Scott Barrett, Carlo Carraro and explicit or implicit carbon price, whether it supports a massive increase in energy R&D, whether it finances a transformation in the world’s energy system, and whether it Jaime de Melo helps the world’s most vulnerable countries and peoples to adapt. If Paris succeeds, 25 years from now, global emissions should be a lot lower than today, and trending further downwards. “A few days before the launch of the COP21 climate conference in Paris, this book appears as an indispensable reference for the multiple global warming agenda issues to be discussed there and in the years to come. It provides a rigorous, lucid and exhaustive account of the unprecedented challenges faced by the world in addressing the climate risk as a true global community, but also of the effective and politically agreeable policies for achieving that goal.“ François Bourguignon, Professor, Paris School of Economics and former Chief Economist of the World Bank “Even if the Paris COP21 proves to be successful in yielding a successor agreement to the Kyoto Protocol, it will still be necessary to do much more than what conceivably would be enshrined in that instrument. This volume is an important contribution for thinking about those additional steps and the substantial predicaments that policymakers are bound to confront as they persevere – as they must – in dealing with climate change. Bravo for the timing and content of this book!“ Ernesto Zedillo Ponce de León, Former President of Mexico and Director of the Yale Center for the Study of Globalization ISBN 978-1-907142-95-6 Centre for Economic Policy Research 77 Bastwick Street, London EC1V 3PZ A VoxEU.org Book Tel: +44 (0)20 7183 8801 Email: [email protected] www.cepr.org 9 781907 142956 CEPR Press CEPR Press Towards a Workable and Effective Climate Regime A VoxEU.org eBook CEPR Press Centre for Economic Policy Research 2nd Floor 33 Great Sutton Street London, EC1V 0DX UK Tel: +44 (0)20 7183 8801 Email: [email protected] Web: www.cepr.org Ferdi Fondation pour les études et recherches sur le développement international (Ferdi) 63, boulevard François-Mitterrand 63000 Clermont-Ferrand France ISBN: 978-1-907142-95-6 © CEPR Press and Ferdi, 2015 Towards a Workable and Effective Climate Regime A VoxEU.org eBook Edited by Scott Barrett, Carlo Carraro and Jaime de Melo CEPR Press Centre for Economic Policy Research (CEPR) The Centre for Economic Policy Research (CEPR) is a network of over 900 research economists based mostly in European universities. The Centre’s goal is twofold: to promote world-class research, and to get the policy-relevant results into the hands of key decision-makers. CEPR’s guiding principle is ‘Research excellence with policy relevance’. A registered charity since it was founded in 1983, CEPR is independent of all public and private interest groups. It takes no institutional stand on economic policy matters and its core funding comes from its Institutional Members and sales of publications. Because it draws on such a large network of researchers, its output reflects a broad spectrum of individual viewpoints as well as perspectives drawn from civil society. CEPR research may include views on policy, but the Trustees of the Centre do not give prior review to its publications. The opinions expressed in this report are those of the authors and not those of CEPR. Chair of the Board Sir Charlie Bean President Richard Portes Director Richard Baldwin Research Director Kevin Hjortshøj O’Rourke Fondation pour les études et recherches sur le développement international The Fondation pour les études et recherches sur le développement international (FERDI) was created in 2003 at the initiative of CERDI (Centre d’études et de recherches sur le développement international, University of Auvergne and CNRS). Its mission is to promote a fuller understanding of international economic development and the factors that influence it. With its network of over 150 experts, FERDI supports research activities that use the most directly relevant instruments and methods to study development and seeks to strengthen the potential of the French-speaking world in this area. FERDI endeavours to promote the contribution of French and European work to the international debate on major development issues, in particular on how Southern and Northern economic policies can best assist development by broadening the capacity for individual choice and by developing equality of opportunity among nations. FERDI wishes to contribute to improving these policies and providing information for companies whose business depends on world markets and their outlook. President Patrick Guillaumont Head of Strategy Christophe Angely Scientific adviser Jaime de Melo Contents List of Abbreviations viii Acknowledgements x Foreword xi 1 Introduction 1 Scott Barrett, Carlo Carraro and Jaime de Melo PART I: The Challenge 2 Implications of climate science for negotiators 31 Thomas F. Stocker 3 Beyond the 2°C limit: Facing the economic and institutional challenges 49 Ottmar Edenhofer, Susanne Kadner, Christoph von Stechow and Jan Minx 4 The state of climate negotiations 69 Brian P. Flannery PART II: Views from Different Parts of the World 5 A view from Africa 85 Alemu Mekonnen 6 A view from China 99 Teng Fei 7 A view from India 107 E. Somanathan 8 The view from different parts of the world: A view from Japan 115 Mitsutsune Yamaguchi and Keigo Akimoto 9 A view from Europe 131 Roger Guesnerie 10 A view from the United States 143 Matthew J. Kotchen PART III: Architecture and Governance 11 Legally binding versus non-legally binding instruments 155 Daniel Bodansky 12 Comparing emission mitigation pledges: Metrics and institutions 167 Joseph E. Aldy and William A. Pizer 13 Towards an effective system of monitoring, reporting, and verification 183 Jonathan B. Wiener 14 After the failure of top-down mandates: The role of experimental governance in climate change policy 201 Robert O. Keohane and David G. Victor 15 A building blocks strategy for global climate change 213 Richard B. Stewart, Michael Oppenheimer and Bryce Rudyk 16 Climate change policies and the WTO: Greening the GATT, revisited 225 Petros C. Mavroidis and Jaime de Melo PART IV: Policy Options 17 The regulatory approach in US climate mitigation policy 239 Dallas Burtraw 18 Pricing carbon: The challenges 251 Thomas Sterner and Gunnar Köhlin 19 Taxing carbon: Current state of play and prospects for future developments 267 Xueman Wang and Maja Murisic 20 Linkage of regional, national, and sub-national policies in a future international climate agreement 283 Robert N. Stavins 21 Options for avoiding carbon leakage 297 Carolyn Fischer PART V: Technology Options 22 International cooperation in advancing energy technologies for deep decarbonisation 315 Michael Toman 23 The role of renewables in the pathway towards decarbonisation 327 Valentina Bosetti vi 24 Carbon capture and storage: Promise or delusion? 343 Massimo Tavoni 25 The alternatives to unconstrained climate change: Emission reductions versus carbon and solar geoengineering 353 Scott Barrett and Juan Moreno-Cruz PART VI: Burden Sharing and Development 26 Poverty and climate change: Natural disasters, agricultural impacts and health shocks 369 Stephane Hallegatte, Mook Bangalore, Laura Bonzanigo, Marianne Fay, Tamaro Kane, Ulf Narloch, Julie Rozenberg, David Treguer and Adrien Vogt-Schilb 27 Policy options in low-income countries: Achieving socially appropriate climate change response objectives 391 Alice Akinyi Kaudia 28 REDD+: What should come next? 405 Arild Angelsen 29 Curbing carbon without curbing development 423 Paul Collier 30 Towards resilient and low-carbon cities 435 Anthony G. Bigio 31 Meaningful technology development and transfer: A necessary condition for a viable climate regime 451 Heleen de Coninck and Shikha Bhasin PART VII: Climate Finance 32 The macroeconomics of climate policy: Investments and financial flows 467 Emanuele Massetti 33 Pros and cons of alternative sources of climate change financing and prospects for ‘unconventional finance’ 483 Barbara Buchner and Jane Wilkinson 34 Harnessing the animal spirits of finance for a low-carbon transition 497 Jean-Charles Hourcade 35 Measuring vulnerability to climate change for allocating funds to adaptation 515 Patrick Guillaumont
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