1. Heleen de Coninck (ECN/IVM) ECN side-event COP13 – December 7th, 2007
Fragmentation of international regimes: cap-and-trade agreements and TOAs
Heleen de Coninck (ECN/IVM)
ECN side-event COP13 – December 7th, 2007

2. Introduction
Aim: To explore the consequences of co-existing cap-and-trade and technology-oriented agreements in an international climate regime
Project: Compatibility of TOAs with cap-and-trade approaches (with VU University of Amsterdam and Utrecht University)
Acknowledge Dutch government for funding and support, however, this presentation is not meant to represent the views of the Dutch government

3. Methodology Identify cap-and-trade and TOA variants
Analyse all combinations and identify the major frictions if they would co-exist
TOAs: CCS and sugarcane-based bioethanol
Cap-and-trade variants:
Kyoto-Continued
Multistage: no-lose/intensity
Rules and modalities of co-existence:
Separate: e.g., APP and Kyoto
Linked: e.g., ETS and CDM
Joined: e.g., CDM and Kyoto

4. Institutional analysis: bioethanol
Kyoto Continued
In this case, all countries in the TOA are also Kyoto countries. TOA introduces technology bias in the EU Kyoto-continued-implementation. If side-CDM arrangement can be made, possibly a geographical bias in CDM towards Africa.
The agreement has no consequences for Brazil.
Multistage
(no-lose and intensity)
African and EU countries can trade similarly as in the Kyoto-continued case. The TOA introduces a technology bias in the EU-implementation, and possibly also a geographical bias in policy-CDM towards Africa. The TOA does not affect Brazil’s multi-stage targets as Brazil is only technology supplier in the TOA.

5. Institutional analysis: CCS
Kyoto Continued
US could exchange CCS-based credits with the Kyoto-continued, although a methodologically challenging baseline would be needed. To guarantee environmental integrity of the Kyoto-continued agreement, the baseline of the EU or Russia could be adopted. A policy-CDM-type of agreement could be agreed between China and India, as Kyoto-ratifying countries without a binding target.
Multistage
(no-lose)
For US, Russia and EU: same as Kyoto-continued
For China and India, risk of double-counting with no-lose baseline. Solution: take CCS agreement into account in baseline.
Multi-stage (intensity)
Same as no-lose. Accounting may be more complex

6. Consequences of post-2012 patchwork
TOA always causes a “technology bias” in a technology-neutral cap-and-trade treaty, so reduces cost-effectiveness
Fragmentation of the international institutional landscape:
Several treaties with similar aim but different sets of rules
Problems with consistency, accountability and transparence
More possibilities for power play; has been shown to weaken weak Parties
Avoid fragmentation of the climate regime!
TOA and cap-and-trade regimes both coordinated under one UNFCCC umbrella

7. Thank you More information and report copies: Heleen de Coninck
Energy research Centre of the Netherlands
Unit Policy Studies
Radarport 60/P.O.Box 56890
1040 AW Amsterdam
Tel