1. ++++++++++++++ ++++++++++++++ Beyond Kyoto Climate Commitments: Assessing the Options Prepared for the Pew Center on Global Climate Change by Daniel Bodansky

2. ++++++++++++++ ++++++++++++++ Why commitments? Climate change mitigation is a collective action problem –Climate change mitigation provides a public good: benefits shared by everyone –But the country undertaking mitigation gets only small fraction of benefits > No incentive to act unilaterally –Action makes sense only if reciprocated by other states

3. ++++++++++++++ ++++++++++++++ The role of commitments Commitments provide some assurance that others will act Even in absence of any “enforcement,” countries feel pressures to comply with commitments –Internalization of commitments: domestic legal and political pressure to comply –External pressure: Reputation internationally Public opinion

4. The Three W’s: What, When and Who? What should be the commitments? Who should be subject to commitments? When should commitments apply?

5. ++++++++++++++ ++++++++++++++ What? – Legal form Binding vs. non-binding –Non-binding “commitments” Example: UNFCCC art. 4.2 –One-way (“no lose”) “commitments” Analogy: CDM baselines –Legally-binding commitments Example: Kyoto targets and timetables –Enforceable commitments

6. ++++++++++++++ ++++++++++++++ What?: Substantive content Emission targets (“obligations of result”) –Absolute targets –Dynamic targets –Conditional targets –Sectoral targets Policies and measures (“obligations of conduct”) –Technology and performance standards –Taxes –Subsidy removal –Emissions trading –Technology R & D and incentives Types of Policy Instruments

7. ++++++++++++++ ++++++++++++++ What?: Examples Non-binding commitments One-wayLegally- binding Enforceable Non-binding vs. binding Targets Absolute Dynamic Conditional Sectoral PAMs Tech standards Taxes Subsidies ET R & D Policy Instrument Kyoto targets UNFCCC target Kyoto, Art. 2

8. ++++++++++++++ ++++++++++++++ When? When will commitment period begin? –If too far in future, lacks credibility –If too near-term, then inefficient: premature capital retirement How long will commitment period last? –Indefinite duration: continues until modified or terminated –Fixed duration Example: Kyoto: 5 years

9. ++++++++++++++ ++++++++++++++ Who? Ways to differentiate commitments –Different stringency –Different time frames –Binding vs. non- binding –Fixed vs. conditional Bases for differentiation –Current emissions –Historical emissions –Wealth/capacity –Like-minded states

10. ++++++++++++++ ++++++++++++++ Assessment criteria Policy –Environmental effectiveness –Cost effectiveness –Equity –Dynamic flexibility / scalability –Complementarity Politics –Negotiability –Enforceability Leakage Effect on technology change Education, public awareness Enforceability

11. ++++++++++++++ ++++++++++++++ Assessment criteria Policy –Environmental effectiveness –Cost effectiveness –Equity –Dynamic flexibility / scalability –Complementarity Politics –Negotiability –Enforceability Market based approaches Flexibility: Where When What

12. ++++++++++++++ ++++++++++++++ Assessment criteria Policy –Environmental effectiveness –Cost effectiveness –Equity –Dynamic flexibility / scalability –Complementarity Politics –Negotiability –Enforceability Equity both End in itself Important factor in what is politically acceptable

13. ++++++++++++++ ++++++++++++++ Assessment criteria Policy –Environmental effectiveness –Cost effectiveness –Equity –Dynamic flexibility / scalability –Complementarity Politics –Negotiability –Enforceability Ease of revision in light of new scientific and economic information

14. ++++++++++++++ ++++++++++++++ Assessment criteria Policy –Environmental effectiveness –Cost effectiveness –Equity –Dynamic flexibility / scalability –Complementarity Politics –Negotiability –Enforceability Possibility of fragmented regime Potential linkages between systems

15. ++++++++++++++ ++++++++++++++ Assessment criteria Policy –Environmental effectiveness –Cost effectiveness –Equity –Dynamic flexibility / scalability –Complementarity Politics –Negotiability –Enforceability Continuity with Kyoto Economic predictability Compatibility with development priorities

16. ++++++++++++++ ++++++++++++++ Assessment criteria Policy –Environmental effectiveness –Cost effectiveness –Equity –Dynamic flexibility / scalability –Complementarity Politics –Negotiability –Enforceability Ease of monitoring Adequacy of domestic legal system

17. ++++++++++++++ ++++++++++++++ Specific options Kyoto-like targets Dynamic national targets Sectoral targets Hybrid targets Non-binding targets for developing countries + graduation criteria Efficiency, technology standards R & D

18. ++++++++++++++ ++++++++++++++ Specific options: Kyoto targets Kyoto-like targets Dynamic national targets Sectoral targets Hybrid targets Non-binding targets for developing countries + graduation criteria Efficiency, technology standards R & D Pros  Environmental effectiveness  Cost-effectiveness  Equity  Scalability  Continuity Cons  Economic uncertainties  Rigidity  Negotiability  Incompatibility with development

19. ++++++++++++++ ++++++++++++++ Specific options: Dynamic targets Kyoto-like targets Dynamic national targets Sectoral targets Hybrid targets Non-binding targets for developing countries + graduation criteria Efficiency, technology standards R & D Compared to Kyoto: Pros  Greater flexibility  Easier to negotiate Cons  Less environmental certainty

20. ++++++++++++++ ++++++++++++++ Specific options: Sectoral targets Kyoto-like targets Dynamic national targets Sectoral targets Hybrid targets Non-binding targets for developing countries + graduation criteria Efficiency, technology standards R & D Compared to Kyoto Pros  Incremental > easier to negotiate  Easier to monitor Cons  Less efficient  Competitiveness, equity concerns

21. ++++++++++++++ ++++++++++++++ Specific options: Safety valve Kyoto-like targets Dynamic national targets Sectoral targets Hybrid targets: safety valve Non-binding targets for developing countries + graduation criteria Efficiency, technology standards R & D Compared to Kyoto Pros  Greater economic certainty  Could generate development funds Cons  Less environmental certainty  Looks like a tax > politically unacceptable?

22. ++++++++++++++ ++++++++++++++ Specific options: Non-binding targets Kyoto-like targets Dynamic national targets Sectoral targets Hybrid targets Non-binding targets for developing countries + graduation criteria Efficiency, technology standards R & D Attractive first step for developing countries??

23. ++++++++++++++ ++++++++++++++ Specific options: Tech standards Kyoto-like targets Dynamic national targets Sectoral targets Hybrid targets Non-binding targets for developing countries + graduation criteria Efficiency, technology standards R & D Pros  Don’t need universal acceptance  Self-enforcing  Easy to monitor Cons  Limit flexibility  Less efficient  Potential lock-in of inefficient technologies

24. ++++++++++++++ ++++++++++++++ Specific options: R & D Kyoto-like targets Dynamic national targets Sectoral targets Hybrid targets Non-binding targets for developing countries + graduation criteria Efficiency, technology standards R & D  Government track record on R & D mixed  But useful add-on to other commitments

25. ++++++++++++++ ++++++++++++++ Conclusions One size may not fit all If commitments variegated, they should be as complementary as possible –Ensure adequate level of effort overall –Mix of commitments should be, broadly speaking, equitable –Promote linkages between systems

26. ++++++++++++++ ++++++++++++++ Extra slides

27. ++++++++++++++ ++++++++++++++ What are commitments? [option1] Commitments vs. obligations Commitments vs. voluntary obligations  Obligations: preexisting duties  Commitments: voluntarily undertaken, based on state interest  Commitments: performance not optional

28. ++++++++++++++ ++++++++++++++ What are commitments [option 2] Voluntary action Acceptance voluntary: based on self-interest Bound whether like it or not Pre-existing dutiesCommitments Obligations Performance optional But performance required

29. ++++++++++++++ ++++++++++++++ What are commitments? [option 3] Acceptance Preexisting duty Voluntary Performance/fulfillment VoluntaryBinding Voluntary action Commitment Obligation Reputation Internalization Sanctions

30. ++++++++++++++ ++++++++++++++ Example 1: Dual intensity targets Non-binding commitments One-wayLegally- binding Enforceable Non-binding vs. binding Targets Absolute Dynamic Conditional Sectoral PAMs Tech standards Taxes Subsidies ET R & D Policy Instrument Strict target Weak target

31. ++++++++++++++ ++++++++++++++ Example 2 : Safety valve Non-binding commitments One-wayLegally- binding Enforceable Non-binding vs. binding Targets Absolute Dynamic Conditional Sectoral PAMs Tech standards Taxes Subsidies ET R & D Policy Instrument Safety valve

32. When?: Possible Evolution of Commitments Non-binding commitments One-wayLegally- binding Enforceable Non-binding vs. binding Time Time 1 Time 2 Time 3 Time 3

33. ++++++++++++++ ++++++++++++++ Comparison of options TargetsPAMs KyotoDynamicSectoralHybrid Non- binding TechR & D Environmental effectiveness   Cost effectiveness     Equity    Scalability    Negotiability    Enforceability  