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Proposal for a Global Climate AgreementProposal for a Global Climate Agreement
Jeffrey FrankelJeffrey Frankel Harpel Professor, Harvard Kennedy SchoolHarpel Professor, Harvard Kennedy School
Copenhagen, December 2009Copenhagen, December 2009
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• unlike other approaches based purely on:
– Science (concentration goals),
– Ethics (equal emission rights per capita),
– or Economics (cost-benefit optimization).
• Why the political approach? – Countries will not accept burdens that they view as unfair.– Above certain thresholds for economic costs, they will drop out.
The target formulas are designed pragmatically,based on what emissions paths are possible politically:
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• Stage 2:Stage 2: When the time comes for developing country cuts, When the time comes for developing country cuts, targets are determined by a formula incorporating targets are determined by a formula incorporating 3 elements, designed so each is asked only to take 3 elements, designed so each is asked only to take actions analogous to those already taken by others:actions analogous to those already taken by others:
– a Progressive Reduction Factor,– a Latecomer Catch-up Factor, and
– a Gradual Equalization Factor.
• Stage 1: • Annex I countries commit to the post-2012 targets that their leaders have already announced.• Others commit immediately not to exceed BAU.
Proposal
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World Industrial Carbon Emissions
0
5
10
15
20
25
GtC
bau
SimulatedEmissions
◙ ◙ Constraints are satisfied:Constraints are satisfied: -- No country in any one period suffers -- No country in any one period suffers a loss as large as 5% of GDP by participating.a loss as large as 5% of GDP by participating. -- Present Discounted Value of loss < 1% GDP. -- Present Discounted Value of loss < 1% GDP.
◙ ◙ In one version, concentrations level off at 500 ppm In one version, concentrations level off at 500 ppm
in the latter part of the century.in the latter part of the century.
Co-author: V.Bosetti
Global peak date ≈ 2035,Global peak date ≈ 2035, 2020 in aggressive version2020 in aggressive version..
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What form should border measures take?What form should border measures take?
1. Best choice: multilateral sanctions under a new Copenhagen Protocol
2. Next-best choice: national import penalties adopted under multilateral guidelines
1. Measures can only be applied by participants in good standing
2. Judgments to be made by technical experts, not politicians
3. Interventions in only a ½ dozen of the most relevant sectors.
3. Third-best choice: no border measures.
4. Each country chooses trade barriers as it sees fit.
5. Worst choice: national measures are subsidies (bribes) to adversely affected firms.
Paper:Paper: http://ksghome.harvard.edu/~jfrankel/SpecificTargetsHPICA2009.dochttp://ksghome.harvard.edu/~jfrankel/SpecificTargetsHPICA2009.docAvailable at: http://ksghome.harvard.edu/~jfrankel/currentpubsspeeches.htm#On%20Climate%20ChangeAvailable at: http://ksghome.harvard.edu/~jfrankel/currentpubsspeeches.htm#On%20Climate%20Change
HPICA HPICA directed bydirected by Rob Rob Stavins.Stavins.
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Appendices:Appendices:
The targeted reductions from BAU agreed to at Kyoto The targeted reductions from BAU agreed to at Kyoto
in 1997 were progressive with respect to income.in 1997 were progressive with respect to income.
-30%
-20%
-10%
0%
10%
20%
30%
40%
50%
2.699 3.699 4.699
Per
cen
t re
du
ctio
n f
rom
2010 b
usi
nes
s-as-
usu
al
.
500 1,000 2,000 5,000 10,000 20,000 50,000
1996 GDP per capita (1987 US dollars, ratio scale)
Cuts ↑
Incomes →
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OECD Emissions
0
1
2
3
4
5
6
7
GtC
BAU
Simulated Emissions
CAP
Emissions path for rich countriesEmissions path for rich countries Fig. 2bFig. 2b
Predicted actual Predicted actual emissions exceed emissions exceed caps, by permit caps, by permit purchases.purchases.
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NON OECD Emissions
0
7
13
20
GtC
BAU
Simulated Emissions
CAP
Emissions path for poor countriesEmissions path for poor countriesFig. 4bFig. 4b
Predicted actual Predicted actual emissions fall emissions fall below caps, by below caps, by permit sales.permit sales.
1010
Price of Carbon Dioxide Price of Carbon Dioxide
Fig. 6bFig. 6b Price of Carbon Permits
0
200
400
600
800
1000
2005 2020 2035 2050 2065 2080 2095
$/tC
O2
e
FRANKELArchitecture
Zoom on Price of Carbon Permits
020406080
100120140160180
2005 2015 2025 2035 2045
$/tC
O2e
FRANKELArchitecture
rises slowly over 50 rises slowly over 50 years, then rapidly.years, then rapidly.
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Concentrations stay below 500 ppm goalConcentrations stay below 500 ppm goalFig. 7bFig. 7b
Carbon Concentrations (CO2 only)
300
350
400
450
500
550
600
650
700
750
800
pp
mv
bau
FRANKELArchitecture