In environmental matters, the free riding generated by the lack of collective action is aggravated by concerns about leakages and by the desire to receive compensation in future negotiations. The dominant “pledge and review” approach to mitigation will deliver appealing promises and renewed victory statements, only to prolong the waiting game. The climate change global…
Tag: Cap and trade
Global Climate Games: How Pricing and a Green Fund Foster Cooperation
The most efficient global climate policy is to price carbon. The Kyoto-Copenhagen agenda was intended to do this with a system of international cap and trade. We view these negotiations as a game in which countries choose their quantity targets based on self interest. Like the analogous public-goods game, in which countries choose their abatement…
Development and Application of Greenhouse Gas Performance Benchmarks in the European Union Emissions Trading Scheme
In the European Union Emissions Trading Scheme’s third trading period (2013-2020), the free allocation of emission allowances will be based on greenhouse gas performance benchmarks. This policy note describes how the revised rules were developed, how they will be applied in practice, and what they imply for operators of installations subject to the system. It…