Economic consequences of the US withdrawal from the Kyoto/Bonn Protocol

Buchner, Barbara; Carraro, Carlo; Cersosimo, Igor

doi:10.1016/s1469-3062(02)00027-x

Cited by 21 publications

(5 citation statements)

References 9 publications

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“…The massive reduction of global carbon emissions necessary to stabilize the world climate at safe levels cannot be achieved without an effective international environmental agreement (IEA). The first legally binding international climate agreement, the Kyoto Protocol, contains rather unambitious commitments for a small number of countries and therefore accomplishes only little more than global non-cooperation (Buchner et al 2002). It phases out in 2012, and the prospects are bleak for reaching a new IEA with many signatories and substantial emission reduction commitments.…”

Section: The Problemmentioning

confidence: 99%

Stable Climate Coalitions (Nash) and International Trade

Eichner

Pethig

2012

SSRN Journal

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Section: The Problemmentioning

confidence: 99%

Stable Climate Coalitions (Nash) and International Trade

Eichner

Pethig

2012

SSRN Journal

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“…(1999). Other studies include Bohringer (2001), Kemfert (2001), Buchner et al (2002), Loschel andZhang (2002), International Monetary Fund (2008).…”

Section: Sources Of Uncertainty and Shocksmentioning

confidence: 99%

Expecting the Unexpected: Macroeconomic Volatility and Climate Policy

2008

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To estimate the emissions reductions and costs of a climate policy, analysts usually compare a policy scenario with a baseline scenario of future economic conditions without the policy. Both scenarios require assumptions about the future course of numerous factors such as population growth, technical change, and non-climate policies like taxes. The results are only reliable to the extent that the future turns out to be reasonably close to the assumptions that went into the model. In this paper we examine the effects of unanticipated macroeconomic shocks to growth in developing countries or a global financial crisis on the performance of three climate policy regimes: a globally-harmonized carbon tax; a global cap and trade system; and the McKibbin-Wilcoxen hybrid. We use the G-Cubed dynamic general equilibrium model to explore how the shocks would affect emissions, prices, incomes, and wealth under each regime. We consider how the different climate policies tend to increase or decrease the shock's effect in the global economy and draw inferences about which policy approaches might better withstand such shocks. We find that a global cap and trade regime significantly changes the way growth shocks would otherwise be transmitted between regions while price-based systems such as a global carbon tax or a hybrid policy do not. Moreover, in the case of a financial meltdown, a price based system enables significant emissions reductions at low economic cost whereas a quantity target base system loses the opportunity for low cost emission reduction reductions because the target is fixed.

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“…Even for extreme assumptions on market power, Kyoto is not much different from Businessas-usual (see also Buchner et al 2002).…”

Section: An Assessment Ofmentioning

confidence: 99%

“…Moreover, the U.S. refusal to ratify the Protocol and the full tradability of emission entitlements conceded to the former Eastern Bloc in excess of its anticipated future businessas-usual emissions (so-called hot air) imply that the current round of the Kyoto Protocol is likely to accomplish very little in terms of global emission reductions (see Buchner et al (2002) or Springer (2002) for surveys of Kyoto assessment studies). This evolution seems to confirm the position of the Protocol's antagonists that its fundamental approach -setting targets and timetables for emission reductions -is seriously flawed.…”

Section: Introductionmentioning

confidence: 99%

The Kyoto Protocol: A Review and Perspectives

Böhringer

2003

Oxford Review of Economic Policy

147

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More than 10 years of climate policy negotiations have produced the Kyoto Protocol, the first legally binding international agreement on climate protection, which may enter into force in the near future. Opponents to the Protocol have condemned it as a "deeply flawed agreement that manages to be both economically inefficient and politically impractical" (McKibbin and Wilcoxen 2002, p.107). This article sustains a more positive perspective on the Kyoto architecture. Key elements of the Protocol comply with basic economic principles. The Protocol is based on a control mechanism that allows iterative adjustment and movement toward evolving goals. A system of periodically negotiated five-year periods supports a flexible approach that allows policy-makers to adjust their decisions according to better information obtained in the future. The Protocol constitutes the first international environmental agreement that builds on market based instruments to determine cost-efficient responses to the undisputed need for GHG abatement. Last but not least, Kyoto-after tough bargaining-came up with a burden-sharing scheme for the first commitment period that all major Parties (with exception of the US) have accepted as a "fair" compromise, hereby reflecting historic responsibilities for the greenhouse gas externality as well as ability to pay. On the other hand, it must be clearly stated that the Kyoto Protocol-as it stands now-has not achieved a decisive breakthrough in international climate policy. First, sink credits, hot air through emissions trading and, in particular, U.S. repudiation will make Kyoto ineffective in environmental terms during the first commitment period. Second, it has yet to be negotiated what must be done after the first commitment period. The major challenge for future Post-Kyoto climate policies remains as to how international cooperation on the provision of climate protection (as a global public good) can be promoted. In the first place, this requires incentives for developing countries to participate. Ultimately, this comes down to how abatement duties-or emission entitlements-should be allocated across countries over a longer time horizon. In the second place, a credible system of direct or indirect sanctions must be developed that can deter free-riding. .

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Economic consequences of the US withdrawal from the Kyoto/Bonn Protocol

Cited by 21 publications

References 9 publications

Stable Climate Coalitions (Nash) and International Trade

Stable Climate Coalitions (Nash) and International Trade

Expecting the Unexpected: Macroeconomic Volatility and Climate Policy

The Kyoto Protocol: A Review and Perspectives

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