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Global CO2 Agreements: A Cost-Effective Approach

Snorre Kverndokk

Year: 1993
Volume: Volume 14
Number: Number 2
DOI: 10.5547/ISSN0195-6574-EJ-Vol14-No2-5
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Abstract:
In this paper I specify CO2 abatement cost Junctions for five different world regions. A cost-effective CO2 agreement is defined by the emissions that follow from minimising the total abatement costs, given a specified CO2 emission limit. Under the cost-effective agreement, the industrialised countries bear all reductions, while developing countries are actually allowed to increase emissions compared to the 1990 level. The developing countries will, nevertheless, bear the highest burdens under this treaty. The agreement is also analysed under different tradeable permit regimes and compared to uniform percentage reductions. The transfers from tradeable permit systems are high, and may be difficult for political leaders to justify. An allocation based on historical CO2 emissions is the only simple rule which ensures every region is better off than under uniform percentage reductions.



Cost-Effective Climate Policy in a Small Country

Cathrine Hagem

Year: 1994
Volume: Volume15
Number: Number 4
DOI: 10.5547/ISSN0195-6574-EJ-Vol15-No4-6
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Abstract:
Unilateral action to curb CO2 emissions in a small country or a group of countries has only a limited effect on global CO2 emissions. However, it could be a first step toward a broader climate treaty. So far, unilateral commitments have been aimed at reducing national consumption of fossil fuels. A country that produces and consumes fossil fuels can also influence the global CO2 emissions by reducing its production. The estimated cost of reducing national CO2 emissions in Norway, through a reduction in fossil fuel consumption, is presented in a report from the Environmental Tax Committee (1992). In this paper, that cost is compared with an estimated cost of reducing fossil fuel production. The calculation reveals that it could be less costly to reduce the production than the consumption, given that the effect on global CO2 emissions is identical.





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