Global CO2 Agreements: A Cost Effective Approach
Authors:
Kverndokk, S
Year:
1993
Reference:
14(2), 91-112Summary
We specify CO2 abatement cost functions for 5 different world regions. A cost-effective CO2 agreement is defined by the emissions following from minimising the total abatement costs given a specified CO2 emission limit. The industrialised countries bear all reductions, and developing countries are actually allowed to increase emissions compared to 1990 level, under the cost-effective agreement. 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 to be better off than under uniform percentage reductions.
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