GOALS AND ECONOMIC INSTRUMENTS FOR THE ACHIEVEMENT OF GLOBAL WARMING MITIGATION IN EUROPE

Transcription

1 GOALS AND ECONOMIC INSTRUMENTS FOR THE ACHIEVEMENT OF GLOBAL WARMING MITIGATION IN EUROPE

2 Goals and Economic Instruments for the Achievement of Global Warming Mitigation in Europe Proceedings of the EU Advanced Study Course held in Berlin, Germany, July 1997 Edited by JÜRGEN HACKER Environmental Management Consultancy UMB Hacker GmbH, Berlin, Germany and ARTHUR PELCHEN Environmental Management Consultancy UMB Hacker GmbH, Berlin, Germany Advanced Study Course, sponsored by DG XII/D Environment and Climate RTD Programme, European Commission SPRINGER-SCIENCE+BUSINESS MEDIA, B.V.

3 A CLP. Catalogue record for this book is available from the Library of Congress. ISBN ISBN (ebook) DOI / Printed on acid-free paper All Rights Reserved 1999 Springer Sciences-Business Media Dordrecht Originally published by Kluwer Academic Publishers in 1999 Softcover reprint of the hardcover 1st edition 1999 No part of the material protected by this copyright notice may be reproduced or utilized in any form or by any means, electronic or mechanical, including photocopying, recording or by any information storage and retrieval system, without written permission from the copyright owner

4 TABLE OF CONTENTS Foreword ix Preface... xi Acknowledgments... xiii SECTION I. STATE OF SCIENTIFIC KNOWLEDGE IN CLIMATE CHANGE K. HASSELMANN and U. CUBASCH Climate and its Influencial Factors, especially the Anthropogene Enhancement of the Greenhouse Effect and its Possible Impacts - Results of the Second Assessment Report of the IPCC... 3 B. LIM, P. BOILEAU and Y. BONDUKI The IPCCIOECD/IEA Greenhouse Gas Inventories Programme: International Methods for the Estimation, Monitoring and Verification of GHG Emission Inventories M. HADUONG Necessities and Problems of Coupling Climate and Socioeconomic Models for Integrated Assessments Studies from an Economist's Point of View F. TOTH, G. PETSCHEL-HELD and T. BRUCKNER Climate Change and Integrated Assessment: The Tolerable Windows Approach (The ICLIPS Project: Integrated assessment of CLimate Protection Strategies) G. PETSCHEL-HELD and F. REUSSWIG Climate Change and Global Change: The Syndrome Concept (The QUESTIONS Project: QUalitativE Dynamics of Syndromes and TransiTION to Sustainibility) SECTION II. FROM SCIENTIFIC RESULTS TO THE POLITICAL AGENDA G. MciNNES A Comparison of GHG Inventories and Reduction Goals for Different Countries in Europe

5 vi U. COLLIER Allocating Emission Reduction Targets in the European Union- Issues and Proposals C. BAIL The EU Position in the Negotiation Process towards a Protocol on the Limitation and Reduction of Greenhouse Gas Emissions SECTION III. POLITICAL AND ECONOMICAL INSTRUMENTS AN OVERVIEW - INTRODUCTION J. HACKER The Range of Possible Political and Economical Instruments for the Mitigation of Global Climate Change A. PELCHEN A Framework for the Evaluation of Political and Economical Instruments for Global Warming Mitigation VOLUNTARY APPROACHES K. MUSCHEN Global and European Voluntary Approaches in Mitigation of Greenhouse Gas Emissions on Municipal Level and their Results F. SCHAFHAUSEN Voluntary Commitments to Mitigate Greenhouse Gas Emissions - The Example of German Industry and Trade K. RENNINGS, K.L. BROCKMANN and H. BERGMANN Voluntary Agreements in Climate Protection - Experiences in Germany and Future Perspectives TAXES S R.BARON Carbon and Energy Taxes in OECD Countries

6 S. BILL European Commission's Experience in Designing Environmental Taxation for Energy Products T.BARKER Limits of the Tax Approach for Mitigating Global Warming vii - JOINT IMPLEMENT A TION C.J. JEPMA Activities Implemented Jointly (AU) as an Instrument for the Mitigation of Global Warming F.TATTENBACH Practical Examples of Activities Implemented Jointly (AU) in Costa Rica J. HACKER Problems and Limitations of AU and the JI Potential from the Perspective of a German Project Broker SECTION IV. TRADEABLE EMISSION PERMITS - A PRACTABLE EXAMPLE: TRADEABLE EMISSION PERMITS FOR SOl B. McLEAN US Experience with Tradeable S02 allowances K.L. BROCKMANN, H. KOSCHEL and T.F.N. SCHMIDT A European Model for Tradeable S02-Emission Permits DESIGN OF A COl EMISSION SYSTEM J. OLIVEIRA MARTINS Efficiency, Equity and Optimal Carbon Abatement

7 viii P. KOUTST AAL Posibilities of an EU System of CO 2 Emission Permits F. T. JOSHUA Launching a Plurilateral Greenhouse Gas Emissions Trading System - the UNCT AD-Earth Council Initiative S. VAUGHAN Tradeable Emissions Permits and the WTO PERSPECTIVE OF A CO 2 EMISSION SYSTEM J. DEPLEDGE Status of Discussion and Negotiation for a System of Tradeable CO 2 Emission Permits within the UNFCCC J. WOLFE The United States Proposal for an International CO 2 Emissions Trading System EMISSION QUOTA TRADE - A SIMULATION EXPERIMENT A. PELCHEN Results of the Emission Quota Trade Simulation Experiment by the Participants SECTION V. COMPARISON OF INSTRUMENTS AND SUMMARY A. ENDRES Assessing the Different Instruments in Climate Change Mitigation from the Perspective of Economics A. PELCHEN Assessment of the Different Economic Instruments by the Participants and Selected Results of the Working Groups List of Authors List of Participants Colour Plate Section

8 FOREWORD Climate change poses important challenges to research and policy. Within three decades, an issue that was initially confined to the attention of a few scientists became the topic of large-scale research programmes, national and European policies and an international Convention. While significant uncertainties remain on the timing and scale of the changes to be expected and of their impacts, an appreciation emerged of the high ecological, economic, political and social stakes involved and lead to governmental, business and citizens' initiatives. After focusing on the understanding of climate processes and the possible impacts of climate change on ecosystems, European research - and international research more generally - started addressing also the social, economic and policy causes of and responses to climate change. In the meantime, local, national and European measures started being developed to mitigate carbon dioxide emissions, a European target was agreed to achieve the stabilization of carbon dioxide by 2000 at the levels of 1990, the Framework Convention on Climate Change (FCCC) was adopted and was followed by its Kyoto Protocol. When the Advanced Study Course "Goals and Economic Instruments for the Achievement of Global Warming Mitigation in Europe" was held, the research and policy communities in Europe and worldwide were intensely debating what targets should be agreed in Kyoto, what instruments and policies could be developed to mitigate greenhouse gases' emissions, how should the responsibility and costs for such mitigation be shared across countries and socio-economic sectors. The Advanced Study Course complemented other research initiatives, such as the series of policy-research interface workshop "EU Climate Policy: Research Support for Kyoto and beyond", undertaken by DG XII (Directorate General for Science, Research and Development) on socio-economic aspects of climate change. The Course focused on the formulation and use of the so-called 'flexibility instruments' (such as joint implementation and emission trading) that were among the most intensely debated issues at the Conference of the Parties of the FCCC in Kyoto and that remain among the 'pending issues' after such Conference. There is no doubt that the organizers of the Course identified a policy relevant issue, and an issue where the need for improved understanding and capacity building - including training of young researchers - was needed. The quality of the contributions by the academic and policy experts and the enthusiasm shown by the students made the Course a useful and challenging event. Given the fact that climate change is a long-term issue which complexity is far from being 'managed', the transmission of analytical and practical knowledge to younger generations seems an effort worth pursuing. Angela Liberatore Unit on socio-economic environmental research DG XII-DS, European Commission

9 PREFACE From July 20 to 26, 1997 an Advanced Study Course "Goals and Economic Instruments for the Achievement of Global Warming Mitigation in Europe" was held at the Technical University of Berlin, Germany. The Course has been carried out by UMB UmweltManagementBeratung Hacker GmbH on behalf of the European Commission, Directorate-General XII/D Environment and Climate RTD Programme. The Course was attended by fifty-one young scientists from twelve EU and seven non-eu nations. Lectures were given by twenty-nine experts from eleven dift:erent EU universities or research institutions, seven international organizations and five governments or governmental agencies. The lectures were structured in five sections like this volume. Additionally, there was an excursion to the Potsdam Institute for Climate Impact Research near Berlin. In four working groups the participants evaluated the results of the lectures of each section and presented and discussed their evaluations in plenary sessions. In the second part of the Course the participants performed an simulation experiment for emission trading. The aims of the Advanced Study Course were: - to improve the communication between students and scientists on a European level as well as fostering the interdisciplinary discussion of the subject of global warming, - to bridge the gap between the scientific knowledge about mitigation of global warming on the one hand and the practical implementation of the scientifically necessary measures for the reduction of GHG-emissions in the political process on the other hand, - to evaluate the different political and economical instruments for the mitigation of global warming that are in today's public, political and scientific discussion in relation to their accuracy of reaching the agreed targets and their cost-efficiency. To enhance the sustainability of these aims the proceedings are published in this book, also sponsored by the European Commission. Part of the papers presented here are the original lectures, part of them are versions modified after the Course. Since especially the contributions concerning the political implementation are very time-related, their date of completion is given at their beginning. We hope that this book stimulates the ongoing public, political and scientific discussion and helps to find sustainable, efticient and fair solutions to the problem of global warming. JUrgen Hacker Dr. Arthur Pelchen

10 ACKNOWLEDGMENTS We wish to acknowledge with sincere thanks all of those responsible for the funding, preparation and organization of the EU Advanced Study Course, which was the basis for editing this book. Firstly, we are grateful to the European Commission, DG XIIID Environment and Climate RTD Programme, for funding the Advanced Study Course and this book. Special thanks is given to Dr. Angela Liberatore, the scientific responsible in the Commission, for her help to cope with all needs of the Commission's administration. Secondly, we wish to thank the members of the Scientific Panel of the Course, Prof. Dr. Jiirgen Starnick (Technical University of Berlin), Dr. Gerhard Petschel Held (Potsdam-Institute for Climate Impact Research), Prof. Dr. Alfred Endres (Distance Teaching University Hagen), Joaquim Oliveira Martins (Organisation for Economic Co-operation and Development) and again Dr. Angela Liberatore for their advice and comments on the programme of the Course and the selection of the lecturers. Especially we thank the Chairman, Prof. Dr. Starnick, for the hospitality of the Technical University of Berlin and the Vice-Chairman, Dr. Petschel-Held, for his efforts in organizing the excursion to the Potsdam-Institute for Climate Impact Research. We also thank Prof. Peter Bohm of Stockholm University for allowing us to rerun his Emission Quota Trade Experiment among four Nordic countries with the participants of the Course despite his doubts of its suitability for this purpose. Naturally we wish to acknowledge with thanks all of the lecturers not only for their presentations to the Advanced Study Course and their readiness and engagement in discussing their lectures with the participants but also for their contributions in this book. We are grateful to Prof. Dr. Dietmar Winje, chairman of the board of the Berlin Electricity Utility Bewag for sponsoring the farewell dinner in the Spandau Citadel. And finally we also thank Astrid Zandee of K1uwer Academic Publishers for her publication assistance. Jiirgen Hacker Dr. Arthur Pelchen