Montreal v. Kyoto. Scott Barrett Columbia University
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1 Montreal v. Kyoto Scott Barrett Columbia University
2 Obligations Domestic v. International Title IV Kyoto Caps SO 2 by plant. Caps GHG by states. Trading Yes Yes Monitoring Precise Self-reporting Participation Mandatory Compliance Fine > $3,000/ ton; much bigger than price. Excess subtracted from next year. Non-compliance a felony Voluntary Article 18: procedures and mechanisms entailing binding consequences be adopted by means of an amendment.
3 Obligations Domestic v. International Title IV Kyoto Caps SO 2 by plant. Caps GHG by states. Trading Yes Yes Monitoring Precise Self-reporting Participation Mandatory Compliance Fine > $3,000/ ton; much bigger than price. Excess subtracted from next year. Non-compliance a felony Voluntary Article 18: procedures and mechanisms entailing binding consequences be adopted by means of an amendment.
4 A Study in Contrast OZONE CLIMATE Restricts emissions Cuts emissions All countries Industrialized countries Up to 100% Around 5% Duration Permanent Consequence Ozone layer restored 2050 Negligible Why the difference?
5 9 October 2010
6 Change over time
7 The underlying PD $5 $1 Π P Π A $104 $100 0 N-1 Number of others that play Abate Card game: $5 if keep red card; $1 for every red card handed in by anyone. Suppose N = 100.
8 To be effective, a treaty must Deter non-participation. Enforce compliance. Do both of these things even while requiring that parties do much more than they would were they to act independently (unilaterally).
9 Montreal Protocol Negotiated in 1987; amended 4 times and adjusted 6 times since then. Bans production and consumption of the ODSs. Achieves universal participation. By around , the ozone layer is expected to be restored. How and why did the MP succeed?
10 Cost-benefit analysis of the Montreal Protocol No Controls Montreal Protocol Unilateral Implementation of MP Ozone Depletion (%) By 2000 By 2050 By % 15.7% 50.0% 0.8% 1.9% 1.2% 0.9% 10.3% 49.0% Payoffs to the US (Billions of 1985 $US) Benefits Costs Net Benefits B-C Ratio $3,575 $21 $3, $1,373 $21 $1, Source: EPA (1988).
11 Implications Favored unilateral implementation by at least some rich countries. Was MP a success? Or did it merely codify what states would have done anyway? Three major worries: (1) production would relocate (leakage); (2) poor countries would not cut back; (3) it would be harder to sustain bigger cuts, involving a wider range of ODSs. MP addressed all three.
12 Carrot Developing countries had common but differentiated responsibilities. Rich countries to pay incremental costs for developing country implementation. So far has given over $2.5 billion in support of 6,200 projects in 148 countries.
13 Ratification of the Montreal Protocol London Amendment Transition Economies Number of Parties Article Industrial
14 Stick The credible threat of a trade restriction sustained full participation and deterred non-compliance.
15 Cooperation & trade restrictions Minimum participation level set to 11 countries making up at least 2/3s of global consumption IEA Game with Trade Sanctions Π n Π s Number of other signatories
16 If the MP had not worked
17 Climate change
18 Framework Convention Aim to stabilize greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous interference with the climate system. Reasonable? Only non-participants are Andorra and Holy See (Iraq, and Somalia joined 2009).
19 Kyoto Protocol
20 Kyoto Protocol Emission caps Annex I only. CO 2, CH 4, N 2 O, HFCs, PFCs, SF 6. Allows trading. Clean development mechanism. Enters into force after being ratified by at least 55 countries making up at least 55% of Annex I CO 2 emissions.
21 Problems Participation Compliance Targets & Post-2012?
22 Reasons for Kyoto s Failure The economics are not as favorable as for ozone.
23 Ozone v. Climate Economics
24 Reasons for Kyoto s Failure Economics not as favorable as for ozone. In contrast to the MP, few countries have an incentive to do much unilaterally. Trade leakage; global energy markets: MCs steep. Gradual climate change winners & losers. Abrupt/catastrophic climate change uncertain.
25 Reasons for Kyoto s Failure Economics not as favorable as for ozone. In contrast to the MP, few countries have an incentive to do much unilaterally. Trade leakage; global energy markets: MCs steep. Gradual climate change winners & losers. Abrupt/catastrophic climate change uncertain. Kyoto difficult to enforce Carrots: Will rich countries pay for abatement? Sticks: Trade restrictions problematic.
26 Why did the U.S. not ratify? Senate Resolution August the United States should not be a signatory to any protocol which would (A) mandate new commitments to limit or reduce greenhouse gas emissions for the Annex I Parties, unless [it] also limit[s] or reduce[s] greenhouse gas emissions for Developing Country Parties within the same compliance period, or (B) would result in serious harm to the economy of the United States.
27 U.S. Strategy Under Clinton Negotiate and then seek ratification. Under Obama Secure domestic legislation and then agree to do this as part of an international agreement.
28 Copenhagen
29 The Copenhagen Accord Negotiated by US + BASIC (114 countries have signed up). Opposed by Bolivia, Cuba, Nicaragua, and Venezuela (as well as Sudan and Tuvalu).
30 Cancun
31 A positive development Effect of MP on climate change. Proposal to control HFCs under the MP. Perhaps we can achieve more by breaking the problem up into individual parts, and addressing each part using different approaches.
32 What else can we do?
33 Adaptation
34 Geoengineering
35 Air capture
36 Conclusion The climate, our institutions, and our technologies will co-evolve.
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