ECN publication
The multi-sector convergence approach of burden sharing. An analysis of its cost implication
Published by: Publication date:
ECN Policy Studies 1-3-2001
ECN report number: Document type:
ECN-C--01-008 ECN publication
Number of pages: Full text:
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This report provides an indication of the cost implications of the multi-sectorconvergence approach of burden sharing with regard to the so-called 'second budget period' (2013-2017). This approach offers a new sector-based framework for negotiating binding emission targets after the first budget period of the Kyoto Protocol (2008-2012), based on

  1. the distinction of different sectors in the national economy, and
  2. the prescriptive norm that ultimately the amount of per capita emission assignments has to converge to the same level for all countries.
The cost indications of the multi-sector convergence approach for the years 2013-2017 are based on a model previously developed by ECN to study the impact of the Kyoto Mechanisms - i.e. Emissions Trading, Joint Implementation and the Clean Development Mechanism - in reducing GHG emissions. The outstanding characteristic of this model is that it covers all six GHGs, all three Kyoto Mechanisms and all major countries/regions in the world within an integrated, bottom-up approach. If all reduction requirements of all Annex-I countries - resulting from the multi-sector convergence approach with regard to the second budget period - will be fully realised domestically, total annual direct abatement costs are estimated at 133 billion US$ (i.e. about 0.3 percent of their GDP in that period). However, in the case of unrestricted global emission trade, Annex I countries will meet some 50 percent of their reduction commitments abroad by means of the Kyoto Mechanisms. As a result, total annual direct abatement costs during the second budget period for all Annex I countries will fall to about 44 billion US$ (i.e. about 0.1 of their GDP), whereas non-Annex I countries are even able to realise net profits of almost 10 billion US$ by exporting CDM emission credits. The major lesson or conclusion of the present report is that allocation-based burden sharing rules in terms of setting emission limitation targets related to a specific reference year have only a relative meaning compared to other, outcome-based burden sharing indicators. The main reason for this finding is that the burden of emission mitigation is not only determined by the setting of emission limitation targets related to a specific reference year but also by other factors such as: h trends in GHG emissions between the reference and target years as determined by population/economic growth and other autonomous (technology) trends regarding GHG emissions; major differences in abatement potentials and costs among countries and regions; including or excluding the (unrestricted/limited) use of the Kyoto Mechanisms; and including or excluding no-regret options in (inter)national abatement strategies. Hence, these factors have to be accounted for when designing and negotiating allocation based burden sharing rules for the years following the first budget period of the Kyoto Protocol. The above-mentioned results should be interpreted carefully as the underlying analysis is characterised by data uncertainties, methodological shortcomings and other limitations such as the exclusion of implementation and macro-economic costs resulting from mitigation policies. At the present stage of climate policy research, the major aim of the present study is just to give an indication of the direct abatement costs of the multi-sector convergence approach - notably in relative terms - and, above all, to analyse the factors and the underlying, structural causal relationships that affect the estimated outcome of the burden sharing indicators considered. 23 refs.

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