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Title:
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The multi-sector convergence approach of burden sharing. An analysis of its cost implication
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Author(s):
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Published by:
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Publication date:
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ECN
Policy Studies
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1-3-2001
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ECN report number:
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Document type:
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ECN-C--01-008
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ECN publication
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Number of pages:
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Full text:
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25
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Download PDF
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Abstract:
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
- the distinction of different sectors in the national economy, and
- 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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