EMISSION CERTIFICATE TRADE AND COSTS UNDER REGIONAL BURDEN-SHARING REGIMES FOR A 2°C CLIMATE CHANGE CONTROL TARGET

T. Kober (), Bob van der Zwaan () and H. Rösler ()
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T. Kober: Policy Studies Department, Energy Research Centre of the Netherlands (ECN), Petten/Amsterdam, The Netherlands
H. Rösler: Policy Studies Department, Energy Research Centre of the Netherlands (ECN), Petten/Amsterdam, The Netherlands

Climate Change Economics (CCE), 2014, vol. 05, issue 01, 1-32

Abstract: In this article we explore regional burden-sharing regimes for the allocation of greenhouse gas emission reduction obligations needed to reach a 2°C long-term global climate change control target by performing an integrated energy-economy-climate assessment with the bottom–up TIAM-ECN model. Our main finding is that, under a burden-sharing scheme based on the allowed emissions per capita, the sum of merchandized carbon certificates yields about 2000 billion US$/yr worth of inter-regional trade around 2050, with China and Latin America the major buyers, respectively Africa, India, and other Asia the main sellers. Under a burden-sharing regime that aims at equal cost distribution, the aggregated amount of transacted carbon certificates involves less than 500 billion US$/yr worth of international trade by 2050, with China and other Asia representing the vast majority of selling capacity. Restrictions in the opportunities for international certificate trade can have significant short- to mid-term impact, with an increase in global climate policy costs of up to 20%.

Keywords: Climate policy; energy system; greenhouse gases; emissions abatement; resource versus cost sharing; carbon certificate trade; Q54; F53 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (5)

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DOI: 10.1142/S2010007814400016

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