Advancing the climate regime through linking domestic emission trading systems?

More and more countries are incorporating the instrument of emissions trading into their national climate policies. This emerging mosaic of emissions trading schemes (ETS) raises the question of whether they should be linked with each other. From an economic point of view, linking of domestic schemes is supposed to increase the economic efficiency of carbon markets. In addition, linking is also expected by some to yield substantial political benefits in terms of the evolution of the UNFCCC/Kyoto regime. However, these optimistic prospects are based on a best-case scenario where all major countries establish environmentally effective emissions trading systems and then link them with each other. Real-life politics might develop rather differently. This paper therefore examines to what extent the current status of emissions trading in industrialised countries provides a basis for reinforcing and moving forward the international climate regime through linking domestic ETS. After comparing emerging emissions trading schemes from an institutional perspective, it emerges that not only emissions trading is at a very early stage in most countries, in addition the emerging systems are probably going to be designed very differently from the EU ETS. While for some design features such as the coverage design differences do not matter, there are some areas where the plans in many non-EU countries look crucially different from the EU system. The outlook for a linked international ETS is therefore currently still very uncertain. Given this state of affairs, the EU should pro-actively engage with the non-EU countries to try to harmonise their developing national emissions trading schemes with the EU ETS, widely disseminate the lessons it has learned from the EU ETS, strongly make the case for environmental integrity and at the same time make clear that systems that want to link to the EU ETS will need to meet certain quality criteria.

Linking Russia with the European and global greenhouse gas emissions trading markets: three paths for greening the Russian assigned amount under the Kyoto Protocol

This article examines possibilities for linkage between the European Union Emissions Trading System (EU ETS) and Russia, with a view to enhancing cooperation on a broader scale than the project-based approaches that have been tested thus far. Three paths for possible EU-Russia linkage are presented by which the Russian Assigned Amount under the Kyoto Protocol can be greened in order to stimulate emissions trading: 1. Joint implementation—reductions earned via individual projects in Russia; 2. Greened allowances or green investment schemes; and 3. Linked cap-and-trade systems, in which a Russian domestic emissions trading system would link with the European Union Emissions Trading System. The authors conclude that the third option, emissions trading through linked domestic emissions trading systems, offers the best opportunities at the lowest transaction costs. The authors discuss useful innovative instruments like call options and slip level arrangements on government-to-government and business-to-business levels.

Linking the EU emissions trading scheme: economic implications of allowance allocation and global carbon constraints

We investigate the role of domestic allowance allocation and global emissions constraints for the carbon-market impacts of linking the EU Emissions Trading Scheme (ETS) internationally. Employing a quantitative simulation model of the global carbon market, we find that the economic benefits from connecting the European ETS to emerging non-EU schemes strongly depend on the regional allowance allocation of the linking participants: In a world of moderate carbon constraints, an economically efficient regional allowance allocation induces a much stronger fall in total compliance costs than a sub-optimal (i.e. too high) domestic allocation of emissions permits. However, a more efficient (i.e. stricter) allocation shifts abatement efforts and compliance costs to energy-intensive industries which are covered by the domestic ETS. We further find that committing to ambitious global emissions reduction targets (compatible with stabilizing CO₂ concentrations at 450 ppm) induces much stronger regional abatement efforts and substantially higher compliance costs for the abating regions. In such an ambitious climate policy regime, an efficient domestic allocation of allowances is even more important from an economic perspective: Here, linking emissions trading schemes diminishes the associated compliance costs on the largest scale.

Greenhouse gas mitigation in developing countries through technology transfer?: a survey of empirical evidence

While greenhouse gas (GHG) emissions are projected to rise primarily in the developing countries, the potential for developing new GHG mitigation technologies exists primarily in the industrialized countries. It is thus important, not only for predictions about future emission paths but also for climate change mitigation policies, to understand how the international diffusion of such technologies takes place and how it affects the energy infrastructure and GHG emissions in developing countries. This paper provides an overview of the channels through which these technologies diffuse and focuses on the empirical evidence pertaining to the effects these technologies have on GHG emissions in developing countries.

Assessing the dynamic efficiency of internal mitigation projects. An evolutionary perspective

Internal mitigation projects have recently been proposed as an additional flexibility mechanism, particularly in the context of the European Union. Their main objective is to engage sectors not included in the European Union emissions trading scheme (EU ETS) in cost-effective emissions reductions. However, in this paper it is argued that, when assessed in terms of dynamic efficiency, the instrument is likely to be, at best, irrelevant to induce the scale of systemic technological changes which are required to tackle the climate change problem and, at worst, detrimental for this task. Insights from the Evolutionary Economics of technological change complemented with political economy considerations are used to support this claim.

The interaction between emissions trading and renewable electricity support schemes. An overview of the literature

The public promotion of electricity from renewable energy sources coexists in many countries with the recent implementation of emissions trading schemes. As shown by several papers, this coexistence may lead to significant interactions between both instruments, in the form of synergies and conflicts. This paper provides an overview and analysis of the literature on such coexistence and interactions. A major conclusion is that policy measures aiming at exploiting the synergies between both instruments should be implemented. The greatest synergy effects from the use of both instruments take place through appropriate coordination of their targets. Another key finding is that, although some stylised facts can be inferred from the studies, some results from those complex interactions are context-specific since they depend on the design of the instruments in particular countries. In spite of the significant policy implications of such interactions for the effective and cost-effective functioning of both instruments, this is a surprisingly under searched field. It is so concerning, both, theoretical and empirical analysis.

Tropical deforestation in a future international climate policy regime—lessons from the Brazilian Amazon

The possibility of adopting national targets for carbon dioxide (CO₂) emissions from tropical deforestation in a future international climate treaty has received increasing attention recently. This attention has been prompted by proposals to this end and more intensified talks on possible commitments for developing countries beyond the United Nations Framework Convention on Climate Change Kyoto Protocol. We analyze four main scientific and political challenges associated with national targets for emissions from tropical deforestation: (1) reducing the uncertainties in emission inventories, (2) preserving the environmental integrity of the treaty, (3) promoting political acceptance and participation in the regime, and (4) providing economic incentives for reduced deforestation. We draw the following conclusions. (1) Although there are large uncertainties in carbon flux from deforestation, these are in the same range as for other emissions included in the current Kyoto protocol (i.e., non-CO₂ GHGs), and they can be reduced. However, for forest degradation processes the uncertainties are larger. A large challenge lies in building competence and institutions for monitoring the full spectrum of land use changes in developing countries. (2 and 3) Setting targets for deforestation is difficult, and uncertainties in future emissions imply a risk of creating ‘tropical hot air’. However, there are proposals that may sufficiently deal with this, and these proposals may also have the advantage of making the targets more attractive, politically speaking. Moreover, we conclude that while a full carbon accounting system will likely be politically unacceptable for tropical countries, the current carbon accounting system should be broadened to include forest degradation in order to safeguard environmental integrity. (4) Doubts can be cast over the possible effect a climate regime alone will have on deforestation rates, though little thorough analysis of this issue has been made.

Fairness aspects of linking the European emissions trading scheme under a long-term stabilization scenario for CO2 concentration

Climate equity is a crucial but difficult element in negotiations on a post-2012 climate regime. With respect to the trading of greenhouse gas emissions the equity aspect is considered in the Kyoto Protocol which demands that emissions trading should be supplemental to domestic abatement efforts. The question arises whether a linking of the European Union Emissions Trading Scheme (EU ETS) to non-EU emission trading schemes or the Clean Development Mechanism (CDM) could have an impact on principles of climate justice and thus potentially affect ongoing negotiations. In this study, we present the results of a three step analysis: In a first step, it estimates mid-term greenhouse gas emission entitlements for Annex B and Non-Annex B countries for the year 2020 which keep within reach a stabilization of the CO₂ concentration at 450 ppmv in the long-term. In the second step, the resulting emission entitlements are used as an input to an economic partial-equilibrium model in order to assess the shift of abatement efforts under different scenarios of linking the EU ETS. In a third step, we analyze the outcome of the economic model with respect to the future trend of European per capita emissions under the current EU ETS relative to different scenarios of linking the EU ETS. The model results indicate that European per capita emissions have to be reduced to a considerably smaller extent if a linking of the EU ETS is accompanied by an optimal design of the National Allocation Plans and if low-cost CO₂ permits became available via the CDM to a large extent.

Approaches to semi-synthetic minimal cells: a review

Following is a synthetic review on the minimal living cell, defined as an artificial or a semi-artificial cell having the minimal and sufficient number of components to be considered alive. We describe concepts and experiments based on these constructions, and we point out that an operational definition of minimal cell does not define a single species, but rather a broad family of interrelated cell-like structures. The relevance of these researches, considering that the minimal cell should also correspond to the early simple cell in the origin of life and early evolution, is also explained. In addition, we present detailed data in relation to minimal genome, with observations cited by several authors who agree on setting the theoretical full-fledged minimal genome to a figure between 200 and 300 genes. However, further theoretical assumptions may significantly reduce this number (i.e. by eliminating ribosomal proteins and by limiting DNA and RNA polymerases to only a few, less specific molecular species). Generally, the experimental approach to minimal cells consists in utilizing liposomes as cell models and in filling them with genes/enzymes corresponding to minimal cellular functions. To date, a few research groups have successfully induced the expression of single proteins, such as the green fluorescence protein, inside liposomes. Here, different approaches are described and compared. Present constructs are still rather far from the minimal cell, and experimental as well as theoretical difficulties opposing further reduction of complexity are discussed. While most of these minimal cell constructions may represent relatively poor imitations of a modern full-fledged cell, further studies will begin precisely from these constructs. In conclusion, we give a brief outline of the next possible steps on the road map to the minimal cell.

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Climate change,adaptive capacity and policy direction in the Canadian North: Can we learn anything from the collapse of the east coast cod fishery?

Scientific evidence gathered over the past five years suggests that northern Canada and the Arctic have undergone, and are undergoing, formidable environmental changes linked to global climate change. Environmental change in the north is expected to persist and intensify over the course of the next century. When large-scale environmental changes take place, they inevitably affect people, especially when the cultures and livelihoods of those people depend on their relationship with the environment. Managing the local impacts of these changes is a matter of adaptation. This paper discusses some of the policy implications of adaptation––government interventions aiming to build communities’ and regions’ capacities to adapt to environmental changes. Three arguments for adaptive capacity building interventions in the north are discussed, and these arguments are augmented by a comparative review of government reactions to the collapse of the cod fishery in Atlantic Canada. Reactive and proactive policy approaches are discussed, and it is suggested from the comparison that proactive approaches to intervention are desirable for building adaptive capacity.

Setting greenhouse gas emission targets under baseline uncertainty: the Bush Climate Change Initiative

There is substantial uncertainty regarding baseline greenhouse gas (GHG) emissions forecasts—i.e., how GHG emissions will grow over time in the absence of policy intervention. Thus baseline uncertainty should be a key consideration in setting GHG emissions targets as a mitigation strategy to respond to global climate change. At a minimum, the emissions target must be less than the baseline level to induce changing behavior and new investment. Despite this fundamental policy criterion, baseline considerations have played only a minor role in target setting under international climate policy. Baseline uncertainty applies to both absolute and intensity based emissions targets. It is demonstrated that one advantage of intensity targets is reduced uncertainty in the projected baseline, however there will always be some residual uncertainty in model projections. To illustrate the importance of considering baseline uncertainty in GHG target setting, the Bush Climate Change Initiative is analyzed against its projected baseline as a case study of a modest intensity target. Based on comparison with historical data, the range of projections by major energy-economic models, past discrepancies in the accuracy of model projections and the added complexity of sector-specific drivers for non-CO₂ GHGs, it is shown that the Bush Initiative cannot be guaranteed or even expected to deliver actual reductions against an uncertain baseline. This finding emphasizes the importance of setting a target that accounts for baseline uncertainty to achieve genuine mitigation of GHG emissions.

Foresty offsets in emissions trading systems: a link between systems?

An important aspect in the linking of different emissions trading schemes is the degree to which these systems allow (or ban) external offset project categories. The EU Emission Trading Scheme (EU ETS) currently allows the use of credits from energy and industry projects developed under the Kyoto Protocol’s Joint Implementation (JI) and Clean Development Mechanism (CDM) but excludes the use of carbon credits from forestry projects for compliance in the EU ETS. Forestry credits generated by the CDM have a limited lifetime and expire at the end of a project’s crediting period, or earlier if the carbon stock for which the credits have been issued ceases to exist. According to the recently adopted amendment of the EU ETS Directive forestry credits will remain to be excluded until 2020. The present article reviews how the New South Wales Greenhouse Gas Abatement Scheme (Australia), the Regional Greenhouse Gas Initiative (US) and the voluntary scheme of the Chicago Climate Exchange integrate forestry offsets into the respective system and how they deal with the risk of losing stored and credited biomass. By comparing the results of different scenarios this article shows how differences in the treatment of forestry offsets could impact the efforts to link various emission trading systems in future.

Fishery livelihoods and adaptation to climate change: a case study of Chilika lagoon, India

Climate change combined with human activities poses significant risks to people’s livelihood especially in developing countries. Adaptation at the community level is of crucial importance in enabling them to respond to the direct and indirect effects of changes in climate. In a case study of fishing communities in Chilika lagoon, India, the focus is made on understanding climate change adaptation at the community level and scaling it up into the policy perspective through application of Sustainable Livelihood Approach. This article challenges the research and policy community to encourage the identification of locally negative constraints and positive strengths toward climate resilient communities in rural areas.

The double trade-off between adaptation and mitigation for sea level rise: an application of FUND

This paper studies the effects of adaptation and mitigation on the impacts of sea level rise. Without adaptation, the impact of sea level rise would be substantial, almost wiping out entire countries by 2100, although the globally aggregate effect is much smaller. Adaptation would reduce potential impacts by a factor 10–100. Adaptation would come at a minor cost compared to the damage avoided. As adaptation depends on socio-economic status, the rank order of most vulnerable countries is different than the rank order of most exposed countries. Because the momentum of sea level rise is so large, mitigation can reduce impacts only to a limited extent. Stabilising carbon dioxide concentrations at 550 ppm would cut impacts in 2100 by about 10%. However, the costs of emission reduction lower the avoided impacts by up to 25% (average 10%). This is partly due to the reduced availability of resources for adaptation, and partly due to the increased sensitivity to wetland loss by adaptation.

An empirical approach to assessing generic adaptive capacity to tropical cyclone risk in coastal districts of India

Differences in impacts of climate hazards across exposed units are determined by many factors including the severity of the hazard itself, the population that is exposed to the hazard and the coping capacity of the exposed units to the hazard. Coping capacity or adaptive capacity results from a combination of development status (generic capacity) and interventions pertinent to the hazard (specific capacity). This paper explores the extent to which the generic adaptive capacity may explain the variation in tropical cyclone impacts. Therefore this paper offers an empirical approach by which adaptive capacity may be measured and validated against actual outcomes. Results not only validate the role of generic adaptive capacity in explaining variations in impact but also reveal that general development indicators are not very important as far as predicting outcomes is concerned. Those indicators of development that can be linked to the impact process are significant in explaining and predicting impact. This can help identify those aspects of generic adaptive capacity which are important from the perspective of policy action for enhancing adaptive capacity to a particular climate hazard.

Challenges and opportunities of a post-Kyoto mitigation regime: a survey of the European electricity sector

This paper empirically shows how the uncertainty associated to the absence of a mitigation regime which follows the United Nations Framework Convention on Climate Change Kyoto Protocol (UN FCCC Kyoto Protocol) is affecting investments in abatement activities in the EU electricity sector and, thus, future emissions levels. Based on a survey of EU electric utilities, it identifies the most likely post-Kyoto scenarios considered by them and how they are coping with such uncertainty in their investment decisions. It is found that firms react differently to such uncertainty and adopt different strategies to cope with it, diversifying their emissions control activities. Although most companies foresee post-Kyoto compliance regimes with emissions trading systems, they differ in their perceptions of the form that a post-Kyoto regime could take and are, thus, positioning differently to face such regime. The particular features of each company and the country where they operate affect their perception of the uncertainties, their position regarding a possible post-Kyoto regime and their inclination to carry out mitigation activities. Complying with Kyoto (and, eventually, post-Kyoto) targets significantly influences the investment decisions of European electricity companies. Uncertainty about a post-Kyoto regime may already be affecting investments in mitigation activities in the electricity sector. Therefore, significant progress has to be made in the definition of a post-Kyoto regime. It is urgent to define and agree internationally the emissions reduction objectives and the mitigation instruments that will be accepted for compliance, ensuring continuity of the international emissions trading system foreseen in the Kyoto Protocol.

Development of an agroforestry carbon sequestration project in Khammam district,India

This paper addresses methodological issues in estimating carbon (C) sequestration potential, baseline determination, additionality and leakage in Khammam district, Andhra Pradesh, southern part of India. Technical potential for afforestation on cultivable wastelands, fallow, and marginal croplands was considered for Eucalyptus clonal plantations. Field studies for aboveground and belowground biomass, woody litter, and soil organic carbon for baseline and project scenarios were conducted to estimate the carbon sequestration potential. The baseline carbon stock was estimated to be 45.3 t C/ha, predominately in soils. The additional carbon sequestration potential under the project scenario for 30 years is estimated to be 12.8 t C/ha/year inclusive of harvest regimes and carbon emissions due to biomass burning and fertilizer application. Considering carbon storage in harvested wood, an additional 45% carbon benefit can be accounted. The project scenario has a higher benefit/cost ratio compared to the baseline scenario. The initial investment cost requirement, however, is high and lack of access to investment is a significant barrier for adoption of agroforestry in the district.

“Bicellar” Lipid Mixtures as used in Biochemical and Biophysical Studies

Over the past decade “bicellar” lipid mixtures composed of the long-chain dimyristoyl phosphatidylcholine (DMPC) and the short-chain dihexanoyl PC (DHPC) molecules have emerged as a powerful medium for studying membrane associated, biologically relevant macromolecules and assemblies. Depending on temperature, lipid concentration and composition these lipid mixtures can assume a variety of morphologies, some of them alignable in the presence of a magnetic field. This article will examine the biophysical studies that have elucidated the various morphologies assumed by these lipid mixtures, and their use in the biochemical studies of biomolecules.

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Impact of bioenergy crops in a carbon dioxide constrained world: an application of the MiniCAM energy-agriculture and land use model

In the coming century, modern bioenergy crops have the potential to play a crucial role in the global energy mix, especially under policies to reduce carbon dioxide emissions as proposed by many in the international community. Previous studies have not fully addressed many of the dynamic interactions and effects of a policy-induced expansion of bioenergy crop production, particularly on crop yields and human food demand. This study combines an updated agriculture and land use (AgLU) model with a well-developed energy-economic model to provide an analysis of the effects of bioenergy crops on energy, agricultural and land use systems. The results indicate that carbon dioxide mitigation policies can stimulate a large production of bioenergy crops, dependent on the level of the policy. This production of bioenergy crops can lead to several impacts on the agriculture and land use system: decreases in forestland and unmanaged land, decreases in the average yield of food crops, increases in the prices of food crops, and decreases in the level of human demand of calories.

Land use change and forestry climate project regional baselines: a review

Climate change programs have largely used the project-specific approach for estimating baseline emissions of climate mitigation projects. This approach is subjective, lacks transparency, can generate inconsistent baselines for similar projects, and is likely to have high transaction costs. The use of regional baselines, which partially addresses these issues, has been reported in the literature on forestry and agriculture projects, and in greenhouse gas (GHG) mitigation program guidance for them (e.g., WRI/WBCSD GHG Project Protocol, USDOE’s 1605(b) registry, UNFCCC’s Clean Development Mechanism). This paper provides an assessment of project-specific and regional baselines approaches for key baseline tasks, using project and program examples. The regional experience to date is then synthesized into generic steps that are referred to as Stratified Regional Baselines (SRB). Regional approaches generally, and SRB in particular explicitly acknowledge the heterogeneity of carbon density, land use change, and other key baseline driver variables across a landscape. SRB focuses on providing guidance on how to stratify lands into parcels with relatively homogeneous characteristics to estimate conservative baselines within a GHG assessment boundary, by applying systematic methods to determine the boundary and time period for input data.