| Abstract: | In June 1992 a Framework on Climate Change Convention was signed in Rio de Janeiro, calling for the control of greenhouse gases, notably in the industrialized countries. Its formulation allows for joint implementation of measures to reach emission targets for greenhouse gases. Such joint implementation covering all greenhouse gases could form the first step towards a system of comprehensive emissions trading. This paper addresses both advantages and disadvantages of comprehensive emissions trading across different gases, sinks and sources. It concludes that in addition to carbon dioxide from fossil fuels, the inclusion of biotic carbon emissions and selected sources of methane is attractive from both the economic and environmental viewpoint. The uncertainties associated with emissions can be overcome by requiring a thorough review of trade proposals by a broad-based international supervisory body, utilizing a consistent methodology such as that being developed by the Intergovernmental Panel on Climate Change (IPCC). Finally, the paper addresses the central objective of the Climate Convention, which implicity sets a limit to greenhouse gases emissions and thus provides a guideline for the total amount of permits that may be made available in a tradeable permit system. |
