Global climate change

Faculty Research Working Papers Series

Can an Effective Global Climate Treaty be Based on Sound Science, Rational Economics, and Pragmatic Politics?
Robert N. Stavins May 2004 RWP04-020

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CAN ANEFFECTIVE GLOBAL CLIMATE TREATY BE BASED ON SOUND SCIENCE, RATIONAL ECONOMICS, AND PRAGMATIC POLITICS?

Robert N. Stavins
John F. Kennedy School of Government, Harvard University and Resources for the Future

May 3, 2004

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ABSTRACT
The Kyoto Protocol (1997) to the United Nations Framework Convention on Climate Change (1992) may come into force without U.S. participation, but its effects on climate change will be virtually non-existent. At the same time, the economic and scientific consensus points to the need for a credible international approach. Areasonable starting point is the Framework Convention on Climate Change (FCCC), which was signed by 161 nations and ratified by 50, including the United States, and entered into force in 1994. In this paper, I remain agnostic on the question of the Kyoto Protocol’s viability. Some analysts see the agreement as “deeply flawed,” while others see it as an acceptable first step. But virtually everyoneagrees that the Protocol is not sufficient to the overall challenge, and that further, subsequent steps will be required. This is my starting point for proposing a three-part policy architecture: first, all nations would be involved through the use of economic trigger mechanisms, plus growth targets; second, long-term targets would be required — in the short-term, firm, but moderate targets, andin the long-term, flexible, but much more stringent targets; and third, market-based policy instruments would be part of the package — emissions trading, carbon taxes, or hybrids of the two. This overall approach can be made to be scientifically sound, economically rational, and politically pragmatic.

Keywords: global climate change, global warming, policy architecture, Kyoto Protocol JELClassification: Q54, Q58, Q48, Q39

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Can an Effective Global Climate Treaty Be Based on Sound Science, Rational Economics, and Pragmatic Politics?
Robert N. Stavins*

1. INTRODUCTION The Kyoto Protocol (1997) to the United Nations Framework Convention on Climate Change (1992) may come into force despite the lack of participation by the United States, because as of 2004, 170 other nationsare at least talking about ratification, and the numerical requirements may be met. The key requirement is that a minimum of 55 nations, representing 55 percent of 1990 industrialized world emissions of carbon dioxide (CO2),1 must ratify the agreement. If all countries except the United States were to ratify the Kyoto Protocol, close to 64 percent of 1990 industrialized world emissions would berepresented, and the Protocol would come into force. Australia, in addition to the Unites States, has indicated that it will not ratify the agreement. Removing Australia drops the relevant share of 1990 emissions to about 62 percent, still enough to bring the agreement into force.2 If the United States, Australia, and Japan failed to ratify, then the

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Albert Pratt Professor of Business and...