Asbjørn Torvanger

Can multi-criteria rules fairly distribute climate burdens? OECD results from three burden-sharing rules

An important feature of the Protocol concluded in Kyoto, Japan, in December 1997 is the differentiation of the climate targets of the industrialized countries. A more systematic approach to burden sharing than that leading to the Kyoto Protocol could help negotiating targets after 2012, and when including developing countries in the group of countries with climate targets at a later stage. The article discusses a number of concepts of equity, examines three specific burden sharing rules and formulae, and presents cost calculations on the burden sharing rules. The three formulae that are explored have some ability to adapt to national circumstances, but none of them creates a burden sharing arrangement that completely equalizes the national income losses as percentage of GDP across the OECD. Nonetheless, the results show that burden sharing rules can be useful tools and provide some, but not all, of the guiding framework for climate policy negotiations.

Criteria for Evaluation of Burden-sharing Rules in International Climate Policy

This article presents nine criteria for assessing, comparing, and ranking burden-sharing rules and conceptual frameworks used in climate policy negotiations and agreements. Three of the criteria are concerned with fairness principles and six criteria are operational requirements. The application of these criteria is illustrated in the context of six different burden-sharing schemes. The Multi-sector Convergence approach and the Triptych approach received highest average score of the six schemes. The Brazilian proposal received a similar total score, but unevenly distributed with a high score on fairness principles and low score on operational requirements. The European Union member countries employed the Triptych approach when they differentiated their national abatement targets prior to the 1997 Kyoto meeting. The Multi-sector Convergence approach was developed in a joint ECN (Netherlands Energy Research Foundation) and CICERO (Center for International Climate and Environmental Research – Oslo) project. It is a sector-based, global approach that comprises convergence of per capita emissions at the same level in all countries. Sector-based approaches have a distinct advantage compared to other approaches because they reflect the economic structure of countries rather well. Such approaches could play a useful role in future climate policy negotiations, not the least in discussions on binding climate targets for developing countries.

Carbon capture and storage deployment rates: needs and feasibility

Carbon capture and storage (CCS) may become a key technology to limit human-induced global warming, but many uncertainties prevail, including the necessary technological development, costs, legal ramifications, and siting. As such, an important question is the scale of carbon dioxide abatement we require from CCS to meet future climate targets, and whether they appear reasonable. For a number of energy technology and efficiency improvement scenarios, we use a simple climate model to assess the necessary contribution from CCS to ‘fill the gap’ between scenarios’ carbon dioxide emissions levels and the levels needed to meet alternative climate targets. The need for CCS depends on early or delayed action to curb emissions and the characteristics of the assumed energy scenario. To meet a 2.5°C target a large contribution and fast deployment rates for CCS are required. The required deployment rates are much faster than those seen in the deployment of renewable energy technologies as well as nuclear power the last decades, and may not be feasible. This indicates that more contributions are needed from other low-carbon energy technologies and improved energy efficiency, or substitution of coal for gas in the first half of the century. In addition the limited availability of coal and gas by end of the century and resulting limited scope for CCS implies that meeting the 2.5°C target would require significant contributions from one or more of the following options: CCS linked to oil use, biomass energy based CCS (BECCS), and CCS linked to industrial processes.

Oil price scenarios and climate policy: welfare effects of including transportation in the EU emissions trading system

The stringency of policies needed to meet a climate target is influenced by uncertain oil prices because price changes cause emission changes, making the robustness of climate policy instruments important. As a result of its dependence on oil, emissions from the transport sector are particularly sensitive to oil price changes. We use a computable general equilibrium model to study the effects of including the transport sector in the EU’s emissions trading scheme under three future oil price scenarios. Our results show that there are potentially significant welfare gains from including transportation in the emissions trading scheme because the system as a whole helps absorb required changes in climate policy to meet the overall EU cap on emissions. There is, however, a cost in terms of somewhat greater permit price uncertainty.