Daniel J. Dudek

“Intensity” targets: pathway or roadblock to preventing climate change while enhancing economic growth?

Abstract After establishing the operative definitions of greenhouse gas emissions “intensity” targets and “absolute” targets for greenhouse gas emissions limits, we identify examples of these approaches in current laws and policies. We focus in particular on the US experience with the sulfur dioxide emissions “cap and trade” program as an example of the use of an “absolute” target approach. We compare and contrast this example with “performance standard” programs under the US Clean Air Act and the Corporate Average Fuel Economy standards for motor vehicles, which embody the emissions rate or “intensity” concept. These case studies give us insights into the pros and cons of the intensity versus absolute approaches. Moving from retrospective to prospective, we consider the possible application of alternative absolute and intensity targets (IT) to global, national and firm-level emissions. We then identify criteria for evaluating the use of “intensity” targets as a tool for achieving both environmental and economic goals. These include success in limiting climate change, achieving cost certainty and manageability, providing flexibility for public and private sector decision-makers in responding to new information, stimulating technological progress and sustaining a global climate regime.

Environmental governance for China: Major recommendations of a Task Force

Abstract For 15 years the China Council for International Cooperation on Environment and Development (CCICED) has given advice to the Chinese government on various aspects of environmental conservation. In 2004, the Council established a Task Force on Environmental Governance, consisting of six international and six Chinese experts. On the basis of a thorough comparative evaluation of the structures, processes and outcomes of the environmental policies in China, the US, Japan and the EU, in November 2006 the Task Force presented its report consisting of 25 major recommendations, which are documented here in a condensed version.

Economics of the Kyoto Protocol for Russia

Abstract In this article we propose a careful analysis of the economic consequences of the Kyoto Protocol for Russia, taking into account the most recently available data and the latest developments in the trends regarding Russian economic recovery. We present a review of different GHG forecasts for Russia and develop a new forecast for uncertain GDP growth and changing elasticity of GHG emission per GDP. Since the rate of growth remains uncertain, elasticity could change over time, as well as the fuel mix. We apply the Monte-Carlo method to simulate these uncertainties and to produce a reasonable interval for CO2 emissions in 2010. The probability of Russia exceeding its Kyoto emissions budget is essentially zero. Further, we discuss the benefits for Russia from the Kyoto Protocol, and more generally from implementation of GHG mitigation policy. Ancillary benefits from Kyoto Protocol implementation will bring essential reductions in risk to human health. On the other hand, potential negative changes in the fuel mix and GDP structure, as well as a slowing of the innovation process, could exacerbate existing health problems. Alternatives to the Kyoto Protocol may bring much tougher commitments to Russia. We conclude that the Kyoto Protocol is the best possible deal for Russia. Therefore, Russia most will ratify it.

Emission inventory on company level: lessons from Russia

Developing a transparent,accurate greenhouse gas (GHG) emissionsinventory is the first step toward buildingan effective GHG management system. Todate, GHG inventories have been conductedprimarily at national levels. Theinternationally accepted inventorymethodology developed by theIntergovernmental Panel on Climate Change(IPCC) is oriented to countrywideinventories. The electricity company RAOUESR is the largest single corporateemitter of GHG in the Russian Federation. The company is responsible for about 1/3 ofRussias CO2 emissions; RAOs fossil fuelemissions are comparable to the fossil fuelemissions of the United Kingdom. The GHGinventory prepared by RAO is the first suchcorporate emissions inventory undertaken ina non-OECD country. In this article wepresent a detailed independent examinationof the methodology RAO applied for theinventory. We identify the most importantsources of uncertainty and we estimate theuncertainty. The main conclusion of theindependent review is that the methodologyutilized by RAO and the informationsupporting the methodology are reliable andpresent a reasonably accurate company-widepicture of RAOs CO2 emissions. The shareof other greenhouse gases is negligiblysmall and we did not focus on this fractionof RAOs GHG emissions. As a next step, RAOmay wish to conduct more precisefacility-by-facility inventories in orderto create a robust GHG emission managementsystem.

CO2 and SO2: Consistent Policy Making in a Greenhouse

This past year has witnessed a resurgence of interest in problems of atmospheric pollution. Two broad-scale atmospheric problems have dominated the news: acid rain and global warming. Each has engendered significant national and international policy debate, but they have not been addressed as linked problems. Instead, the constituencies supporting or opposing various policy initiatives have pursued very narrowly focused objectives. This narrowed vision is a primary source of the complex and conflicting mandates of the current Clean Air Act. The reauthorized Act should be viewed as a major opportunity for reform which should begin with the recognition of trade-offs among environmental objectives. Chief among these opportunities are SO2 control strategies which would also reduce CO2, the primary greenhouse gas.

Integrating Energy and The Environment in The Marketplace

Economists have long believed that the internalization of environmental externalities is a positive and effective policy prescription for managing these problems. Although internalization can be accomplished through a wide array of policy instruments,2 economists have preferred the use of economic incentives. Most frequently these prescriptions have taken the form of charges or fees for emissions, in essence a special corrective tax.

Applying Greenhouse Gas Emissions Trading to the Light-Duty Vehicle Sector

The threat of global climate change induced by human production of greenhouse gases is becoming more intensely debated every year. With international agreement on the Kyoto Protocol in December 1997, nations are beginning to assess their options to meet the commitments that they have made. In terms of greenhouse gas emissions control, the passenger vehicle sector presents a significant challenge. Every liter of gasoline burned produces approximately 2.3 kg of carbon dioxide, the most common greenhouse gas. Although all known methods of greenhouse gas emissions control come with some associated costs, a properly designed emissions trading system is a promising policy tool to deal with this increasingly significant environmental problem in a costeffective manner. The issues involved with measurement of the greenhouse gases produced by passenger vehicles and their incorporation into an intersectoral emissions trading system were investigated. It is suggested that direct emissions measurement may not be necessary for these vehicles to participate in such a program, and an alternate emissions estimation methodology is described. Finally, an emissions trading implementation plan is discussed. By that plan vehicle manufacturers are given credit or responsibility for the greenhouse gas emissions of the vehicles that they sell, with the emissions annualized over the projected lifetime of the vehicles.

Energy and Environmental Policy: The Role of Markets

In the aftermath of both a new Clean Air Act and the Persian Gulf War, Congress and the administration have once again turned their attention to the question of the nation’s use and management of energy resources. Energy, like many other valuable resources, has been the grist for many political, economic, and military battles. These struggles have largely been fought for control of these resources and the wealth that flows from such control. In our contemporary focus, we tend to forget that many of the vents of the twentieth century have been largely shaped by various conflicts over energy resources. Daniel Yergin’s recent book, The Prize, is a compelling tale of the influence of oil. Much of the development of the western part of the United States has been spurred by energy development and use. This trend continues as the Pacific Northwest debates the environmental impact of hydroelectric development and as Alaska attempts to tap the Arctic National Wildlife Refuge.

Greenhouse Gases and Emissions Trading

Atmospheric concentrations of carbon dioxide and other greenhouse gases have grown rapidly since the beginning of this century. Unless emissions are controlled, the world could face rapid climate changes, including an increase in temperature and shifts in weather patterns.