Jean Charles Hourcade

Clean development mechanism: Leverage for development?

The objective of this paper is to show that the investments through the clean development mechanism (CDM) can exert a leverage effect to (i) make attractive to developing countries non-binding commitments and the adoption of national policies and measures; this comes as a guarantee of non-conditionally of the mechanism to strictly environmental concerns and (ii) create a flow of additional investments and technological transfer from Annex B countries to non-Annex B countries. n nThe Indian power sector has been chosen as an example of a sector where institutional barriers, market imperfections, and tariff distortions create a great space for Pareto improvements and leave an important potential for no-regret measures: technological transfer, air conditioned systems, transport infrastructures and removal of subsidies on consumption. n nThis paper presents a micro-economic formalisation on (i) the evolution of profitability of current emitting technologies used in the power sector under the adoption of national policies and measures and (ii) the impact on renewable energy technologies competitiveness of emission credits in the context of CDM. This formalisation has been developed to enable quantitative simulation. A first exercise using the Markal model (used in 77 countries) on the electric sector in India enabled us to simulate the leverage effect of emission credits on additional incomes taken as a proxy for development.

Viable responses to the equity-responsibility dilemma: a consequentialist view

Abstract This paper aims at clarifying some conceptual flaws blurring the equity-efficiency debates involved in the setting of objectives of GHGs emissions control beyond 2012. To this end, it carries out numerical experiments that test the viability of agreements grounded on two contrasting target allocation rules: a “Soft Landing” rule prolonging a Kyoto-type agreement; and a “Convergence” rule progressively re-directing Kyoto towards a per capita emissions endowment. The numerical results demonstrate the sensitivity of the impact to the metric used to assess it and to assumptions regarding the interaction between the cap and trade system and accompanying measures such as domestic policies(characterised as simple fiscal reforms) and international public funding. In a further step, the paper derives some lessons about how to reconcile two political imperatives:(a) an ex-post or “consequentialist” approach to equity, which however cannot fully avoid relying on ex-ante rules, and(b) the necessity of an agreement on such stable ex-ante rules to set up emissions targets and efficient emissions trading. Such reconciliation suggests a coming back to the environment/development “Gordian Knot”, which underpins all global environmental affairs since the Stockholm Conference in 1972: the equity-efficiency dilemma has to be set in a broader sustainable development perspective whereby climate policies are integrated with development priorities of the poorest countries so as to create a leverage effect on development.

Dans le labyrinthe de verre: La négociation sur l'effet de serre

La negociation sur le changement climatique, depuis ses debuts a Rio en 1992, sest deroulee continument sous le signe du malentendu, notamment entre les Etats-Unis et lEurope, et a abouti a un semi-echec : le schema dapplication du protocole de Tokyo adopte en novembre 2001 ninclut pas les Etats-Unis, pourtant premier pays producteur de gaz a effet de serre. En parcourant les etapes de cette negociation, on rencontre un nombre incroyable doccasions de compromis manquees, de jeux rhetoriques qui figent durablement les partenaires dans des oppositions que rien ne laissait objectivement prevoir, de dialogues de sourds... Lincomprehension mutuelle qui peut surgir dans nimporte quelle negociation se double ici dun jeu de miroirs trompeurs, ou chaque partie tient avant tout un discours a destination de sa propre opinion publique ou de ses propres groupes dinterets, ce que le partenaire ne comprend pas toujours, ou ne peut pas accepter pour les memes raisons, souvent purement symboliques.