Use of market-based mechanisms are favored by economists and welcomed by industry as they reduce the costs of meeting emissions targets. The Kyoto Protocol created three distinct flexibility mechanisms to reduce the economic burden of target compliance—joint implementation, the Clean Development Mechanism, and international emissions trading. The advantages and limitations of these approaches, as well as the employment of a carbon tax, should be considered.
Market-based mechanisms are generally favored by economists and welcomed by industry, as they tend to reduce the costs to industry (or countries) of complying with targets. However, effective trading approaches require an overall cap on emissions. Analysts are discovering that the administrative difficulties of implementation and enforcement of capand-trade systems amongst countries are not trivial. The Financial Times recently exposed the weaknesses in the carbon offsets market with buyers paying either for reduction that do not take place or for reductions that would have taken place anyway. Partly for these reasons, some economists prefer the levying of taxes on activities that lead to the emissions of greenhouse gases.
Carbon taxes are easier to implement than cap-and-trade schemes, economically efficient, but politically difficult to legislate in some democratic regimes. A carbon tax would reduce carbon emissions and increase revenues. Substantial benefits could be gained from carbon taxes in all countries based on the “common but differentiated” principle. In addition to emissions reductions, they would generate resources for the development of clean energy sources as well as for the cost of adaptation in poor developing countries.
The CDM was created to support low-carbon investment in developing countries. It allows both the private sector and governments to invest in projects that reduce emissions (as compared to emissions that would occur in a baseline scenario) in developing countries, and provides one way to support links between different regional emissions trading schemes. However, it has encountered administrative and technical hurdles, and its future is clouded because of the uncertainty about the post-2012 regime. Appendix 3 summarizes other challenges that the CDM faces. Initial CDM projects have been limited to a few countries, and a few gases, and have been plagued by bureaucratic procedures, with little contribution to sustainable development.
Some analysts have suggested that these market-based mechanisms are good at identifying the cheapest mitigation opportunities amongst existing options, and spurring innovations that have immediate cost reductions, but are less helpful in spurring the development of new lowemission technologies.
Questions for GLCA:
-Should GLCA advocate or recommend a carbon tax, cap-and-trade system, or a combination of both?
-Should GLCA propose concrete steps for reforming the CDM?
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ScienceDaily: Australia's hottest year on record in 2013 along with the accompanying droughts, heat waves and record-breaking seasons of that year was virtually impossible without the influence of human-caused global warming.
New research from ARC Centre of Excellence for Climate System Science (ARCCSS) researchers and colleagues, over five different Australian papers in a special edition of the Bulletin of the American Meteorological Society (BAMS), has highlighted the powerful influence of global warming...
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Australia's 2013 heatwave due to climate change, researchers conclude
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Researchers from the University of Melbourne, the Australian National University and the University of NSW have concluded it is "virtually impossible" that the heatwaves that hit Australia in 2013 would have occurred were it not for carbon emissions caused by human activity.
The reports have been published in the Bulletin of the American Meteorological Society...
Greenland Ice Sheet more vulnerable to climate change than previously thought
ScienceDaily: A new model developed by researchers at the University of Cambridge has shown that despite its apparent stability, the massive ice sheet covering most of Greenland is more sensitive to climate change than earlier estimates have suggested, which would accelerate the rising sea levels that threaten coastal communities worldwide.
In addition to assessing the impact of the increasing levels of meltwater created and spilled into the ocean each year as the climate continues to warm, the new model also...
US carbon emissions from energy use increase
RTCC: US carbon dioxide emissions from energy consumption rose 3% in the first six months of 2014 compared to the same period last year.
The latest figures from the US Energy Information Administration show energy sources belched out 2,737 million tonnes of carbon dioxide between January and June.
That was up from 2,664Mt in the same period of 2013 and 2,583Mt in 2012.
It is a reversal of the downward trend seen in the last full-year results available, from 2012. That reduction was attributed...
Oil majors target King Coal in fight climate high ground
RTCC: Coal chief executives were thin on the ground in New York last week, perhaps fearing an onslaught from green groups at the UN?s one-day climate summit.
Tactically, it was a good way to avoid negative headlines. Strategically, it may prove to be a disaster.
In meeting called ?Industry Action Areas? the world?s leading oil and gas companies queued up to voice their concerns about climate change, and argue they offer a future coal cannot.
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RTCC: By 2050 the sun could become the world?s largest source of electricity, according to the International Energy Agency (IEA).
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This would push solar ahead of fossil fuels, hydropower, nuclear and other forms of electricity generation.
The IEA says a government-backed move to solar would negate the emission of six billion...
Stanford scientists say greenhouse gases worsen California drought
Reuters: California?s catastrophic drought has most likely been made worse by man-made climate change, according to a report released Monday by Stanford University, but scientists are still hesitant to fully blame the lack of rain on climate change.
The research, published in the Bulletin of the American Meteorological Society as part of a collection of reports on extreme weather events in 2013, is one of the most comprehensive studies linking climate change and California's ongoing drought, which has...