Linking Heterogeneous Climate Policies (Consistent With The Paris Agreement)

If CitEc has recognized a reference but has not linked an element of RePEc to it, you can use this form to help you. The link is relatively simple when the guidelines in question are similar. However, a link is possible even if this is not the case: for example, when one jurisdiction uses a cap-and-trade system to reduce emissions, while another jurisdiction depends on CO2 taxes. There are several potential sources of heterogeneity: the type of political instrument used (for example. B taxation vs. cap-and-trade vs. performance or technological standard); state jurisdiction (for example, regional). B, national or sub-national); status under the Paris Agreement (i.e. whether or not jurisdiction is a party to the agreement or within a party); type of policy objective (e.g.B. absolute mass emissions relative to emission intensity relative to change from business-as-usual); and the operational details of the country`s NMPPs, including the type of reduction target, the selection of target and reference years, sectors and greenhouse gases covered.

The full document examines five specific cases of link with different combinations of characteristics to determine what types of links are achievable, which are the most promising and what accounting mechanisms are needed to make their operation compatible with the Paris Agreement. Interconnection is important in part because it can reduce the cost of achieving a specific emission reduction target. Reducing costs, on the other hand, could lead to more politically ambitious targets. In a world where the marginal cost of reducing emissions – that is, the cost of reducing an additional tonne of emissions – varies widely, interconnection improves the overall cost by allowing jurisdictions with relatively higher mitigation costs to finance reductions from countries with relatively low costs. Indeed, the link leads participating jurisdictions to a common cost of carbon, which accounts for marginal reduction costs and allows for a more efficient distribution of emissions reduction activities. These benefits are potentially significant: the World Bank estimates that the international link could reduce the cost of achieving the emission reductions set in the initial national contribution rate (NDC) presented under the Paris Agreement, by 32% by 2030 and 54% by 2050. Article 6 of the Paris Agreement establishes a basis for connection by recognising that the parties to the agreement “can continue voluntary cooperation in the implementation of their NDCs through the “use of internationally transferred mitigation results” (ITMO). Unlike the Kyoto Protocol (which also included provisions on international cooperation), the voluntary and flexible architecture of the Paris Agreement allows for wide differences, not only in the nature of the climate policy that countries want to implement, but also in the form and rigour of the mitigation targets they have adopted. The Paris Agreement on the United Nations Framework Convention on Climate Change has achieved one of the two essential conditions necessary to succeed – a broad basis for participation among the countries of the world. But another necessary condition still needs to be achieved – an appropriate collective ambition for each nationally determined contribution.

How can climate negotiators create a structure that encourages increased ambitions over time? An important part of the response may be the international articulation of regional, national and sub-national policies, i.e. formal recognition of emission reductions in another jurisdiction in order to achieve its own mitigation objectives.