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Emission Certificate Trade And Costs Under Regional Burden-Sharing Regimes For A 2°C Climate Change Control Target

Author

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  • T. KOBER

    (Policy Studies Department, Energy Research Centre of the Netherlands (ECN), Petten/Amsterdam, The Netherlands)

  • B. C. C. VAN DER ZWAAN

    (Policy Studies Department, Energy Research Centre of the Netherlands (ECN), Petten/Amsterdam, The Netherlands;
    Lenfest Center for Sustainable Energy, Earth Institute, Columbia University, New York, USA;
    School of Advanced International Studies, Johns Hopkins University, Bologna, Italy)

  • H. RÖSLER

    (Policy Studies Department, Energy Research Centre of the Netherlands (ECN), Petten/Amsterdam, The Netherlands)

Abstract

In this article we explore regional burden-sharing regimes for the allocation of greenhouse gas emission reduction obligations needed to reach a 2°C long-term global climate change control target by performing an integrated energy-economy-climate assessment with the bottom–up TIAM-ECN model. Our main finding is that, under a burden-sharing scheme based on the allowed emissions per capita, the sum of merchandized carbon certificates yields about 2000 billion US$/yr worth of inter-regional trade around 2050, with China and Latin America the major buyers, respectively Africa, India, and other Asia the main sellers. Under a burden-sharing regime that aims at equal cost distribution, the aggregated amount of transacted carbon certificates involves less than 500 billion US$/yr worth of international trade by 2050, with China and other Asia representing the vast majority of selling capacity. Restrictions in the opportunities for international certificate trade can have significant short- to mid-term impact, with an increase in global climate policy costs of up to 20%.

Suggested Citation

  • T. Kober & B. C. C. Van Der Zwaan & H. Rösler, 2014. "Emission Certificate Trade And Costs Under Regional Burden-Sharing Regimes For A 2°C Climate Change Control Target," Climate Change Economics (CCE), World Scientific Publishing Co. Pte. Ltd., vol. 5(01), pages 1-32.
    • Handle: RePEc:wsi:ccexxx:v:05:y:2014:i:01:n:s2010007814400016
    DOI: 10.1142/S2010007814400016
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    Cited by:

    1. Dalla Longa, Francesco & van der Zwaan, Bob, 2021. "Heart of light: an assessment of enhanced electricity access in Africa," Renewable and Sustainable Energy Reviews, Elsevier, vol. 136(C).
    2. Lucena, André F.P. & Hejazi, Mohamad & Vasquez-Arroyo, Eveline & Turner, Sean & Köberle, Alexandre C. & Daenzer, Kathryn & Rochedo, Pedro R.R. & Kober, Tom & Cai, Yongxia & Beach, Robert H. & Gernaat,, 2018. "Interactions between climate change mitigation and adaptation: The case of hydropower in Brazil," Energy, Elsevier, vol. 164(C), pages 1161-1177.
    3. Arango-Aramburo, Santiago & Turner, Sean W.D. & Daenzer, Kathryn & Ríos-Ocampo, Juan Pablo & Hejazi, Mohamad I. & Kober, Tom & Álvarez-Espinosa, Andrés C. & Romero-Otalora, Germán D. & van der Zwaan, , 2019. "Climate impacts on hydropower in Colombia: A multi-model assessment of power sector adaptation pathways," Energy Policy, Elsevier, vol. 128(C), pages 179-188.
    4. Marcucci, Adriana & Panos, Evangelos & Kypreos, Socrates & Fragkos, Panagiotis, 2019. "Probabilistic assessment of realizing the 1.5 °C climate target," Applied Energy, Elsevier, vol. 239(C), pages 239-251.
    5. van der Zwaan, Bob & Kober, Tom & Longa, Francesco Dalla & van der Laan, Anouk & Jan Kramer, Gert, 2018. "An integrated assessment of pathways for low-carbon development in Africa," Energy Policy, Elsevier, vol. 117(C), pages 387-395.

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    More about this item

    Keywords

    Climate policy; energy system; greenhouse gases; emissions abatement; resource versus cost sharing; carbon certificate trade; Q54; F53;
    All these keywords.

    JEL classification:

    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations

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