nep-res New Economics Papers
on Resource Economics
Issue of 2009‒02‒07
two papers chosen by
Maximo Rossi
Universidad de la Republica

  1. Linkage of Tradable Permit Systems in International Climate Policy Architecture By Jaffe, Judson; Stavins, Robert
  2. Global Environmental Policy and Global Trade Policy By Frankel, Jeffrey

  1. By: Jaffe, Judson (Analysis Group); Stavins, Robert (Harvard U)
    Abstract: Cap-and-trade systems have emerged as the preferred national and regional instrument for reducing emissions of greenhouse gases throughout the industrialized world, and the Clean Development Mechanism--an international emission-reduction-credit system--has developed a substantial constituency, despite some concerns about its performance. Because linkage between tradable permit systems can reduce compliance costs and improve market liquidity, there is great interest in linking cap-and-trade systems to each other, as well as to the CDM and other credit systems. We examine the benefits and concerns associated with various types of linkages, and analyze the near-term and long-term role that linkage may play in a future international climate policy architecture. In particular, we evaluate linkage in three potential roles: as an independent bottom-up architecture, as a step in the evolution of a top-down architecture, and as an ongoing element of a larger climate policy agreement. We also assess how the policy elements of climate negotiations can facilitate or impede linkages. Our analysis throughout is both positive and normative.
    JEL: F50 Q20 Q40 Q50
    Date: 2008–10
    URL: http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp08-053&r=res
  2. By: Frankel, Jeffrey (Harvard U)
    Abstract: The global climate regime, as represented by the Kyoto Protocol, may be on a collision course with the global trade policy regime, as represented by the WTO (World Trade Organization). Environmentalists fear that international trade will undercut reductions in greenhouse gas emissions as dirty production migrates to non-participating countries, a phenomenon known as leakage. Meanwhile businesspeople fear the effects on their own competitiveness of the same phenomenon. These fears have now become prominent in the policy-making process. In early 2008, legislation to enact long-term targets for reduced emission of greenhouse gases included provisions for possible barriers against imports from countries perceived as non-participating--in both Washington, DC (where the bills have not yet passed) and in Brussels (where the EU Commission Directive has gone into effect). Such provisions could be interpreted as violations of the rules of the WTO, which poses the nightmare scenario of a WTO panel rejecting a major country's climate change legislation. In light of the hostile feelings that such a scenario would unleash, it would be a nightmare for the supporters of the WTO and free trade as much as for the supporters of the Kyoto Protocol and environmental protection. The issue is just the latest and largest instance of fears among many environmentalists that the WTO is an obstacle to their goals in general. The issue transcends institutions. For the critics, the WTO is a symbol of globalization, and their fears attach also to that larger phenomenon. The first part of this paper discusses the broader issue of whether environmental goals in general are threatened by free trade and the WTO. The second half of the paper focuses exclusively on the narrower question of trade aspects of nations' efforts to implement climate change policy and whether they are likely to come into conflict with the WTO.
    Date: 2008–10
    URL: http://d.repec.org/n?u=RePEc:ecl:harjfk:rwp08-058&r=res

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