Angela Köppl, Claudia Kettner (WIFO), Andreas Türk (Climate Strategies), Michael Mehling (Ecologic Institute)
Synthesis: Searching for a Global Architecture
Studien, Juni 2012, 23 Seiten
The project "ICPIA – Coping with Complexity in the Evolving International Climate Policy Institutional Architecture" was funded
by the Austrian "Klima- und Energiefonds" and carried out within the research programme "ACRP".
Auftraggeber: Klima- und Energiefonds
Studie von: Österreichisches Institut für Wirtschaftsforschung – Climate Strategies
The outcome of the Durban Climate Conference in December 2011 will lead to a more fragmented climate regime after 2012. While
a few countries may continue with the Kyoto Protocol, its governance and its rules, the majority of countries will proceed
with the bottom-up approach of voluntarily proposing and reviewing reduction targets at least until 2020 when a new global
treaty may come into force. Designing this transition period will be a major challenge. This ICPIA synthesis paper includes
lessons from other ICPIA work packages in order to draw conclusions for improving the design of the climate regime for the
time after 2012 and after 2020. The paper concludes that finding a common ground on important design features, such as accounting
or new market mechanisms, in the short term will impact the ability to create a comprehensive agreement in the long term.
Forschungsbereich:Klima-, Umwelt- und Ressourcenökonomie
The project "ICPIA – Coping with Complexity in the Evolving International Climate Policy Institutional Architecture" was funded
by the Austrian "Klima- und Energiefonds" and carried out within the research programme "ACRP".
Auftraggeber: Klima- und Energiefonds
Studie von: Österreichisches Institut für Wirtschaftsforschung – Climate Strategies
The political differences on fundamental questions of a future climate regime remain high and the outcome of the latest climate
conference in Durban is still uncertain. Important nations and groups of countries have come out with widely divergent proposals
on their favoured institutional trajectory for the future climate regime. This policy paper evaluates the positions of several
countries or country blocks that are critical for the design and success of the future climate regime, including the EU, the
BASIC countries and the USA. It builds on a parallel ICPIA paper that provides a first conceptual framework for the systematic
analysis of different regime architectures and applies the criteria defined therein to the proposals submitted by central
actors in the current negotiations. The policy paper outlines the strength and the weaknesses of the different proposals.
It concludes that the strengths of the current climate regime, such as a high participation and inclusiveness and political
feasibility, can serve as a robust basis for a more comprehensive and ambitious international climate regime in the long term.
The project "ICPIA – Coping with Complexity in the Evolving International Climate Policy Institutional Architecture" was funded
by the Austrian "Klima- und Energiefonds" and carried out within the research programme "ACRP".
Auftraggeber: Klima- und Energiefonds
Studie von: Österreichisches Institut für Wirtschaftsforschung – Climate Strategies
Recent climate negotiations have evinced a controversial debate on how best to reform the institutional and legal framework
of international climate governance. Unlike the domestic policy context, where widely recognised criteria have evolved to
guide choices among alternative policy frameworks, no equally systematic approach has yet been developed for the international
arena, where narrow state preferences or a specific methodology tend to dominate the discussion. Drawing on lessons from the
evaluation of domestic climate policies and measures as well as the study of broader international environmental governance,
this paper surveys existing research and proceeds to define a matrix of criteria for the classification of alternative frameworks
for international climate cooperation. In so doing, it hopes to facilitate a more transparent and systematic approach to the
assessment of alternative frameworks for climate cooperation. Specifically, the criteria proposed in this paper are: level
of ambition, compliance facilitation and control, institutional capacity, participation and inclusiveness, systemic coherence,
as well as political and economic feasibility. Future application of this matrix to existing and proposed climate governance
frameworks will determine whether the foregoing criteria offer a suitable frame of reference for the evaluation and comparison
of contending climate architectures, regimes, and institutions. Given the proliferation of existing and proposed venues to
advance climate governance, such a framework would seem both timely and useful.
The project "ICPIA – Coping with Complexity in the Evolving International Climate Policy Institutional Architecture" was funded
by the Austrian "Klima- und Energiefonds" and carried out within the research programme "ACRP".
Auftraggeber: Klima- und Energiefonds
Studie von: Österreichisches Institut für Wirtschaftsforschung – Climate Strategies
In order to successfully tackle the challenge of limiting climate change it has to be recognised that climate policy is a
cross-sectoral issue and needs to be firmly integrated in general and sector-specific policy areas that frame economic activity
and societal development. Experience however shows that there is a divide between the need of addressing climate policy as
cross-sectoral issue and short-term policy decisions that imply a low hierarchical rank for climate policy versus other policy
areas. Still a big step is necessary to depart from climate policy as add-on policy area towards comprehensive integration.
This paper addresses the topic of climate policy integration. We focus on horizontal policy integration at the EU level with
respect to general strategic policy papers, energy policy and the EU's Multi-annual Financial Framework. Our qualitative appraisal
confirms that while there is a high general commitment to climate change action on EU level, evidence on climate policy integration
into specific policies analysed in this paper is not clear cut: While recent energy policy documents generally refer to climate
change as a central motivation, the EU budget does not mention climate change as a budgetary priority. On the strategic level,
the relationship of energy policy and climate policy is partly synergetic (e.g., the objective of a sustainable energy system)
and partly conflicting (e.g., the emphasis on fossil fuels in order to ensure energy security). Specific energy policy documents
generally reinforce climate policy targets. Climate policy integration is not reflected in the EU budget: no explicit resources
are dedicated to climate change issues in the Multi-annual Financial Framework; in cohesion funding – to which a significant
part of the EU budget accrues – climate-friendliness of the proposed projects is also no funding criterion. Quite the contrary,
a large portion of cohesion funding is allocated to investment in road transport entailing adverse effects for climate policy.
The project "ICPIA – Coping with Complexity in the Evolving International Climate Policy Institutional Architecture" was funded
by the Austrian "Klima- und Energiefonds" and carried out within the research programme "ACRP".
Auftraggeber: Klima- und Energiefonds
Studie von: Österreichisches Institut für Wirtschaftsforschung – Climate Strategies
Several years of experience with the EU ETS and various adaptations of the regulatory framework are accompanied by discussions
whether an institutional setting to stabilise carbon markets is needed. This paper discusses imperfections in market forces
– contrary to theoretical assumptions – especially with respect to the implications of the use of marginal abatement cost
curves as well as the role of stable price signals for investment decisions. We argue that the gap between ex ante information
when emission caps are set and ex post outcomes might be one of the reasons for price variability in the EU ETS. This divergence
between ex ante and ex post information illustrates that the theoretical assumptions on emission trading are not matched by
a real world setting. We conclude that this weakens the potential role of carbon prices for investment decisions. In order
to improve the functioning of the EU ETS we re-iterate the arguments for a carbon authority put forward in the literature
and extend them by the argument that the concept of abatement curves is only of limited value in the context of CO2 emission
reductions where marginal abatement costs often are ambiguous and time variant.
Thomas Spencer (University of Edinburgh und IDDRI), Dora Fazekas, Simone Cooper (Climate Strategies), Tim Laing (LSE)
The project "ICPIA – Coping with Complexity in the Evolving International Climate Policy Institutional Architecture" was funded
by the Austrian "Klima- und Energiefonds" and carried out within the research programme "ACRP".
Auftraggeber: Klima- und Energiefonds
Studie von: Österreichisches Institut für Wirtschaftsforschung – Climate Strategies
Approaches to redistribute the costs of climate policy (effort sharing) have been central to EU climate change policy since
its inception in the early 1990s. This is both due to the nature of the problem, which inherently involves (re-)distributing
costs between sectors, jurisdictions and generations, and the nature of the EU. This paper surveys the effort sharing approaches
taken over the course of EU climate policy, since its early efforts to agree to the distribution of a common EU Kyoto target
among member countries to the 2008 Climate and Energy Package. In so doing, the paper aims to draw lessons learned for other
jurisdictions and the EU itself as they develop and implement climate change policies. The paper comes to several central
conclusions: Firstly, climate policy negotiation in the EU takes place within an enormously complex web of other policies
and interests, allowing space for (implicit) bargaining that is unlikely to exist in other international settings. Secondly,
a central difficulty over the history of EU effort sharing has been the harmonisation of climate policy across multiple, overlapping
climate regimes, including the Kyoto Protocol, the Burden Sharing Agreement between the EU 15, and the European ETS. This
overlap led to linkages and disharmonies that proved difficult to reconcile. Thirdly, the EU''s climate policy has moved gradually
towards more centralised modes of governance; this has facilitated the harmonisation and effectiveness of ambitious climate
policies, but at the cost of derogations, which have potentially weakened harmonised instruments such as the ETS. Overall,
the balance appears positive, however, as EU effort sharing approaches have allowed member countries to go further than they
would in a purely domestic context. Ultimately, the EU's effort sharing policies need to be seen in the difficult context
of shared competences between the EU and member countries in the energy sector, and conflicting EU principles of the internal
market and solidarity, which implies a differentiated approach to fundamental economic reform.
Peter Wooders, Marius Keller, Barbara Anzinger, Tom Moerenhout (IISD)
The project "ICPIA – Coping with Complexity in the Evolving International Climate Policy Institutional Architecture" was funded
by the Austrian "Klima- und Energiefonds" and carried out within the research programme "ACRP".
Auftraggeber: Klima- und Energiefonds
Studie von: Österreichisches Institut für Wirtschaftsforschung – Climate Strategies
The detailed analysis of the energy-intensive sectors in Austria starts with reference to the cost and decision-making drivers,
and then considers how climate change policies and measures could affect them relative to other drivers faced by the industries.
The report assesses carbon costs relative to financial indicators for the Austrian cement, steel and paper and pulp sectors.
It finds no compelling evidence that the EU ETS has already had an impact on competitiveness and leakage in the sectors analysed.
As carbon costs to European producers may increase after 2012 due to changes in the design of the EU ETS, a reduction in competitiveness
and leakage could however be expected, with a likely first impact being reductions in investment in new capacity (noting that
such investments have already been limited in the EU over the past decade). The report asks how effective sectoral approaches,
agreements and measures (SAAMs) might be in reducing competitiveness and leakage impacts. Six possible variants are described
from a wide range of types, and their impacts assessed.
The project "ICPIA – Coping with Complexity in the Evolving International Climate Policy Institutional Architecture" was funded
by the Austrian "Klima- und Energiefonds" and carried out within the research programme "ACRP".
Auftraggeber: Klima- und Energiefonds
Studie von: Österreichisches Institut für Wirtschaftsforschung – Climate Strategies
If dangerous and irreversible climatic events are to be avoided, global average temperature should not increase by more than
2°C above pre-industrial levels. In order to achieve such a global target, a mitigation pathway has to limit global emissions
to about 50 percent below 1990 levels by 2050. This paper investigates the radical change of the energy system that would
be needed for entering the pathway for halving emission levels by applying a global analytical tool. A comprehensive database
with a global coverage including socioeconomic data as well as data on energy and emissions has been set up. By dividing the
world into six countries and regions which account for two thirds of global emissions and a region for the rest of the world
we investigate in an analytical framework the key drivers and parameters of the energy system which refer to population dynamics,
economic activity, energy and carbon intensity. Based on assumptions about the diffusion and convergence of these key parameters
we derive implications for long-term emission reduction targets.
The project "ICPIA – Coping with Complexity in the Evolving International Climate Policy Institutional Architecture" was funded
by the Austrian "Klima- und Energiefonds" and carried out within the research programme "ACRP".
Auftraggeber: Klima- und Energiefonds
Studie von: Österreichisches Institut für Wirtschaftsforschung – Climate Strategies
The EU Emission Trading Scheme (EU ETS) covers emitters from industry and the energy sector and 40 percent of the EU's total
greenhouse gas emissions. It is the biggest implementation of a cap-and-trade scheme worldwide and the core instrument of
European climate policy since its start in 2005. Based on a database comprising more than 10,000 installations in 26 EU countries,
this paper provides a thorough analysis of the performance of the EU ETS in the period 2005-2010. In the first part, we analyse
allocation patterns – i.e., the stringency of allocation caps and distribution issues – on EU and country level comparing
the results of the EU ETS pilot phase and the first three years of the Kyoto phase. In the second part of the paper, we assess
trading flows of European Allowance Units (EUAs) between EU countries comparing the results for the first and second trading
period and analyse the use of project-based credits in the second trading period. Our analysis shows a higher overall stringency
of the 2008 allocation caps compared to the first trading period reflecting the stronger role of the European Commission.
For the following years we find, however, a surplus of allowances reflecting the decline in emissions due to the economic
crisis. Traded certificates account for only a small share in EU-wide surrendered allowances, but increased in the second
trading phase. Our analysis reveals that some countries have been net importers of EUAs despite national surpluses of allowances.
This may either be due to differences in allocation patterns within EU countries, EUA transfers between associate companies
or due to excess imports because of wrong (emission) growth expectations.