Practical Global Climate Policy
William A. Pizer, Resources for the Future
Summary:
William Pizer has proposed an approach to climate policy architecture that reflects the institutional limitations and current domestic preferences regarding an international climate agreement. He calls for the largest emitters and economies to pledge specific actions and policy commitments, which can take any form (cap-and-trade, taxes, suite of technology standards, etc.), in an initial agreement. These commitments would be non-binding and there would be no “minimum” commitment necessary to participate. A streamlined version of the Clean Development Mechanism could allow for more credits to be generated by sector-based activities and by avoided deforestation and these credits could be used by countries with commitments. Linking of domestic policies advanced in this initial agreement would be allowed. Rolling five-year reviews of national policies, patterned on the OECD country review process, would serve as the means for evaluating effort. These reviews would focus on emission mitigation, technology development, and developing country engagement. Annual meetings would allow for discussion of progress and reviews. Every five years, a major evaluation of progress would be undertaken and a new round of commitments would be put forward. This agreement would not rely on explicit non-compliance penalties, but instead on public shame and the interest to avoid having a weakened negotiating position as incentive for meeting commitments.
Pros:
This proposal takes as its starting point what is politically feasible for countries given their domestic politics and preferences. The focus on actions instead of goals should make commitments both more tangible and more realistic. The annual and five-year review process provides a venue for countries to learn from each other about successful emission mitigation and R&D policies. The expansion of the CDM to allow for avoided deforestation and sector-based policies should aid transition of developing countries toward commitments and secure both greater resources for them and more emission credits for industrialized countries. Allowing commitments to take any form should also facilitate developing country commitments.
Cons:
A bottom-up pledge and review program with voluntary commitments and no formal compliance mechanism may not deliver sufficient emissions mitigation over time. The fundamental challenge in addressing climate change is in overcoming the interest for countries to free ride on the efforts of others in providing a global public good, and voluntary pledges may not be much different from a world with no multilateral framework and only unilateral actions. Countries may have more incentive to achieve emission mitigation and pursue technology development than engage developing countries, because a country’s resources would likely stay within its borders under the first two categories of actions. Countries may pledge less significant support for technology transfer and infrastructure projects in developing countries in this case. The variety of domestic policy actions may not necessarily achieve cost-effective mitigation of climate change risks.