Designing the Post-Kyoto Climate Regime*

The Kyoto Protocol to the United Nations Framework Convention on Climate Change (UNFCCC) marked the first meaningful attempt by the community of nations to curb greenhouse gas (GHG) emissions. This agreement, though a significant first step, is not sufficient for the longer-term task ahead. Whether one thinks the Kyoto Protocol was a good first step or a bad first step, everyone agrees that a second step is required. This chapter identifies some key principles and promising policy architectures for the post-Kyoto period. A credible global climate change agreement must be: equitable; cost-effective; able to facilitate significant technological change and technology transfer; consistent with the international trade regime; practical, in the sense that it builds where possible on existing institutions and practices; attentive to short-term achievements, as well as medium-term consequences and long-term goals; and realistic. The chapter also considers four potential frameworks for a post-Kyoto agreement. The first calls for emissions caps established using a set of formulas that assign quantitative emissions limits to countries through 2100. A second potential framework would instead rely on a system of linked international agreements that separately address mitigation in various sectors and gases. A third architecture would consist of harmonized domestic taxes on emissions of GHGs from all sources. A fourth architecture links national and regional tradable permit systems only indirectly, through the global Clean Development Mechanism (CDM) established by the Protocol.