What had the Kyoto Protocol Wrought?: The Real Architecture of International Tradable Permit Markets



What had the Kyoto Protocol Wrought?: The Real Architecture of International Tradable Permit Markets (Aei Studies on Global Environmental Policy)
AEI Press | January-1-1999 | ISBN: 084477135X | 39 pages | File type: PDF | 1.3mb
This volume investigates a central issue of climate policy architecture: the structure and potential performance of the Kyoto Protocol's international trading mechanisms in the presence of diverse types of domestic greenhouse policy instruments. The authors focus on that issue because the protocol explicitly and prominently provides for domestic sovereignty regarding instrument choice and because previous policy experience suggests that many or most countries may not choose tradable permits as their sole or even primary domestic vehicles.

Hahn and Stavins find that although the Kyoto Protocol can provide for an internally consistent international tradable permit program, a fully cost-effective international emissions trading program is not compatible with the notion of full domestic sovereignty regarding the choice of instrument. The authors conclude that individual nations' choices of domestic policy instruments to meet the Kyoto Protocol's targets can substantially limit the cost-saving potential of an international trading program. Because international permit trading remains an attractive approach to achieving global greenhouse targets, policymakers need to analyze the likely cost savings from feasible, as opposed to idealized, approaches to reducing international greenhouse gas emissions.

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