Post-Kyoto International Climate...

Post-Kyoto International Climate Policy

The Harvard Project on International Climate Agreements is a global, multi-disciplinary effort intended to help identify the key design elements of a scientifi cally sound, economically rational, and politically pragmatic post-2012 international policy architecture for addressing the threat of climate change. It has commissioned leading scholars to examine a uniquely wide range of core issues that must be addressed if the world is to reach an effective agreement on a successor regime to the Kyoto Protocol. The purpose of the project is not to become an advocate for any single policy but to present the best possible information and analysis on the full range of options concerning mitigation, adaptation, technology, and fi nance. The detailed fi ndings of the Harvard Project are reported in this volume, which contains twenty-seven specially commissioned chapters. A companion volume summarizing the main fi ndings of this research is published separately as Post-Kyoto International Climate Policy: Summary for Policymakers.

joseph e. aldy is Fellow at Resources for the Future in Washington, DC. He also served on the staff of the President’s Council of Economic Advisers, where he was responsible for climate change policy from 1997 to 2000.

robert n. stavins is Albert Pratt Professor of Business and Government at the John F. Kennedy School of Government at Harvard University. He is also Director of the Harvard Environmental Economics Program and Chairman of the Kennedy School’s Environment and Natural Resources Faculty Group.

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Post-Kyoto International Climate Policy:Implementing Architectures for Agreement

Research from the Harvard Project on International Climate Agreements

Edited by

joseph e. aldyandrobert n. stavins






cambridge university pressCambridge, New York, Melbourne, Madrid, Cape Town, Singapore, São Paulo, Delhi

Cambridge University PressThe Edinburgh Building, Cambridge CB2 8RU, UK

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Contents

Harvard Environmental Economics Program, International Advisory Board page ix

Harvard Project on International Climate Agreements, Faculty Steering Committee xi

Harvard Project on International Climate Agreements, Project Management xiii

List of fi gures xiv

List of tables xviii

List of contributors xxi

Foreword xxxiiiTimothy E. Wirth

1. Introduction 1Joseph E. Aldy and Robert N. Stavins

Part I Alternative international policy architectures

2. An elaborated proposal for a global climate policyarchitecture: specifi c formulas and emission targets for all countries in all decades 31Jeffrey Frankel

3. The EU emission trading scheme: a prototype global system? 88Denny Ellerman

4. Linkage of tradable permit systems in international climate policy architecture 119Judson Jaffe and Robert N. Stavins

v






vi Contents

5. The case for charges on greenhouse gas emissions 151Richard N. Cooper

6. Towards a global compact for managing climate change 179R. Agarwala

7. Sectoral approaches to a post-Kyoto international climate policy framework 201Akihiro Sawa

8. A portfolio system of climate treaties 240Scott Barrett

Part II Negotiation, assessment, and compliance

9. How to negotiate and update climate agreements 273Bård Harstad

10. Metrics for evaluating policy commitments in a fragmented world: the challenges of equity and integrity 300Carolyn Fischer and Richard D. Morgenstern

11. Justice and climate change: the unpersuasive casefor per capita allocations of emissions rights 343Eric A. Posner and Cass R. Sunstein

12. Toward a post-Kyoto climate change architecture:a political analysis 372Robert O. Keohane and Kal Raustiala

Part III The role and means of technology transfer

13. International climate technology strategies 403Richard G. Newell

14. Mitigation through resource transfers to developing countries: expanding greenhouse gas offsets 439Andrew Keeler and Alexander Thompson

15. Possible development of a technology clean development mechanism in a post-2012 regime 469Fei Teng, Wenying Chen, and Jiankun He






Contents vii

Part IV Global climate policy and international trade

16. Global environment and trade policy 493Jeffrey Frankel

17. A proposal for the design of the successor to the Kyoto Protocol 530Larry Karp and Jinhua Zhao

Part V Economic development, adaptation, and deforestation

18. Reconciling human development and climate protection: a multistage hybrid climate policy architecture 563Jing Cao

19. What do we expect from an international climate agreement? A perspective from a low-income country 599E. Somanathan

20. Climate accession deals: new strategies for taming growth of greenhouse gases in developing countries 618David G. Victor

21. Policies for developing country engagement 649Daniel S. Hall, Michael A. Levi, William A. Pizer, and Takahiro Ueno

22. International forest carbon sequestration in a post-Kyoto agreement 682Andrew J. Plantinga and Kenneth R. Richards

Part VI Modeling impacts of alternative allocations of responsibility

23. Modeling economic impacts of alternative international climate policy architectures: a quantitative and comparative assessment of architectures for agreement 715Valentina Bosetti, Carlo Carraro, Alessandra Sgobbi, and Massimo Tavoni

24. Sharing the burden of GHG reductions 753Henry D. Jacoby, Mustafa H. Babiker, Sergey Paltsev, and John M. Reilly






viii Contents

25. When technology and climate policy meet: energy technology in an international policy context 786Leon Clarke, Kate Calvin, Jae Edmonds, Page Kyle, and Marshall Wise

26. Revised emissions growth projections for China:why post-Kyoto climate policy must look east 822Geoffrey J. Blanford, Richard G. Richels, and Thomas F. Rutherford

27. Expecting the unexpected: macroeconomic volatility and climate policy 857Warwick J. McKibbin, Adele Morris, and Peter J. Wilcoxen

Part VII Synthesis and conclusion

28. Epilogue 889Richard Schmalensee

29. Lessons for the international policy community 899Joseph E. Aldy and Robert N. Stavins

Appendix A: Selected List of Individuals Consulted, Harvard Project on International Climate Agreements 930

Appendix B: Workshops and Conferences, Harvard Project on International Climate Agreements 935

Glossary and Abbreviations 939

Index 947






Harvard Environmental Economics Program International Advisory Board

The Harvard Project on International Climate Agreements is an ini-tiative of the Harvard Environmental Economics Program, which develops innovative answers to today’s complex environmental issues, through research, teaching, and policy outreach.

Carlo CarraroProfessor of Environmental EconomicsUniversity of Venice

Eileen ClaussenPresidentPew Center on Global Climate Change

Fulvio ContiChief Executive Offi cer and General ManagerEnel SpA

Maureen CropperProfessor of EconomicsUniversity of Maryland

Robert E. GradyManaging DirectorThe Carlyle Group

C. Boyden GrayFormer United States Ambassadorto the European Union

Lars G. JosefssonPresident and Chief Executive Offi cerVattenfall

Fred KruppPresidentEnvironmental Defense Fund

John LlewellynPrincipalLlewellyn Consulting

Frank E. LoyFormer Under Secretary for Global AffairsUnited States Department of State

Bijan Mossavar-RahmaniChief Executive Offi cerMondoil Corporation

Fernando NapolitanoManaging DirectorBooz & Company Italia

ix






x International advisory board

William K. ReillySenior AdvisorTPG Capital LLP

James E. RogersChairman, President, and Chief Executive Offi cerDuke Energy

Theodore Roosevelt IVManaging DirectorBarclays Capital

François RousselyChief Executive Offi cerCredit Suisse, France

Richard L. SchmalenseeHoward W. Johnson Professor of Economics and ManagementMIT Sloan School of Management

Phil SharpPresidentResources for the Future

Domenico SiniscalcoVice Chairman and Managing DirectorMorgan Stanley International

Neil H. SmithPresident and Chief Executive Offi cerInterGen

Björn StigsonPresidentWorld Business Council for Sustainable Development

Cathleen StoneSpecial Assistant for EnvironmentOffi ce of the Mayor of Boston, Massachusetts

Jorge VasconcelosChairmanNew Energy Solutions First (NEWES)

Robert C. WeberGroup Chief ExecutiveAECOM EnvironmentalManagement Group

Timothy E. WirthPresidentUnited Nations Foundation






Harvard Project on International Climate Agreements Faculty Steering Committee

Graham AllisonDouglas Dillon Professor of GovernmentHarvard Kennedy School

Jeffrey FrankelJames W. Harpel Professor of Capital Formation and GrowthHarvard Kennedy School

Jerry GreenJohn Leverett Professor in the UniversityHarvard Faculty of Arts and Sciences

James HammittProfessor of Economics and Decision SciencesHarvard School of PublicHealth

William HoganRaymond Plank Professor of Global Energy PolicyHarvard Kennedy School

Dale JorgensonSamuel W. Morris University ProfessorHarvard Faculty of Arts and Sciences

Robert LawrenceAlbert L. Williams Professorof International Trade and InvestmentHarvard Kennedy School

Richard PeiserMichael D. Spear Professor of Real Estate DevelopmentHarvard Graduate Schoolof Design

Forest ReinhardtJohn D. Black Professor of Business AdministrationHarvard Business School

Daniel SchragProfessor of Earth and Planetary SciencesHarvard Faculty of Arts and Sciences

Steven ShavellSamuel R. Rosenthal Professor of Law and EconomicsHarvard Law School

Beth SimmonsClarence Dillon Professor of International AffairsHarvard Faculty of Arts and Sciences

xi






xii Faculty steering committee

Robert StavinsAlbert Pratt Professor of Business and GovernmentHarvard Kennedy School

Richard VietorPaul Whiton CheringtonProfessor of Business AdministrationHarvard Business School






Harvard Project on International Climate AgreementsProject Management

xiii

Robert StavinsDirector

Robert StoweProject Manager

Jason ChapmanProject Coordinator

Tyler GumprightProject Assistant

Susan LynchWebmaster

Matthew RansonResearch Assistant






Figures

2.1 The emissions cuts agreed at Kyoto were progressivewith respect to income, when expressed relativeto BAU page 59

2.2a Emissions path for industrialized countries in the aggregate—with later targets for developing countries 72

2.2b Emissions path for industrialized countries in theaggregate—with earlier targets for developing countries 72

2.3a Emissions path for poor countries in the aggregate—with later targets for developing countries 73

2.3b Emissions path for poor countries in the aggregate—with earlier targets for developing countries 73

2.4a Emissions path for the world, in the aggregate—with later targets for developing countries 74

2.4b Emissions path for the world, in the aggregate—with earlier targets for developing countries 74

2.5a Price of carbon dioxide rises slowly over 50 years,then rapidly—with later targets for developingcountries 77

2.5b Price of carbon dioxide rises slowly over 50 years,then rapidly—with earlier targets for developingcountries 78

2.6 Loss of aggregate gross world product by budget period, 2015–2100—with later targets for developingcountries 79

2.7a CO2 concentrations nearly achieve year-2100 concentration goal of 500 ppm—with later targets for developing countries 80

2.7b CO2 concentrations achieve year-2100 goal of500 ppm—with earlier targets for developing countries 80

3.1 Relation of NAP1 totals to baseline emissions andthe Kyoto/BSA targets 105

xiv






List of fi gures xv

3.2 NAP2 national totals in relation to NAP1 totals and 2005 emissions 106

3.3 2020 auction rights in relation to 2005 emissions and per capita GDP 108

3.4 Redistribution of auction rights from a proportional allocation 109

7.1 Method 1: global top-runner 2169.A1 If the social cost of pollution increases while abatement

costs decrease, the total number of quotas should decrease (from q to q’’), but an emission tax may not change much (only from t to t’’) 297

11.1 Relationship between population and per capita wealth 358

13.1 Cumulative global mitigation costs under alternative technology scenarios 407

13.2 Schematic of the innovation system 40813.3 Public energy R&D spending in IEA countries

(1974-2006) 42213.4 IEA Committee on Energy Research and Technology

(CERT) 42515.1 Cumulative installed capacity and cost trends for

600–750 kW wind turbines in China (1994–2007)(GWEC, 2008a) 477

15.2 The importance of technology transfer for early action in developing countries 478

15.3 Infl uence of published emission factors (EFs) on the number of CDM projects in pipeline 488

18.1 A top-down and bottom-up post-2012 climate policy enforcement framework 570

19.1 Budget shares of fuel in India in 2004–05 by consump-tion expenditure decile, accounting for its use as an intermediate input. 607

21.1 Fossil fuel and industrial CO2 emission forecasts for developed (Annex I) and developing (non-Annex I) countries 650

21.2 Distribution of CERs issued from each project type 66121.3 Regional distribution 66223.1 Projected fossil-fuel CO2 emissions from the WITCH

model in the business-as-usual scenario 717






xvi List of fi gures

23.2 Global energy CO2 emissions paths 72823.3 Temperature change above pre-industrial levels in 2100 72923.4 Implications for GWP 73223.5 Temporal distribution of the policy costs 73324.1 Annex I and non-Annex I emissions, reference and

30-70 cases 76224.2 CO2-e prices under alternative allocation rules 76625.1 Carbon price paths that limit atmospheric CO2

concentrations to 500 ppmv for four alternativetechnology suites under FULL international partici-pation from 2012 onward 799

25.2 CO2 concentration paths for four alternative technology suites under FULL international participation from 2012 onward 801

25.3 Carbon emissions paths that limit atmospheric CO2 concentrations to 500 ppmv for four alternativetechnology suites under FULL international participation from 2012 onward 801

25.4 Global emissions in 2035, 2065, and 2095 across theeight atmospheric CO2 concentration limitationscenarios 803

25.5 Emissions pathways in India for selected scenarios 80425.6 Emissions pathways in the United States for selected

scenarios 80425.7 Primary energy, United States, 2095 for four alternative

technology suites under FULL and DELAY international policy architectures 806

25.8 Primary energy, China, 2095 for four alternative technology suites under FULL and DELAY international policy architectures 806

25.9 Primary energy, United States, 2035 for four alternative technology suites under FULL and DELAY international policy architectures 808

25.10 Primary energy, China, 2035 for four alternative technology suites under FULL and DELAY international policy architectures 809

25.11 Total global present discounted mitigation costs, 2005 through 2095, for four alternative technology






List of fi gures xvii

suites under FULL and DELAY international policy architectures 813

25.12 Global discounted mitigation cost, 2005 through 2095, under varying deployment assumptions 815

25.13 Discounted mitigation cost in the United States, 2005 through 2095, under varying deployment assumptions 816

26.1 Primary energy consumption in China relative toeconomic growth 823

26.2 Energy-related CO2 emissions in China 82526.3 MERGE projections relative to historical experience

in Asia. 83126.4 New baseline emission projections relative to stabilization

pathways 83526.5 Global carbon emissions and carbon price for optimal

stabilization pathways 83726.6 Global carbon emissions with abatement in Annex B

only 83926.7 Global carbon emissions in the “graduated 550 tax”

scenario 84026.8 Global carbon emissions in the “progressive targets”

scenario 84326.9 Global emissions through 2100 84426.10 Loss in GWP from reference under various mitigation

scenarios 84626.11 Distribution of abatement cost in 550 optimal scenario,

2020–2050. 84826.12 Average surface temperature increase above pre-industrial 85027.1 Comparison of projected energy consumption for China 86527.2 Effect of a growth shock on GDP, price policy 87027.3 Effect of a growth shock on emissions, price policy 87127.4 Effect of a growth shock on GDP, quantity policy 87227.5 Year 5 difference in GDP, price less quantity result 87327.6 Effect of a growth shock on emissions, quantity

policy 87427.7 Effect of a risk shock on GDP, price policy 87627.8 Effect of a risk shock on emissions, price policy 87727.9 Difference in GDP, quantity less price result 87827.10 Effect of a risk shock on emissions, quantity policy 879






Tables

2.1 Emission targets for each of 11 regions, accordingto the formulas page 41

2.2 Years when countries are to commit to targets atBAU and then below BAU 63

2.3a Implied economic cost of emission targets for eachof 10 regions with later targets for developing countries 71

2.3b Implied economic cost of emission targets for each of12 regions with earlier targets for developing countries 71

5.1 World carbon dioxide emissions 1525.2 Estimated revenues from carbon charge in 2015, before

behavioral response 1635.3 Changes in household disposable income 1686.1 Trends in CO2 emission, 1990–2003 1886.2 CO2 emissions, 2003 and 2050 1906.3 Targets for reducing carbon intensity of GDP 1927.1 Policy template to be negotiated 2137.2 Method 2: Equalizing marginal abatement cost 21810.1 Examples of policies and measures 32011.1 An example 34911.2 Taxes versus permits 35011.3 Four permit allocation schemes 35211.4 Distributive effects of permit allocation schemes 35413.1 International R&D expenditures in 2006 41013.2 R&D expenditures for top R&D-spending companies

worldwide for 2006 41615.1 Comparison between pCDM and tCDM 48318.1 Global percentage share of population, income,

capacity, cumulative emissions, carbon sink,responsibility, and global RCI for selected countriesand groups 577

18.2 Share of global RCI in different scenarios 579

xviii






List of tables xix

21.1 Energy subsidies in developing countries 65321.2 Summary of actions for domestic policy improvements

in developing countries 65822.1 Terrestrial sequestration practices to increase carbon

stocks or reduce greenhouse gas emissions 68623.1 Architectures for agreement 72123.2 Number of times that fi ve-year temperature change

is greater than 0.1°C 73123.3 Gini index in 2100 73523.4 Potential enforceability and political acceptability 73723.5 Assessment criteria for the different policy

architectures 73924.1 Regions, sectors, and primary factors in the

EPPA model 75824.2 Scenarios of allocation and compensation 76424.3 Welfare effects in 2020 & 2050, universal

participation 76724.4 Net fi nancial transfers, 2000 US$ billions, result-

ing from allowance trade in 2020 & 2050, universal participation 769

24.5 Allowance allocations in 2020 & 2050 77024.6 Breakdown of welfare effects on Annex I parties,

full compensation 77524.7 Welfare effects in 2020 and 2050, partial

compensation 77825.1 Defi nitions for four technology suites 79125.2 Year in which carbon emissions limitations are fi rst

imposed in each of the 14 MiniCAM regions 79625.3 Combinations of technology suites and hypothetical

policy architectures 79626.1 Exogenous annual growth rates in MERGE 82826.2 Annual rates of change in total primary energy

and intensity 83026.3 Progressive emissions reduction targets 84126.4 Radiative forcing and temperature outcomes 85026.A1 Electric generation technology assumptions 85326.A2 Non-electric energy technology assumptions 85426.B1 Overview of scenarios 85526.B2 Regional composition 856






xx List of tables

27.1 Regions in the G-Cubed model 86727.2 Sectors in each region 86727.3 Effect of a growth shock on carbon emissions

in year 10 874






Contributors

Ramgopal Agarwala is a consultant to the World Bank and Asian Development Bank and a Distinguished Fellow at Research and Information System for Developing Countries in New Delhi. He has worked in various senior positions in the World Bank for 25 years, with his last posting to Beijing as the chief economist of the World Bank in China. His most recent research includes articles on interna-tional fi nancial architecture and climate change.

Joseph E. Aldy is a Fellow at Resources for the Future. He served on the staff of the President’s Council of Economic Advisers from 1997 to 2000, where he was responsible for climate change policy. Dr. Aldy holds a PhD in economics from Harvard University. His research is on international climate change policy architectures; emissions trading programs and other mitigation policies; and the relationship between economic development and greenhouse gas emissions.

Mustafa H. Babiker holds a BSc in Econometrics and Social Statistics from the University of Kartoum, Sudan, and an MA and PhD in Economics from the University of Colorado-Boulder. He has served as an economist with the MIT Joint Program on the Science and Policy of Global Change and the Arab Planning Institute, and he con-tinues work with the Joint Program on applications of its Emissions Prediction and Policy Analysis model.

Scott Barrett is Lenfest Earth Institute Professor of Natural Resource Economics at Columbia University, in the School of International and Public Affairs. He is the author of Environment and Statecraft: The Strategy of Environmental Treaty-Making (2005) and Why Cooperate? The Incentive to Supply Global Public Goods (2007). He taught previously at the Johns Hopkins University School of Advanced International Studies and at the London Business School.

Geoffrey J. Blanford currently manages the climate policy research program at the Electric Power Research Institute. His research focuses

xxi






xxii List of contributors

on energy-economy modeling and the development of integrated assessment tools for application to international climate agreements and technology policy decisions. He has authored several analyses using the MERGE model and holds a PhD in management science and engineering from Stanford University.

Valentina Bosetti holds a PhD in Computational Mathematics and Operations Research from the Università Statale of Milan and an MA in Environmental and Resources Economics from University College of London. At the Fondazione Eni Enrico Mattei, in Italy, since 2003, she works as a modeler for the Sustainable Development Program, leading the Climate Change Modeling and Policy initiative. She is cur-rently a visiting researcher at the Princeton Environmental Institute.

Katherine Calvin is a Research Economist at the Pacifi c Northwest National Laboratory’s Joint Global Change Research Institute. Dr. Calvin’s research focuses on international climate policy regimes, integrated assessment modeling, and the implications of carbon policy on agriculture and land use.

Jing Cao is an Assistant Professor at the School of Economics and Management, Tsinghua University, in Beijing. She is also an affi li-ated researcher at The Center for China in the World Economy at Tsinghua, at Environmental Development (China Center), and at the Harvard China Project. She has a PhD in Public Policy from Harvard University. Her research focuses on environmental taxation, climate change economics and modeling, productivity measurements, and economic growth.

Carlo Carraro is Professor of Environmental Economics at the University of Venice and Director of Research of the Fondazione Eni Enrico Mattei. He is Vice Chair of IPCC Working Group III and Director of the Climate Impacts and Policy Division of the EuroMediterranean Centre on Climate Change. He holds a PhD from Princeton University and is a Research Fellow of CEPR, CESifo and CEPS.

Wenying Chen is a professor in the Institute of Energy, Environment, and Economy, Tsinghua University. Her research focuses on energy modeling, integrated assessment models in climate change, carbon capture and storage, and energy systems analysis. Professor Chen has led a number of national and international research projects in the fi eld of energy and climate change.






List of contributors xxiii

Leon Clarke is a Senior Research Economist at the Pacifi c Northwest National Laboratory’s Joint Global Change Research Institute. Dr. Clarke’s research focuses on technology planning for climate change, climate mitigation scenarios, international climate policy, and integrated assessment of climate change.

Richard N. Cooper is Maurits C. Boas Professor of International Economics at Harvard University. He is Vice-Chairman of the Global Development Network and a member of the Trilateral Commission, the Council on Foreign Relations, the Executive Panel of the US Chief of Naval Operations, and the Brookings Panel on Economic Activity. He has served on several occasions in the US Government, most recently as chairman of the National Intelligence Council (1995-97).

Jae Edmonds is a Chief Scientist and Laboratory Fellow at the Pacifi c Northwest National Laboratory’s Joint Global Change Research Institute, Adjunct Professor of Public Policy at the University of Maryland-College Park, and has actively participated in the IPCC. His research in the areas of long-term, global energy, technology, economy, and climate change spans three decades, producing several books and numerous scientifi c papers and presentations.

A. Denny Ellerman is a Senior Lecturer at MIT’s Sloan School of Management and an internationally recognized expert on energy and environmental economics with a particular focus on emissions trading. He is a co-author of the leading book on the US SO2 trading program, Markets for Clean Air, and co-editor of Allocation in the European Emissions Trading Scheme. He earned a PhD in political economy and government from Harvard University.

Carolyn Fischer is a Senior Fellow at Resources for the Future in Washington, DC. Her research addresses a variety of environmen-tal policy issues, including climate change mitigation, technological change, international trade and environmental policies, and resource economics. She holds a PhD in Economics from the University of Michigan and a BA in International Relations from the University of Pennsylvania, and she previously served at the White House Council of Economic Advisors.

Jeffrey Frankel is Harpel Professor at Harvard’s Kennedy School. He directs the program in International Finance and Macroeconomics at






xxiv List of contributors

the National Bureau of Economic Research, where he is also on the Business Cycle Dating Committee. He served on President Clinton’s Council of Economic Advisers (1996–1999), with responsibility for environmental, international, and macroeconomics. Earlier he was professor of economics at the University of California, Berkeley. His economics PhD is from MIT.

Daniel S. Hall is a Research Associate at Resources for the Future, where his work focuses on climate change policy, including mecha-nisms for cost containment, the design of offset programs, and legislative analysis. Hall holds a Master of Environmental Science and Management from the Donald Bren School at the University of California, Santa Barbara.

Bård Harstad is an Associate Professor at the Kellogg School of Management, Northwestern University. In recent years he has devel-oped theories for international political economy, with a particular focus on international bargaining and the design elements of envi-ronmental agreements. His research has been published in American Economic Review, Quarterly Journal of Economics, and Scandinavian Journal of Economics.

Jiankun He is the director of the Low Carbon Energy Laboratory at Tsinghua University, China. Professor He’s research interests include energy systems engineering and energy modeling, strategic responses to climate change, resource management, and sustainable development. He has been the principal investigator of a number of national key research projects and international collaborative research projects.

Henry D. Jacoby is Professor of Management in the MIT Sloan School of Management and Co-Director of the MIT Joint Program on the Science and Policy of Global Change. He holds a PhD in Economics from Harvard, where he served in the Department of Economics and the Kennedy School of Government. He serves on the Scientifi c Committee of the International Geosphere-Biosphere Program and on the Climate Research Committee of the National Research Council.

Judson Jaffe is a Vice President at Analysis Group, Inc. He previously spent two years on the staff of the Council of Economic Advisers at the White House, where he provided economic analysis of environ-mental and energy policy. He received an MPhil in Economics from






List of contributors xxv

Cambridge University, and an AB summa cum laude in Environmental Science and Public Policy, and Economics from Harvard University.

Larry Karp is Professor of Agricultural and Resource Economics and the Department Chair at the University of California, Berkeley. His research and teaching interests include environmental econom-ics, trade policy, dynamic methods, and industrial organization. He is Associate Editor of the Journal of Economic Dynamics and Control and has served as Co-editor of the Journal of Environmental Economics and Management. He is a Fellow of the Agricultural and Applied Economics Association.

Andrew Keeler teaches at the John Glenn School of Public Affairs at the Ohio State University and writes on state, national, and interna-tional climate change policy. He served as the Senior Staff Economist for Environment at the President’s Council of Economic Advisers (2000–2001) where he was a member of the US negotiating team for climate change and a diplomatic representative to OECD meetings on coordinating national sustainability policies.

Robert O. Keohane is Professor of International Affairs, Princeton University. He is the author of After Hegemony (1984) and Power and Governance in a Partially Globalized World (2002). He is co-author (with Joseph S. Nye, Jr.) of Power and Interdependence (third edition 2001) and (with Gary King and Sidney Verba) of Designing Social Inquiry (1994). He is a member of the American Academy of Arts and Sciences, the American Philosophical Society, and the National Academy of Sciences.

Page Kyle is a Research Analyst with the Pacifi c Northwest National Laboratory’s Joint Global Change Research Institute. His research focuses on modeling of greenhouse gas emissions from end-use energy consumption and secondary fuel production, with particular attention to technological development and climate change mitigation.

Michael A. Levi is the David M. Rubenstein Senior Fellow for Energy and the Environment at the Council on Foreign Relations (CFR) and Director of its Program on Energy Security and Climate Change. He was project director for a recent CFR-sponsored independent task force on climate change, and is the author of On Nuclear Terrorism (Harvard University Press, 2007) and The Future of Arms Control (Brookings Institution Press, 2005).






xxvi List of contributors

Warwick J. McKibbin is Professor and Director of the Centre for Applied Macroeconomic Analysis in the College of Business and Economics at the Australian National University. He also holds posi-tions at the Lowy Institute for International Policy and the Brookings Institution. He is a member of the Policy Board of the Reserve Bank of Australia. Professor McKibbin received a PhD in Economics from Harvard University in 1986.

Richard D. Morgenstern is a Senior Fellow at Resources for the Future and has written widely on climate change mitigation policy. His involvement in the issue reaches back two decades and includes his work at the US EPA, where he directed the Agency’s climate change activities and, subsequently, as a member of the State Department’s negotiating team for the Kyoto Protocol.

Adele Morris is a Fellow and Deputy Director for Climate and Energy Economics at the Brookings Institution. Her economic and natural resource policy experience includes work at the Joint Economic Committee of Congress, the US Treasury, the President’s Council of Economic Advisers, and OMB. She was a lead climate negotiator with the US State Department in 2000. She holds a PhD in Economics from Princeton University.

Richard G. Newell is Gendell Professor of Energy and Environmental Economics, Nicholas School of Environment, Duke University; a Research Associate, National Bureau of Economic Research; and a University Fellow, Resources for the Future. He has served as Senior Economist for energy and environment on the President’s Council of Economic Advisers and on several National Academy of Sciences com-mittees related to energy, environment, and climate. His PhD is from Harvard University.

Sergey Paltsev is a Principal Research Scientist at the Joint Program on the Science and Policy of Global Change at the Massachusetts Institute of Technology, where he has been working since 2002 as the lead modeler in charge of the MIT Emissions Prediction and Policy Analysis (EPPA) model, a multi-regional computable general equilib-rium model of the world economy that has been widely used to study climate change policy.

William A. Pizer is the Deputy Assistant Secretary for Environment and Energy at the US Department of the Treasury. Prior to coming to Treasury, and throughout his involvement with the Harvard






List of contributors xxvii

Project, Pizer was a Senior Fellow at Resources for the Future where his research looked at how the design of environmental policy affects costs and environmental effectiveness, often related to global climate change. He holds a PhD in Economics from Harvard University.

Andrew J. Plantinga is Professor of Agricultural and Resource Economics at Oregon State University. He received a PhD in Agricultural and Resource Economics from the University of California-Berkeley and an MS in Forestry from the University of Wisconsin-Madison. His research on the economics of land use is supported by the National Science Foundation, the US Forest Service, and the US Department of Energy.

Eric A. Posner is Kirkland and Ellis Professor of Law, University of Chicago. He is author of The Perils of Global Legalism (University of Chicago, forthcoming); Terror in the Balance: Security, Liberty and the Courts (with Adrian Vermeule) (Oxford, 2007); New Foundations of Cost-Benefi t Analysis (with Matthew Adler) (Harvard, 2006); The Limits of International Law (with Jack Goldsmith) (Oxford, 2005); and Law and Social Norms (Harvard, 2000).

Kal Raustiala is a professor at UCLA Law School and the UCLA International Institute, where he is also Director of the Ronald W. Burkle Center for International Relations. His previous publica-tions include The Implementation and Effectiveness of International Environmental Commitments (MIT, 1998), co-edited with David G. Victor and Eugene Skolnikoff.

John M. Reilly is the Associate Director for Research in the Joint Program on the Science and Policy of Global Change and a Senior Lecturer in the Sloan School at MIT. Prior appointments were with the USDA’s Economic Research Service and the US DOE National Laboratories. He holds a PhD in economics from the University of Pennsylvania. His research has focused on the economics of energy, agriculture, and climate change.

Kenneth R. Richards is an Associate Professor at the School of Public and Environmental Affairs and an adjunct professor at the Maurer School of Law, Indiana University. He holds a PhD in Public Policy and a JD from the University of Pennsylvania. He is associate director of the Richard G. Lugar Center for Renewable Energy in Indianapolis and the Center for Research in Energy and the Environment in Bloomington, Indiana.






xxviii List of contributors

Richard G. Richels is Senior Technical Executive for global climate change research at the Electric Power Research Institute and is Adjunct Professor at the Johns Hopkins School of Advanced International Studies. He has served on a number of national and international advisory panels, including committees of the Department of Energy, the Environmental Protection Agency, the National Research Council, and the Intergovernmental Panel on Climate Change.

Thomas F. Rutherford has been professor of energy economics at ETH Zürich since January, 2008. He earned a PhD in Operations Research from Stanford University under the supervision of Alan S. Manne. He subsequently had academic appointments in economics at the University of Western Ontario and the University of Colorado. Professor Rutherford’s main research areas concern the formulation and analysis of computational economic equilibrium models.

Akihiro Sawa is a Senior Executive Fellow, 21st Century Public Policy Research Institute, Keidanren, Tokyo, Japan. He was previously a Director of Environmental Policy (2001–2003) and Director of Resources and Fuel Policy (2003–2004) for the Ministry of Economy, Trade and Industry of the Government of Japan and a Professor at the Research Center for Advanced Science and Technology, University of Tokyo (2004–2008).

Richard Schmalensee is the Howard W. Johnson Professor of Economics and Management at MIT and Director of the MIT Center for Energy and Environmental Policy Research. He has served as the John C. Head III Dean of the MIT Sloan School of Management (1998–2007) and as the Member of the President’s Council of Economic Advisers with responsibility for environmental policy (1989–1991).

Alessandra Sgobbi holds a PhD in Analysis and Governance of Sustainable Development at the School for Advanced Studies in the Venice Foundation. She collaborates with the Fondazione Eni Enrico Mattei, in Italy, on various projects in the fi eld of natural resources management and climate change. Currently, she works at the European Commission, EuropeAid Cooperation Offi ce, focusing on development interventions in the fi elds of sustainable consumption and production, energy effi ciency, and the “grey” environment.

E. Somanathan received a PhD in economics from Harvard in 1995 and taught at Emory University and the University of Michigan at






List of contributors xxix

Ann Arbor before joining the Indian Statistical Institute, Delhi, where he is Professor in the Planning Unit. His main research interest is in development economics, particularly environmental problems and political economy. He is writing a book on environmental issues in India.

Robert N. Stavins is Albert Pratt Professor of Business and Government, Harvard Kennedy School; Director, Harvard Environmental Economics Program; Director, Harvard Project on International Climate Agreements; University Fellow, Resources for the Future; Research Associate, National Bureau of Economic Research; and Editor, Review of Environmental Economics and Policy. He was Chairman, US EPA Environmental Economics Advisory Committee, and Lead Author, Intergovernmental Panel on Climate Change. He holds a PhD in economics from Harvard.

Cass R. Sunstein is the Felix Frankfurter Professor of Law at Harvard Law School. A former attorney-adviser in the Offi ce of Legal Counsel in the Department of Justice, he is author or co-author of more than fi fteen books and hundreds of scholarly articles. Sunstein joined the law faculty of the University of Chicago in 1981 and later became the Karl N. Llewellyn Distinguished Service Professor of Jurisprudence at the University.

Massimo Tavoni is a Senior Researcher at the Fondazione Eni Enrico Mattei, in Italy, and is now a Post-doctoral Research Fellow at the Princeton Environmental Institute. His research interests include international climate mitigation policies, technological evolution and uncertainty, and tropical deforestation. He holds an MSc in Mathematical Economics from the London School of Economics and a PhD in Political Economics from the Catholic University of Milan.

Fei Teng is an Associate Professor at the Institute of Energy, Environment, and Economy, Tsinghua University. His research inter-ests include climate policy analysis, energy policy analysis, and technology transfer mechanisms in climate regimes. He is a review expert for the CDM DNA in China and also a member of the Chinese delegation to the UNFCCC and its Kyoto Protocol.

Alexander Thompson is Associate Professor of Political Science at Ohio State University. He has research interests in the areas of international organizations and US foreign policy. He is the author






xxx List of contributors

of Channels of Power: The UN Security Council and U.S. Statecraft in Iraq (Cornell University Press, 2009) and articles in various jour-nals, including International Organization, the Journal of Confl ict Resolution, and the Journal of Legal Studies.

Takahiro Ueno is a Researcher at the Socio-economic Research Center of the Central Research Institute of Electric Power Industry, Japan. He was a Visiting Scholar at Resources for the Future in 2006 and 2007. He has researched international negotiations on climate change, energy and environmental technology policy, international cooperation on energy effi ciency, and technology transfer to develop-ing countries.

David G. Victor is Professor at the School of International Relations and Pacifi c Studies, University of California at San Diego; he also serves as Senior Fellow at the Council on Foreign Relations. His current research focuses on the performance of state-controlled oil companies, on global climate protection, and on the emerging global market for coal. His PhD is from the Massachusetts Institute of Technology and his BA is from Harvard University.

Peter J. Wilcoxen is an Associate Professor of Economics and Public Administration at the Maxwell School of Syracuse University and a Nonresident Senior Fellow at the Brookings Institution. He has published extensively on energy and environmental policy and is cur-rently a member of the US EPA’s Environmental Economics Advisory Committee. He holds a BA in physics from the University of Colorado and a PhD in economics from Harvard University.

Timothy Wirth has been President of the United Nations Foundation since its founding in 1998. He represented Colorado in the US House of Representatives from 1975 to 1987 and the US Senate from 1987 to 1993. From 1993 to 1997, he served as the fi rst US Under Secretary of State for Global Affairs, leading the US team preparing for the Kyoto climate negotiations. He received a PhD from Stanford University.

Marshall Wise is a Senior Research Scientist at Battelle’s Joint Global Change Research Institute at the University of Maryland. He is a long-time member of the MiniCAM integrated assessment model develop-ment team with expertise in economic modeling and analysis of energy systems, with experience in both broad-scale energy policy analysis and in detailed analysis of the electric power generation sector.






Contents xxxi

Jinhua Zhao is an Associate Professor in the Department of Economics and the Department of Agricultural, Food and Resource Economics at Michigan State University. His research interests include applied microeconomic theory, environmental and resource economics, energy economics, dynamic decision making under uncertainty, among others. He was a co-editor of the Journal of Environmental Economics and Management (JEEM) and is on the editorial council of JEEM and the Review of Development Economics.

List of contributors xxxi






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