1. Formulas for Quantitative Emission Targets Jeffrey Frankel Harvard Kennedy School For Architectures for Agreement: Addressing Global Climate Change in the Post Kyoto World; and Harvard Project on International Climate Agreements Directed by Joe Aldy and Robert Stavins Paper available at http://ksghome.harvard.edu/~jfrankel/currentpubsspeeches.htm#On%20Climate%20Change

2. J. Frankel, Harvard2 A constructive approach “You’re Getting Warmer: The Most Feasible Path for Addressing Global Climate Change Does Run Through Kyoto.” Features of Kyoto worth building on –Politics: Quantitative limits maximize national sovereignty –Economics: Market mechanisms What successor to the 2008-2012 regime? –Build on what is good about Kyoto & fix what is lacking.

3. J. Frankel, Harvard3 Desiderata for the next stage, requirements for the next multilateral treaty More comprehensive participation –specifically getting US, China, et al, to join Efficiency Dynamic consistency (credible century path) Equity re poor countries Compliance – no country will stay in if it means huge economic sacrifice in any given period Robustness under uncertainty

4. J. Frankel, Harvard4 Proposed Architecture for Quantitative Emissions Targets Unlike Kyoto, my proposal seeks to bring all countries in & to look far into the future. But we can’t pretend to see with a fine degree of resolution at a century-long horizon. How to set a century of quantitative targets? –a decade at a time, in a sequence of negotiations. <= Fixing targets a century ahead is impractical. –But within an overall flexible framework, –building confidence as it goes along.

5. J. Frankel, Harvard5 “An Elaborated Proposal For Global Climate Policy Architecture: Specific Formulas and Emission Targets for All Countries in All Decades,” Oct. 2008 A framework of formulas that produce precise numerical targets for the emissions of carbon dioxide in all regions in all decades. The formulas are designed pragmatically, based on what is possible politically. Why the political approach? Many of the usual science- and economics-based paths are not dynamically consistent; that is, it is not credible that successor governments will be able to abide by the commitments that today’s leaders make.

6. J. Frankel, Harvard6 The formulas are driven by 5 axioms: 1.The US will not commit to quantitative targets if China and & major developing countries do not commit to quantitative targets at the same time, due to concerns about economic “competitiveness” and carbon leakage. 2.China & other developing countries will not make sacrifices different in character from those made by richer countries who have gone before them. 3.In the longer run, no country can be rewarded for having “ramped up” its emissions high above the levels of 1990. 4.No country will abide by targets that cost it more than, say 5% of GDP in any on period. 5.If one major country drops out, others will become discouraged and the system may unravel.

7. J. Frankel, Harvard7 The 11 regions: EUROPE = –Old Europe + –New Europe US = The United States KOSAU = Korea + S. Africa + Australia (3 coal-users) CAJAZ = Canada, Japan & New Zealand TE = Russia & other Transition Economies MENA = Middle East + North Africa SSA = Sub-Saharan Africa SASIA= India & the rest of South Asia CHINA = PRC EASIA = Smaller countries of East Asia LACA = Latin America & the Caribbean

8. J. Frankel, Harvard8 Building on existing commitments Between now and 2050, the EU follows the path laid out in the January 2008 EC Directive, the US follows the path in the Lieberman bills, and Japan, Australia & Korea follow statements that their own leaders have recently made. China, India & others agree immediately to quantitative targets which at first merely copy their BAU paths, thereby precluding leakage. –They are not expected to cut emissions below their BAU until they cross certain thresholds.

9. J. Frankel, Harvard9 When the time comes for developing countries cuts, their emission targets are determined by a formula that incorporates 3 elements, designed so they are only asked to take actions analogous to those already taken by others: –a Progressive Cut Factor: For each 1% difference in income/cap => target is 0.14% greater emissions abatement from BAU, as agreed at Kyoto. –a Latecomer Catch-up Factor, gradually closing the gap between the starting point of the latecomer & 1990 emission levels, at the same rate as US (Goal: avoid rewarding latecomers for ramping up emissions). And –a Gradual Equalization Factor: in the long run, rich & poor countries’ emissions/cap targets converge. (Goal: equity)

10. J. Frankel, Harvard10 The targeted reductions from BAU agreed to at Kyoto were progressive with respect to income.

11. J. Frankel, Harvard11 The resultant paths for emissions targets, permit trading, the price of carbon, GDP costs, & environmental effects Estimated by means of the WITCH model of FEEM, Milan, applied by Valentina Bossetti Overall economic costs, discounted: 0.24% of GDP. No country in any one period suffers a loss as large as 5% of GDP by participating. Concentrations level off at 500 ppm in the latter part of the century.

12. J. Frankel, Harvard12 Targets for emission per capita, by region

13. J. Frankel, Harvard13 Fig. 3: Emissions path for industrialized countries in the aggregate (Predicted actual emissions exceed caps, by permit purchases)

14. J. Frankel, Harvard14 Fig. 4: Emissions path for poor countries in the aggregate (Predicted actual emissions fall below caps, by permit sales)

15. J. Frankel, Harvard15 Fig. 5: Emissions path for the world, in the aggregate

16. J. Frankel, Harvard16 Fig. 6: Price of Carbon Dioxide Rises Slowly Over 50 Years, then Rapidly

17. J. Frankel, Harvard17 Fig. 8: Concentrations come very close to the 500ppm goal

18. J. Frankel, Harvard18 Figure 9