Title: Kyoto and technology at world level: costs of CO₂ reduction under flexibility mechanisms and technical progress

Authors: Patrick Criqui, Laurent Viguier

Addresses: Institut d'Economie et de Politique de l'Energie, BP47, 38040 Grenoble CEDEX 09, France. ' Institut d'Economie et de Politique de l'Energie, BP47, 38040 Grenoble CEDEX 09, France

Abstract: This paper is dedicated to the analysis of the consequences of CO₂ emission reduction policies, as deriving, in a world perspective, from the Kyoto Protocol for the 2010 horizon. The basic methodological principles for the assessment of the Marginal Abatement Costs and for the quantification of the economic ||gains from trade|| in flexibility mechanisms are first presented in Section 2. Section 3 provides a thorough assessment, based on the POLES model results, of the marginal and total costs of compliance to the Kyoto Protocol for a ||non trading|| case and for two cases of emission trading, respectively at Annex B level and at world level. Section 4 identifies some possible consequences and policy implications of decisions on ||flexibility mechanisms||, particularly in the perspective of induced technical change. It shows that, in principle, low flexibility schemes may induce strong price signals in a limited number of constrained countries, while high flexibility schemes may induce lower price signals but on a much broader geographical basis.

Keywords: CO₂ emission reduction; Kyoto Protocol; marginal abatement costs; shadow carbon taxes: national and international carbon value; flexibility mechanisms; emission trading.

DOI: 10.1504/IJGEI.2000.004417

International Journal of Global Energy Issues, 2000 Vol.14 No.1/2/3/4, pp.155 - 168

Published online: 10 May 2004 *

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