The effects on developing countries of the Kyoto Protocol and carbon dioxide emissions trading

The trading of rights to emit carbon dioxide has not officially been sanctioned by the United Nations Framework Convention on Climate Change, but it is of interest to investigate the consequences, both for industrial (Annex B) and developing countries, of allowing such trades. The authors examine the trading of caps assigned to Annex B countries under the Kyoto Protocol and compare the outcome with a world in which Annex B countries meet with their Kyoto targets without trading. Under the trading scenario the former Soviet Union is the main seller of carbon dioxide permits and Japan, the European Union, and the United States are the main buyers. Permit trading is estimated to reduce the aggregate cost of meeting the Kyoto targets by about 50 percent, compared with no trading. Developing countries, though they do not trade, are nonetheless affected by trading. For example, the price of oil and the demand for other developing country exports are higher with trading than without. The authors also consider what might happen if developing countries were to voluntarily accept caps equal to Business as Usual Emissions and were allowed to sell emission reductions below these caps to Annex B countries. The gains from emissions trading could be big enough to give buyers and sellers incentive to support the system. Indeed, a global market for rights to emit carbon dioxide could reduce the cost of meeting the Kyoto targets by almost 90 percent, if the market were to operate competitively. The division of trading gains, however, may make a competitive outcome unlikely: Under perfect competition, the vast majority of trading gains go to buyers of permits rather than to sellers. Even markets in which the supply of permits is restricted can, however, substantially reduce the cost to Annex B countries of meeting their Kyoto targets, while yielding profits to developing countries that elect to sell permits.Economic Theory&Research,Environmental Economics&Policies,Markets and Market Access,Montreal Protocol,Climate Change,Environmental Economics&Policies,Carbon Policy and Trading,Energy and Environment,Economic Theory&Research,Montreal Protocol

Short-term CO₂ abatement in the European power sector

This paper focuses on the possibilities for short term abatement in response to a CO2 price through fuel switching in the European power sector. The model E-Simulate is used to simulate the electricity generation in Europe as a means of both gaining insight into the process of fuel switching and estimating the abatement in the power sector during the first trading period of the European Union Emission Trading Scheme. Abatement is shown to depend not only on the price of allowances, but also and more importantly on the load level of the system and the ratio between natural gas and coal prices. Estimates of the amount of abatement through fuel switching are provided with a lower limit of 35 million metric tons in 2005 and 19 Mtons in 2006

Bringing Transportation into a Cap-and-Trade Regime

Abstract in HTML and technical report in PDF available on the Massachusetts Institute of Technology Joint Program on the Science and Policy of Global Change website (http://mit.edu/globalchange/www/).The U.S. may at some point adopt a national cap-and-trade system for greenhouse gases, and if and when that happens the system of CAFE regulation of vehicle design very likely could still be in place. Imposed independently these two systems can lead to economic waste. One way to avoid the inefficiency is to integrate the two systems by allowing emissions trading between them. Two possible approaches to potential linkage are explored here, along with a discussion of ways to guard against violation under such a trading regime of vehicle standards that may be justified by non-climate objectives. At a minimum, implementation of a U.S. cap-and-trade system is several years in the future, so we also suggest intermediate measures that would gain some of the advantages of an integrated system and smooth the way to ultimate interconnection.This study received funding from the MIT Joint Program on the Science and Policy of Global Change, which is supported by a consortium of government, industry and foundation sponsors

Climate Change Taxes and Energy Efficiency in Japan

Abstract in HTML and technical report in PDF available on the Massachusetts Institute of Technology Joint Program on the Science and Policy of Global Change website (http://mit.edu/globalchange/www/).In 2003 Japan proposed a Climate Change Tax to reduce its CO2 emissions to the level required by the Kyoto Protocol. If implemented, the tax would be levied on fossil fuel use and the revenue distributed to several sectors of the economy to encourage the purchase of energy efficient equipment. Analysis using the MIT Emissions Prediction and Policy Analysis (EPPA) model shows that this policy is unlikely to bring Japan into compliance with its Kyoto target unless the subsidy encourages improvement in energy intensity well beyond Japan’s recent historical experience. Similar demand-management programs in the U.S., where there has been extensive experience, have not been nearly as effective as they would need to be to achieve energy efficiency goals of the proposal. The Climate Change Tax proposal also calls for restricting Japan’s participation in the international emission trading. We consider the economic implications of limits on emissions trading and find that they are substantial. Full utilization of international emission trading by Japan reduces the carbon price, welfare loss, and impact on its energy-intensive exports substantially. The welfare loss with full emissions trading is one-sixth that when Japan meets its target though domestic actions only, but Japan can achieve substantial savings even under cases where, for example, the full amount of the Russian allowance is not available in international markets

Emissions trading to reduce greenhouse gas emissions in the United States : the McCain-Lieberman Proposal

Abstract in HTML and technical report in PDF available on the Massachusetts Institute of Technology Joint Program on the Science and Policy of Global Change website (http://mit.edu/globalchange/www/).The Climate Stewardship Act of 2003 (S. 139) is the most detailed effort to date to design an economy-wide cap-and-trade system for US greenhouse gas emissions reductions. The Act caps sectors at their 2000 emissions in Phase I of the program, running from 2010 to 2015, and then to their 1990 emissions in Phase II starting 2016. There is a strong incentive for banking of allowances, raising the costs in Phase I to achieve savings in Phase II. Use of credits from outside the capped sectors could significantly reduce the cost of the program, even though limited to 15% and 10% of Phase I and II allowances respectively. These credits may come from CO2 sequestration in soils and forests, reductions in emissions from uncapped sectors, allowances acquired from foreign emissions trading systems, and from a special incentive program for automobile manufacturers. The 15% and 10% limits increase the incentive for banking and could prevent full use of cost-effective reductions from the uncapped sectors. Moreover, some of the potential credits might contribute little or no real climate benefit, particularly if care is not taken in defining those from forest and soil CO2 sequestration. Analysis using the MIT Emissions Prediction and Policy Analysis model shows that costs over the two Phases of the program could vary substantially, depending on normal uncertainty in economic and emissions growth, and the details of credit system implementation

How can power discourses be changed? - Contrasting the ‘daughter deficit’ policy of the Delhi government with Gandhi and King’s transformational reframing

Social policy impact is partly determined by how policy is articulated and advocated, including which values are highlighted and how. In this paper, we examine the influence of policy framing and reframing on outcomes, with particular reference to the policies of the Delhi state government in India that target the practices of female feticide, infanticide and neglect that underlie the ‘daughter deficit’. Using Snow and Benford’s categories for understanding reframing processes, the paper outlines and applies a ‘model’ of reframing disputed issues derived from looking at two famous campaigns – Gandhi’s 1930 Salt March in the struggle for Indian freedom from British rule and the African-American civil rights struggle of the 1950s and 1960s. It argues that ‘carrot and stick’ policy measures, such as financial incentives and legal prohibitions, to counteract the ‘daughter deficit’ must be complemented by well crafted discursive interventions

Privatization and State Capacity in Postcommunist Society

Economists have used cross-national regression analysis to argue that postcommunist economic failure is the result of inadequate adherence liberal economic policies. Sociologists have relied on case study data to show that postcommunist economic failure is the outcome of too close adherence to liberal policy recommendations, which has led to an erosion of state effectiveness, and thus produced poor economic performance. The present paper advances a version of this statist theory based on a quantitative analysis of mass privatization programs in the postcommunist world. We argue that rapid large-scale privatization creates severe supply and demand shocks for enterprises, thereby inducing firm failure. The resulting erosion of tax revenues leads to a fiscal crisis for the state, and severely weakens its capacity and bureaucratic character. This, in turn, reacts back on the enterprise sector, as the state can no longer support the institutions necessary for the effective functioning of a modern economy, thus resulting in deindustrialization. Using cross-national regression techniques we find that the implementation of mass privatization programs negatively impacts measures of economic growth, state capacity and the security of property rights.http://deepblue.lib.umich.edu/bitstream/2027.42/40192/3/wp806.pd

Communitarian perspectives on social enterprise

Concepts of social enterprise have been debated repeatedly, and continue to cause confusion. In this paper, a meta-theoretical framework is developed through discussion of individualist and communitarian philosophy. Philosophers from both traditions build social theories that emphasise either consensus (a unitarist outlook) or diversity (a pluralist outlook). The various discourses in corporate governance reflect these assumptions and create four distinct approaches that impact on the relationship between capital and labour. In rejecting the traditional discourse of private enterprise, social enterprises have adopted other approaches to tackle social exclusion, each derived from different underlying beliefs about the purpose of enterprise and the nature of governance. The theoretical framework offers a way to understand the diversity found within the sector, including the newly constituted Community Interest Company (CIC).</p

Distinct Regions of the Large Extracellular Domain of Tetraspanin CD9 Are Involved in the Control of Human Multinucleated Giant Cell Formation

Multinucleated giant cells, formed by the fusion of monocytes/macrophages, are features of chronic granulomatous inflammation associated with infections or the persistent presence of foreign material. The tetraspanins CD9 and CD81 regulate multinucleated giant cell formation: soluble recombinant proteins corresponding to the large extracellular domain (EC2) of human but not mouse CD9 can inhibit multinucleated giant cell formation, whereas human CD81 EC2 can antagonise this effect. Tetraspanin EC2 are all likely to have a conserved three helix sub-domain and a much less well-conserved or hypervariable sub-domain formed by short helices and interconnecting loops stabilised by two or more disulfide bridges. Using CD9/CD81 EC2 chimeras and point mutants we have mapped the specific regions of the CD9 EC2 involved in multinucleated giant cell formation. These were primarily located in two helices, one in each sub-domain. The cysteine residues involved in the formation of the disulfide bridges in CD9 EC2 were all essential for inhibitory activity but a conserved glycine residue in the tetraspanin-defining ‘CCG’ motif was not. A tyrosine residue in one of the active regions that is not conserved between human and mouse CD9 EC2, predicted to be solvent-exposed, was found to be only peripherally involved in this activity. We have defined two spatially-distinct sites on the CD9 EC2 that are required for inhibitory activity. Agents that target these sites could have therapeutic applications in diseases in which multinucleated giant cells play a pathogenic role