Flexible emission targets
Description:
Countries could take on flexible emission targets as an alternative to absolute binding emission targets. Several options would be possible:
- Dynamic or indexed targets: expressed as a function of the GDP or variables of physical production (e.g. emissions per tonne of steel produced).
"Intensity targets" are a special form in which emission rights are
directly proportional to GDP.
- Non-binding targets: not reaching the target has no consequences. Emission trading cannot be applied.
- "No lose", "one way" or "positively binding"
targets: additional emission rights can be sold, if the target is reached, but no additional emission rights have to be bought, if no rights have been sold and the target is still not met.
- Dual targets: two targets are defined, a “selling target”, below which emission rights can be sold, and a “buying target”, above which emission right have to be bought.
- Price cap: an unlimited number of additional emission rights is provided at a given maximum price.
- Sector targets: emission targets set for specific sectors only.
All these options aim at providing more flexibility to the countries, so that extremely high costs are avoided, if the economic development and therefore emission development is different than expected at the time of setting the target.
On the one hand, this would enable countries to take on targets that are
more stringent, than they would under absolute emission reduction
targets. On the other hand, providing this flexibility reduces the certainty that a given emission level is really reached. The increased certainty in costs
and possibly more stringent targets is traded against an increase in uncertainty in the total resulting emissions.
Further Research:
World Resources Institute (WRI), USA
IEA
OECD
Ecofys
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