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A balanced-efforts approach for climate cooperation

Nature Climate Change volume 5, pages 10–12 (2015)Cite this article

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Focusing on policies and effort costs rather than emissions may facilitate climate negotiations and improve the chances of reaching a successful agreement. The effort costs of a country comprise investments in low-carbon technologies, in addition to direct mitigation costs.

In the past, climate negotiations have focused primarily on emissions targets. Stiglitz, however, argues that it would be easier to negotiate about taxes1. In his view, the advantage of a common tax over the Kyoto approach would be that most of the distributional debate is sidestepped. In particular, under the Kyoto approach, obtaining the right to pollute is like receiving a gift. Hence, countries may struggle for the best 'deal', which can make an agreement difficult to achieve. In an earlier contribution, Schelling2 suggests that countries choose their own policy instruments when contributing to climate stability. He argues that a proposal should specify policies, such as taxes, regulations, or research and development subsidies, accompanied by (uncertain) estimates of their probable effects on emissions. I re-evaluate Schelling's proposal in the light of the developments over the past two decades and recent economic research, and develop it further. I argue that this strategy may not only be instrumental in reaching a global climate agreement, but such a flexible approach towards cooperation may also lead to a more efficient outcome than negotiating about emissions.

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Acknowledgements

I have benefitted from discussions with and/or received very helpful comments from the following people: Scott Barrett, Ottmar Edenhofer, Larry Karp, and Robert Marschinski. I also thank the members of the CREW-project for inspiring discussions. Financial support by the German Federal Ministry for Education and Research is gratefully acknowledged (FKZ01LA1121C).

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  1. Robert C. Schmidt is in the School of Business and Economics, Humboldt-Universität zu Berlin, Spandauer Strasse 1, 10178 Berlin, Germany,

    Robert C. Schmidt

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Correspondence to Robert C. Schmidt.

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Schmidt, R. A balanced-efforts approach for climate cooperation. Nature Clim Change 5, 10–12 (2015). https://doi.org/10.1038/nclimate2447

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