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1.
The Green Climate Fund (GCF) is a significant and potentially innovative addition to UNFCCC frameworks for mobilizing increased finance for climate change mitigation and adaptation. Yet the GCF faces challenges of operationalization not only as a relatively new international fund but also as a result of US President Trump’s announcement that the United States would withdraw from the Paris Agreement. Consequently the GCF faces a major reduction in actual funding contributions and also governance challenges at the levels of its Board and the UNFCCC Conference of the Parties (COP), to which it is ultimately accountable. This article analyzes these challenges with reference to the GCF’s internal regulations and its agreements with third parties to demonstrate how exploiting design features of the GCF could strengthen its resilience in the face of such challenges. These features include linkages with UNFCCC constituted bodies, particularly the Technology Mechanism, and enhanced engagement with non-Party stakeholders, especially through its Private Sector Facility. The article posits that deepening GCF interlinkages would increase both the coherence of climate finance governance and the GCF’s ability to contribute to ambitious climate action in uncertain times. Key policy insights The Trump Administration’s purported withdrawal from the Paris Agreement creates challenges for the GCF operating model in three key domains: capitalization, governance and guidance. Two emerging innovations could prove crucial in GCF resilience to fulfil its role in Paris Agreement implementation: (1) interlinkages with other UNFCCC bodies, especially the Technology Mechanism; and (2) engagement with non-Party stakeholders, especially private sector actors such as large US investors and financiers. There is also an emerging soft role for the GCF as interlocutor between policy-makers and non-Party actors to help bridge the communication divide that often plagues cross-sectoral interactions. This role could develop through: (a) the GCF tripartite interface between the Private Sector Facility, Accredited Entities and National Designated Authorities; and (b) strengthened collaborations between the UNFCCC Technical and Financial Mechanisms.
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2.
Africa is growing rapidly both in terms of population size and economically. It is also becoming increasingly clear that fossil fuels impose a high price on society through local environmental pollution and Africa’s particular vulnerability to climate change. At the same time, Africa has an excellent renewable energy potential and prices for renewable energy are reaching the price range of fossil fuels. Comparing results from state-of-the-art Integrated Assessment Models we find different options for achieving a sustainable energy supply in Africa. They have in common, however, that strong economic development is considered compatible with the 2°C climate target. Taking both challenges and appropriate solutions into account, some models find that a complete switch to renewable energy in electricity production is possible in the medium term. The continental analysis identifies important synergy effects, in particular the exchange of electricity between neighbouring countries. The optimal energy mix varies considerably between African countries, but there is sufficient renewable energy for each country. The intermittency and higher capital intensity of renewable energy are important challenges, but proven solutions are available for them. In addition, we analyse the political economy of a sustainable energy transition in Africa. Key policy insights An almost complete shift towards renewable energy (RE) is considered feasible and affordable in Africa. By 2050, electricity generation could be sourced largely from solar, wind and hydro power. Prices for RE in Africa are now within the price range of fossil fuels, partly due to the excellent RE potential. The optimal energy mix varies strongly between countries, but RE is sufficiently available everywhere. Addressing intermittency is possible, but requires investments and cooperation on the grid.
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3.
With poverty alleviation and sustainable development as key imperatives for a developing economy like India, what drives the resource-constrained state governments to prioritize actions that address climate change impacts? We examine this question and argue that without access to additional earmarked financial resources, climate action would get overshadowed by developmental priorities and effective mainstreaming might not be possible. A systematic literature review was carried out to draw insights from the current state of implementation of adaptation projects, programmes and schemes at the subnational levels, along with barriers to mainstreaming climate change adaptation. The findings from a literature review were supplemented with lessons emerging from the implementation of India’s National Adaptation Fund on Climate Change (NAFCC). The results of this study underscore the scheme’s relevance. Key policy insights Experience with NAFCC implementation reveals that states require sustained ‘handholding’ in terms of financial, technical and capacity support until climate change issues are fully understood and embedded in the policy landscape. Domestic sources of finance are critically important in the absence of predictable and adequate adaptation finance from international sources. The dedicated window for climate finance fosters a spirit of competitive federalism among states and encourages enhanced climate action. Enhanced budgetary allocation to NAFCC to strengthen the state-level adaptation response and create capacity to mainstream climate change concerns in state planning frames, is urgently needed.
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4.
Climate science denialism is a form of pseudoscience. This contribution provides proposals for how to counter it, based on previous research on the demarcation between science and pseudoscience and on the author’s experience of tackling other forms of pseudoscience. Science denialism has much in common with other variants of pseudoscience, but it also has characteristics of its own. In particular, it is much more prone than other forms of pseudoscience to seek conflicts with genuine science. Like other science denialists, those attacking climate science have fabricated a large number of fake controversies in issues where there is no authentic scientific controversy. The defence of climate science against science denial has to take this into account. There is no reason to accept the denialists’ agenda or to treat their claims as legitimate alternatives to science. Climate science should primarily be presented to the public in ways that are independent of denialist activities, rather than reactively in response to those activities. Disclosures of the strategies, motives and funding of denialism are important contributions to the public understanding of the fake controversies. It is also important to document the scientific consensus and make it known. The public defence of climate science is an important and urgent undertaking, and active contributions by as many scientists as possible are needed. Key policy insights Climate science denialism is a form of pseudoscience, and much can be learned from confrontations with other types of pseudoscience. The creation of fake controversies is a key strategy of climate science denialism. It is important to expose this strategy and not to accept denialists’ choice of an agenda. ‘Equal time’ arrangements should be rejected since they put the truthful side at a disadvantage. It takes more time to refute a single lie than to deliver ten new ones. The experience from fighting tobacco science denialism shows that it is highly efficient to expose the hidden operations, funding and motives behind denialism. As many scientists as possible should take part in the public defence of climate science. This is one of the best ways to show our consensus.
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5.
While carbon pricing is widely seen as a crucial element of climate policy and has been implemented in many countries, it also has met with strong resistance. We provide a comprehensive overview of public perceptions of the fairness of carbon pricing and how these affect policy acceptability. To this end, we review evidence from empirical studies on how individuals judge personal, distributional and procedural aspects of carbon taxes and cap-and-trade. In addition, we examine preferences for particular redistributive and other uses of revenues generated by carbon pricing and their role in instrument acceptability. Our results indicate a high concern over distributional effects, particularly in relation to policy impacts on poor people, in turn reducing policy acceptability. In addition, people show little trust in the capacities of governments to put the revenues of carbon pricing to good use. Somewhat surprisingly, most studies do not indicate clear public preferences for using revenues to ensure fairer policy outcomes, notably by reducing its regressive effects. Instead, many people prefer using revenues for ‘environmental projects’ of various kinds. We end by providing recommendations for improving public acceptability of carbon pricing. One suggestion to increase policy acceptability is combining the redistribution of revenue to vulnerable groups with the funding for environmental projects, such as on renewable energy. Key policy insights If people perceive carbon pricing instruments as fair, this increases policy acceptability and support. People’s satisfaction with information provided by the government about the policy instrument increases acceptability. While people express high concern over uneven distribution of the policy burden, they often prefer using carbon pricing revenues for environmental projects instead of compensation for inequitable outcomes. Recent studies find that people’s preferences shift to using revenues for making policy fairer if they better understand the functioning of carbon pricing, notably that relatively high prices of CO2-intensive goods and services reduce their consumption. Combining the redistribution of revenue to support both vulnerable groups and environmental projects, such as on renewable energy, seems to most increase policy acceptability.
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6.
This paper explores policies for Negative Emissions Technologies (NETs), in an attempt to move beyond the supply-side focus of the majority of NETs research, as well as the current dominance of carbon pricing as the main NETs policy proposal. The paper identifies a number of existing policies from four key areas – energy/transport, agriculture, sub-soil, and oceans – which will have an impact on three NETs: Bioenergy with Carbon Capture and Storage (BECCS), Direct Air Capture (DAC), and terrestrial Enhanced Rock Weathering (ERW). We propose that non-climate co-benefits may be valuable in terms of the policy ‘demand pull’ for NETs; in particular, we find that ERW may provide multiple co-benefits which can be mandated through existing policy structures. However, interaction with numerous policy areas may also create barriers, particularly where there is tension between the priorities of different government departments. On the basis of existing and analogous policies from a range of geographical contexts and scales, this paper proposes four options for NETs policy that could be reasonably implemented in the near-term. We also argue that ERW demonstrates the importance of scale and framing, because the policy environment depends on whether it is framed as a soil amendment at local scales or as a climate stabilization technique at international scale. Key policy insights Co-benefits may assist the ‘demand pull’ for novel technologies by providing multiple policy angles for incentivisation rather than relying on a ‘fix-all’ policy such as a high carbon price. DAC with storage might be overly reliant on a high carbon price, because it only provides one core benefit – that of atmospheric carbon reduction. ERW may provide multiple co-benefits which can be mandated through existing policy structures, but should focus on using waste rock rather than mining virgin material. We propose four near-term options for NETs policy: funding for small-scale BECCS demonstration and an international biomass certification mechanism; small-scale loans for ERW on farms and promotion of locally-sourced rock residues; amendment of fertilizer subsidy schemes to include silicate rock; and a clearer framework for licensing sub-soil access for CO2 storage.
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7.
Agriculture is responsible for the bulk of Ireland’s greenhouse gas (GHG) emissions. However, the potential to mitigate some of these emissions through the adoption of more efficient farm management practices may be hampered by farmers’ awareness and attitude towards climate change and agriculture’s role in contributing to GHG emissions. This paper presents results from a survey of 746 Irish farmers in 2014, with a view to understanding farmers’ awareness of, and attitudes to, climate change and GHG emissions. Survey results show that there was a general uncertainty towards a number of questions related to agricultural GHG emissions, e.g. if tilling of land causes GHG emissions, and that farmers were reluctant to take action to reduce GHG emissions on their farm. To further explore farmers’ attitudes towards climate change, a multinomial logit model was used to examine the socio-economic factors that affect farmers’ willingness to adopt an advisory tool that would show the potential reduction in GHG emissions from the adoption of new technologies. Results show that farmers’ awareness of human-induced global climate change was positively related to the tool’s adoption. Key policy insights Irish farmers are generally not sufficiently aware of the impact of their activities on climate change. A quarter of farmers believed that climate change will only impact on their business in the long-term; such an attitude may lead to a reluctance amongst these farmers to adopt management practices that reduce GHG emissions. Awareness of climate change affects positively the adoption of new tools to reduce GHG emissions on farmers’ farms. IT literacy affects willingness to adopt new tools to address GHG emissions. Reception of agri-environmental advice can have a positive influence on farmers’ willingness to adopt new GHG emission abatement tools. Farmers in receipt of environmental subsidies are more likely to adopt new abatement tools, either because they are more environmentally conscious or because the subsidy raised their environmentally consciousness. Willingness to adopt differs between different farm enterprises; operating dairy enterprise increases the willingness to adopt new advisory mitigation tools.
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8.
Coral reefs are highly vulnerable to the impacts of rising marine temperatures and marine heatwaves. Mitigating dangerous climate change is essential and urgent, but many reef systems are already suffering on current levels of warming. Geoengineering options are worth exploring to protect the Great Barrier Reef (GBR) from extreme warming conditions, but we contend that they require strong governance and public consultation from the outset. Australian governments are currently funding feasibility testing of three geoengineering proposals for the GBR. Each proposal involves manipulating ocean or atmospheric conditions to lower water temperatures and thereby reduce the threat of mass coral bleaching events. Innovative strategies to protect the GBR and field testing of these is essential, but current laws do not guarantee robust governance for field testing of these technologies. Nor do they provide the foundation for a more coherent national policy on climate intervention technologies more generally. Responsible governance frameworks, including detailed risk assessment and early public consultation, are necessary for geoengineering research to build legitimacy and promote scientific progress. Key policy insights Marine heatwaves pose a serious threat to coral reefs, including Australia’s iconic Great Barrier Reef. Australian governments have recognized the threats of warming waters, and are funding research of geoengineering options for the Great Barrier Reef. The limited earlier field testing of geoengineering demonstrates the need for specific governance to manage risks, build legitimacy and maintain public support. Australia requires a framework to govern geoengineering research and development before deployment of such technologies.
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9.
ABSTRACTChina’s overseas investment flows (US$ 183 billion) and stock (US$ 4.7 trillion) reached a record peak in 2016, second only to those of the US. A major cause for concern lies in the environmental sustainability of China’s overseas investment portfolio, which is compounded by the lack of transparency of China’s main development finance arms. We intend in this paper to give an update on the magnitude of green finance in China’s overseas investment and development finance portfolio on the basis of the best available estimates, and to put these figures into a broader perspective of multilateral development banks’ commitments and practices to combat climate change. We derive practical policy recommendations that Chinese development banks could take to further align China’s overseas investment with the 2°C target of the Paris Agreement, with the first step being to revise the ‘host country standard’ principle, to ensure that Chinese development banks use the most stringent of the two environmental standards, abroad or at home. Key policy insights Chinese development banks lend, give or invest between US$ 38 billion and US$ 45 billion every year to developing countries, without either elaborating on, or integrating, the provisions of the Paris Agreement into their investment strategy. Regulations and safeguards are much more stringent for China’s domestic investment than for China’s overseas investment, and this stringency gap has been widening over recent years. As a step towards aligning Chinese overseas investment with the Paris Agreement, Chinese development banks could revise the ‘host country standard principle’. They could instead choose the highest among the two – recipient country or Chinese domestic – in terms of environmental stringency, consequently harmonizing overseas environmental regulation and safeguards with those that apply domestically.
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10.
Global climate change mitigation action is hampered by systematic under-assessment of national ‘fair shares’, largely on the basis of perceived national interests. This paper aims to inform discussions centred on South Africa’s nationally determined contribution (NDC) by estimating (1) emissions reduction pathways for the country using the Climate Equity Reference Calculator (CERC) assuming a maximum 2°C aggregate warming target and (2) the likely economy-wide net mitigation costs or savings associated with reaching these pathways if known lower-cost mitigation measures, identified through the national mitigation potential analysis, are prioritised. The cumulative net savings associated with achieving the CERC ‘fair share’ emissions pathway, assuming the moderate use of low carbon power generation measures, would reach $5.3 billion by 2030. Net savings could be substantially greater reaching $46.8 billion by 2030 assuming power generation focuses on moving towards full decarbonisation. An unconditional commitment to the mitigation action implied by the ‘fair share’ emissions pathway therefore seems reasonable and prudent purely from the point of view of net country-wide savings. Only if power generation moves towards full decarbonisation would there be a reasonable chance of achieving the more ambitious CERC domestic emissions pathway. However, the significant additional cost associated with achieving the domestic emissions pathway should be conditional on international assistance. Key policy insights South Africa can only achieve its ‘fair share’ of the global mitigation effort if greater use is made of renewable energy options, and can realise significant net savings if it does so. Further emissions reductions would incur costs and require significant upscaling of the share of renewable energy and full implementation of all non-power generation mitigation measures available. Committing to this further mitigation action contingent on international finance would both strengthen the nation’s position in climate negotiations and support the provision of finance for those vulnerable developing nations that bear little or no responsibility for climate change.
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11.
Globally, adaptation policies and programmes are being formulated to address climate change issues. However, in the agricultural sector, and particularly in least developed countries (LDCs), concerns remain as to whether these policies and programmes are consistent with farmers’ preferences. This study empirically investigates Nepalese farmers’ willingness to support the implementation of adaptation programmes. To this end, we first developed suggested adaptation programmes in accordance with the adaptation measures identified by LDCs in their National Adaptation Programmes of Actions. We then employed a choice experiment framework to estimate farmers’ willingness to pay (WTP) for adaptation benefits. The findings indicate that the substantial benefits of the adaptation programmes for farmers result in a sizeable WTP to participate, which would appear to justify the programmes’ widespread implementation. Key policy insights Farmers are willing to participate in, and contribute to, the suggested adaptation programmes in the form of increased access to climate adaptive crop species and varieties, improved soil quality and irrigation and the provision of training in climate adaptive farming. Key socio-economic factors influence farmers’ support of adaptation programmes. Older farmers, those households closer to government extension services, larger land holders, those involved in household labour exchange, farmers located in drought and flood-prone regions and those who perceive that the climate has changed are more likely to participate. The more farmers are aware of climate change impacts, the greater their preference for adaptation programmes. Increasing farmer awareness prior to implementation of such programmes is therefore an obvious means of further raising participation rates.
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12.
Adaptation finance is primarily allocated to multilateral entities and national governments, rather than local organizations. This means that the social, political and economic processes that create and sustain inequalities within a country will be the same processes that determine how adaptation finance is used. Using an urban lens, we consider the obstacles currently faced by local governments and local civil society groups in accessing adaptation finance, and show that these are a function of systemic power imbalances between levels of government, and between government and vulnerable communities. We argue that even relatively small amounts of adaptation finance could have a catalytic effect on the capacities and impacts of local organizations, contributing to greater levels of both distributive and procedural justice. We analyse different financial intermediaries and planning systems that could be used to make disbursements from multilateral climate funds fairer and more effective. This could potentially create political opportunities both to respond to direct climate threats and to address underlying drivers of vulnerability, such as marginalization and exclusion. In this way, channelling adaptation finance to the local level could deliver more just processes and outcomes. Key policy insights More multilateral climate funds should establish direct access modalities, and introduce ‘fit-for-purpose’ accreditation procedures and approval processes. Those that have already established such enabling frameworks should prioritize providing readiness support to local organizations, and incentivize state and citizen collaboration in adaptation projects. National governments should consider clearly enshrining the rights and responsibilities of local authorities in National Adaptation Plans, and help them to collect the information, build the capacities and acquire the resources needed to plan and implement adaptation measures. National governments should further encourage local authorities to adopt participatory planning, budgeting, monitoring and evaluation procedures to encourage citizen participation. Local civil society groups should identify or establish collective entities that can seek accreditation with multilateral funds and then disburse money to their members. Collaboration between groups can facilitate up-scaling through replication (particularly where peer-to-peer learning is embedded in the network) and reduce the transaction costs associated with myriad small projects.
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13.
Reducing Emissions from Deforestation and forest Degradation (REDD+) has emerged as a promising climate change mitigation mechanism in developing countries. In order to identify the enabling conditions for achieving progress in the implementation of an effective, efficient and equitable REDD+, this paper examines national policy settings in a comparative analysis across 13 countries with a focus on both institutional context and the actual setting of the policy arena. The evaluation of REDD+ revealed that countries across Africa, Asia and Latin America are showing some progress, but some face backlashes in realizing the necessary transformational change to tackle deforestation and forest degradation. A Qualitative Comparative Analysis (QCA) undertaken as part of the research project showed two enabling institutional configurations facilitating progress: (1) the presence of already initiated policy change; and (2) scarcity of forest resources combined with an absence of any effective forestry framework and policies. When these were analysed alongside policy arena conditions, the paper finds that the presence of powerful transformational coalitions combined with strong ownership and leadership, and performance-based funding, can both work as a strong incentive for achieving REDD+ goals. Key policy insights The positive push of already existing policy change, or the negative stress of resource scarcity together with lack of effective policies, represents institutional conditions that can support REDD+ progress. Progress also requires the presence of powerful transformational coalitions and strong ownership and leadership. In the absence of these internal drivers, performance-based funding can work as a strong incentive. When comparing three assessments (2012, 2014, 2016) of REDD+ enabling conditions, some progress in establishing processes of change can be observed over time; however, the overall fluctuation in progress of most countries reveals the difficulty in changing the deforestation trajectory away from business as usual.
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14.
Energy and climate policies may have significant economy-wide impacts, which are regularly assessed based on quantitative energy-environment-economy models. These tend to vary in their conclusions on the scale and direction of the likely macroeconomic impacts of a low-carbon transition. This paper traces the characteristic discrepancies in models’ outcomes to their origins in different macro-economic theories, most importantly their treatment of technological innovation and finance. We comprehensively analyse the relevant branches of macro-innovation theory and group them into two classes: ‘Equilibrium’ and ‘Non-equilibrium’. While both approaches are rigorous and self-consistent, they frequently yield opposite conclusions for the economic impacts of low-carbon policies. We show that model outcomes are mainly determined by their representations of monetary and finance dimensions, and their interactions with investment, innovation and technological change. Improving these in all modelling approaches is crucial for strengthening the evidence base for policy making and gaining a more consistent picture of the macroeconomic impacts of achieving emissions reductions objectives. The paper contributes towards the ongoing effort of enhancing the transparency and understanding of sophisticated model mechanisms applied to energy and climate policy analysis. It helps tackle the overall ‘black box’ critique, much-cited in policy circles and elsewhere. Key policy insights Quantitative models commissioned by policy-makers to assess the macroeconomic impacts of climate policy generate contradictory outcomes and interpretations. The source of the differences in model outcomes originates primarily from assumptions on the workings of the financial sector and the nature of money, and of how these interact with processes of low-carbon energy innovation and technological change. Representations of innovation and technological change are incomplete in energy-economy-environment models, leading to limitations in the assessment of the impacts of climate-related policies. All modelling studies should state clearly their underpinning theoretical school and their treatment of finance and innovation. A strong recommendation is given for modellers of energy-economy systems to improve their representations of money and finance.
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15.
Mobilizing climate finance for climate change mitigation is a crucial part of meeting the ‘well-below’ 2°C goal of the Paris Agreement. Climate finance refers to investments specifically in climate change mitigation and adaptation activities, which involve public finance and the leveraging of private finance. A large proportion of climate finance is Official Development Assistance (ODA) from OECD countries to ODA-eligible countries. The evidence shows that the largest proportion of climate finance for climate change mitigation has been channelled to the development of renewable energy, with a much smaller proportion flowing to other crucial forms of clean energy-related measures, such as demand-side management (DSM) (particularly sustainable cooling) and carbon capture, usage and storage (CCUS). This forms the rationale and aim of this synthesis paper: to review the role of climate finance to develop clean energy beyond renewables. In doing so, the paper draws on practical policy and programme experiences of some donor countries, such as the UK, and Development Finance Institutions (DFIs). This paper argues that a greater amount of climate finance from OECD countries to ODA-eligible fossil fuel-intensive emerging economies and developing countries is required for sustainable cooling and CCUS, particularly in the form of technical assistance and clean energy innovation. Key policy insights Demand-side management (DSM) and carbon capture, usage and storage (CCUS) are underfunded in climate finance compared with the promotion of renewables. Climate finance for sustainable cooling, in particular, represents just 0.04% of total ODA, despite cooling projected to represent 13% of global emissions by 2030. Public investment in CCUS is limited at US $28 billion since 2007, despite the costs of meeting the Paris Agreement estimated to be 40-128% more expensive without CCUS. Additional climate finance for these sectors should not come at the expense of funding for renewables but should be complementary to it.
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16.
The successful implementation of the Paris Agreement requires substantial energy policy change on the national level. In national energy policy-making, climate change mitigation goals have to be balanced with arguments on other national energy policy goals, namely limiting cost and increasing energy security. Thus far, very little is known about the relative importance of these goals and how they are related to political partisanship. In order to address this gap, we focus on parliamentary discourse around low-carbon energy futures in Germany over the past three decades and analyze the relative importance of, and partisanship around, energy policy goals. We find that the political discourse revolves around four, rather than three, goals as conventionally assumed; improving the competitiveness of the national energy technology industry is not only an additional energy policy goal, it is also highly important in the political discourse. In general, the relative importance of these goals is rather stable over time and partisanship around them is limited. Yet, a sub-analysis of the discourse on renewable energy technologies reveals a high level of partisanship, albeit decreasing over time. Particularly, the energy industry goal’s importance increases while its partisanship vanishes. We discuss how these findings can inform future energy policy research and provide a potential inroad for more ambitious national energy policies. Key policy insights In addition to the three classic goals of energy policy (limiting cost, securing access and reducing the environmental burden) we identify a fourth policy goal: strengthening the national energy technology industry Conformity between the three classical energy and the industrial policy goals is a key driver explaining policy change For renewable energy technologies, partisanship around this fourth goal is lower than around other goals and decreases over time as innovation allows these technologies to increasingly correspond to policy-makers’ high-level goals Extant research underestimates the importance of industry policy goals, but overestimates environmental co-benefits of low-carbon energy options Paradigmatic policy change in Germany did not depend on top-down shifts in high-level policy goals but was driven by lower-level technology-specific goals
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17.
Under the Paris Agreement, countries are encouraged to submit long-term low greenhouse gas emissions development strategies. Such strategies will merge emissions goals with socio-economic objectives and enable countries to increase their ambition over time, thus offering an opportunity to close the gap between the current emissions trajectory and the Agreement’s ‘well below 2°C’ target. China is in the process of preparing its own long-term strategy. We argue in this article that non-CO 2 greenhouse gases (NCGGs) should be an essential component of China’s long-term low-emissions strategy. To incorporate NCGGs into China’s long-term low-emissions development strategy, key scientific and institutional challenges should be addressed, such as uncertainty about the accuracy of NCGG emissions inventories; uncertainty about future projections of NCGG emissions; and institutional coordination deficits and imbalanced policy approaches. Overcoming these barriers will have significant implications for climate change mitigation and can open a path for the development of concrete follow-up actions. Key policy insights Non-CO2 greenhouse gases (NCGGs) make up around 17% of China’s GHG emissions, but China has no quantified target to limit or reduce these gases. NCGG emissions mitigation should be an essential component of China's long-term low-emissions strategy, which is currently under development. Considerable uncertainty exists over both historical NCGG emissions data and forecasts. This poses challenges to developing a comprehensive multi-gas strategy. Institutional challenges must also be addressed, such as fragmentation of responsibility for NCGGs.
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18.
This study reports survey results of American and Chinese citizens administered to determine the effect of reciprocity and the absence of reciprocity on public support of international climate treaties. American and Chinese college students and adults were surveyed about their support for signing an international climate treaty including commitments to reduce their greenhouse gas emissions, conditional on the other country signing the same treaty or not. This study finds knowledge of other-country non-support on average decreases cooperative behaviour among all age groups in both the US and China. Knowledge of China’s support for the treaty is found on average to increase support among American adults, while having no noticeable effect on average support among American college students. Chinese citizens are found to not respond positively to reciprocity. Although not statistically significant at conventional significance levels, knowledge of the US’s support is found on average to decrease support among Chinese college students and adults. Key policy insights To increase support for international climate treaties, knowledge that another major emitter will sign the treaty does not unanimously increase domestic support. Knowing the other country will not sign the treaty decreases domestic support for signing an international climate treaty for both Americans and Chinese, relative to not being told about the other country’s decision to sign the treaty. Knowing China will sign an international climate treaty on average increases American adult support for signing the same treaty, while American college student support is unaffected. Although not statistically significant at conventional significance levels, knowing the US will sign an international climate treaty on average decreases Chinese support for signing the same treaty. Policy-makers pursuing increased international support of climate treaties by first getting support from countries with substantial historical emissions might deter international support if little attention to fairness concerns is given.
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19.
Environmental policies may have important consequences for firms’ competitiveness or profitability. For the European Union Emissions Trading System (EU ETS) the empirical literature documents that significant emissions reductions have resulted from it. Surprisingly, however, the literature shows that there have been hardly any concurrent negative effects on firms’ competitiveness during the first two phases of the scheme (2005–2012). We show that the main explanations for the absence of negative impacts on competitiveness are a large over-allocation of emissions allowances leading to a price drop and the ability of firms to pass costs onto consumers in some sectors. Cost pass-through combined with free allocation, in turn, partly generated windfall profits. In addition, the relatively low importance of energy costs indicated by their average share in the budgets of most manufacturing industries may have limited the impact of the EU ETS. Finally, small but significant stimulating effects on innovation have been found so far. Several factors suggest that over-allocation is likely to remain substantial in the upcoming periods of the scheme. Therefore, we expect to see no negative competitiveness effects from the EU ETS in Phases III and IV (2013–2030). Key policy insights Empirical literature on the EU ETS shows that there have been hardly any effects on firms’ competitiveness or profitability. One main explanation is a large over-allocation of emissions allowances leading to a price drop. This reduced incentives for innovation. Moreover, firms were able to pass costs on to consumers in some sectors which partly generated windfall profits. Innovation effects have so far been small but positive. We expect to see no negative competitiveness effects on regulated firms in the near future suggesting that no further reliefs for regulated firms are required.
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20.
International carbon markets can be an important tool in achieving countries’ mitigation targets under the Paris Agreement, but they are subject to a number of environmental integrity risks. An important risk is that some countries have mitigation targets that correspond to higher levels of emissions than independent projections of their likely emissions. If such ‘hot air’ can be transferred to other countries, it could increase aggregated emissions and create a perverse incentive for countries not to enhance the ambition of future mitigation targets. Limits to international transfers of mitigation outcomes have been proposed to address this risk. This article proposes a typology for such limits, explores key design options, and tests different types of limits in the context of 15 countries. Our analysis indicates that limits to international transfers could, if designed appropriately, prevent most of the hot air contained in current mitigation targets from being transferred, but also involve trade-offs between different policy objectives. Given the risks from international transfer of hot air and the uncertainty over whether other approaches will be effective in ensuring environmental integrity, we recommend that countries take a cautious approach and pursue a portfolio of approaches to ensure environmental integrity, in which case limits could provide for additional safeguards. Key policy insights Limits to international transfers involve trade-offs between different policy objectives, in particular reducing the risk that countries transfer hot air and enabling participation in carbon markets. Under ‘relative’ limits a country may transfer mitigation outcomes to the extent that its actual emissions are below the limit. Relative limits derived from historical emissions data have significant limitations, and none of the tested approaches was found to be effective for all countries. Relative limits based on emission projections could be a more valid approach, although they are also technically and politically challenging. Under ‘absolute’ limits a country could only issue, transfer or acquire a certain amount of mitigation outcomes. Absolute limits set at sufficiently low levels could prevent countries from transferring large amounts of hot air, but are bluntly applicable to all countries, whether or not they have hot air.
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