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This article outlines the current state of affairs in fossil fuel subsidy reform, and highlights its contribution at the nexus of climate policy, fiscal stability and sustainable development. It discusses common definitions, provides quantitative estimates, and presents the evidence for key arguments in favour of subsidy reform. The main drivers and barriers for reform are also discussed, including the role of (low) oil prices and political economy challenges. Commitments to subsidy reform by the international community are reviewed, as well as the progress at the country level. Although fossil fuel subsidy reform indeed plays a critical role in climate policy, experience shows that the rationale for such reforms is determined in a complex environment of political economy challenges, macro-economic, fiscal and social factors, as well as external drivers such as energy prices. The article synthesizes the key principles for designing effective reforms and emphasizes that subsidy reforms cannot only yield fiscal relief, but should also contribute to long-term sustainable development objectives. Areas for future research are also identified. [ABSTRACT FROM AUTHOR]

The language of transformational change is increasingly applied to climate policy, and particularly in climate finance. Transformational change in this context is used with respect to low-carbon development futures, with the emphasis on mitigation and GHG metrics. But, for many developing countries, climate policy is embedded in a larger context of sustainable development objectives, defined through a national process. Viewed thus, there is a potential tension between mitigation-focused transformation and nationally driven sustainable development. We explore this tension in the context of operationalizing the Green Climate Fund (GCF), which has to deal with the fundamental tension between country ownership and transformational change. In relation to climate finance, acceptance of diverse interpretations of transformation are essential conditions for avoiding risk of transformational change becoming a conditionality on development. We further draw lessons from climate governance and the development aid literature. The article examines how in the case of both the Clean Development Mechanism and Nationally Appropriate Mitigation Actions, there has been limited success in achieving both development objectives and ‘nationally appropriate’ mitigation. The development aid literature points to process-based approaches as a possible alternative, but there are limitations to this approach. Policy relevance The concept of transformational change has gained prominence in climate finance. The conundrum facing the GCF is that it seeks to support transformational change in the climate realm, in a context where countries may have competing priorities. Balancing or even transcending this tension is a fundamental design challenge for the GCF. A primary focus on mitigation, particularly if metrics of performance are tied exclusively to GHG reduction, raise concerns about diluting ownership by recipient countries and evokes concerns of conditionality or worse. The literature on development assistance has explored options notably conditions on process and adequate capacity, and suggests that there are no short cuts to building domestic ownership. Actors on climate change need to avoid the risk that transformational change is perceived as, and becomes, an imposed condition. The risk that transformation change, operationalized in the context of unequal power relations, becomes an imposition on development, needs to be avoided. [ABSTRACT FROM AUTHOR]

Policy initiatives in India, such as the Social Forestry Program and later the Joint Forest Management, were introduced for their co-benefits, including forest protection, employment opportunities, and added income for communities living in and around the forests. The evolution of these forest policies is critically reviewed. It is argued that India is perfectly positioned to benefit from climate change mitigation efforts, due to a rich, albeit chequered, history in forest management. National forestry policies are examined to assess how they can complement international climate change mitigation instruments, such as the Clean Development Mechanism (CDM) and the more recent Reduced Emissions from Deforestation and Forest Degradation (REDD or REDD+ with conservation, sustainable management of forests, and enhancement of forest carbon stocks) and aid national sustainable development objectives. There is a need to heed the experiences from India's evolving forest policies, particularly those concerning land tenure and resource rights, which lack specificity within international mechanisms. The active engagement of rural communities must be integral to any programmes that make any claim to development and to environmental integrity as a whole. Policy relevance India's forestry programmes are examined for their effectiveness in informing international initiatives such as the CDM and REDD+. Forestry policies in India can evolve to complement international climate mitigation tools. By examining current and historical forest legislation, and their subsequent impacts, it is shown how communities can sustain their system of forest management and retain/obtain rights to land and resources under the CDM and REDD+. Looking for such synergies within existing national policies to implement newer international initiatives can greatly facilitate and increase the momentum of global environmental change. [ABSTRACT FROM AUTHOR]

Emissions trading schemes (ETS) coexist with other environmental and energy policies, such as renewable energy promotion schemes. The potential synergies and conflicts between these policies are worth analysing. Spain is used as a case study to illustrate the theoretical, practical and quantitative interactions. The existence of national policies which affect CO2 emissions and interact with the EU ETS may lead to conflicts, which could make it more difficult to reach the objectives of emissions reductions, local sustainability benefits, dynamic efficiency and moderate consumer costs. The coordination of efforts to mitigate these conflicts is difficult and may have limited effectiveness, since the instruments employed have multiple objectives and different territorial scopes. However, the coexistence of the EU ETS with other instruments can be justified if the latter can provide social benefits or tackle problems that the former cannot provide or solve (such as 'local' and 'dynamic efficiency' benefits). The results of an interaction between an ETS and renewable electricity promotion schemes depend on the type of RES-E (electricity from renewable energy sources) support scheme being used and on the specific design features of the instrument implemented. [ABSTRACT FROM AUTHOR]

Linking emissions trading schemes has attracted interest as a means of reducing costs and expanding market size and liquidity. A number of studies have explored the compatibility of schemes, although little attention has been devoted to the implementation of links. Most trading schemes provide for unilateral recognition of certified emission reductions (CERs) and occasionally other units. Restrictions on the types of units and the quantity that can be used are common. Unilateral links can be implemented through adoption of a schedule that lists the units accepted together with limits on, and adjustments to, imported units. Only a bilateral link yields the full benefits of linking trading schemes. No bilateral links have been established yet, but the number of schemes interested in such links is growing. Implementing such a link through a binding agreement affords participants considerable certainty. However, it entails cumbersome adoption procedures as well as legal and procedural constraints. Reciprocal unilateral links, possibly accompanied by an informal agreement, are easier to implement and offer more flexibility. Economic benefits will not differ significantly from a bilateral linking agreement. [ABSTRACT FROM AUTHOR]

This study examines the economic and environmental implications of a unique Clean Development Mechanism (CDM) scheme in which a non-Annex B country (Thailand) introduces a carbon tax and exports the resulting emission mitigation as certified emission reductions (CERs). A general equilibrium model for Thailand has been developed for analysing this carbon tax-cum-CDM (CT-CDM) policy. The study finds that, unlike a carbon tax policy, the CT-CDM policy could increase economic welfare in Thailand, depending on CER price and schemes of recycling carbon tax- and CER-revenue to the economy. The CT-CDM policy is found to increase economic welfare at a very low CER price (US$55/tCO2). [ABSTRACT FROM AUTHOR]

Japan has recognized the need to make significant reductions in greenhouse gas (GHG) emissions, including CO2, but Japanese energy policy is fragmented and ineffective in coping with the challenge. Highly controversial options have been included in its strategy. Against this background, the current Japanese energy policy is reviewed and alternative future options are proposed, with their implications examined in the real policy context. A backcasting methodology, which creates a normative vision and identifies policy paths to attain the vision, is identified as a highly relevant conceptual framework for the analysis. Four visions are presented, within which subsequent policy packages and detailed policy paths are created. Two-tier evaluation stages are set to validate the policy packages and paths, through discussion with key Japanese energy experts. The study provides an insight into the effectiveness of the methodology, and implications of the proposed visions and policy packages. A series of innovations are made, including the 'policy road map' as an effective tool that links the backcasting framework and strategic policy discussions. [ABSTRACT FROM AUTHOR]

Recognizing the potential for over- as well as under-estimating the mitigation costs of non-CO2 greenhouse gases in an offset programme, this article examines the accuracy of cost estimates prepared by government agencies for the control of other types of emissions from small/medium sources via an offset programme. Specifically, analogy is made to the control of SOx and NOx controlled by California's Regional Clean Air Incentives Market (RECLAIM) Program. Even allowing for the energy crisis in 2000-2001 that drove up NOx emissions and control costs, it appears that the engineering cost methods used turned out to be generally accurate, defined as ±25%. Although such a finding does not ensure that the same results will apply to the case of non-CO2 GHGs, it certainly reinforces the growing literature on ex ante-ex post cost comparisons of environmental controls. [ABSTRACT FROM AUTHOR]

Distributive justice in climate change has been of interest both to the ethics and to the climate policy communities, but the two have remained relatively isolated. By combining an applied ethics approach with a focus on the details of a wide range of proposed international climate policies, this article proposes two arguments. First, three categories of proposals are identified, each characterized by its assumptions about the nature of the 'problem' of climate change, the burdens that this problem imposes, and its application of distribution rules. Each category presents potential implications for distributive justice. The second, related, argument is that assumptions about technology, sovereignty, substitution and public perceptions of ethics shape the distributive justice outcomes of proposed policies even though these areas have largely been overlooked in discussions of the subject in either literature. The final lesson of this study is that the definition, measurement and distribution of burdens are all critical variables for distributive justice in climate policy. [ABSTRACT FROM AUTHOR]

Oregon's governor has proposed a load-based cap and trade programme that limits carbon dioxide (CO2) emissions to 10% below 1990 levels by 2020. A load-based programme is different from the source-based European Union Emissions Trading Scheme (EU ETS), as it regulates emissions sources, located outside the state, that serve Oregon's electricity load. This article describes the stakeholder process that developed the legislative proposal for the load-based cap. The Oregon Clean Energy Planning Model©, a modified capacity expansion model of annual load resource balances, is used to estimate programme costs. The net present value of the climate policy to Oregon ranges from a $518 million benefit to a $414 million cost under various load growth scenarios. Programme benefits are possible under low and medium load growth because the societal returns of energy efficiency exceed its cost over the life of the programme. CO2 allowance prices in 2017-2020 are estimated in the medium case at approximately $21 per tonne. Low energy efficiency deployment could raise allowance costs to $36, while an aggressive efficiency programme could reduce them to $13.50. Competition for Northwest renewable resources could increase allowance prices in final phase to $37, indicating the interdependence in programme design among state climate policies. [ABSTRACT FROM AUTHOR]

Irrespective of mitigation efforts, adaptation measures will be needed in most parts of the world. The greatest challenge will be for developing countries. The estimated needs for adaptation funding in developing countries are considered in the context of the status and 'delivery' of the current financing efforts made under the UN regime and the anticipated Adaptation Fund. A considerable gap exists between the actual (as well as projected) supply of funding and estimated adaptation needs. A number of alternative financial mechanisms are suggested to close the gap between estimated needs and actual delivery. [ABSTRACT FROM AUTHOR]

Managing local and global risks from the geological storage of CO2 under the Clean Development Mechanism (CDM) presents three main challenges. First, the CDM procedures must be adapted to the specifics of the technology. Second, storage must last far longer than the crediting period, leaving questions about the management of long-term risks. Third, management of local environmental, health and safety risks falls largely outside the CDM governance framework. CDM procedures could be adapted to successfully manage the short-term global risk of carbon dioxide re-entering the atmosphere during the CDM crediting period, but local environmental, health and safety risks and longterm global risk cannot be ensured under existing structures. To better manage these risks, the implications for the CDM are: (1) to provide guidance on site characterization requirements, and have an independent auditor verify that the proposed geological storage site has a high likelihood of safely containing the injected carbon dioxide; (2) to require that carbon capture and storage (CCS) project design documents specify post-crediting-period commitments; and (3) to support CCS specific capacity building. But because CDM governance is designed to strike a balance between respecting host country sovereignty and ensuring high-quality emission reduction credits, some limitations to risk management of geological storage under the CDM remain. These limitations should be weighed against the potential benefits of including CCS in the CDM. [ABSTRACT FROM AUTHOR]

The challenge of creating a global low-carbon society is examined from the perspectives of a slow-growing but highly developed economy (Canada) and a fast-growing developing economy (China). Both countries' responses are compared to a similar carbon price schedule (US$10/tCO2e in 2013 rising exponentially to $100 by 2050) using a hybrid technologically explicit and behaviourally realistic model with macroeconomic feedbacks (CIMS). Then additional measures are imposed based on the national circumstances of each country; for Canada we simulate a 50% reduction by 2050, and stabilization for China. The scale of the challenge in all cases requires that every available option be vigorously pursued, including energy efficiency, fuel switching, carbon capture and storage, and accelerated development of renewables; to compensate, there are significant co-reductions of local air pollutants such as SOx and NOx. Finally, the abatement cost schedules of China and Canada are compared, and implications considered for carbon permit flows if the cost schedule of the rest of the developed world is assumed to be similar to that of Canada. We found that the developed world and China could collectively reduce emissions by 50% in 2050 at a price of $175/ tCO2e, with permits flowing from the developed countries to China; while abatement costs are lower in China up to $75/t, at higher prices reductions are less costly in the developed world. Our results indicate that a global low-carbon society is feasible, on condition that policy makers are willing and able to impose long-term, credible policy packages with carbon pricing policy as the core element, coupled with supplementary regulations to address market failures. [ABSTRACT FROM AUTHOR]

Stabilization presents a daunting challenge for all countries of the world, regardless of their stage of development, institutions or technological capabilities. This article explores the implications for the USA of climate stabilization at 3.4 W/m². Stabilization at this level, even under idealized conditions of nearly immediate global cooperation, will require a transformation of the USA's energy system, beginning almost immediately and extending throughout the century and beyond. This transformation will need to be even more rapid and extensive if the emissions reduction regime encompasses only a portion of the global economy. The availability of advanced technologies such as CCS, sustainable bioenergy production, wind and solar, nuclear energy and end-use efficiency improvements will facilitate this transition. Indeed, the degree to which technology advances over the coming century is among the most important determinants of the economic costs of stabilization for the USA and the rest of the world. The scope of the energy system transformation highlights the need to begin deploying technologies that are currently available and to continue to invest in R&D to develop newer, more efficient, and less expensive low- or zero-carbon energy supply technologies and end-use technologies. [ABSTRACT FROM AUTHOR]

The author reflects on the context of the Low-Carbon Society research project of the government of Japan and Great Britain. He describes the conclusions in which the project has arrived at during its two-year course. He also explores the working definition of the low-carbon society concept, the need for, and the feasibility of achieving low-carbon societies, establishing and developing low-carbon society visions and some policy recommendations.

Although great strides have been made towards a more nuanced understanding of the impacts and causes of global climate change, the ability to design and implement policy responses that engender effective action has remained insufficient. Recent framings of adaptive capacity and mitigative capacity are built upon in this article, and response capacity is introduced as a useful way to integrate adaptation and mitigation within the context of underlying development paths. In tracing the complex and non-linear relationships between response capacity — which represents a broad pool of development-related resources that can be mobilized in the face of any risk — and real policy and behaviour change in response to climate change, the strong influence of manifold socio-cultural factors is revealed. Only through an analysis of these deeper trajectories can the most important barriers to action begin to be addressed. Theories of risk perception are drawn upon to elucidate the complex nature of the relationship between capacity and action. A deeper understanding of these relationships will aid in the design and implementation of adaptation and mitigation policies that more effectively address the multitude of temporally and contextually specific intricacies of human behaviour in response to risks such as climate change. The literatures of institutional genesis and change, socio-technical systems, social movements, and collective behaviour change theory (to name but a few) are argued to be crucial to an improved understanding of the underlying development paths which influence both capacity and action. [ABSTRACT FROM AUTHOR]

Recent case studies for individual locations and on individual urban challenges reveal the growing complexity of managing interrelations among population, infrastructure and institutions. Climate change is increasing the pressures on many urban systems and adding to this complexity. Many of the case studies investigating urban dynamics in the light of climate change have chosen narrow, sector-specific approaches. Few projects have built on insights from complexity theory and related bodies of knowledge which are more consistent with the perspective that urban infrastructure systems are tightly coupled with one another and must respond to often subtle, long-term changes of technological, social and environmental conditions. Drawing on that knowledge, and building on insights from previous case studies, this article explores the potential roles of complexity theory in guiding investment and policy decisions in the urban context. Policy and management that are consistent with insights from complexity theory will need to anticipate a wide array of potential trajectories for urban dynamics, identify and implement strategies that are robust under a range of potential developments, continuously innovate the policy-making and management institutions, and intensify the exchange of knowledge between science and society. [ABSTRACT FROM AUTHOR]

Can an integrated approach to mitigation and adaptation offer opportunities for a more effective response to climate change than the current strategies? The nature of the linkages depends on the dimensions: economic, institutional or environmental, and on the scale. Differences are pervasive: adaptation and mitigation usually have different temporal and spatial scales and are mostly relevant for different economic sectors, so that costs and benefits are distributed differently. The article concludes that generally the global, regional and — in most countries — national potential of synergetic options to mitigate and adapt to climate change is relatively low, and both strategies should be considered as complementary. However, a few notable exceptions are identified in the land and water management and urban planning sectors, in particular in countries or locations where these sectors provide important adaptation and mitigation opportunities. What is the theoretically most efficient and least expensive mixture of adaptation and mitigation policies may not be a very urgent policy question. Instead, five pragmatic ways of broadening climate policy are suggested, while taking into account the linkages between adaptation and mitigation: (1) avoiding trade-offs — when designing policies for mitigation or adaptation, (2) identifying synergies, (3) enhancing response capacity, (4) developing institutional links between adaptation and mitigation — e.g. in national institutions and in international negotiations, and (5) mainstreaming adaptation and mitigation considerations into broader sustainable development policies. [ABSTRACT FROM AUTHOR]

Even though sustainable development has been broadly debated, the clean development mechanism (CDM) still lacks sophisticated multi-criteria decision methods for identifying, selecting and assessing CDM project activities from this perspective. Bearing in mind the huge number of CDM projects that are beginning to accumulate as the carbon market gains momentum, and the importance for non-Annex I Parties to keep focused on the sustainability objective, this article aims at developing a tool for prioritizing — within a given group, and once a specific list of sustainable development criteria is agreed upon and given — proposed CDM projects from this sustainable development point of view. We reached the following conclusions: (1) it is important to make a conscious choice of an appropriate way to normalize the sustainability performance data of CDM projects; (2) it is important to make a conscious choice of how to aggregate across multiple attributes; (3) in contrast with conventional multi-criteria assessments, which elicit preferences from a stakeholder panel, preference optimization infers from CDM projects' performance data an optimal set of weights that proponents would choose in order to win a competitive selection process. Such preference optimization methods (a) yield sensible results, simulating a range of decision circumstances, (b) avoid conflict and convey impartiality in situations where competing project proponents are likely to clash over objectionable weightings, (c) avoid cognitive overload when the number of CDM projects and/or indicators is overwhelmingly large, and (d) circumvent time-consuming and costly interviews and surveys. From a policy perspective, the multi-criteria assessment described here can be a powerful tool for prioritizing CDM projects (1) when there is a limited amount of grant funding to certain CDM project candidates, and (2) when the decision-making process incorporates the CDM objective of promoting sustainable development, in addition to the objective of helping developed countries to meet part of their reduction obligations as specified in Annex I of the Protocol. [ABSTRACT FROM AUTHOR]