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The objective of this paper is to assess recent developments and prospects for future changes in United States (US) climate strategy. In doing so, the paper explores some of the key factors that have shaped strategies and policies to date, distinguishing between factors related to institutional and governance structures, linkages between science and policy, energy technology and the role of interest groups. Against this background, the paper attempts to explore future development paths for US climate policy. More specifically, the paper assesses opportunities for policy changes compared to the preferences of the current administration, and the prospects for future linkages between US and international climate change strategies. In brief, the paper argues that substantial changes are unlikely to take place in the near to medium term, leaving open, however, the possibility of wide-ranging changes in domestic politics or major incidents that could facilitate a shift in the perceived need for near-term action. [Copyright &y& Elsevier]

The objective of this paper is first to provide empirical evidence of what can be seen as a rather remarkable change in EU’s position on the use of greenhouse gas (GHG) emissions trading (ET) in climate policy, from the role of a sceptic in the run-up to Kyoto towards more of a frontrunner. The paper argues that there is a synergistic and multilevel mix of explanatory factors for this “U-turn”, including developments at the international, EU, Member State, sub-national, and even down to the personal level. Second, the paper explores and discusses the philosophy behind the Commission’s proposal for a directive on GHG ET. Third, the paper examines the prospects for ‘success’ of a scheme for EU-wide ET using a multifaceted set of metrics. In brief, we argue that output success—the chances for having a directive adopted—hinges on the resolution of two key issues. First, whether the preliminary phase is to be mandatory or voluntary, and second, incompatibilities with domestic ET schemes. Outcome success—steering and cost-effectiveness—will in turn depend on factors like the coverage of the scheme and inclusion of project-based credits, while more long-term political implications hinges on the successful adoption and operation of the scheme.“The Proposal on emissions trading represents a major innovation for environmental policy in Europe. We are de facto creating a big new market, and we are determined to use market forces to achieve our climate objectives in the most cost-conscious way […]. The emissions trading system will be an important cornerstone in our strategy to reduce emissions in the most cost-effective way”.Environment Commissioner Margot Wallstro¨m. [Copyright &y& Elsevier]

After the US withdrawal from the Kyoto Protocol and the extension of national quotas in the Bonn and Marrakesh agreements, meagre environmental effects and a low price of emission permits are likely to be the outcome of implementation. This paper attempts to analyze this scenario, mainly in relation to the Russian case. I discuss on the basis of certain key assumptions the strategic options open to the supply side of the permit market and Russia’s potentially incompatible interests as a producer of oil and gas on the one hand and a dominating seller of emission permits under the Kyoto Protocol on the other. The analysis shows that Russian oil and gas interests are likely to boost Russia’s inclination to sell permits, ultimately resulting in lower permit prices. [Copyright &y& Elsevier]

Five years down the road from Kyoto, the Protocol that bears that city’s name still awaits enough qualifying ratifications to come into force. While attention has been understandably focussed on the ratification process, it is time to begin thinking about the next steps for the global climate regime, particularly in terms of a deeper inclusion of developing countries’ concerns and interests. This paper begins doing so from the perspective of the developing countries. The principal argument is that we need to return to the basic principles outlined in the Framework Convention on Climate Change in searching for a north–south bargain on climate change. Such a bargain may be achievable if we can realign the policy architecture of the climate regime to its original stated goals of sustainable development. [Copyright &y& Elsevier]

The first commitment period of the Kyoto Protocol is expected to result in only a small role for the Clean Development Mechanism (CDM), including afforestation and reforestation projects. Wide ranging concerns regarding sinks in the CDM have been reflected in the Marrakech Accords capping the total amount of emission offsets from sinks projects to be used by Annex I countries. Decisions about the second commitment period and beyond are likely to be of far greater importance for these projects.This paper contributes to the discussion on how caps on sinks under the CDM could be used to obtain overall improved outcomes for developing countries. We examine two distinctive ways in which quantitative caps on sinks in the CDM can be implemented: one, restricting the use of sinks CERs to meet targets, as under the Marrakech Accords (a cap on demand); and two, restricting supply of sink CERs using a quota system. We argue in favour of a supply side cap, if Parties are to preserve the idea of limiting sinks in the CDM. Limiting the supply of credits could lead to better financial outcomes for developing countries as a whole, make higher-cost projects viable which may have better sustainability impacts, and provide an alternative to deal with equity concerns between developing countries. [ABSTRACT FROM AUTHOR]

To reduce the risk of overselling in the context of international greenhouse gas trading under the Kyoto Protocol, Parties have agreed to a commitment period reserve requirement. The commitment period reserve requires each Annex B Party to hold in its national registry quota equal to the lower of (a) X% of five times the Party’s most recently reviewed emissions inventory; and (b) Y% of the Party’s initial assigned amount. The agreement reached at the resumed sixth session of the Conference of the Parties (COP) sets X=100% and Y=90%. This paper analyses different specifications (values of X and Y) of the commitment period reserve in terms of potential non-compliance due to overselling and restricted sales of quota surplus to compliance needs of the seller. To eliminate potential non-compliance due to overselling, Y must be equal to 100% and X must be greater than 105%. Specifications that limit potential non-compliance due to overselling, may temporarily restrict sales of quota surplus to the compliance of some countries. The Annex II Parties are less likely to face restrictions on sales of surplus quota than other Annex B countries. The risk of temporarily restricted sales is reduced to less than 10% for almost all countries for a value of X close to 90%. [Copyright &y& Elsevier]

This paper examines three issues in quantifying project-level emissions reductions (ERs): baseline and additionality determination, leakage assessment, and measurement of net emissions. It finds no systematic differences between land use change and forestry (LUCF) and energy projects in addressing these issues. Rather, the ease of quantification depends on the following:

In response to the Kyoto Protocol, an international market for carbon dioxide tradable permits is likely to be created. Two of the key issues involved are explaining the concepts of tradable permits to industrialists, policy-makers and the man on the street, and anticipating how the market will evolve. A simple game of the market for carbon dioxide tradable permits has been developed and used that can help deal with both issues. As a pedagogical tool, this game benefits from simplicity (just a few pieces of paper are needed) and enables students to grasp the concepts and remember them through the intensity and fun of a trading ‘pit’. The experiences also provide substantial insights into the evolution of the carbon dioxide permit market, particularly related to the evolution of trade volume, permit prices and country strategies. [Copyright &y& Elsevier]