Abstract
The Kyoto Protocol is a bad outcome for global environmental policy. It has cre
ated a great deal of uncertainty about how and whether countries are going to
achieve by 2008-12 the strict quantity targets that have been set. The international
community had an opportunity to implement a credible instruments-based ap
proach that would begin to reduce emissions at low cost wherever possible, in addi
tion to giving flexibility to the time frame and burden-sharing arrangements. Policy-
makers now have to turn to economic instruments within a target regime that has
many potential risks.
For researchers of climate change and for negotiators and bureaucrats, Kyoto
was a full-employment contract for many years to come. For the world economy, it
has presented many crucial challenges. Our goal should be to make the system that
develops as decentralised as possible and to ensure that Australia does not commit
to a significant loss in economic well-being while waiting for the other key countries
to participate. If greenhouse gas emission reductions are to be pursued and this
will need to start soon if Australia is serious about the Kyoto Protocol one way
forward is a domestic version of the McKibbin-Wilcoxen proposal outlined in this
article. In this case, a tradeable permit system could be implemented within Austra
lia but with a very low fixed price for permits. The initial allocation of permits could
be the Kyoto target. The market would then be used to determine the extent of
abatement at a known cost. This begins the greenhouse reduction process at the
same time as keeping costs low until the outcome of a decade of future negotiations
is realised.
ated a great deal of uncertainty about how and whether countries are going to
achieve by 2008-12 the strict quantity targets that have been set. The international
community had an opportunity to implement a credible instruments-based ap
proach that would begin to reduce emissions at low cost wherever possible, in addi
tion to giving flexibility to the time frame and burden-sharing arrangements. Policy-
makers now have to turn to economic instruments within a target regime that has
many potential risks.
For researchers of climate change and for negotiators and bureaucrats, Kyoto
was a full-employment contract for many years to come. For the world economy, it
has presented many crucial challenges. Our goal should be to make the system that
develops as decentralised as possible and to ensure that Australia does not commit
to a significant loss in economic well-being while waiting for the other key countries
to participate. If greenhouse gas emission reductions are to be pursued and this
will need to start soon if Australia is serious about the Kyoto Protocol one way
forward is a domestic version of the McKibbin-Wilcoxen proposal outlined in this
article. In this case, a tradeable permit system could be implemented within Austra
lia but with a very low fixed price for permits. The initial allocation of permits could
be the Kyoto target. The market would then be used to determine the extent of
abatement at a known cost. This begins the greenhouse reduction process at the
same time as keeping costs low until the outcome of a decade of future negotiations
is realised.
Original language | English |
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Pages (from-to) | 299-309 |
Number of pages | 11 |
Journal | Agenda: A Journal of Policy Analysis and Reform |
Volume | 5 |
Issue number | 3 |
Publication status | Published - 1998 |