A New Global Deal on Climate Change

Posted: 16 Sep 2008

See all articles by Cameron J. Hepburn

Cameron J. Hepburn

London School of Economics, Grantham Research Institute

Nicholas Stern

Stern Review on the Economics of Climate Change

Multiple version iconThere are 2 versions of this paper

Date Written: September, 16 2008

Abstract

A global target of stabilising greenhouse gas concentrations at between 450ppm CO2e and 550ppm CO2e has proven robust to recent developments in the science and economics of climate change. Retrospective analysis of the Stern Review indicates that the risks were underestimated, suggesting a stabilisation target closer to 450ppm CO2e. Climate policy at the international level is now moving rapidly towards agreeing an emissions pathway, and distributing responsibilities between countries. A feasible framework can be constructed in which each country takes on its own responsibilities and targets, based on a shared understanding of the risks and the need for action and collaboration on climate change. The global deal should contain six key features: (i) a pathway to achieve the world target of 50% reductions by 2050, where rich countries contribute at least 75% reductions; (ii) global emissions trading to reduce costs; (iii) reform of the clean development mechanism to scale-up emission reductions on a sectoral or benchmark level (iv) scaling up of research and development funding for low-carbon energy; (v) an agreement on deforestation; and (vi) adaptation finance.

Keywords: climate change, ethics, uncertainty, instrument choice, climate policy, game theory, emissions trading, clean development mechanism (CDM), international negotiations

JEL Classification: H41, Q54, Q56

Suggested Citation

Hepburn, Cameron J. and Stern, Nicholas, A New Global Deal on Climate Change (September, 16 2008). Oxford Review of Economic Policy, Vol. 24, No. 2, Summer 2008. Available at SSRN: https://ssrn.com/abstract=1268559

Cameron J. Hepburn (Contact Author)

London School of Economics, Grantham Research Institute ( email )

Houghton Street
London, WC2A 2AE
Great Britain

HOME PAGE: http://www.cameronhepburn.com

Nicholas Stern

Stern Review on the Economics of Climate Change

HM Treasury
1 Horse Guards Road
London SW1A 2HQ
United Kingdom

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