A New Global Deal on Climate Change

Posted: 7 Nov 2008

See all articles by Cameron J. Hepburn

Cameron J. Hepburn

London School of Economics, Grantham Research Institute

Nicholas Stern

London School of Economics & Political Science (LSE) - Grantham Research Institute on Climate Change and the Environment

Multiple version iconThere are 2 versions of this paper

Date Written: Summer 2008

Abstract

A global target of stabilizing greenhouse-gas concentrations at between 450 and 550 parts per million carbon-dioxide equivalent (ppm COe) has proven robust to recent developments in the science and economics of climate change. Retrospective analysis of the Stern Review (2007) suggests that the risks were underestimated, indicating a stabilization target closer to 450 ppm COe. 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 per cent reductions by 2050, where rich countries contribute at least 75 per cent of the 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 R&D 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, H41, Q54, Q56

Suggested Citation

Hepburn, Cameron J. and Stern, Nicholas, A New Global Deal on Climate Change (Summer 2008). Oxford Review of Economic Policy, Vol. 24, No. 2, pp. 259-279, 2008, Available at SSRN: https://ssrn.com/abstract=1297159 or http://dx.doi.org/grn020

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

London School of Economics & Political Science (LSE) - Grantham Research Institute on Climate Change and the Environment ( email )

Houghton Street
London, WC2A 2AE
Great Britain

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