Working Paper Sustainability and Innovation S9/2012
This paper explores the contribution that no-lose target schemes for non-Annex I (NAI) countries can make to achieving the 2 °C target. The analyses rely on marginal abatement cost curves obtained from a global partial equilibrium model for the year 2020 and specifically account for 18 NAI countries' incentives to participate in no-lose target schemes. Findings suggest that implementing uniform no-lose targets as part of the burden-sharing discussed in the IPCC report (Metz et al., 2007) will not lead to global emission levels compatible with the 2 °C target, because uniform no-lose targets are only beneficial to a few NAI countries. Employing more lenient uniform no-lose targets or individualizing no-lose targets for large emitters could increase participation by NAI countries and decrease global emissions, global compliance costs, rents by NAI countries, and compliance costs for Annex I (AI) countries, but the resulting global emission levels would also not be consistent with the 2 °C target. Achieving the 2 °C target requires more stringent emission targets for AI countries and more lenient no-lose targets for NAI countries. In this case, no-lose targets account for 20% to 47% of global emission reductions, while due to emissions trading around 2/3 of global emission reductions are realized in NAI countries. An effective solution may entail no-lose targets for five to seven large NAI countries, only.