MITIGATION

Cap and trade and Clean Development Mechanism




Element Description: Mitigation is one of the two central approaches to climate change and involves human intervention to reduce greenhouse gas (GHG) emissions.“The ultimate objective of the United Nations Framework Convention on Climate Change (UNFCCC) is to stabilize atmospheric concentrations of greenhouse gases at a level that will prevent dangerous interference with the climate system” (UNFCCC’s GHG Data Report 2008).There are various proposals of how to decrease GHGs, but the central question is how to make mitigation “measureable, reportable, and verifiable.”Three major strategies to mitigate, or alleviate, greenhouse gases are a cap and trade system, the Clean Development Mechanism (CDM), and technology.

The ultimate objective of the United Nations Framework Convention on Climate Change (UNFCCC) is to stabilize atmospheric concentrations of greenhouse gases at a level that will prevent dangerous interference with the climate system.


Concentration level before industrial revolution
278 ppm
Concentration level 1990
350 ppm
Concentration level (latest)
387 ppm

MITIGATION STRATEGIES

Cap and Trade
Element Description: Allowance emissions trading system that harnesses the incentives of the free market to reduce pollution.Its goal is to steadily reduce greenhouse gas emissions economy-wide in a cost-effective manner.

  1. Cap: limit on amount of pollution that can emitted
  2. Allowance: authorization to emit a fixed amount
  3. Reduction: options of how to reduce emissions
  4. Allowance trading: buy/sell allowances in open market
  5. Compliance: own as many allowances as emissions

Stakeholders:The European Union and Australia are already using emissions trading to meet Kyoto targets, and many U.S. states and Canadian provinces have begun regional trading schemes.Other stakeholders include large-scale emitter companies and industries.It is cheaper or easier for some companies to reduce their emissions below their required limit than others, so the more efficient companies, who emit less than their allowance, can sell their extra permits to companies that are not able to make reductions as easily.This creates a system that guarantees a set level of overall reductions, while rewarding the most efficient companies and ensuring that the cap can be met at be lowest possible cost to the economy.

Key Issues:
Components of a good cap and trade system:
STRONG ENVIRONMENTALLY
Strict limits à pollution reduction
Significant, widespread, and guaranteed human health and environmental benefits


STRONG POLITICALLY
High compliance, transparency, and accountability
Compatibility with state and local programs
STRONG ECONOMICALLY
Regulatory certainty and flexibility for sources
Incentives for early pollution reduction and innovations in control technologies
SENDS MESSAGE
It “PAYS TO CHANGE,” rather than you can “GET AWAY WITHOUT CHANGING”

Criticisms of a bad cap and trade system:
Pay to not reduce emissions
Groups that do not pollute sell their conservation to the highest bidder, who pays not to reduce
Pay to emit emissions
No net reduction in emissions à more polluting allowed
If too many emission credits issued, more allowances than carbon (the effectiveness of regulation is diluted, e.g. European Union Emission Trading Scheme)
Can’t pay to reduce or emit
Still too expensive to change and reduce

Clean Development Mechanism
Element Description:Clean development mechanism is a major policy component of the Kyoto Protocol.Wealthy nations can meet their emissions reduction targets by funding GHG mitigation projects and sustainable development projects in non-Annex I Parties to reduce emissions in developing countries, where mitigation costs are lower.

Stakeholders:Non-Annex I parties (developing countries) are at stake, and some argue that the wealthy nations that initiate projects in developing countries are just trying to avoid responsibility for lowering their own emissions.The wealthier nations are interested in meeting the Kyoto Treaty emissions reduction targets, and the developing nations are interested in supporting their people and building more sustainable infrastructures.Many developing countries are taking mitigation action, including the scaling up of renewables in energy generation or energy efficiency targets.

Key Issues:The stakeholders in CDM are the Non-Annex I parties (developing countries), and some argue that the wealthy nations that initiate projects in developing countries are just trying to avoid responsibility for lowering their own emissions.It is also argued that the projects do not ensure “real, measureable and verifiable emission reductions that are additional to what would have occurred without the project,” but instead that many CDM projects would have occurred without the funding.