Comparability of Effort inInternational Climate Policy
ArchitectureMotivations for comparability• Normative / ethical approaches for burden-sharing• Compliance metrics• Facilitative—supporting cooperation and future
ambition– How might parties measure the effort of others?
– “individuals tends to react to the positive actions ofothers with positive responses and the negative actionsof others with negative responses” Ostrom (1998).
**does not need to be one measure or agreement**2

Principles for metrics• Comprehensive: captures the notion of “effort”
in the widest possible sense. Similar countries
ought to exhibit similar values in a “fair”
agreement• Measurable and replicable: directly observableor based on transparent analysis• Universal: can be applied to efforts by a broad
set of countries
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Families of effort metrics:

Emissions (and other physical measures)• Potential measures– Relative to base year or forecast level– Relative to population or economic activity,
absolute or change over time4

Emissions growth since 1990 (%)

5Emissions growth since 2005 (%)

6CO2/GDP growth since 1990 (%)

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CO2 Forecasts (EIA 2013,IEA 2014 “New Policies”)

8Families of effort metrics:

Emissions (and other physical measures)• Potential metrics– Relative to base year or forecast level– Relative to population or economic activity,
absolute or change over time

• Pros/Cons– Reflects environmental outcome (+)– Generally measurable (+)– Choice of base year / index will re-rank (+/-)– Relative to forecast may be best notion of “effort”
but less measurable (-)
9Families of effort metrics:
Prices• Potential metrics– Carbon dioxide or energy– Taxes / carbon price or net price of energy– Absolute levels or change over time

10Energy Prices and Energy Taxes(2010, change since 1997, for select OECD Countries)
Average Energy
Price(2012US$/MMBTU)

1997-2010
Change in Energy
Price (percentage)

Average Energy
Tax(2012US$/MMBTU)

1997-2010
Change in EnergyTax (percentage)

United States

24.1

+72%

1.0-2%

United Kingdom

61.5

+29%

6.4

-30%

France58.4+28%

5.9-34%Germany

59.7

+51%

9.2+29%

Japan

47.5

+34%

1.9+12%

Canada33.6+77%

2.7+86%Australia

37.8+67%

2.4+9%

Mexico24.0+33%

0.6-56%Country

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Families of effort metrics:
Prices• Potential metrics– Carbon dioxide or energy– Taxes / carbon price or net price of energy– Absolute levels or change over time

• Pros/Cons– Carbon price reflects marginal effort (+)– Market prices are observable (+)– Reflect long-term investment incentives (+)– Exchange rates can be problematic (-)– Does not easily capture non-price policies (-)

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Families of effort metrics:
Costs• Potential metrics– Absolute or relative to GDP– Estimate for actual policies or least cost alternative• Pros/Cons– Most closely reflects “effort” (+)– Not observed; requires modeling (-)– Actual policy costs could reward costly but
ineffective policies (-)
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Developing multiple metrics to compare
prospective emissions commitments
USEmissions
Versus 1990-13% (in 2025)
Versus 2005-27% (in 2025)
Versus 2025
-21%*
Versus 2030
<requires modeling>
Δ (CO2/GDP) 2010-25 -4.2% per year*
Δ (CO2/GDP) 2010-30<requires modeling>Price
CO2 2025<requires modeling>Δ fossil energy 2010-25 <requires modeling>
Δ electricity 2010-25<requires modeling>
Cost$ policy cost v. BAU<requires modeling>$ cost / $ GDP<requires modeling>

EU

China

-40% (in 2030)<requires modeling>-38% (in 2030)<requires modeling><requires modeling> <requires modeling>-39%*†<requires modeling><requires modeling> <requires modeling>-4.3% per year*†<requires modeling><requires modeling> <requires modeling><requires modeling> <requires modeling><requires modeling> <requires modeling><requires modeling> <requires modeling><requires modeling> <requires modeling>*Forecast based on US EIA International Energy Outlook 2013
†EU = OECD Europe

14When do we measure effort?
• Prospectively (ex ante), when commitments arebeing made, in order to try to increase theambition of current commitments.
– Prospectively, emission commitments can becompared to historic levels or a forecast baseline (andpossibly in relation to population or income).

• Retrospectively (ex post), after efforts arerealized, in order to increase the ambition of thenext iteration of commitments.
– Retrospectively, emission outcomes can be comparedto historic levels, previous forecasts, or a15
counterfactual outcome absent policies.

2010 actual emission levels relativeto forecast (published in 2000)

RETROSPECTIVE ANALYSIS WILL REQUIRE MODELING 16

Summary of comparability metrics
Motivation is to facilitate cooperation and ambition• Emissions (and other physical measures)
Relative to base year or forecast level; relative to population oreconomic activity; absolute or changes• Prices
Carbon dioxide or energy; levels or changes• Costs
Actual policies or least-cost alternatives

No single metric satisfies all of our principles; the morecomprehensive measures of effort require modeling andtherefore tend to be less measurable / reliable / universal.
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