APRIL 2001

ECN-C--01-007
CICERO WP 2001: 4

THE MULTI-SECTOR CONVERGENCE APPROACH

A flexible framework for negotiating global rules for national
greenhouse gas emissions mitigation targets

J.C. Jansen
J.J. Battjes
J.P.M. Sijm
C.H. Volkers
J.R. Ybema

ECN: Energy research centre of the Netherlands

CICERO

Center for International Climate and Environmental Research - Oslo
Senter for klimaforskningAcknowledgement
This report is the fifth Working Paper of the Burden Sharing study project that aims to identify
the most promising rules applicable for differentiation of the greenhouse gas emission reduction
burden among countries. The project is carried out jointly by CICERO (Oslo, Norway) andECN (Petten, The Netherlands) under ECN project number 7.7170. The project has started in
October 1998 and has been completed in December 2000.
The following reports have been prepared within the framework of the current project:• ECN-C--00-010 / CICERO WP 1999: 12
Project definition and introduction to some key concepts and issues – The joint CICEROECN project on sharing the burden of greenhouse gas reduction among countries. J.R.
Ybema, J.C. Jansen, F.T. Ormel• ECN-C--00-011 / CICERO WP 1999: 13
Burden Differentiation: Fairness principles and proposals - The joint CICERO-ECN project
on sharing the burden of greenhouse gas reduction among countries. L. Ringius, A.
Torvanger, A. Underdal• ECN-C--00-012 / CICERO WP 1999: 14
Burden differentiation: GHG emissions, undercurrents and mitigation costs - The joint
CICERO-ECN project on sharing the burden of greenhouse gas reduction among countries.
J.R. Ybema, J.J. Battjes, J.C. Jansen, F.T. Ormel• ECN-C--00-013 / CICERO WP 2000: 1
Burden differentiation: Criteria for evaluation and development of burden sharing rules The joint CICERO-ECN project on sharing the burden of greenhouse gas reduction among
countries. A. Torvanger, L. Ringius• ECN-C--01-007 / CICERO WP 2001:4
The multi-sector convergence approach - A flexible framework for negotiating global rules
for national greenhouse gas emissions mitigation targets. J.C. Jansen, J.J. Battjes, J.P.M.
Sijm, C.Volkers, J.R. Ybema• ECN-C--01-008 / CICERO WP 2000:2
The multi-sector convergence approach - An analysis of its cost implications. J.P.M. Sijm,
J.C. Jansen, J.J. Battjes, C.Volkers, J.R. Ybema• ECN-C--01-009 / CICERO WP 2001:5
Sharing the burden of greenhouse gas mitigation - Final report of the joint CICERO-ECN
project on the global differentiation of emission mitigation targets among countries. ECN:
J.C. Jansen, J.J. Battjes, F.T. Ormel, J.P.M. Sijm, C. Volkers, J.R. Ybema; CICERO: A.
Torvanger, L. Ringius, A. Underdal
The Burden Sharing study project has been financed by the Dutch National Research
Programme on Global Air Pollution and Climate Change and by own contributions of theparticipating institutes.

Abstract
This Working Paper presents a new sector-based framework for negotiating binding emission
targets after the first budget period as defined in the Kyoto Protocol. The framework offers aflexible tool to negotiators for agreeing upon emission assignments at the aggregate level of thesignatory Parties concerned, for identifying country-specific concerns at the sector level, and forrolling over emission limitation targets from one period into the next one.

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CONTENTS
TOCSUMMARY

5

1. INTRODUCTION

6

2. LESSONS FROM EARLIER BURDEN SHARING PROPOSALS
2.1 Findings from phase one of the burden sharing project
2.2 Review of the Triptych approach
2.3 Some inferences for the design of a new framework

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10
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3. THE MULTI-SECTOR CONVERGENCE APPROACH
3.1 Introduction
3.2 The distinction of different sectors
3.3 The setting of global sector emission standards
3.4 The determination of national pre-adjustment emission mitigation targets
3.5 Adjustment for allowance factors
3.6 Graduation threshold and adjustment period
3.7 Summary

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4. SOME NUMERICAL ILLUSTRATIONS
4.1 Introduction
4.2 Selection of exemplary countries
4.3 Sector and national GHG emissions in the base year
4.4 Emissions standards in the convergence year
4.5 National pre-adjustment emission mitigation targets
4.6 The inclusion of allowance factors
4.6.1 Introduction
4.6.2 Climate
4.6.3 Population density
4.6.4 Transition economies
4.6.5 Renewable energy resources
4.7 The participation of non-Annex I countries

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5. CONCLUSIONS33

REFERENCES

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4

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SUMMARYThis report presents an approach, called the Multi-Sector Convergence (MSC) framework, togenerate comprehensive sets of national targets for greenhouse gas (GHG) mitigation. The MSC
framework is aimed at facilitating international negotiations on national emission mitigation
targets after the first budget period defined in the Kyoto Protocol.
The main features of the MSC approach are:(i) Emission standards are based on the distinction of different sectors within the national
economy.
(ii) The base model prescribes that the amount of per capita emission assignments will
ultimately converge to the same level for all countries.
(iii) Additional allowances may be conceded to countries facing specific circumstances thatwarrant higher emission needs than countries with more favourable specific emission
mitigating circumstances, all other factors being the same.
The MSC approach encompasses the following stages:
1. the distinction of different sectors,
2. the setting of global sector emission norms,
3. the determination of pre-adjustment national emission mitigation targets,
4. adjustment for allowance factors, yielding the ultimate national emission assignments.
Major considerations underlying the design of the MSC framework are:
• The framework is flexible in terms of structure and input parameter values.
• The framework is comprehensive to the maximum extent possible with regard to inclusionof the distinct greenhouse gases specified by the Kyoto Protocol and in terms of global
coverage.
• A sectoral bottom-up approach is opted for in defining standards for per capita emission
needs.Distinct structures of the national economies constitute a significant factor in
determining the possibilities of the adjustment process in terms of mitigation burden andspeed. Some sectors have a slower turnover rate of GHG-emitting infrastructures thanothers. Furthermore, certain sectors might be considered to provide more essential services
to fulfil basic human needs than others.
• Convergence of emissions per capita is a key point of embarkation.
• Given the large uncertainties surrounding the Climate Change issue and inertia in theadjustment process towards meeting targets consistent with sustainable emission levels fromthe climate perspective, the framework should include ample negotiation space forconvergence year(s) and convergence level(s).
• The framework should make due allowance for major country-specific emission factors.
• The share of emission allowances on account of country-specific emission factors in theultimate national emission assignments should be very transparent.
• Countries with relatively low per capita emission levels - which are almost invariably at thesame time countries with low (average) living standards - should have the right to economic
development without any emission limitation constraints up to some defined point, the socalled graduation threshold.
• Low-emission countries with emissions exceeding the graduation threshold in some future
emission accounting (budget) period will be granted a pre-set adjustment period. After thisperiod has lapsed, they are due to take on commitments to meet the targets consistent withthe prevailing global emission mitigation regime.

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1.

INTRODUCTION

The issue of fair differentiation of national GHG emission mitigation targets is possibly themost difficult one to resolve under the Framework Convention on Climate Change. Since the
Kyoto Conference of December 1997, this issue has received little attention as quantified
emission limits and reduction commitments have been agreed upon for the first budget period(2008-2012) for the Annex I countries.1 Since Kyoto, a large part of the discussion has focusedon guidelines, modalities, principles and rules for the flexible instruments, i.e. Emissions
Trading, Joint Implementation and Clean Development Mechanism.
However, there are various arguments why the issue of burden differentiation will very likely
return in the near future. First, under the Kyoto Protocol only the Annex I countries took
commitments while most of the developing countries did not yet accept such commitments.
Their participation is required at some moment in time in order to meet the ultimate objective of
the UNFCCC. Second, the Kyoto Protocol only covers quantified emission limitation andreduction commitments for the first budget period.2 In the longer term further reductions are
required. It is expected that burden differentiation will again get prime attention in theinternational climate negotiations within a few years.
Before Kyoto, various proposals were made on how to differentiate emission burdens between
countries (for an overview see Torvanger and Godal, 1999). At the Conference of the Parties
meeting in Bonn (COP-5), only one of these earlier proposals - the so-called Brazilian proposal- was briefly mentioned. At this occasion, various countries expressed their interest to further
continue exploring rules and principles for burden sharing.
Sceptics may claim that the issue of determining national GHG mitigation targets can not be
solved by simple rules or equations. However, the point is that burden sharing rules3 are notintended to replace negotiations. The process will always be steered by negotiations. Still,burden sharing rules can be of great value. They can support negotiations by adding structure.
Burden sharing rules can be a tool to show the consequences in terms of quantitative emission
limits and reduction objectives of different agreements. As such, burden sharing rules canfacilitate actual negotiations. Participation of parties in the negotiation process is an importantfactor to achieve an agreement. Therefore, consulting different kinds of actors during the design,
selection and adjustment phases of burden sharing is considered crucial.

1

In fact, the Kyoto Protocol speaks of ‘Annex B countries’ rather than ‘Annex I countries’. Whereas the former
category refers to countries mentioned in Annex B of the Kyoto Protocol, the latter category concerns countries
listed in Annex I of the UNFCCC. Annex B includes all countries recorded in Annex I, except Belarus and Turkey
that did not accept an emission abatement target at the Kyoto Conference. Unless stated otherwise, this report will
speak of Annex I countries, implying those countries – except Belarus and Turkey – that have accepted an official
commitment to limit their GHG emissions.
2
In the current language used at international climate change negotiations an emission reduction target relates to atargeted decline of emissions per period, an emission limitation target refers to a targeted limitation of the increasein emissions per period. Emission mitigation refers to incremental efforts to realise reduced growth or faster declineof emissions per period as compared to the baseline situation in which no such efforts would be undertaken.
Emission mitigation targets encompass both limitation and reduction targets.
3
In this report burden sharing rules refer to rules for determining (proposed) national mitigation targets. It is
acknowledged that, strictly speaking, these targets as such and the possible economic burden of meeting themconstitute two related but distinct issues. In fact, the present Working Paper deals with the former and Working
Paper no. 6 deals with the latter issue.

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Since Kyoto, the set of elements to be considered in burden sharing has changed somewhat:• The Kyoto Protocol also covers emissions of other greenhouse gases (CH4, N2O, HFCs,
PFCs and SF6) and part of the sinks of carbon dioxide that occur via land use changes. The
pre-Kyoto proposals on burden sharing covered only CO2 emissions in most cases. New
burden sharing proposals need to cover the other greenhouse gas emissions and sinks.
• Further, the Kyoto Protocol includes the three flexible instruments Emissions Trading (ET),
Joint Implementation (JI) and Clean Development Mechanism (CDM). These instruments
enable Annex I countries to reduce the costs of meeting their emission mitigationcommitments by means of transactions abroad. However, they also have burden sharing
consequences. Such consequences need to be taken into account in the design of new
burden sharing rules. While designing burden sharing rules one needs to have an idea howmuch the flexible instruments will be used and what their cost consequences might be.
One way to divide proposed burden sharing rules is between allocation-based rules andoutcome-based rules. Allocation-based rules define equitable burden sharing in terms ofprinciples for the distribution of emission rights. Outcome-based rules define equitable burden
sharing in terms of the (projected) final outcome, i.e. the (projected) net welfare impacts of theimplementation of mitigation policies. Moreover, some even distinguish process-based rules,
defining equitable burden sharing in terms of the process for arriving at a distribution ofemission burdens.4 For outcome-based burden sharing rules, models are needed, e.g. to calculate
the cost impacts for different countries.
On the one hand, it is believed that outcome-based BSRs are unlikely to garner a critical massof support among climate-change negotiators, given the highly speculative content of theoutcomes of the underlying model exercises. Comparison of short-term forecasts by well-known
institutes like the IMF or OECD of macroeconomic variables such as GDP or aggregate
investments with realisations learns that this type of variables cannot be predicted within small
confidence intervals. Systematic error margins in forecasts are compounded when theforecasting horizon is extended. It does not seem likely that it is possible to agree on one single
model approach to make such forecasts. Every model is a simplification of reality and there isno agreement how reality can best be modelled. If convincing allocation-based rules can be
designed these will be intrinsically more appealing.
On the other hand, negotiators may wish to have a good understanding of the cost implicationsof alternative burden sharing rules. Although outcome-based BSRs may seem unlikely to garner
the broad support needed, cost considerations are due to play a major role in the evaluation of
proposed allocation-based rules. Hence, allocation-based burden sharing rules should be readily
amenable to changes considered fair by the relevant negotiators based on information theyreceive and consider credible on cost implications for the country they represent. The cost
implication issue will be taken up in the final Working Paper (No. 6) of the present project.
A major advantage of allocation-based burden sharing rules is that a large part of the dataneeded can directly be measured or monitored. Models are not needed. This makes it possiblethat discussion can be aimed at perceptions, arguments and weights, as the numerical base is notor much less under debate. Operational burden sharing rules need to involve only indicators that
already are, or can be made, readily available for most or all countries.
Several analyses of burden sharing rules (Carraro and Goria, 1999; Torvanger and Godal, 1999)
suggest that a promising approach for the design of burden sharing rules is to follow a sectorbased approach. A key reason may well be that such an approach allows countries to see their
specific situation reflected in a burden sharing rule. Moreover, early in the process ofdetermining national GHG emission mitigation targets stakeholders at sector levels may beconsulted.
4This classification of burden sharing rules or rather burden sharing criteria is quoted in Carraro and Goria (1999)
from Rose et al. (1998).

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This report will introduce a framework for negotiating burden differentiation among countries at
the global level. First, some lessons drawn from earlier burden sharing proposals are discussed,
relevant for the design of new burden sharing rules (Chapter 2). Subsequently, Chapter 3
introduces a flexible sector-based framework for negotiating burden sharing rules - resulting in
national emission mitigation targets - while Chapter 4 presents some numerical illustrations of
this framework. Conclusions are given in Chapter 5.

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2.

LESSONS FROM EARLIER BURDEN SHARING PROPOSALS

2.1

Findings from phase one of the burden sharing project

Earlier burden sharing proposals - both before and after the assignment of the Kyoto Protocol have been examined in Project Working Paper No. 2 (Ringius, Torvanger and Underdal, 1999).
Some major findings are epitomised below.
CICERO has identified and analysed the main general principles of fairness. A first distinction
is between equality, equity and exemption. Equal obligation has a firm normative basis if allparties involved are equal in all relevant aspects. If this is not the case, equity comes into play.
A range of key principles exists to distribute obligations equitably. If the range of variance is so
great that equity rules still lead to unfair burdens upon the poorest parties, exemption of
obligations is the option that remains.
Lesson for the design of new burden sharing rules: equity is the level to aim at in thisstudy. Too few countries are equal enough to legitimise equal obligations. Further, if
exemption would be the ‘rule’ it would not make sense to construct burden sharing
rules.
Principles of equity can be distributed in four groups (Ringius, Torvanger and Underdal, 1999):
1. Principle of need
2. Principle of capacity
3. Principle of contribution
4. Principle of guilt.
It was found that burden sharing rules should not be incompatible with the principle of need.
Several examples of need-based burden sharing rules exist. Most of them follow a top-down
approach. These rules suggest a step towards convergence of the greenhouse gas emission levels
per capita. Only the Triptych proposal includes more bottom-up elements as it calculates theallowed emission for a certain time period following a sector approach.
But what does the principle of need imply in terms of operational indicators? It implies that all
human beings are granted emission allowances needed to secure basic human needs. The rules
for allocating emission permits for basic human needs might be different from the rules toallocate emissions for the production and use of luxury goods. If such an approach is pursued, afirst question that has to be solved is that a distinction needs to be made between what is a basic
need and what is a luxury good.
To make the principle of need operational, a step needs to be made to express general equity
considerations in terms of real life indicators. The translation of the need principle to concrete
indicators will be ruled by pragmatic considerations, as a multitude of factors affect the level ofemissions and one can not include all of them and still have a simple and transparent burdensharing rule. Thus, in designing a need-based burden sharing rule it will be endeavoured toinclude those factors that are considered most important.
An approach that considers aggregate emissions from a bottom-up sector perspective is alogical choice: the need to emit is linked to the provision of services, taking place in distinct
sectors. Moreover, a sector approach also allows one to relatively easily integrate otherconcerns, such as country-specific aspects which importantly affect the capacity to bear theburden of emission mitigation (prevailing welfare levels, availability of cheap mitigation
options, differences in emission needs to provide the same level of a certain service, etc.).
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Future climate agreements need commitments from countries that together represent the majorpart of current and future greenhouse gas emissions. Although, in line with the Climate
Convention, high-income countries should take the lead through initial unilateral mitigation
actions, new, more comprehensive burden sharing approaches are called for that will make it
feasible for medium- and low-income countries to assume commitments commensurate with
their welfare situation.
Any burden sharing rule should have due consideration for inertia (lead times) in behaviour,
institutions, capital and infrastructure related to activities that determine the level of greenhousegas emissions. Many of the mitigation options that are expected to have a large impact require
investments. Evidently, inertia aspects manifest themselves quite differently in distinct
economic sectors.

2.2

Review of the Triptych approach

Before starting up sector BSR design activities, it is useful to review the determination ofemission allowances in the Triptych approach.5 It should be stressed that the Triptych approach
was originally intended as a burden sharing application for a group of economically relatively
homogeneous countries, being Member States of the European Union. For any Triptych
approach to become successful for world-wide application, adjustment is necessary to make it
more flexible in accounting for the wide diversity of country-specific circumstances among thevarious nations of the world.
The major characteristics of the Triptych approach include:
Based on fuel input, CO2 emissions by the power sector are calculated for the base year
(1990), using standard IPCC default values.
• For the electric power sector, a norm is used for volume changes: power generation percapita is allowed to increase at a rate of 1% per year. In order to arrive at an aggregate
sector emission level, norms are formulated for the fuel-input mix. By the year 2010, nongas fossil-fuel shares should be reduced to 30%, while the share of CHP (cogeneration)
should have gone up to 15%. In addition, the share of renewables should have increased to
8%. Gas should account for the remaining share. Renewable-based and nuclear-based power
generation is assumed to be totally emission-free. For power generation based on coal, oil,and gas, standard IPCC emission values are imputed, while CHP-based power generation
emissions are assumed to be 70% of power generation based on gas. Subsequently, thesector emission reduction norm can be calculated.
• For energy-intensive industrial sectors, a fixed reduction factor is taken for CO2 emissions
for all countries. To make the norms not overly complicated, no allowance was made forstructural developments regarding sector composition and initial differences in energy
efficiency.
• The domestic sector is defined to comprise households, services, light industry, agriculture
and transportation. For this sector, per capita emission allowances should converge towards
an equal level in some distant year, e.g. 2030. Adjustment for climate differences withrespect to space heating was applied. Interim allowances are derived by linear interpolation.
• It should be stressed that countries would only be bound to the overall aggregate reduction
norm. Overshoots at sector level are permitted, if these are fully compensated by emission
reductions above the norm for other sectors.
•

5

See Blok, Phylipsen, and Bode (1997), and Phylipsen, Groenenberg, and Blok (1998).

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The attractiveness of the Triptych approach for the given purpose - setting medium termemission targets for a group of fairly homogeneous countries - relates to its relative simplicity
and transparency on the one hand and a sector bottom-up approach which permitted to takeaccount of some broad country-specific ‘emission needs’ aspects on the other hand.
This report addresses the issue of country/region emission assignments at a global level andover a longer-term time frame. Evidently, accounting fairly for country-specific circumstances
at a global level including ‘developmental emission needs’ demands more elaboration andflexibility than the Triptych approach offers. Nonetheless, Triptych has proven the usefulness ofbottom-up sector approaches. Among its outstanding features are its relative simplicity andtransparency.

2.3

Some inferences for the design of a new framework

The Climate Change issue can be looked at from many perspectives. One major feature
motivating worldwide action is the risk of human-induced drastic climate change to mankind.
Should drastic Climate Change become reality, initially certain world regions may well be lessadversely affected than other regions. Some regions might even gain initially. However, throughsocial tensions by way of migratory movements, social conflicts may be transmitted to initiallyless badly affected regions, while climate may change further, turning initial local gains into
eventual substantial losses. Hence, all countries might ultimately be less well off, although withlarge - but hard to predict - differences. Therefore, the precautionary motive suggests that
containment of global GHG emissions to more sustainable levels from the perspective of theinternational climate system will be ultimately beneficial for all countries. On the one hand aregime to achieve this has to be quite comprehensive. On the other hand, emission needs
comprise an overriding principle for which such a regime should account. Moreover, locationspecific factors and adjustment problems (e.g. related to infrastructural inertia) make for widely
divergent emission patterns and per capita emission requirements among countries, even if
living standards would be comparable.
These considerations make convergence of per capita emissions an attractive point of departure.
Yet, at the same time, the Climate Change issue is surrounded by very large uncertainties that
may or may not be reduced in future. Moreover, location-specific factors and adjustment
problems have to be duly taken into account. Hence, a very flexible approach is called for in
negotiations on national GHG mitigation targets.
Paramount considerations for introducing flexibility are:• Level and time path of allowable global GHG emission levels. Given the large uncertainties,
ample negotiation space for convergence year(s) and convergence level(s) should be built
in.
• Allowance for low-emission countries. Countries with relatively low per capita emission
levels - which are almost invariably at the same time countries with low (average) living
standards - should have the right to economic development and associated emissions (up tosome defined point) without incurring the additional cost of emission mitigation.
• Adjustment for rigidities and other major concerns at sectoral level. Distinct structures of
the national economies constitute a significant factor in determining the possibilities of theadjustment process in terms of mitigation burden and speed. Some sectors have a slower
turnover rate of GHG-emitting infrastructures than others. Furthermore, certain sectors
might be considered to provide more essential services to fulfil basic human needs thanothers.

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• Allowance for constant location-specific factors. Per capita emissions in areas withextremely cold or hot climates will be appreciably higher than the ones in temperate
climates, other factors being equal. The same applies to sparsely populated areas ascompared to densely populated areas. Also the resource base for harnessing the renewableenergy potential importantly affects the cost of low-emission energy.
• Allowance for changeable location-specific factors. Some countries are faced with severe
economic transition problems. These countries may negotiate assigned emission levels thatgives some leeway to solve these problems.

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3.

THE MULTI-SECTOR CONVERGENCE APPROACH

3.1

Introduction

In this chapter, a sector-based approach will be introduced for setting national targets regarding
GHG emission mitigation. This approach is called the Multi-Sector Convergence (MSC)
approach. The major distinguishing characteristics of the MSC approach are that (i) it is basedon the distinction of different sectors within the national economy, (ii) the MSC base model
prescribes that the amount of per capita emission assignments will ultimately converge to thesame level for all countries, (iii) additional allowances may be conceded to countries facing
specific circumstances that warrant higher emission needs than countries with more favourable
specific emission mitigating circumstances, all other factors being the same.
In the previous chapters, it has been argued why this study opts for a flexible, sector-based
burden sharing approach. Reasons in favour of this choice include:• A large part of the data needed can directly be measured or monitored.
• For determining the emission (mitigation) assignments, no a priori macroeconomic
modelling exercises are needed.
• A direct link can be made between sector emission norms and meeting specific needs.
• An early consultation with sector representatives would improve the feasibility of setting
targets and, at the same time, stimulate commitment on the part of sector agents.
• Apart from emission needs, allowance can be made for other sensitive, country-specificaspects.
• The approach can be implemented in a flexible way in the sense that the resulting national(or regional) emission targets will be proposed as binding assignments, whereas the distinct
envisaged sector emission standards are not.
• The resulting national targets can be aggregated to global GHG emission targets. In turn, theimpact of the latter on the stabilisation level of atmospheric concentrations (ppm) can beassessed. If deemed necessary, parameter values of the MSC approach can be re-calibrated
in an iterative way to reconcile considerations of Climate Change with the ones of economic
costs of and political feasibility.
The MSC approach outlined in this chapter includes the following stages:
1. The distinction of different sectors.
2. The setting of global sector emission norms.
3. The determination of national emission mitigation targets.
4. The inclusion of allowance factors.
Stages one to three yield results for the MSC base model (i.e. results before adjustment for
major country-specific emission factors). The last stage leads to the determination of postadjustment emission allowances. These steps will be further explained below in Sections 3.2 up
to 3.5. The final result of this process contains the national emission (mitigation) targets after
adjustment for allowance factors. Some numerical examples to illustrate the MSC approach will
be presented in the next chapter.

3.2

The distinction of different sectors

The first stage of the proposed sector-based framework for negotiating burden sharing rules is todistinguish a relevant set of socio-economic sectors. The precise division between sectors
should be an appropriate compromise between various concerns, i.e.:

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•
•
•

•

Distinct sectors should account for a significant share in total, human-induced GHG
emissions.
The sectors should not be overly heterogeneous with respect to intra-sector GHG-emission
characteristics.
Reliable data should be available on indicators of the distinct sectors for a large number ofcountries.
The number of sectors should be large enough to guarantee maximum comprehensiveness,but small enough to preserve simplicity and clarity.

In line with the above-mentioned considerations, the following sectors - and related GHG
emissions - will be distinguished for the time being, given the present state of data availability:
1. Power
GHG emissions related to power generation, excluding emissions related to power use inindustry.

•

2. Households• All energy-related GHG emissions by households, except for emissions related to electricity
use.
3. Transportation• All energy-related GHG emissions by the transportation sector, except for emissions related
to electricity use.
4. Industry• GHG emissions related to power generation, brought about by power use in industry.
• Other energy-related GHG emissions by the industrial sector.
• Non-energy GHG emissions of high GWP (Global Warming Potential) gases in industrial
processes (notably in the cement industry).
5. Services
All energy-related GHG emissions by services and agriculture, except for emissions related
to electricity use.

•

6. Agriculture• Non-energy-related GHG emissions from crop production (mainly methane from paddy
growing).
• Non-energy-related GHG emissions from livestock (notably methane, some nitrous oxide).
7. Waste• Non-energy-related GHG emissions from waste treatment (mainly from landfills: especiallymethane, some nitrous oxide).
All energy-related GHG emissions are encompassed by the first five sectors. Data availability
problems necessitated the inclusion of GHG emissions from electricity use in the sectors
Households and Services in the sector Power. As factors determining GHG emissions fromindustrial processes are similar to the ones determining energy-related industrial GHG
emissions, emissions from industrial processes have been categorised under Industry. The sector
Services in fact encompasses energy-related GHG emissions by services and agriculture, except
for emissions related to electricity use. As services accounts for the lion’s share of theseemissions, we have labelled the sector concerned as Services. The last two sectors - Agriculture
and Waste - account for (the bulk of) non-energy-related GHG emissions.

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Together, the seven sectors distinguished above account for the vast majority of GHGs coveredby the Kyoto Protocol. The main exceptions are GHG emissions due to land use changes andemissions of HFCs, SF6 and PFCs. The major reasons for these exceptions are (1) lack ofavailable, reliable data at the sector and/or national level for a large number of countries and (2)for land use changes: current uncertainty on future arrangements as to whether and, if so, howsinks will be accounted for in the determination of allowable emission levels. Improvement in
the availability of data and future agreements on the role of sinks in the determination ofallowable emission levels may give rise to the introduction of an alternative choice of sectors
and further improvement in the coverage of global GHG emissions. In fact, the flexibility of the
MSC approach lends itself well towards doing so: in principle, land use changes can be readily
included in the MSC framework.

3.3

The setting of global sector emission standards

For each sector, several aspects have been considered in order to establish at the global level
non-binding sector emission standards - expressed in per capita terms - in both a base year, aconvergence year and intermediate target years (see below). These aspects or considerations
include:1. main subsectors or end uses and major sector-related GHGs,
2. considerations at subsector level, including the character of the needs met in association
with the emissions (‘basic needs’ versus ‘non-basic’ needs),
3. main factors explaining variances in sector emission levels among countries,
4. global activity and non-policy-induced decarbonisation trends, and other major driving
factors for emissions at the sector level,
5. typical turnover periods of capital goods of the sector considered, which ‘lock in’ emission
reduction potentials for a certain period,
6. impact of an assumed level of Climate Change policy efforts on decarbonisation trends at
sector level taking into account sector-specific rigidities (such as the ones mentioned underpoint e),7. major allowance factors, i.e. country-specific circumstances resulting in variances of sector
emissions among countries that are virtually impossible to influence by the governments
concerned.
With the exception of item f (see Section 3.5 hereafter), these aspects have been considered inorder to establish global sector emission standards. For the base year (2010), these standards
have been set equal to the world average sector GHG emissions per capita in that year.
Subsequently, an annual mitigation (reduction or limitation) norm per sector has been set expressed in a percentage per year - in order to derive sector emission standards in the years
thereafter, notably in a convergence year (e.g. 2100) and in some intermediate target years (forinstance, 2015, representing the second budget period). Finally, per capita emission standards atthe sector level have been added up to obtain the global per capita emission standard at theaggregated level.6
Countries with emission levels in a certain base year higher than the global per capita total
emission standard (GTES) in that year will be designated as high-emission countries, while
countries with lower emissions than this standard will be called low-emission countries. We
assume that international agreement will be reached that signatory countries to the UNFCCC
exceeding the GTES will have to graduate into the league of countries accepting future emission
mitigation targets. This assumption of convenience can be readily replaced by another‘graduation’ assumption. The graduation issue is further discussed in Section 3.6.

6

A numerical example will be presented in the next chapter.

ECN-C--01-007

15

3.4

The determination of national pre-adjustment emission mitigation targets

The next step in designing a sector-based burden sharing framework concerns the determinationof emission limitation targets for each country in certain target years such as 2015 or 2050 inaccordance with the MSC base model. Starting point for each country is its sector levels of percapita emissions in the base year (2010).7 In the years thereafter, these levels are supposed toconverge to the global (per capita) sector emission standards of the convergence year derived in
the previous Section. Non-binding (per capita) sector emission levels for each country inintermediate target years are obtained by geometric interpolation between the actual national
sector emission levels in the base year and the global sector emission standards of theconvergence year.8 Finally, these non-binding sector emission levels are added up andmultiplied by total population in order to determine national emission mitigation targets for thecountries and years concerned. These commitments can be expressed either in absolute terms i.e. in amounts of emission assignments for a certain budget period - or as a reduction/limitation
rate, i.e. as a percentage by which emissions in a certain budget period has to be reduced/limited
compared to a base year or a previous budget period.

3.5

Adjustment for allowance factors

The framework for negotiating national GHG emission mitigation targets can be fine-tuned byincluding so-called allowance factors. These factors can be defined as country-specificcircumstances resulting in variances of sector emissions among countries that are virtually
impossible to influence by the governments concerned, at least in the short and medium run.
Hence, under certain conditions such allowance factors may provide grounds for justification
and agreement at the international negotiation table to concede certain additional allowances tothe national emission mitigation targets derived in the previous Section in countries that are
faced with less favourable country-specific circumstances.9 Additional allowances may benegotiated to be either temporary - i.e. only for specific target years - or for all target years,
including the convergence year. Allowance factors may impact differently on per capita
emissions for the distinct sectors. Yet, it is proposed to include allowance factors at the national
level so that the impact of the allowance for country-specific emission factors on the total
emission budget becomes fully transparent.
Some examples of possible allowance factors include:• Climate
Due to climate factors and resulting differences in in-doors heating and coolingconditioning, emission levels between countries may vary significantly, notably in the
power, household and other sectors of the economy. These factors may be accounted for by
granting countries with relatively high needs for space conditioning an additional amount ofemission assignments.

7

For Annex-I countries, the sector levels of per capita emissions in the year 2010 are based on the actual sector
emission levels in the year 1990 adjusted by the (national) emission mitigation rates laid down in the Kyoto
Protocol. For non-Annex-I countries, the sector levels of per capita emissions in the year 2010 are based on theactual sector emission levels in the year 1990 adjusted by the projected regional growth rates according to the A1
SRES- scenario of the IPCC.
8
It should be noted that whereas the normative, sector emission standards of the convergence year are, in principle,
the same for each country, the actual sector emission levels in the base year - and, hence, in intermediate target
years - are different for each country (see numerical examples included in Chapter 4).
9
Although, from a negotiation strategy perspective, we have opted to include allowance additions only, thealternative of including allowance deductions as well with a neutral impact on the global emission budget has theadvantage of potentially higher robustness of global emission mitigation objectives. Including only allowance
additions in the MSC framework, implies stronger reliance on feedback iterations after comparing first-roundaggregate results with desired global emission limits.

16

ECN-C--01-007

•Population density
A low population density compared to some world standard will, on average, result in ahigher level of per capita GHG emissions, mainly because of higher efficiency losses in the
power sector, higher transport needs, and higher energy needs in the household sector (forinstance, to warm houses in scarcely populated areas), if differences in other circumstances
would be negligible. Therefore, it seems justified to assign an extra amount of GHG
emissions to scarcely populated countries.

•

Agriculture
Some countries are highly dependent on rice cropping in order to meet the basic food needsof their population. Rice cropping by means of irrigation or natural flooding, however, isthe most important source of GHG emissions - notably of CH4 - in the food crop sector.
Hence, rice cropping may be included as an allowance factor for the countries concerned,
according to the area of their irrigated paddy fields. To a certain extent, animal husbandry
also provides basic food needs. An alternative way of making allowance for the basic needs
character of certain products of the agricultural sector and the required non-energy GHG
emissions to produce these products is to introduce relatively lenient GHG emission
standards for agriculture.

•

Transition economies
Some countries are facing specific problematic circumstances because their economy is in astate of transition, either from a centrally planned to a market-led economy or from arapidly developing, industrialising state to a more developed and moderately growing
services economy. These circumstances may justify temporary, additional amounts ofemission assignments during the transition period. The same - evidently also on a temporary
basis - might be considered for fossil-fuel exporting countries, i.e. countries that face thedifficult transition towards a more diversified economic base with reduced dependence on
fossil fuel exports and use. However, this kind of compensation would only be useful if oil
exporting countries would accept an emission limitation commitment. Moreover, as recently
recommended by a joint study of ECN and Clingendael, it could also be considered tocompensate oil exporting countries by creating a special fund managed by the IMF andWorld Bank (Van der Linden et al. 1999). Resources on behalf of this fund can be generated
by raising taxes on oil consumption of Annex I countries or by providing other financial
means to this fund. These resources can be used as balance-of-payments support (IMF) or to
restructure oil exporting economies during their transition period.

•

Renewable energy resources
Some countries are poorly endowed with renewable energy resources (hydro power
potential, wind resources, solar energy), whereas other countries possess vast resources ofrenewable energy. These differences in renewable energy resources - resulting in large
variances in GHG emissions of power generation - may justify country-specific additional
allowances for the former renewable-energy-recources-poor group of countries.

In addition, other allowance factors may be considered. For instance, the above-average
presence of export-oriented industries is sometimes suggested as an allowance factor as
countries concerned are faced by additional amounts of GHG emissions. However, as theflexible mechanisms of the Kyoto Protocol may enable the Annex I countries to meet theirdomestic emission commitments by means of foreign transactions, it seems more obvious thatexport-oriented countries use part of their foreign revenues to obtain additional amounts ofemission assignments by means of the flexible instruments (Emissions Trading, Joint
Implementation and/or the Clean Development Mechanism). This way, relative (world) pricesof high-carbon-intensity products will increase (with respect to low-carbon-intensity goods). As
the world demand for high-carbon-intensive products might be negatively affected by thisinternalisation of cost to the global environment without significantly affecting the incidence ofcomparative advantages in the manufacturing of these products, this is an efficient way of
ECN-C--01-007

17

including environmental concerns in the world economy.10 In conclusion, whether an allowancefactor is justified depends not only on the incidence of country-specific circumstances but also
on the institutional setting of granting and trading emission assignments.

3.6

Graduation threshold and adjustment period

In Section 3.3, the assumption has been set out that so-called low-emission countries will be
exempted from taking on emission mitigation commitments. In the MSC framework, it isassumed that such countries will eventually graduate towards taking on emission mitigationcommitments when exceeding a certain per capita emission threshold. This graduationthreshold indicates the - to be negotiated - per capita realised emission level at which nonAnnex-I countries, signatory to the FCCC, will have to assume mitigation commitments. In the
numerical example to be explained in the next chapter, the graduation threshold will be put at
the GTES level (global total emission standard on a per capita basis, already explained in
Section 3.3).
Granted five-year budget periods with reference years 2010, 2015, 2020, etc. as mid-years, we
may assume that for each country that is signatory to the FCCC realised emissions in a certain
budget period will be determined and verified ex post by the following reference year at thelatest. Hence, the national emissions in the first budget period, 2008-2012, are assumed to be
determined and verified by the year 2015 at the latest.
Now assume a certain non-Annex-I country has generated average annual (per capita) emissions
during the first budget period exceeding the graduation threshold. Assuming this country will be
notified to take on emission mitigation commitments in year 2015, the earliest budget period inwhich this country can conceivably take on emission limitation commitments is the third budget
period, 2018-2023. Yet it is conceivable that a longer adjustment period will be agreed upon,e.g. an additional five year adjustment period. This is depicted in Figure 3.1.
In conclusion, in the MSC approach the adjustment period after which a signatory non-Annex I
country exceeding the graduation threshold, will have to adopt the targeted emission mitigation
is an additional flexible parameter which value is to be determined by international negotiations.

1

Budget period

Year

2008

2010

2

2013

2015

Verification
period

3

2018

2020

4

2023

2025

2028

Adjustment
periodFigure 3.1 Example of an adjustment period, including verification and notification, of 15 years

10This assumes a high extent of comprehensiveness of the mitigation regime and, consequently, no major ‘carbon
leakage’ to non-Annex I countries.

18

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3.7

Summary

The MSC framework can be summarised by means of a ‘flow chart’, presented in Figure 3.2. Inorder to make the chart not overly complicated, this chart pertains to the so-called high-emission
countries, presumably having committed themselves to the MSC mitigation regime. Figure 3.2.
gives an outline of most steps to be taken and depicts the iterative character of the MSC
approach.
Let us explain the flow chart in Figure 3.2. The flow chart assumes that the determination of thesectors to be included (stage 1 explained in Section 3.2) has already taken place. Steps 1-6 will
have to be taken in stage 2, the setting of global sector emission standards. The following steps
have to be taken:• establish (total) sector emissions at national level in the base year for all countries (step 1),• establish sector emissions at the global level in the base year (step 2),• establish per capita sector emissions at the global level in the base year (step 3),• set the per capita sector emission limitation rates that determine non-binding sector
emission standards at the global level given projected sectoral emission trends at anassumed global level of Climate Change mitigation policy efforts (step 4),• set the convergence year and the per capita sector emission standards in the convergenceyear (step 5).
Stage 3, the determination of national emission mitigation targets, involves the following steps:• determine the national per capita sector emissions in the base year (step 6),• determine the implied per capita sector emission limitation rates at the national level (step7),• determine the (non-binding) per capita sector emission standards in the target year at thenational level (step 8),• aggregation of these per capita sector emission standards and multiplication by the projected
population number in the target year yield the proposed pre-adjustment national
assignments in the target year (step 9).
Stage 4, the inclusion of allowance factors, runs as follows:• determine the allowance factors to be included, and for each factor its indicator, the country
indicator values of the allowance indicators concerned and the rule to determine the level ofadditional allowances per country (step 10),• determine the post-adjustment national assignments in the target year (step 11).
For assessing the Climate Change impact and impact on the national economies further steps
need to be made:• based on the target national assignments (for countries with mitigation commitments) andbaseline emission projections (for countries without commitments), target global emissions
can be obtained by aggregation (step 12),• results generated by steps 11 and 12 have to be weighted on their potential impact on
Climate Change (e.g. by projecting atmospheric carbon-equivalent concentrations in ppm)
and macroeconomic impacts at the national level (‘Are the national mitigation cost burdensand other macroeconomic impacts ‘politically feasible?’).
If the outcomes of a certain run with the MSC framework model are not considered satisfactoryfrom the Climate Change perspective (or, alternatively, from the perspective of the expectedeconomic impacts), negotiators can iteratively define new input parameter values considered
fair and mutually consistent. The iterations are to be continued until results are obtained on
which broad-based agreement on a comprehensive set of national mitigation targets can bereached. Notably the following negotiation parameters may be reconsidered for plugging inalternative values:• the convergence year,
ECN-C--01-007

19

•

per capita sector emission mitigation rates at global level (asuming more/less Climate
Change mitigation policy efforts),
allowance factors: deletion or inclusion of more factors, the rules for determining allowance
additions for each factor e.g. the maximum percentage rate of additional allowance over the
MSC base model allowable emissions,the graduation threshold.
the adjustment period towards graduation,
the accounting rule for possible surplus emission credits of low-emission countries.

•
•
•
•

The list above shows the main negotiation parameters but is far from exhaustive. Yet it bringsout the great flexibility of the MSC framework. The next chapter presents a numerical example
that may provide further insight into the MSC approach.

Targeted atmosphericconcentrations inTarget Year

Atmosphere23Sectoremissions in
Base Year

P.C. sector
emissions in
Base Year

Check on consistency
and cost implications +feed back

13

5

P.C. sector emission
standards inConvergence Year
4

12

Target global
emissions inTarget Year

P.C. sector
emission limitation
rates

World

10

Countries
1

Sectoremissions in
Base Year

6

7

P.C. sector
emissions in
Base Year

Implied P.C.
sector emissions
limitation rates

11

Allowance
factors

Post-adjustment
national assignments
in Target Year8

Non-binding P.C. sector
emission standards inTarget Year

9

Pre-adjustment
national assignments
in Target Year

Note: P.C. = Per Capita

Figure 3.2 A flow chart of the main steps of feedback loops in the Multi-Sector Convergenceapproach

20

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4.

SOME NUMERICAL ILLUSTRATIONS11

4.1

Introduction

This chapter will present some numerical illustrations of the Multi-Sector Convergenceframework for negotiating national GHG mitigation targets outlined in the previous chapter. 12
This approach will particularly be illustrated for a selection of nine countries and regions
introduced in Section 4.2. Subsequently, Section 4.3 will provide data on GHG emissions ofthese countries/regions in the base year 1990. The setting of sector and national emission
standards in the convergence year will be illustrated in Section 4.4, while Section 4.5 will show
the determination of national emission limitation targets. The introduction of allowance factors
is clarified in Section 4.6. Finally, Section 4.7 will pay specific attention to the discussion
whether and how non-Annex I countries could participate in the GHG emission mitigation
framework.

4.2

Selection of exemplary countries

As noted above, the MSC approach will be illustrated for a selected sample of countries andregions.13 These countries/regions can be considered to represent a wide variety of interests andconcerns on the world climate change negotiation table. The countries, in ascending order of percapita GNP in 1998, are:• Tanzania: a low-income African developing country with relatively small endowments offossil energy resources.
• India: the world’s second most populous country; a low-income Asian developing country
with relatively small endowments of fossil energy resources with the notable exception ofcoal.
• China: the world’s most populous country, a low-income Asian developing country with aremarkably fast growing economy over the last two decades but relatively poorly endowedwith fossil energy resources with the notable exception of coal.
• Iran: a middle-income Asian developing country with large endowments of fossil fuelenergy resources; member of OPEC.
• Russia: the country with the largest economy in transition, a middle-income country
endowed with large fossil resources but presently coping with the consequences of an
economy in transition and a declining population.
• Brazil: the largest Latin-American country, a middle-income country with moderate fossil
fuel endowments.
• EU-15: the most populous developed-region party of the FCCC.
• USA: the country with the world’s largest economy in terms of total GNP.
• Japan: the richest country - in per capita terms - among the world’s largest economies.

11

An interactive Multi-Sector Convergence tool will become available soon: Internet website
http://www.ecn.nl/unit_bs/kyoto/burden/main.html
12
Data regarding GHG emissions in absolute terms presented in this chapter have been compiled with great care. Yet
these data ought to be treated with caution as some differences with not completely consistent officially publisheddata. Nevertheless, the data used are deemed to be reliable enough for application of the MSC framework on thebasis of a set of assumptions on the input parameter values. The upshot will be sets of suggested national emission
mitigation targets, either in relative terms or as a percentage of emissions in a certain base year.
13
It should be noted that the sample of selected countries/regions could be extended to any country or region forwhich the necessary data are available. The project has developed a database to apply the burden sharing
framework to more than 50 countries and 3 regions (EU, Annex I and non-Annex I region).

ECN-C--01-007

21

Table 4.1 presents some data regarding population, GNP and GHG emissions of the selected
countries. It shows that these countries account for 58 percent of world population (1997), 79
percent of world GNP (1998) and 75 percent of global GHG emissions in the year 1990.
Table 4.1 Population, GNP and GHG emission data of selected countries
Population
GNP
GNP/cap GHG emission GHG/cap
Index
Index
[million] [billion US$] [US$][MtCO2eq.]a [kgCO2eq.]a [GNP/cap] [GHG/cap]
1997
1998
1998
1990
1990
1998
1990
Tanzania
India
China
Iran
RussiaBrazil
EU-15
USA
Japan
Total
selection
World
Selection as% of world

a)

31
962
1227
61
147
164
375
268
126
3349

7
421
929
110
338
758
8280
7923
4090
22856

210
430
750
1770
2300
4570
22010
29340
32380
6738

21
1481
3497
251
2960
509
4175
5903
1175
19949

813
1741
3027
4236
20163
3437
11431
23230
9511
6375

4
9
15
36
47
93
450
600
662
138

16
35
60
84
401
68
226
462
190
127

5820

28862

4890

26552

5027

100

100

57.5

79.2

75.1

Excluding estimated emissions from land use changes.

4.3

Sector and national GHG emissions in the base year

This section will provide some data of GHG emissions at the sector and national level, notablyof the selected countries introduced in the previous section. As noted in Chapter 3, these data
include the three major GHGs covered by the Kyoto Protocol (CO2, CH4 and N2O) but exclude
the three minor GHGs (HFCs, SF6 and PFCs) as well as emissions from land use changes(‘sinks’).14
First of all, Table 4.2 presents an overview of GHG emissions in the base year 1990 by sector
and greenhouse gas. Of all three major GHGs, CO2 accounts - on average - for 81 percent of
global emissions in 1990, whereas the shares of CH4 and N2O amount to 15 and 4 percent,respectively. At the national level, however, the distribution of GHG emissions may show quite
different patterns as illustrated in Figure 4.1 for Tanzania and Japan.
At the sector level, global GHG emissions in 1990 can be largely ascribed to industry (36.5
percent), followed by power (18.2 percent), agriculture (15.7 percent) and transportation (13.5
percent). Again, this distribution of GHG emissions by sector shows significant differences
between countries. For instance, GHG emissions in Japan can be mainly attributed to industry(48.2 percent) and hardly to agriculture (only 1.8 percent), whereas in Tanzania the comparative
shares of these sectors are quite the opposite, i.e. 3.0 and 77.3 percent respectively.
The bottom-line of Table 4.2 presents data on total GHG emissions. In 1990, total and average
global emissions amounted to 26,552 MtCO2eq and 5.0 tonne CO2 eq. per capita, respectively(see also Table 4.1). As expected, per capita emission levels show large differences among
countries, depending - to some degree - on their level of GNP per capita. For instance, per capita
emissions in the USA are about 32 times higher than in Tanzania. The major exceptions to therelationship between GNP and GHG emissions are Russia (i.e. relatively high GHG emissions)as well as Brazil and Japan (i.e. relatively low GHG emissions, see Table 4.1 - last two columns- and Figure 4.2).
14

In 1990, the three major GHGs accounted for 99 percent of all global emissions - excluding sinks - covered by the
Kyoto Protocol. In 2010, the share of these gases will be some 98 percent (Ybema et al. 1999; Sijm et al., 2000).

22

ECN-C--01-007

Table 4.2 Emissions in selected countries by sector and GHG (1990)a
Unit
CO2
CH4
N2O
Total GHG

% of total% of total% of total
MtCO2eq

Tanzania India China Iran Russia Brazil EU-15 USA Japan World
9.3
69.5
21.1
21

42.5
69.1 76.1
79.3
49.1
25.5 20.0
18.3
8.4
5.4 3.9
2.31481 3497 251 2990

45.1
79.9
83.5 95.7
73.6
46.2
11.1
10.6
2.8
22.4
8.6
9.0
6.0
1.5
4.0
509
4175 5903 1175 26552

4.4
15.1
10.8 13.7
30.4
1.0
20.1
23.2 15.8
18.2
3.0
23.7
49.6 22.9
45.6
24.6
32.9
29.8 48.2
36.5
3.5
5.2
3.8 8.0
5.7
14.8
17.1
26.0 18.0
13.5
1.7
2.9
10.4 4.2
3.1
3.1
10.1
5.4
6.1
6.2
0.0
0.1
4.2 33.7
8.2
2.6
6.3
4.6
8.3
5.9
77.3
47.3
18.8 11.2
5.6
48.2
9.6
7.3
1.8
15.7
10.1
5.8
2.3 6.3
1.4
5.7
4.0
3.7
1.9
3.9
21
1481 3497 251 2990
509
4175 5903 1175 26552
a)Including CO2, CH4 and N2O but excluding estimated emissions from land use changes.

Power
Industry
Transport
Households
Services
Agriculture
Waste
Total GHG

% of total% of total% of total% of total% of total% of total% of total
MtCO2eqJapan

Tanzania

World

2%
9%

21%

4%

3%
22%

CO2
CH4
N2O

74%
95%

70%

Figure 4.1 Distribution of GHG emissions by gas

Table 4.3 Assumptions on deriving the world GHG mitigation rate per sector (in annual % ofchange)Assumed future per Assumed future baseline Assumed climate change policy- Total reduction orcapita activity trend decarbonisation trend
induced additional reduction
mitigation rate a
Power
1.5
Industry
1.0
Transport
1.5Households
0.8Services
1.0
Agriculture
0.2
Waste
1.0
a)
Rounded to nearest decimal.

ECN-C--01-007

0.8
0.4
0.2
0.4
0.4
0.1
0.8

1.3
1.3
1.3
1.3
1.3
0.1
1.3

-0.6
-0.7
0.0
-0.9
-0.7
0.0
-1.1

23

GHG per capita [kgs]
25000
20000
15000
10000
5000
0
Tanzania

India

China

Iran

RussiaBrazil

EU-15

USA

Japan

World

Figure 4.2 GHG emissions per capita in selected countries (1990) [kgs]Table 4.4 Derivation of global per capita emission standards in the convergence year a
SectorBase year GHG/cap 2010
BY
[kgCO2eq]
GSESbyPower
Industry
Transport
Households
Services
Agriculture
Waste
Total

a)

b)

2010
2010
2010
2010
2010
2010
2010
2010

1036
2081
772
354
337
895
224
5700

Mitigation norm[% per annum]
GSEMN b

Convergence[year]
CY

GHG/cap CY[kgCO2eq]
GSEScy

-0,6
-0,9
0,0
-0,7
-0,7
0,0
-1,1

2100
2100
2100
2100
2100
2100
2100
2100

591
915
758
186
177
895
82
3606

Including CO2, CH4 and N2O but excluding estimated emissions from land use changes.
Rounded to nearest decimal (See Table 4.3).

4.4

Emissions standards in the convergence year

A possible approach for the determination of global per capita emission standards at the sector
and aggregated level is illustrated in Tables 4.3 and 4.4. Table 4.3 shows the derivation of
global sector emission mitigation norms. These norms indicate the normative % change per year
in global sector emissions per capita, presupposing a comprehensive global emission mitigation
policy framework. For power generation the applied norm is a per capita global emission
reduction of -0.6% per year. This norm is based on the following assumptions on future
developments:• power generation per capita is assumed to increase by 1.5% per year,• the quantity of GHG emitted per kWh of power produced is assumed to decrease by 0.8%
per year,• the international climate change negotiations and resulting policies are assumed to lead to afurther reduction in carbon emissions by 1.3% per year.
These figures serve to illustrate the MSC methodology. In-depth analysis of recent sector trends,
consultations with sector representatives and international negotiations should improve therealistic value of the underlying assumptions.
Based on the (annual) global sector emission mitigation norms, global sector emission standards(GSESs) for the assumed convergence year (2100) can be derived: see Table 4.4.

24

ECN-C--01-007

The GSESs depend on the following parameters:• The base year (BY). In the example included in Table 4.4, the base year is set at 2010. If
desired, however, another year might be chosen.
• The global per capita sector emission standards in the base year (GSESby). In Table 4.4,
these standards have been set equal to the projected world average GHG emissions at thesector/national level in 2010. However, they could be fixed at the average level of any
region or groups of countries, for instance the average emission levels of the EU or all
Annex I countries.
• The convergence year (CY). This parameter refers to the year in which countries with actual
national emission levels above the convergence national emission standard should havebrought down these levels to this standard. In Table 4.4, the convergence year is set at 2100.
However, it could also be 2050 or any other year in the (far) future. Moreover, although inthe present example the convergence year is set the same for each sector and country, it
could be varied by sector/country.
• The global per capita sector emission mitigation norm (GSEMN). This variable concerns
the annual mitigation rate of the emission standards in the years following the base year.
The GSEMN can not only vary by sector but also by variant considered within the MultiSector Convergence framework.
Together, these four parameters determine the global per capita emission standards at sector andaggregated levels in the convergence year (GSEScy) as shown in the last column of Table 4.4. In
the convergence year, the global sector emission standards are assumed to hold at the national
level as well. In order to obtain the global total emission standard in the convergence year in percapita terms (GTEScy) - which applies to all countries - the GSEScy sector standards should be
added up.

4.5

National pre-adjustment emission mitigation targets

Actual emissions levels of the selected sample of countries in the year 1990 have been recorded
in Table 4.2, whereas normative emissions standards for all countries in the convergence year
2100 have been derived in Table 4.4. As explained in Section 3.4, non-binding sector emission
standards for each country in intermediate years - for instance, 2015, representing the second
budget period - are obtained by geometric interpolation between the actual sector emission
levels in the base year and the global sector emission standards of the convergence year. These
non-binding sector emission standards are multiplied by total population and, subsequently,
added up in order to determine national emission mitigation targets for the countries and years
concerned.
Results of this procedure assuming immediate participation of low-emission countries (i.e.
making no allowance for exemption of low-emission countries) are summarised in Table 4.5 forthe selected sample of countries in the years 2010, 2015, 2020, 2050 and 2100. This tableshows, for instance, that Tanzania is allowed to increase its total GHG emissions from 21 Mt in1990 to 67 Mt in 2010 and even to 397 Mt in 2100. This significant increase is due to the
combination of two effects, i.e. (i) a substantial rise in allowable emissions per capita - up to theworld average standards - is multiplied by (ii) a rapidly growing population. On the other hand,
Russia is obliged to reduce its total GHG emissions from almost 3,000 Mt in 1990 to some 350
Mt in 2100 as a result of (I) a substantial lower emission assignment per capita in 2100,
combined by (II) a steadily declining population.
In order to enhance the comparability of national emission mitigation targets between theselected countries and budget periods, the lower part of Table 4.5 expresses these targets interms of reduction/limitation percentages. According to the multi-sector convergence approach,the rates of emission reductions regarding the second budget period are quite substantial,
varying from +13.9 percent for Tanzania to -12.7 percent for Russia. In cumulative terms,
Russia has to reduce its GHG emissions by 89 percent over the years 2010-2100 compared to 52
ECN-C--01-007

25

percent for Japan. On the other hand, non-Annex I countries such as Tanzania or India areallowed to increase their GHG emissions over the period 2010-2100 by 495 and 55 percent,respectively.
Table 4.5 Pre-adjustment emission mitigation targets for selected countries: immediate
participation case (2015-2100)a
Unit

Year/period Tanzania

India China

Iran

Russia Brazil EU-15 USA Japan World

GHG/cap[kgCO2eq/cap]

1990
2010
2015
2020
2050
2100

813
1514
1520
1530
1737
3606

1741
3263
3240
3220
3181
3606

3027
6504
6216
5947
4689
3606

4236
8214
7651
7154
5129
3606

20163
21198
18890
16857
8824
3606

3437 11431 23230
8627 10259 18368
8109 9599 16680
7630 8989 15156
5431 6177 8633
3606 3606 3606

9511
8693
8155
7657
5383
3606

Total GHG
[MtCO2eq]

1990
2010
2015
2020
2050
2100

21
67
76
86
152
397

1481
3760
3926
4095
4923
5839

3497
8878
8759
8616
7026
4897

251
807
838
857
804
619

2990
2990
2610
2272
1032
346

509
1637
1619
1591
1369
986

4175
3852
3588
3340
2054
989

5903
5490
5185
4884
3090
1277

1175 26552
1104 39275
1026 39301
948 39372
731 38950
536 35908

1990-20102010-2015
2015-2020

221.8
13.9
13.2

0.0 221.8
-12.7
-1.1
-13.0
-1.7

-7.7
-6.8
-6.9

-7.0
-5.6
-5.8

-6.0
-7.1
-7.6

47.9
0.1
0.2

2010-2050
128.7
30.9 -20.9-0.4-65.5 -16.4 -46.7
2010-2100
495.3
55.3 -44.8 -23.3-88.4 -39.8 -74.5
a)Including CO2. CH4 and N2O but excluding estimated emissions from land use changes.

-43.7
-76.7

-33.8
-51.5

-0.8
-8.6

Change[%]153.8 153.8 221.8
4.4
-1.3
3.8
4.3
-1.6
2.3

5027
5700
5394
5132
4173
3606

Table 4.6 presents emission limitation targets for the full sample of countries and regions
included in the database of the present research project on burden sharing. Besides 17 nonAnnex I countries and three regional groupings of countries, it covers all Annex I countries of
the UNFCCC.15 The average reduction rate agreed by the Annex I countries as part of the Kyoto
Protocol is about five percent for the first budget period, whereas the comparative figure
according to the multi-sector convergence approach is projected to be about eight percent for thesecond and third budget periods.

4.6

The inclusion of allowance factors

4.6.1 Introduction
As discussed in Section 3.5, the MSC framework for negotiating global rules for national GHG
emission mitigation targets can be fine-tuned by including country-specific allowance factors.
This section will provide some examples of operational rules and/or numerical illustrations ofsuch allowance factors. It should be stressed, that these examples are largely presented forillustrative purposes only and that they can be changed - i.e. adjusted, elaborated, removed or
extended by other examples - during the Climate Change negotiation process on the issue ofemission mitigation targets. Additional research is needed to further elaborate upon theexamples of allowance factors suggested below or to develop new ones.

15

As explained in footnote 1, all countries listed in Annex I of the UNFCCC have accepted an emission limitation
target at the Kyoto Conference of 1997, except Belarus and Turkey. Hence, the latter two countries are not listedon the so-called ‘Annex B list’ of the Kyoto Protocol.

26

ECN-C--01-007

Table 4.6 National pre-adjustment emission mitigation targets for the full database ofcountries: immediate participation case [%]First(2008-12)

Per budget perioda
Second(2013-17)

Cumulativeb
Third(2018-22)

2010-2050

2010-2100

Australia
8.0
-5.2
-5.3
-41.5
-76.1
Austria
-13.0
-5.8
-6.0
-41.4
-65.5
Belarus
-19.0
-7.4
-7.7
-47.8
-75.1
Belgium
-7.5
-7.8
-7.7
-50.6
-78.5
Bulgaria
-8.0
-11.0
-10.8
-58.4
-82.7
Canada
-6.0
-5.3
-5.4
-41.7
-74.9
Czech Republic
-8.0
-11.5
-11.7
-62.9
-85.5
Denmark
-21.0
-6.4
-6.2
-44.9
-74.7
Estonia
-8.0
-15.9
-16.0
-72.7
-91.2
Finland
0.0
-7.6
-7.6
-51.6
-80.3
France
0.0
-5.2
-5.3
-40.9
-70.2
Germany
-21.0
-7.6
-7.8
-50.3
-77.5
Greece
25.0
-8.5
-8.7
-52.1
-79.4
Hungary
-6.0
-8.7
-8.6
-49.1
-71.9
Iceland
10.0
-4.3
-3.9
-40.6
-67.0
Ireland
13.0
-7.8
-8.4
-55.1
-84.2
Italy
-6.5
-7.6
-7.9
-46.8
-72.3
Japan
-6.0
-7.1
-7.6
-33.8
-51.5
Latvia
-8.0
-9.7
-10.0
-56.6
-83.0
Lithuania
-8.0
-8.8
-8.9
-53.9
-80.2
Luxembourg
28.0
-13.8
-13.9
-71.6
-92.7
Netherlands
-6.0
-7.2
-7.2
-49.1
-77.8
New Zealand
0.0
-5.1
-4.9
-38.9
-70.1
Norway
1.0
-6.4
-6.3
-47.2
-73.4
Poland
-6.0
-6.6
-6.9
-47.7
-75.0
Portugal
23.9
-7.0
-6.9
-44.4
-70.3
Romania
-8.0
-7.7
-8.0
-48.5
-73.4
Russia
0.0
-12.7
-13.0
-65.5
-88.4
Slovakia
-8.0
-7.3
-7.6
-50.3
-77.9
Spain
15.0
-6.4
-6.8
-43.9
-71.5
Sweden
4.0
-3.5
-3.3
-34.8
-64.4
Switzerland
-8.0
-5.4
-5.3
-38.2
-58.9
Turkey
54.0
3.3
2.8
20.9
24.8
Ukraine
0.0
-11.8
-12.0
-62.7
-86.8
United Kingdom
-12.5
-6.2
-6.1
-45.3
-74.7
United States
-7.0
-5.6
-5.8
-43.7
-76.7
Bangladesh
153.8
4.8
3.5
34.6
143.9
Bolivia
221.8
4.8
4.0
13.4
4.9
Brazil
221.8
-1.1
-1.7
-16.4
-39.8
China
153.8
-1.3
-1.6
-20.9
-44.8
Egypt
221.8
3.9
3.8
36.2
59.5
India
153.8
4.4
4.3
30.9
55.3
Indonesia
153.8
4.7
4.3
34.6
57.0
Kazakhstan
-19.4
-4.4
-4.9
-31.6
-54.8
Kuwait
221.8
-10.0
-10.7
-64.1
-89.6
Mexico
221.8
-2.0
-2.6
-23.6
-57.3
Iran
221.8
3.8
2.3
-0.4
-23.3
Nigeria
221.8
17.3
16.4
171.9
490.6
Saudi Arabia
221.8
1.2
0.3
-27.6
-66.4
South Africa
221.8
-2.2
-3.0
-26.1
-60.7
South Korea
153.8
-8.7
-8.4
-50.4
-81.1
Tanzania
221.8
13.9
13.2
128.7
495.3
Yemen
221.8
19.4
18.7
151.6
341.2
Total
47.9
-3.2
-3.2
-24.3
-40.1
EU-15
-7.7
-6.8
-6.9
-46.7
-74.5
Annex 1
-5.1
-7.8
-7.9
-49.2
-77.1
Non-Annex 1
152.6
5.9
5.4
35.0
42.2
World
47.9
0.1
0.2
-0.8
-8.6
a)
Percentage reduction of GHG emissions in the period considered compared to the previous period. For the firstbudget period, this reduction is compared to the emission level in the base year 1990.
b)
Percentage reduction of GHG emissions in the last year mentioned compared to the year 2010.

ECN-C--01-007

27

4.6.2 Climate
Differences in climate conditions may result in differences in GHG emissions per capita.
Climate differences can be expressed by the number of heating degree-days, defined as thenumber of days that require indoor heating multiplied by the number of heating degrees
concerned.16 Differences in heating degree-days among countries may allow for an additionalamount of GHG emissions. Countries with an above-average number of degree-days would be
eligible for a certain additional emission allowance. Once reliable data will become available,
the index to be used may relate to their average number of heating degree-days. An index Iclimate
may be designed with a base value 100 for countries with average country-specific emission
conditions: the world average number of heating degree-days and values below 100 for
countries with less favourable country-specific conditions with respect to the allowance factor
Climate. This may be done in the following way:
Given the variables
EMBED: index base value of allowance factor ‘climate’
Iclimate,b
HDDn: annual number of heating degree-days for country n: average annual number of heating degree-days for all countries concerned
HDDavaclimate,n: additional allowance regarding ‘climate’ for country n, in % of preadjustment emission allowance: maximum additional allowance regarding ‘climate’mclimate
Aclimate,n: additional allowance regarding ‘climate’ for country n, in MtCO2 eq.

Ε pan: pre-adjustment emission allowance for country n in per capita terms (tCO2 eq.)Pn

: population of country n (millions),

the additional allowance for country n regarding allowance factor ‘climate’ can be derived byapplication of the following rules:
Iclimate,b= 100

Iclimate,n= (HDDav/ HDDn) x 100

aclimate,n= (1 - Iclimate,n / 100) x mclimate , if Iclimate,n < 100=0otherwise

Aclimate,n= aclimate,n x Ε pan x Pn

A major problem to put into operation the rules stated above is lack of data on the number ofheating degree-days for a large number of countries. This problem can be relieved by restricting
the allowance factor concerned to only those countries which have accepted an official
commitment to limit their GHG emissions (i.e. the Annex I countries). A fictive, illustrative
example of heating degree-days as an allowance factor is presented in Table 4.7. It shows, forinstance, that country D has a number of 4000 heating degree-days a year. Based on a maximum
allowance factor of 10% (in terms of the pre-adjustment total emission allowance) and using theformulas expressed above, this results in a total additional amount of emission assignments of
0.7 MtCO2 eq. for country D.

16

A similar rule can be designed for cooling degree-days (or, alternatively, a rule for a combination of heating andcooling degree-days).

28

ECN-C--01-007

Table 4.7 Fictive example of heating degree-days as an emission allowance factor
Iclimate,naclimate,nPn
Country
HDDn
pa

Ε

A
B
C
D
E

1000
2000
3000
4000
5000

300
150
100
75
60

[%]a)
0.0
0.0
0.0
2.5
4.0

Aclimate,nn[tCO2eq]
5.02
7.01
9.00
11.0
8.0

[million]
15
10
38
22
53

[MtCO2eq]
0.0
0.0
0.0
6.1
17.0

a)mclimate has been set at 10%.

Another problem is that the concepts of (average) heating degree days and cooling degree days
are less meaningful for countries with fast differences in climate within the country. For
establishing adjustments for allowance factors for very large countries covering e.g. widelydifferent climate zones, it might be considered to determine these adjustments in per capita
terms at appropriate sub-national/regional levels using population weights for aggregation. Thismight especially hold for giant countries such as Russia, China or the US (with even noncontagious regions such as Alaska).

4.6.3 Population density
Differences in population density among countries and resulting differences in GHG emissions
can be accounted for in a similar vein by including an allowance factor ‘population density’ in asimilar way as the allowance factor ‘climate’. The index Ipopdens,n for country n can be obtainedby taking the ratio of population density in country n to the mean population density in the
countries considered and multiplying by 100. A similar approach as with allowance factor‘climate’ can then be pursued.
Given that
Ipopdens,nIpopdens,b
PDn
PDav

apopdens,nindex value of allowance factor ‘population density’ for country nindex base value of allowance factor ‘population density’
population density for country n (#inhabitants/km2)
average population density for all countries concerned (#inhabitants/km2)
additional allowance regarding ‘population density’ for country n (in % of preadjustment emission allowance): maximum additional allowance regarding ‘population density’: additional allowance regarding ‘population density’ for country n (in MtCO2eq.)Ε pan: pre-adjustment emission allowance for country n in per capita terms (tCO2eq.)

Pn: population of country n (millions),

a popdens,,nmpopdens

:
:
:
:
:

the additional allowance for country n regarding allowance factor ‘population density’ can bederived by application of the following rules:
Ipopdens,b = 100
Ipopdens,n = (PDn/ PDav) x 100
apopdens,n = (1 - Ipopdens,,n / 100) x mpopdens, if Ipopdens,n < 100=0otherwise
Apopdens,n = apopdens,n x Epan x Pn

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29

A numerical example of population density as an allowance factor is presented in Table 4.8. It is
assumed that this allowance factor applies only to countries with population densities below
world average.
Table 4.8 Example of population density as an emission allowance factor
Ipopdens,napopdens,nPnApopdens, nCountry
PDn
E pan
a)

A
B
C
D
E

30
300
10
40
70

60
600
20
80
140

[%]b)
3.2
0.0
6.4
1.6
0.0

[tCO2eq]
5.0
7.0
9.0
11.0
8.0

[millions]
15
10
38
22
53

[MtCO2eq]
2.4
0.0
21.9
3.9
0.0

a)

Taking as base value the average world population density in the year considered, set in this example
at 50 inhabitants/km2.
b) mpopdens has been set at 8%.

4.6.4 Transition economies
It is hard to formulate a general rule - resulting in a certain allowance factor - that applies to all
economies in a state of transition, either from a communist, centralised state to a capitalist,
market-led economy or from a rapidly developing, industrialising state to a more developed andmoderately growing services economy. However, some suggestions can be made. For instance,
countries in economic transition with GHG emission above the world average emission standard
may be granted a grace or exemption period during which GHG emissions are limited to acertain specified level, followed by an adjusted abatement regime in the years thereafter. These
adjusted stipulations depend on both country-specific circumstances and the outcome ofpolitical negotiations during the process of allocating emission limitation targets.

4.6.5 Renewable energy resources
The share of renewables in total energy supply might be taken as a first crude point of departurefor developing a suitable index for the economic potential of renewable energy resources of acountry. In principle, this information is readily available. ECN has developed a more
appropriate methodology for determining an indicator for renewable energy potential of acountry.17 This methodology is presently being applied to the EU member-countries (REBUS
project) and to China.

4.7

The participation of non-Annex I countries

A major point of discussion is whether and how non-Annex I countries should participate in theburden sharing approach outlined above. The present, post-Kyoto situation is that non-Annex I
countries are not subject to an official commitment to limit their GHG emissions. However,they are involved in international climate policies to control the greenhouse effect by means of
the Clean Development Mechanism (CDM). The main objectives of this mechanism are (a) to
encourage the sustainable development of non-Annex I countries by means of institutional
capacity building and technology transfers, and (b) to enable Annex I countries to meet part oftheir Kyoto commitments cost-effectively by means of abatement projects in non-Annex I
countries.

17

Reference is made to Schaeffer et al. (1999) for a first introduction.

30

ECN-C--01-007

Although the specific guidelines, rules and procedures of CDM still have to be defined byongoing policy negotiations as part of the annual Conference of the Parties (CoP), the postKyoto situation offers the following advantages:18• It encourages the sustainable development of all interested non-Annex I countries as it
implies a transfer from Annex I to non-Annex I countries of investment funds, knowledge
and technologies regarding GHG mitigation.
• It offers net gains to non-Annex I countries by selling CDM emission credits to Annex I
countries.
• It encourages particularly the participation in international GHG mitigation efforts of those
non-Annex I countries that possess a large abatement potential at relatively low costs (suchas China or India).
• It contributes to mitigating GHG emissions at low costs and, hence, to accepting more
ambitious, higher emission limitation targets by Annex I countries.
• It does not require a reliable system of monitoring and evaluating GHG emissions at thenational level, but only at the project level.
It should be stressed, however, that the above-mentioned advantages depend partly on thespecific definition of the guidelines, rules and procedures of the CDM (which - as noted - is stillpart of ongoing policy negotiations). Compared to Joint Implementation (JI) - which enables
Annex I countries to meet their Kyoto commitments through abatement projects in other Annex
I countries - the Clean Development Mechanism is characterised by some specific problems
regarding emission reduction validation, monitoring and verification because non-Annex I
countries do not have a mitigation commitment. As a result, the risks of fake abatement projects
and other kinds of ‘leakages’ are higher for CDM than JI since in case of JI projects both hostand investing countries have an interest in correct emission monitoring and verification.
Probably the best way to avoid an improper use of CDM is to formulate a list of criteria towhich CDM projects must comply - in order to ensure that only genuine reduction activities are
accepted to generate and trade CDM credits - accompanied by a strict GHG monitoring andevaluation system at the project level.
An alternative option to ensure the participation of non-Annex I countries is that they - just as
Annex I countries - accept an official commitment to limit their national GHG emissions as
determined by the MSC approach discussed above. Table 4.6 shows that the non-Annex I
countries as a whole do not really have to reduce their GHG emissions as - even in the basemodel variant without incorporation of an adjustment period and allowance factors - they areallowed to increase these emissions by 42 percent over the years 2010-2100. For individual
non-Annex I countries, however, emission limitation targets differ significantly. For instance, a
non-Annex I countrY such as Nigeria is permitted to increase its emissions by some 172 percent
over the years 2010-2100, whereas other non-Annex I countries - for instance, Kuwait -has toreduce its emissions by some 64 percent over this period (Table 4.6).
The effects (advantages/disadvantages) of this alternative option depend largely on the question
whether - and to what extent - non-Annex I countries are able to trade their surplus of emission
assignments to deficit (mostly Annex I) countries. If not, this option corresponds highly to thepresent, post-Kyoto situation outlined above, albeit some non-Annex I countries are committed
to limit their emissions rather strictly in the nearby future, notably when population/economic
growth is accounted for. On the other hand, if non-Annex I countries are allowed to trade theirfull surplus of emission assignments (‘hot air’), the most likely effects will be:• Non-Annex I countries - such as Tanzania or Nigeria - which will benefit most fromEmissions Trading (ET) will accept the commitments concerned, whereas countries thatwill be faced by strict emission limitations - or even real reductions - will not be inclined to18

For details, see Sijm et al. (2000a). See also Working Paper No. 6 of the present research project (Sijm et al.,2000b).

ECN-C--01-007

31

participate. From a GHG emission limitation point of view, however, the latter group ofcountries is far more interesting than the former group.
Depending on the variant of the MSC approach, allowing non-Annex I countries to trade
their full ‘hot air’ surplus of emission assignments implies that the emission targets ofAnnex I countries will be largely undermined - notably in the second, but also in thesubsequent budget periods - as they can be achieved quite simply by buying emission
credits at relatively cheap terms from non-Annex I countries. The overall impact might be alarge transfer of financial resources from Annex I countries to non-Annex I countries which may also undermine the present system of development assistance - with hardly any
real limitation of global GHG emissions. These effects may be mitigated by raising theemission limitation commitments of Annex I countries and/or by reducing the surplus ofemission assignments that non-Annex I countries may sell (either by reducing their level ofemission assignments or by stipulating that only a certain percentage - say 10 percent - ofthe surplus may be traded). In the first case, Annex I countries will be faced by higher
abatement burdens, with higher financial transfers to non-Annex I countries. In the second
case, non-Annex I countries that are most interesting from a GHG emission mitigation pointof view will be even less inclined to participate in the burden sharing approach concerned.

•

Moreover, emissions trading between countries requires a reliable system of monitoring andevaluating GHG emissions at the national level. At present, such systems are hardly available innon-Annex I countries.19 Therefore, regarding the participation of low-emission non-Annex I
countries in global emission limitation efforts, the present (post-Kyoto) situation seems to be
more preferable than the alternative option discussed above. However, with regard to the higher
emission non-Annex-I countries that are signatories to the UNFCCC, it is assumed that they will
have to accept future emission mitigation targets as part of the international negotiations on thisissue.
For negotiating a comprehensive MSC approach with participation of the present non-Annex-I
countries, the introduction of an adjustment period of acceding countries appears warranted.
Reference is made to Section 3.6 in which recommendations for the design of a graduation
procedure for high-emission non-Annex-I countries have been presented.

19

Even the emission statistics of some non-Annex I countries included in the database of the present research project
are questionable.

32

ECN-C--01-007

5.

CONCLUSIONS

It was found that burden sharing rules should not be incompatible with the principle of need.
Several examples of need-based burden sharing rules exist. Most of them follow a top-down
approach. These rules suggest a step towards convergence of the greenhouse gas emission levels
per capita, be it with due allowance for country-specific emission circumstances.
To make the principle of need operational, a step needs to be made to express general equity
considerations in terms of real life indicators. The translation of the need principle to concrete
indicators will be ruled by pragmatic considerations, as a multitude of factors affect the level ofemissions and one can not include all of them and still have a simple and transparent burden
sharing rule. Linking the most important factors to emissions per sector seems a logical choice
as the need to emit is linked to the provision of services which, in turn, takes place in distinct
sectors. Moreover, a sectoral approach will be helpful in designing national emission mitigation
policies.
In this report a flexible Multi-Sector Convergence framework is introduced to facilitate Climate
Change negotiators in reaching a comprehensive agreement on the allocation of national GHG
emission commitments. The MSC framework is characterised by:• A number of distinct ‘emission sectors’ covering all human-induced GHG emissions.
Pending the availability of reliable data and further guidance from the Climate Change
negotiating table, sinks/land-use changes have not yet been included but could be included
at a later stage.
• Inclusion of the greenhouse gases CO2, CH4 and NO2, accounting for approximately 99% of
all human-induced GHG emissions.
• Convergence of national sector emissions per capita to world standards in the (negotiated)convergence year.
• The aggregation of world sector standards defines the world standard of total emissions (inper capita terms) towards which the national total emissions (again in per capita terms) will
have to converge.
• The world sector standards can be set, considering the desired total world emission leveland sector-specific considerations.
• Allowance factors can be included in the framework to allow for major country-specificcircumstances that explain significant variations in per capita emission levels.
• Also a graduation threshold and a graduation adjustment period can be included.
Should the MSC methodology be used as a framework for international emission mitigation
negotiations, it stands to reason that final negotiation results will be obtained after several
iterations. E.g. should the resulting first-round adjusted global emission mitigation targets for all
countries be considered too lenient, all parameter values including the ones for allowancefactors should be scrutinised on the scope for further tightening.
More research is required to improve the empirical basis for the formulation of sector mitigation
norms. The same holds for the development of appropriate indicators for allowance factors suchas climate and the potential for renewable energy.

ECN-C--01-007

33

A distinct but related issue to the approach for determining national mitigation targets, is theoperationalisation method for the flexible instruments of the Kyoto Protocol. High emission
burdens are only likely to be accepted by high-emission countries when these will be achieved
most cost-effectively by the Kyoto flexible instruments. High caps on the use of these
instruments are poised to render significant additional emission mitigation commitments
politically infeasible. Yet modest caps might be considered to encourage domestic emission
mitigation efforts in high-emission countries.

34

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