EVALUATING COST-EFFECTIVE STRATEGIES FOR MEETING REGIONAL CO2 TARGETS

Various climate protocol proposals oblige different industrialized cou ntries to reduce CO2 and other greenhouse gas emissions, In principle, the total costs of these obligations could be substantially reduced i f emission reductions are implemented in regions with low marginal cos ts for CO2 reduction, This has been difficult to quantify because of l ack of models with suitable regional and sectoral detail, In this pape r we perform these calculations by taking advantage of the capability of the IMAGE 2 model to compute regional emissions and costs, Two main options are examined for allocating emission reductions required of i ndustrialized regions in a cost effective manner: (1) allocating them among industrialized regions (2) allocating them among all world regio ns, The cost savings for each of these options are presented, The main conclusions are that (a) it is of great importance for the cost compa risons of protocols to use a well defined baseline scenario and clearl y formulated targets, and (b) large economic benefits, in the order of 35-65%, can accrue from joint-implementation agreements which allocat e investments on the basis of net marginal costs of CO2 reduction. Cop yright (C) 1996 Science Ltd