INCENTIVES FOR 45 COUNTRIES TO JOIN VARIOUS FORMS OF CARBON-REDUCTIONAGREEMENTS

This paper attempts an assessment of the incentives for 45 major carbo n emitting countries to join various forms of international CO2 reduct ion agreements. The agreements considered are designed to implement a 50 percent cut in overall emissions by 2050, relative to the 1987 leve l (Toronto target). The paper extends previous work on emission quota schemes by considering damage functions. A major result is that a syst em of arbitrarily distributed flexible (tradeable) quotas may lead to a close approximation of an agreement with optimal quotas. If the dist ribution of flexible quotas is based on uniform emission rights per ca pita, the incentives to join a flexible quota agreement are similar to those to participate in an optimal quota agreement, provided the over all emission cap is the same.