The efficiency of international cooperation in mitigating climate change: analysis of joint implementation, the clean development mechanism and emission trading for the Federal Republic of Germany, the Russian Federation andIndonesia

This paper presents results of an analysis of the flexible instruments join t implementation, clean development mechanism and emission allowance tradin g with regard to achieving CO, emission reduction targets economically. The analysis is based on the development and application of energy and materia l flow models for the considered countries, the Federal Republic of Germany as a host country with quantified emission reduction targets as well as th e Russian Federation and Indonesia as potential partners. In this approach, a transparent and credible baseline for the calculation of emission credit s is determined by developing consistent national emission reduction strate gies for each country. The efficiency of international cooperation is subse quently analysed by linking the national models using a decomposition algor ithm. Different assumptions with respect to the economic and political fram ework as well as regarding the impact of transaction costs associated with cooperation projects are considered. The model results show substantial pot entials to limit emission reduction expenditures by multilateral cooperatio n. The most favourable types of cooperation projects for the considered cou ntries are CO2 sequestration and power plant projects. (C) 2001 Elsevier Sc ience Ltd. All rights reserved.