Weathervane - EU, OECD, and Russia

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The EU Emissions
Trading System:
Five Things to Watch
as the Program Develops
Joe Kruger, Visiting Scholar, RFF
RFF Seminar
May 19, 2004

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EU, OECD, and Russia

The Organization for Economic Cooperation and Development (OECD), which includes the EU countries and all other industrialized countries, generally supports the Kyoto Protocol and the concept of international agreements with binding emissions reduction targets -- with the notable exceptions of the United States and Australia. At present, however, most of these countries have not yet worked out or have just begun to craft the policies that will bring their emissions under the Kyoto limits that come into force in 2008.

In its efforts to limit greenhouse gas emissions, the European Union stands out. The European Union was the main political force behind Kyoto. But, not waiting for its limits to become binding, in January 2005 the Europeans established their own Emissions Trading Scheme, a cap-and-trade program for carbon dioxide emissions -- three years before the Kyoto limits take effect.

Russia is a special case. Though not a member of the OECD, Russia's perspective on global warming is closer to that of the other industrialized nations than developing countries. Now the world's second-largest exporter of oil (behind Saudi Arabia), it appears to have mixed feelings about programs that will discourage oil use. But it has accepted emissions limits in principle and ratified Kyoto, although its own emissions are far below the very generous limits that resulted from the global negotiations behind Kyoto.

		Divergence in State-Level Per Capita Carbon Dioxide Emissions Joseph E. Aldy February 2006 RFF Fellow Joseph Aldy's study of per capita CO2 emissions in the U.S. states shows a disconnect between convergence of income and emissions – a finding that holds serious implications for the design of future climate policies.



		Balancing the Partnership with the U.S.: A Golden Opportunity Frank E. Loy, RFF Board Chair A Weathervane Commentary March 13, 2006 RFF Board Chair Frank E. Loy asserts that European countries need to press the U.S. to rescind its proposed funding cuts to the Global Environment Facility, a program that helps poorer countries develop sustainable resources.



		Per Capita Carbon Dioxide Emissions: Convergence or Divergence? Joseph E. Aldy Discussion Paper 05-53 March 2006 RFF Fellow Joe Aldy suggests the gap between developing and industrialized countries’ per capita emissions has not closed over the past 40 years and may in fact widen, complicating efforts to develop international climate policy.



		Europe Goes to Market: An Update RFF Web Commentary November 28, 2005 Visiting Scholar Joe Kruger and Fellow Billy Pizer review the European Emissions Trading Scheme.




		The Ten-Year Rule: Allocation of Emission Allowances in the EU Emission Trading System Markus Åhman, Dallas Burtraw, Joseph A. Kruger, and Lars Zetterberg Discussion Paper 05-30 June 2005



		Companies and Regulators in Emissions Trading Programs Joseph A. Kruger Discussion Paper 05-03 February 2005



		The EU Emissions Trading Directive: Opportunities and Potential Pitfalls Joseph A. Kruger and William A. PizerDiscussion Paper 04-24 April 2004



		Greenhouse Gas Trading in Europe: The New Grand Experiment Joe Kruger and Billy Pizer Environment October 2004



		13 + 1: A Comparison of Global Climate Change Policy Architectures Joseph E. Aldy, Scott Barrett, and Robert N. Stavins Discussion Paper 03-26 August 2003