Climate Policy Beyond Kyoto: Quo Vadis?

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Abstract
Summary: We investigate the possible future of Post‐Kyoto climate policies until 2020. Based on across‐impact analysis, we first evaluate an expert poll to identify the most likely Post‐Kyoto climate policy scenarios. We then use acomputable general equilibrium modelto assess the economic implications of these scenarios. We find that Post‐Kyoto agreements will include only small reductions in global greenhouse gas emissions, with abatement duties predominantly assigned to the industrialized countries, while developing countries remain uncommitted, but can sell emission abatement to the industrialized world. Equity rules to allocate abatement duties are mainly based on sovereignty or ability‐to‐pay. Global adjustment costs to Post‐Kyoto policies are very moderate, but regional costs to fuel exporting countries can be substantial because of distinct terms‐of‐trade effects on fossil fuel markets.