Rob Dellink Policies and options for post-2012 global action OECD analysis of the economics of climate change mitigation

Achieving ambitious mitigation policy objectives requires: The adoption of a cost-effective policy mix anchored on global carbon pricing A broad coverage of the policy mix across gases, sectors and countries Fostering a gradual development of a global carbon market Setting up ETSs in as many countries as possible Linking ETSs directly or indirectly Developing a well-functioning crediting mechanism

Achieving ambitious mitigation policy objectives requires:

The adoption of a cost-effective policy mix anchored on global carbon pricing

A broad coverage of the policy mix across gases, sectors and countries

Fostering a gradual development of a global carbon market

Setting up ETSs in as many countries as possible

Linking ETSs directly or indirectly

Developing a well-functioning crediting mechanism

Costs and effects of ETSs differ across countries

Linking leads to price convergence across ETSs … but may not be beneficial to all sectors in all countries

A well functioning crediting mechanism can cut mitigation costs for Annex I … but requires dealing with concerns about environmental integrity

Final words Pay due attention to harmonisation and regulatory issues Two main messages: Constraints on coverage make mitigation policy ineffective and costly So do barriers to the gradual development of a global carbon market

Pay due attention to harmonisation and regulatory issues

Two main messages:

Constraints on coverage make mitigation policy ineffective and costly

So do barriers to the gradual development of a global carbon market

[email_address] www.oecd.org/env/cc/econ OECD (2009), The economics of climate change mitigation: policies and options for global action beyond 2012 ISBN 978-92-64-05606-0