Where to next? Future steps of the global climate regime

This briefing paper, published by the International Institute for Sustainable Development on 14 December 2004, presents the collective understanding of an international research collaboration on the future of the global climate regime following the Kyoto Protocol's first commitment period. The authors explore two primary strategies—'Cap First' and 'Empower First'—to reach a long-term global solution consisting of a cap-and-trade scheme, technology development agreements, and assistance for developing countries.

• The research team concludes that a lasting global solution after 2030 must integrate three core components: a cap-and-trade scheme, an agreement for technology development, and an assistance package for developing countries.
• The authors identify two divergent strategies for advancing the climate regime: a 'Cap First' strategy, which seeks to broaden and deepen absolute binding caps, and an 'Empower First' strategy, which focuses on creating an 'enabling environment' through technology and development cooperation.
• To re-engage the United States without requiring Senate ratification of the Kyoto Protocol, the authors suggest the COP/MOP could allow allowances from non-parties' trading systems to be used for compliance and permit non-parties to participate in governing institutions like the CDM Executive Board.
• The document argues that carbon market price signals (then between 5 and 10 € per tonne of CO2) are too low to justify significant R&D in nascent technologies, necessitating additional policies to enhance technology development and deployment.
• Analysis of technological innovation suggests that formal global treaties are rarely the primary driver; instead, innovation occurs at national or regional levels, often through the creation of 'niche markets' supported by non-market instruments like direct regulation or subsidies.
• The authors propose an equitable target-setting framework that differentiates countries into six groups based on development and emissions status (Annex II, Annex I but not Annex II, NICs, RIDCs, IgDCs, and LDCs) to ensure global participation.
• The paper highlights a conflict in Official Development Assistance (ODA), where declining funds clash with rising obligations to provide aid, leading to an acrimonious negotiating dynamic regarding the financing of climate-change-related activities in developing countries.

APA

International Institute for Sustainable Development (n.d.). Where to next? Future steps of the global climate regime. https://www.iisd.org/system/files/publications/climate_where_to_next.pdf

Chicago

International Institute for Sustainable Development. Where to next? Future steps of the global climate regime. n.d. https://www.iisd.org/system/files/publications/climate_where_to_next.pdf.

Wikipedia

{{cite report |author=International Institute for Sustainable Development |title=Where to next? Future steps of the global climate regime |url=https://www.iisd.org/system/files/publications/climate_where_to_next.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{internationalinstituteforsustainabledevelopmentndwhere, author = {{International Institute for Sustainable Development}}, title = {{Where to next? Future steps of the global climate regime}}, institution = {International Institute for Sustainable Development}, url = {https://www.iisd.org/system/files/publications/climate_where_to_next.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }