Search Climate Insights Directory

The document evaluates the potential for carbon leakage in South Korea as it implements the Korean emission trading scheme (KETS). Using methodology from the EU ETS Directive, the analysis finds that several manufacturing sectors face a moderate to high risk of leakage, primarily driven by high trade intensity rather than additional production costs. The report highlights that while energy efficiency and fuel switching have historically reduced emissions intensity, the recovery of emission-intensive industries like steel and cement has increased structural risks. It recommends that the South Korean government consider mitigation policies such as free allowances, border adjustments, or import taxes to prevent the displacement of emissions to regions with less stringent climate policies.

The document examines the evolution of the EU ETS through its first three phases, focusing on how carbon pricing affects the international competitiveness of energy-intensive industries. It analyzes the phenomenon of 'carbon leakage'—where production relocates to countries with laxer environmental rules—and argues that while this risk exists for specific sectors like steel and cement, it is often mitigated by free allowance allocations and broader economic restructuring trends. The author suggests that for countries like South Korea, the EU experience shows that the risk of leakage is manageable if policy focuses on the most vulnerable sectors and the decarbonization of the energy mix.

The document examines the AAU market from 2008 to 2012, focusing on how Central and Eastern European (CEE) countries used Green Investment Schemes (GIS) to transform 'hot air'—surplus emission rights resulting from economic downturns—into funding for climate mitigation. It analyzes the strategies of seller countries like Estonia and the Czech Republic, which were successful due to transparent monitoring, and buyer countries like Japan and Spain, which used these deals for technology exports. The report highlights a significant price drop in AAUs by 2012 and discusses the potential for GIS to inform future fund-based mechanisms like NAMAs in developing countries.

The author examines the impact of civil society organizations (CSOs) on the democratic legitimacy of UNFCCC negotiations. While CSOs are widely integrated into delegations and observer roles, survey experiments indicate that citizens do not necessarily perceive their presence as an automatic improvement in transparency, representation, or effectiveness. However, the removal of CSOs from delegations leads to a dramatic decrease in perceived legitimacy, suggesting that their inclusion is essential for maintaining public support for global climate governance.

The report assesses how carbon pricing affects the competitiveness and investment strategies of energy-intensive industries (EIIs). It finds that while carbon costs are a factor, they are often secondary to energy and raw material prices. The analysis highlights the risk of carbon leakage, where production shifts to regions with lower emissions costs, particularly as demand grows in Asia. The report emphasizes that current short-term policy horizons, such as the EU's 2020 targets, are insufficient for the 20- to 40-year investment cycles typical of these sectors, suggesting a need for longer-term regulatory certainty and support for breakthrough technologies like Carbon Capture and Storage (CCS).

The report analyzes the design and operational experiences of various emissions trading systems, including the EU ETS, RGGI, WCI, NZ ETS, TMG ETS, and the Australian CPM. It highlights key design trade-offs regarding coverage, allowance distribution, and price management, while emphasizing that the EU ETS experience demonstrates that over-allocation does not necessarily preclude abatement. The document also provides a toolkit for policymakers to assess the environmental and economic effectiveness of such systems.

The document argues that addressing the energy gap for the 'bottom of the pyramid' (BOP) requires a comprehensive approach to the innovation cycle, moving beyond simple technology development to include user-centric design, strategic deployment models, and the building of local institutional capabilities. It highlights that nearly 1.3 billion people lack electricity and 2.6 billion lack clean cooking energy, with significant health and climate costs associated with traditional biomass use. The author recommends leveraging diverse funding sources—including climate and health funds—and coordinating international initiatives to scale up sustainable energy solutions.

The document examines the impact of the growing middle class in developing countries on global carbon emissions, projecting that this group will grow from 1.5 billion in 2009 to almost 5 billion by 2030. It argues that because traditional carbon pricing is often impractical in these contexts, targeted technology and innovation policies are needed to steer consumption toward low-carbon alternatives in urban planning, transport, and household energy. Using case studies on Compact Fluorescent Lamps (CFLs) and Bus Rapid Transit (BRT), the brief emphasizes that success depends on addressing the political economy and building local capabilities rather than relying solely on economic incentives.

The report finds that while global economic impacts of market-based measures (MBMs) for international aviation and shipping are small, effects vary significantly by country. Small, remote island states dependent on air tourism, such as Samoa, face the highest GDP risks, while large economies like China and India experience minimal impacts. The study concludes that MBM revenues and increased demand for Clean Development Mechanism (CDM) offsets can be used to mitigate these undesired economic effects.

The document examines Bus Rapid Transit (BRT) as a cost-effective, low-carbon alternative to private car-based transport in rapidly growing cities. It details the hardware and software components of BRT, analyzes the value chain and organizational roles (owner, manager, and asset manager), and discusses the political economy challenges, such as resistance from informal transport operators and car owners. The report emphasizes that while BRT is a mature technology, its success depends on local context, institutional capability, and integration with broader transport networks.

The document examines CFL exchange programmes in Ghana and Kenya, finding that while they achieved immediate technical goals—such as reducing greenhouse gas emissions and peak electricity demand—they often overlooked opportunities to build indigenous technological capabilities. In Ghana, a 2007 GEF-funded programme distributed 6 million CFLs, reducing peak demand by 128 MW and saving approximately USD 33 million annually. In Kenya, the 'Badilisha Bulb' programme distributed 1.25 million CFLs, reducing CO2 emissions by 55,000 tonnes per annum. The author argues that for long-term low-carbon development, policymakers should move beyond the simple distribution of finished goods toward building local manufacturing capabilities and implementing robust performance standards to prevent the market from being flooded with low-quality imports.

The document examines how Taiwan can engage with international carbon markets despite not being a party to the UNFCCC or the Kyoto Protocol. It analyzes formal eligibility requirements and material 'market readiness' conditions across various systems, including the EU ETS, RGGI, WCI, and others. The study suggests that while formal treaty-based access is restricted, Taiwan can utilize indirect participation, bilateral cooperation, and the development of a robust domestic cap-and-trade system with absolute targets to facilitate future linkage.

The report analyzes a diverse array of cap-and-trade systems, from the established EU ETS to emerging pilots in China and South Korea. It argues that the success of these markets depends heavily on long-term political commitment, robust data collection, and centralized decision-making to avoid over-allocation. The authors highlight a shift in the center of carbon market activity toward Asia-Pacific economies, which are experimenting with novel scopes including buildings and indirect emissions.

The report examines how unilateral carbon pricing leads to carbon leakage—where emissions are shifted to foreign locations—across energy-intensive industries (EII) such as steel, cement, and chemicals. It evaluates the effectiveness of various policy remedies, including border adjustments and output-based free allocations, across different regional contexts. Findings indicate that while the EU can mitigate leakage from a 30% reduction target at moderate cost, a mandatory Japanese ETS would significantly impact steel and cement production. In China, a carbon price of 100 Yuan/t CO2 would most affect ferrous metals, basic chemicals, refining, and cement, potentially serving as a tool to reduce carbon intensity and restrain exports during high growth periods.

The document analyzes the UNFCCC Technology Mechanism, consisting of the Technology Executive Committee (TEC) and the Climate Technology Centre and Network (CTC&N). It argues that for the mechanism to succeed, it must move beyond a linear view of technology transfer to a systemic innovation approach. Key recommendations include promoting cooperative research, development, and demonstration (RD&D) to bridge the 'valley of death' in financing, creating 'enabling environments' through both push and pull factors in developed and developing nations, and establishing a dedicated technology funding window within the Green Climate Fund (GCF).

The document synthesizes findings from six climate models, noting that while stabilizing atmospheric CO2 at 450ppmv is feasible, the reported costs are highly dependent on baseline assumptions. It argues that most models focus on 'GDP losses' relative to future business-as-usual scenarios, which can be misleading; instead, it suggests presenting results against historical baselines to show that significant economic growth is still projected even with ambitious climate action.

The document argues that low-carbon innovation is a systemic process involving networks of actors and institutional environments, rather than just technical hardware. It highlights that developing countries have a unique opportunity to bypass high-carbon 'lock-in' due to less established energy infrastructures. The authors recommend a 'socio-technical' approach that considers local cultural practices and 'fit-stretch dynamics' to ensure technology adoption. Strengthening indigenous capabilities and aligning international initiatives, such as the UNFCCC Technology Mechanism, with national policies are presented as essential for sustainable transition.

The research paper evaluates the economic and emissions impacts of increasing the EU's 2020 GHG reduction target to 30%. Using the E3MG model, it focuses on three energy-intensive sectors: iron and steel, aluminium, and cement. The findings indicate that while a 30% target significantly increases EU ETS allowance prices, there is no evidence of substantial carbon leakage through import substitution. Border adjustment measures partially protect EU output but have a negligible macroeconomic impact, as the affected sectors collectively account for less than 1% of EU GDP.

The paper evaluates the EU ETS allocation method—specifically the New Entrants Reserve (NER) and grandfathering—against output-based allocation (OBA), full auctioning, and border adjustments in the cement industry. It finds that while the EU ETS method effectively tackles carbon leakage, it creates economic distortions between new and existing plants, leading to lower overall welfare compared to border adjustments or OBA. The analysis suggests that the EU ETS method's primary advantage is its lower distributional impact on consumers and producers.

The report argues that a universally applied market-based instrument (MBI), specifically a cap-and-trade scheme, is the most effective and politically feasible way to address emissions from international transport. To comply with the principle of common but differentiated responsibilities (CBDR), the report proposes a governance structure where revenues or allowances are selectively disbursed to ensure no net incidence on developing countries. The remaining value would be transferred to the Green Climate Fund and used for fuel-efficiency improvements. The author concludes that an emissions trading system (ETS) is superior to levy-based systems because it avoids being classified as an international tax and does not require the direct funding of an international organisation or the hypothecation of national fiscal revenues.