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Carmen Bunzl - Universidad Pontificia Comillas

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Chapter 2. Options for future climate change architectures 50<br />

binding emission target, if they are worried about uncertainty of economic<br />

development or of abatement costs.<br />

Targets with a price cap can be environmentally efficient if set at a high level.<br />

Emission trading would be possible at prices bellow the price cap, therefore<br />

improving economic efficiency; at higher prices the cap would work as a tax,<br />

which would have negative impacts on environmental efficiency. Equity would<br />

depend on the level of the price cap. Also, reliable data on marginal abatement<br />

costs would be necessary before fixing it.<br />

The revenue from selling additional emission rights can be used to finance<br />

emission reduction projects, R&D activities, or adaptation.<br />

2.1.1.6 Sectoral targets<br />

Targets are set for selected sectors that are particularly suited for this<br />

approach, such as industrial or electricity production. Sectoral targets can be<br />

defined either globally or only for newly joining countries. They can be binding<br />

or no-lose targets, absolute or dynamic described as function of unit of output<br />

(e.g. CO2/t steel) (Philibert and Pershing, 2001; Samaniego and Figueres, 2002;<br />

Höhne et al., 2006; Schmidt et al., 2006).<br />

In developing countries only part of the economy might provide the<br />

infrastructure or data availability to take in national reduction targets.<br />

However, single sectors may be able to do so. Only the relevant sectors would<br />

take part of international emission trading.<br />

Efficiencies (e.g. CO2/t steel) vary greatly between countries. Annex I<br />

country productions are not necessarily scoring better compared to Non-Annex<br />

I countries. If sectoral targets are defined as no lose or dynamic, they could be<br />

an incentive for some developing countries to participate, to take on a target.<br />

Least developed countries would most likely be exempt; other developing<br />

countries such as China or India would not assume them but would not<br />

disagree if others take on one. Russia is currently less efficient than most<br />

Escuela Técnica Superior de Ingeniería ICAI <strong>Carmen</strong> <strong>Bunzl</strong> Boulet Junio 2008

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