sectoral economic costs and benefits of ghg mitigation - IPCC

Fossil Fuels
• CO 2 segregation and disposal, either for EOR or storage in exhausted oil and gas
wells.
• Probable need, however, for mechanisms that explicitly encourage projects in OPEC
Member Countries, e.g. energy efficiency improvement, reducing air pollution, etc.
• Trade preferential treatment for developing countries could be utilised. Removal of
direct and indirect trade barriers to developing countries should be encouraged.
• Market distortions such as subsidies on fossil fuel production need to be corrected.
Also, are tax incentives on oil production in Annex I countries consistent with the
Kyoto Protocol?
• It is important that Annex I countries exert genuine effort to include all GHGs
identified by the UNFCCC in their emission abatement measures if a significant
minimisation of impacts is to be achieved.
In conclusion, four distinct points could be summarised as follows:
• Oil exporting developing countries are identified as the main countries vulnerable to
adverse effects of implementation of mitigation measures.
• Kyoto Protocol targets imply huge revenue losses for OPEC, between $20 and $60
billion pa.
• Tax restructuring can reduce OECD CO 2 emissions by at least 10%.
• Implementation of Kyoto mechanisms does not eliminate losses, in fact, losses
remain vast.
A genuine effort is therefore now required to ensure that the provisions of Articles 4.8 and 4.9 of
the UNFCCC and 2.3 and 3.14 of the Kyoto Protocol are fully and effectively implemented.
These are obligations of Annex I countries and should be fulfilled.
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