We have presented and analysed two different stylised conceptions of a future climate agreement regime. The comprehensive targets and timetables approach represents an extended and idealised version of the climate regime embodied in Kyoto. The other approach consists of a portfolio of agreements, with each agreement in the portfolio having its own structures and enforcement mechanisms. We have argued that the portfolio approach has strong advantages for addressing the challenges of motivating adequate action and providing for effective enforcement. This approach is weaker in promoting cost-effectiveness. The seriousness of this problem depends on how different the shadow price of carbon ends up being across sources, sectors, and countries. We believe there will be strong incentives towards cost-effectiveness under the portfolio approach as well. It will be important to design measures that can provide transparency in actions taken and thus a capacity to assess marginal costs in different agreements.
* Scott Barrett and Michael Toman, Contrasting Future Paths for an Evolving Global Climate Regime, Policy Research Working Paper 5,164, The World Bank, January 2010