Common but differentiated convergence (CDC): a new conceptual approach to long-term climate policy

Abstract

This article describes a new concept for an international climate regime for differentiation of future commitments: the ‘common but differentiated convergence’ approach (CDC). Under CDC, Annex-I countries' per-capita emission allowances converge within a convergence period to a low level. Individual non-Annex-I countries' allowances converge to the same level also within the same period (‘common convergence’), but starting when their per-capita emissions are a certain percentage above global average (‘differentiated’). Until then they may voluntarily take on ‘positively binding’ targets. This approach eliminates two concerns often voiced in relation to gradually converging per-capita emissions: (i) advanced developing countries have their commitment to reduce emissions delayed and their targets are not the same as Annex-I countries with equal per-capita emissions; (ii) CDC does not provide excess emission allowances to the least developing countries. Under CDC, stabilizing greenhouse gas concentrations at 550 and 650 ppm CO₂-equivalent can be reached with participation at roughly 0% and 50% above global average and convergence to around 3 and 4.5 tCO₂-eq/cap within 40 years. Even if the CDC approach is not implemented in its entirety, it is possible that the step-by-step decisions on the international climate regime can be guided by the principles provided in the CDC approach.     

Reductions of greenhouse gas emissions in Annex I and non-Annex I countries for meeting concentration stabilisation targets

The IPCC Fourth Assessment Report, Working Group III, summarises in Box 13.7 the required emission reduction ranges in Annex I and non-Annex I countries as a group, to achieve greenhouse gas concentration stabilisation levels between 450 and 650 ppm CO₂-eq. The box summarises the results of the IPCC authors’ analysis of the literature on the regional allocation of the emission reductions. The box states that Annex I countries as a group would need to reduce their emissions to below 1990 levels in 2020 by 25% to 40% for 450 ppm, 10% to 30% for 550 ppm and 0% to 25% for 650 ppm CO₂-eq, even if emissions in developing countries deviate substantially from baseline for the low concentration target. In this paper, the IPCC authors of Box 13.7 provide background information and analyse whether new information, obtained after completion of the IPCC report, influences these ranges. The authors concluded that there is no argument for updating the ranges in Box 13.7. The allocation studies, which were published after the writing of the IPCC report, show reductions in line with the reduction ranges in the box. From the studies analysed, this paper specifies the “substantial deviation” or “deviation from baseline” in the box: emissions of non-Annex I countries as a group have to be below the baseline roughly between 15% to 30% for 450 ppm CO₂-eq, 0% to 20% for 550 ppm CO₂-eq and from 10% above to 10% below the baseline for 650 ppm CO₂-eq, in 2020. These ranges apply to the whole group of non-Annex I countries and may differ substantially per country. The most important factor influencing these ranges above, for non-Annex I countries, and in the box, for Annex I countries, is new information on higher baseline emissions (e.g. that of Sheehan, Climatic Change, 2008, this issue). Other factors are the assumed global emission level in 2020 and assumptions on land-use change and forestry emissions. The current, slow pace in climate policy and the steady increase in global emissions, make it almost unfeasible to reach relatively low global emission levels in 2020 needed to meet 450 ppm CO₂-eq, as was first assumed feasible by some studies, 5 years ago.     

Sharing the reduction effort to limit global warming to 2°C

In order to stabilize long-term greenhouse gas concentrations at 450 ppm CO₂-eq or lower, developed countries as a group should reduce emissions by 25–40% below 1990 levels by 2020, while developing countries' emissions need to be reduced by around 15–30%, relative to their baseline levels, according to the IPCC and our earlier work. This study examines 19 other studies on the emission reductions attributed to the developed and developing countries for meeting a 450 ppm target. These studies considered different allocation approaches, according to equity principles. The effect of the assumed global emissions cap in these studies is analysed. For developed countries, the original reduction range of 25–40% by 2020 is still within the average range of all studies, but does not cover it completely. Comparing the studies shows that assuming a global emissions cap of 5–15% above 1990 levels by 2020 generally leads to more stringent reduction targets than when a global emissions cap of 20–30% above 1990 levels is assumed. For developing countries, the reduction range of 15–30% below their baseline levels by 2020 corresponds to an increase on the 1990 level from 70% (about the 2006 level) to 120%. Reducing deforestation emissions by 50% below baseline levels by 2020 may relax the emission reductions for either group of countries; for developing countries by about 7% or for developed countries by about 15% (but not for both).     

Multi-gas Emissions Pathways to Meet Climate Targets

So far, climate change mitigation pathways focus mostly on CO₂ and a limited number of climate targets. Comprehensive studies of emission implications have been hindered by the absence of a flexible method to generate multi-gas emissions pathways, user-definable in shape and the climate target. The presented method ‘Equal Quantile Walk’ (EQW) is intended to fill this gap, building upon and complementing existing multi-gas emission scenarios. The EQW method generates new mitigation pathways by ‘walking along equal quantile paths’ of the emission distributions derived from existing multi-gas IPCC baseline and stabilization scenarios. Considered emissions include those of CO₂ and all other major radiative forcing agents (greenhouse gases, ozone precursors and sulphur aerosols). Sample EQW pathways are derived for stabilization at 350 ppm to 750 ppm CO₂ concentrations and compared to WRE profiles. Furthermore, the ability of the method to analyze emission implications in a probabilistic multi-gas framework is demonstrated. The probability of overshooting a 2 ^∘C climate target is derived by using different sets of EQW radiative forcing peaking pathways. If the probability shall not be increased above 30%, it seems necessary to peak CO₂ equivalence concentrations around 475 ppm and return to lower levels after peaking (below 400 ppm). EQW emissions pathways can be applied in studies relating to Article 2 of the UNFCCC, for the analysis of climate impacts, adaptation and emission control implications associated with certain climate targets. See for EQW-software and data.     

Climate change: long-term targets and short-term commitments

International negotiations under the UN Framework Convention on Climate Change could take several different approaches to advance future mitigation commitments. Options range from trying to reach consensus on specific long-term atmospheric concentration targets (e.g. 550 ppmv) to simply ignoring this contentious issue and focusing instead on what can be done in the nearer term. This paper argues for a strategy that lies between these two extremes. Internationally agreed threshold levels for certain categories of impacts or of risks posed by climate change could be translated into acceptable levels of atmospheric concentrations. This could help to establish a range of upper limits for global emissions in the medium term that could set the ambition level for negotiations on expanded GHG mitigation commitments. The paper thus considers how physical and socio-economic indicators of climate change impacts might be used to guide the setting of such targets. In an effort to explore the feasibility and implications of low levels of stabilisation, it also quantifies an intermediate global emission target for 2020 that keeps open the option to stabilise at 450 ppmv CO₂ If new efforts to reduce emissions are not forthcoming (e.g. the Kyoto Protocol or similar mitigation efforts fail), there is a significant chance that the option of 450 ppmv CO₂ is out of reach as of 2020. Regardless of the preferred approach to shaping new international commitments on climate change, progress will require improved information on the avoided impacts climate change at different levels of mitigation and careful assessment of mitigation costs.     

Assessment of greenhouse gases emission from civil aviation in Russia

The greenhouse gases emission (CO₂, CH₄, and N₂O) from domestic and international aviation in the Russian Federation is assessed. In 2007, the total emission of CO₂, CH₄, and N₂O amounted to 18.4 million tons of CO₂-equivalent, which is 21% below the 1990 level. Carbon dioxide dominates in the component composition of the emissions, its part in 2007 accounted for 99.1% of the emission. Taking into account the tendency towards increasing fuel consumption due to intense aircraft traffic it can be expected that compared to the present level the greenhouse gases emissions in 2012 and 2020 will increase by 15 and 45%, respectively. Accounting for the increased aircraft emissions as well as plans of foreign countries to include the international aviation into the scheme of greenhouse gases emission allowance (trade credits) it is expedient to make more precise the greenhouse gases emissions from the Russian aviation based on the detailed flight data for all types of the aircraft.     

Stabilizing greenhouse gas concentrations at low levels: an assessment of reduction strategies and costs

On the basis of the IPCC B2, A1b and B1 baseline scenarios, mitigation scenarios were developed that stabilize greenhouse gas concentrations at 650, 550 and 450 and – subject to specific assumptions – 400 ppm CO₂-eq. The analysis takes into account a large number of reduction options, such as reductions of non-CO₂ gases, carbon plantations and measures in the energy system. The study shows stabilization as low as 450 ppm CO₂-eq. to be technically feasible, even given relatively high baseline scenarios. To achieve these lower concentration levels, global emissions need to peak within the first two decades. The net present value of abatement costs for the B2 baseline scenario (a medium scenario) increases from 0.2% of cumulative GDP to 1.1% as the shift is made from 650 to 450 ppm. On the other hand, the probability of meeting a two-degree target increases from 0%–10% to 20%–70%. The mitigation scenarios lead to lower emissions of regional air pollutants but also to increased land use. The uncertainty in the cost estimates is at least in the order of 50%, with the most important uncertainties including land-use emissions, the potential for bio-energy and the contribution of energy efficiency. Furthermore, creating the right socio-economic and political conditions for mitigation is more important than any of the technical constraints.     

Implications of weak near-term climate policies on long-term mitigation pathways

While the international community has agreed on the long-term target of limiting global warming to no more than 2 °C above pre-industrial levels, only a few concrete climate policies and measures to reduce greenhouse gas (GHG) emissions have been implemented. We use a set of three global integrated assessment models to analyze the implications of current climate policies on long-term mitigation targets. We define a weak-policy baseline scenario, which extrapolates the current policy environment by assuming that the global climate regime remains fragmented and that emission reduction efforts remain unambitious in most of the world’s regions. These scenarios clearly fall short of limiting warming to 2 °C. We investigate the cost and achievability of the stabilization of atmospheric GHG concentrations at 450 ppm CO₂e by 2100, if countries follow the weak policy pathway until 2020 or 2030 before pursuing the long-term mitigation target with global cooperative action. We find that after a deferral of ambitious action the 450 ppm CO₂e is only achievable with a radical up-scaling of efforts after target adoption. This has severe effects on transformation pathways and exacerbates the challenges of climate stabilization, in particular for a delay of cooperative action until 2030. Specifically, reaching the target with weak near-term action implies (a) faster and more aggressive transformations of energy systems in the medium term, (b) more stranded investments in fossil-based capacities, (c) higher long-term mitigation costs and carbon prices and (d) stronger transitional economic impacts, rendering the political feasibility of such pathways questionable.     

Greenhouse gas taxes on animal food products: rationale, tax scheme and climate mitigation effects

Agriculture is responsible for 25?C30% of global anthropogenic greenhouse gas (GHG) emissions but has thus far been largely exempted from climate policies. Because of high monitoring costs and comparatively low technical potential for emission reductions in the agricultural sector, output taxes on emission-intensive agricultural goods may be an efficient policy instrument to deal with agricultural GHG emissions. In this study we assess the emission mitigation potential of GHG weighted consumption taxes on animal food products in the EU. We also estimate the decrease in agricultural land area through the related changes in food production and the additional mitigation potential in devoting this land to bioenergy production. Estimates are based on a model of food consumption and the related land use and GHG emissions in the EU. Results indicate that agricultural emissions in the EU27 can be reduced by approximately 32 million tons of CO₂-eq with a GHG weighted tax on animal food products corresponding to ?60 per ton CO₂-eq. The effect of the tax is estimated to be six times higher if lignocellulosic crops are grown on the land made available and used to substitute for coal in power generation. Most of the effect of a GHG weighted tax on animal food can be captured by taxing the consumption of ruminant meat alone.     

Options for differentiation of future commitments in climate policy: how to realise timely participation to meet stringent climate goals?

Abstract

This paper aims at exploring options for differentiation of future commitments in global greenhouse gas emissions control, linked to climate targets. This is done on the basis of theEUtarget of a maximum global temperature increase of 2°C compared to pre-industrial levels. The Framework to Assess International Regimes for the differentiation of commitments (FAIR) is used to explore the implications of two possible climate regimes: (1) increasing participation (i.e. a gradual increase in the number of parties involved and their level of commitment according to participation and differentiation rules) and (2) ‘contraction and convergence’ (C&C) with universal participation and a convergence of per capita emission permits. It is found that in a regime of increasing participation, stabilising the CO₂ concentration at 450 ppmv by 2100 requires participation of major developing countries before 2050 in global emission control, irrespective of the participation and differentiation rules chosen. In the case of stringent climate targets, a convergence regime seems to provide more incentives for a timely participation of developing countries, and opportunities for an effective and efficient regime for controlling global emissions than increasing participation.     

Options for differentiation of future commitments in climate policy: how to realise timely participation to meet stringent climate goals?

This paper aims at exploring options for differentiation of future commitments in global greenhouse gas emissions control, linked to climate targets. This is done on the basis of the EU target of a maximum global temperature increase of 2°C compared to pre-industrial levels. The Framework to Assess International Regimes for the differentiation of commitments (FAIR) is used to explore the implications of two possible climate regimes: (1) increasing participation (i.e. a gradual increase in the number of parties involved and their level of commitment according to participation and differentiation rules) and (2) ‘contraction and convergence’ (C&C) with universal participation and a convergence of per capita emission permits. It is found that in a regime of increasing participation, stabilising the CO₂ concentration at 450 ppmv by 2100 requires participation of major developing countries before 2050 in global emission control, irrespective of the participation and differentiation rules chosen. In the case of stringent climate targets, a convergence regime seems to provide more incentives for a timely participation of developing countries, and opportunities for an effective and efficient regime for controlling global emissions than increasing participation.     

Harmonization vs. fragmentation: overview of climate policy scenarios in EMF27

This paper synthesizes results of the multi-model Energy Modeling Forum 27 (EMF27) with a focus on climate policy scenarios. The study included two harmonized long-term climate targets of 450 ppm CO₂-e (enforced in 2100) and 550 pm CO₂-e (not-to-exceed) as well as two more fragmented policies based on national and regional emissions targets. Stabilizing atmospheric GHG concentrations at 450 and 550 ppm CO₂-e requires a dramatic reduction of carbon emissions compared to baseline levels. Mitigation pathways for the 450 CO₂-e target are largely overlapping with the 550 CO₂-e pathways in the first half of the century, and the lower level is achieved through rapid reductions in atmospheric concentrations in the second half of the century aided by negative anthropogenic carbon flows. A fragmented scenario designed to extrapolate current levels of ambition into the future falls short of the emissions reductions required under the harmonized targets. In a more aggressive scenario intended to capture a break from observed levels of stringency, emissions are still somewhat higher in the second half due to unabated emissions from non-participating countries, emphasizing that a phase-out of global emissions in the long term can only be reached with full global participation. A key finding is that a large range of energy-related CO₂ emissions can be compatible with a given long-term target, depending on assumptions about carbon cycle response, non-CO₂ and land use CO₂ emissions abatement, partly explaining the spread in mitigation costs.     

Meeting the EU 2°C climate target: global and regional emission implications

Abstract

This article presents a set of multi-gas emission pathways for different CO₂-equivalent concentration stabilization levels, i.e. 400, 450, 500 and 550 ppm CO₂-equivalent, along with an analysis of their global and regional reduction implications and implied probability of achieving the EU climate target of 2°C. For achieving the 2°C target with a probability of more than 60%, greenhouse gas concentrations need to be stabilized at 450 ppm CO₂-equivalent or below, if the 90% uncertainty range for climate sensitivity is believed to be 1.5–4.5°C. A stabilization at 450 ppm CO₂-equivalent or below (400 ppm) requires global emissions to peak around 2015, followed by substantial overall reductions of as much as 25% (45% for 400 ppm) compared to 1990 levels in 2050. In 2020, Annex I emissions need to be approximately 15% (30%) below 1990 levels, and non-Annex I emissions also need to be reduced by 15–20% compared to their baseline emissions. A further delay in peaking of global emissions by 10 years doubles maximum reduction rates to about 5% per year, and very probably leads to high costs. In order to keep the option open of stabilizing at 400 and 450 ppm CO₂-equivalent, the USA and major advanced non-Annex I countries will have to participate in the reductions within the next 10–15 years.     

Regional spatial inventories (cadastres) of GHG emissions in the Energy sector: Accounting for uncertainty

An improvement of methods for the inventory of greenhouse gas (GHG) emissions is necessary to ensure effective control of commitments to emission reduction. The national inventory reports play an important role, but do not reflect specifics of regional processes of GHG emission and absorption for large-area countries. In this article, a GIS approach for the spatial inventory of GHG emissions in the energy sector, based on IPCC guidelines, official statistics on fuel consumption, and digital maps of the region under investigation, is presented. We include mathematical background for the spatial emission inventory of point, line and area sources, caused by fossil-fuel use for power and heat production, the residential sector, industrial and agricultural sectors, and transport. Methods for the spatial estimation of emissions from stationary and mobile sources, taking into account the specifics of fuel used and technological processes, are described. Using the developed GIS technology, the territorial distribution of GHG emissions, at the level of elementary grid cells 2 km?×?2 km for the territory of Western Ukraine, is obtained. Results of the spatial analysis are presented in the form of a geo-referenced database of emissions, and visualized as layers of digital maps. Uncertainty of inventory results is calculated using the Monte Carlo approach, and the sensitivity analysis results are described. The results achieved demonstrated that the relative uncertainties of emission estimates, for CO₂ and for total emissions (in CO₂ equivalent), depend largely on uncertainty in the statistical data and on uncertainty in fuels’ calorific values. The uncertainty of total emissions stays almost constant with the change of uncertainty of N₂O emission coefficients, and correlates strongly with an improvement in knowledge about CH₄ emission processes. The presented approach provides an opportunity to create a spatial cadastre of emissions, and to use this additional knowledge for the analysis and reduction of uncertainty. It enables us to identify territories with the highest emissions, and estimate an influence of uncertainty of the large emission sources on the uncertainty of total emissions. Ascribing emissions to the places where they actually occur helps to improve the inventory process and to reduce the overall uncertainty.     

Safe policies in an uncertain climate: an application of FUND

Various aspects of the role of uncertainty in greenhouse gas emission reduction policy are analyzed with the integrated assessment model FUND. FUND couples simple models of economy, climate, climate impacts, and emission abatement. Probability distribution functions are assumed for all major parameters in the model. Monte Carlo analyses are used to study the effects of parametric uncertainties. Uncertainties are found to be large and grow over time. Uncertainties about climate change impacts are more serious than uncertainties about emission reduction costs, so that welfare-maximizing policies are stricter under uncertainty than under certainty. This is more pronounced without than with international cooperation. Whether or not countries cooperate with one another is more important than whether or not uncertainty is considered. Meeting exogenously defined emission targets may be more or less difficult under uncertainty than under certainty, depending on the asymmetry in the uncertainty and the central estimate of interest. The major uncertainty in meeting emissions targets in each of a range of possible future is the timing of starting (serious) reduction policies. In a scenario aiming at a stable CO₂ concentration of 550 ppm, the start date varies 20 years for Annex I countries, and much longer for non-Annex countries. Atmospheric stabilization at 550 ppm does not avoid serious risks with regard to climate change impacts. At the long term, it is possible to avoid such risks but only through very strict emission control at high economic costs.     

Emission scenarios and global climate protection

This paper evaluates the effectiveness of a wide range of emission scenarios in protecting climate (where ‘protecting climate’ Is used here to mean minimizing ‘dangerous anthropogenic interference with the climate system’ which results in impacts to society and the natural environment). Under baseline (no action) conditions there is a significant Increase in emissions, temperature and climate impacts. Controlling only CO₂ emissions (ie freezing emissions in year 2000 at 1990 levels, and decreasing them afterwards at 1%/yr) and only in Annex I countries, does not significantly reduce the impacts observed under the baseline scenario. However, impacts are substantially reduced when emissions are controlled in both Annex I and non-Annex I countries, and when both CO₂ and non-CO₂ emissions are controlled. It was also found that stabilizing CO₂ in the atmosphere below 450 ppm substantially reduces climate impacts. But in order to follow the pathway to stabilization at 450 ppm specified by the IPCC, global emissions can only slightly increase in the coming decades, and then must be sharply reduced. On the other hand, stabilizing CO₂ in the atmosphere above 450 ppm can have significant impacts, which indicates that stabilization of greenhouse gases in the atmosphere will not necessarily provide a high level of climate protection. Results from these and other scenarios are synthesized and related to climate protection goals through a new concept — ‘safe emission corridors’. These corridors indicate the allowable range of near-term global emissions (equivalent CO₂) which complies with specified short- and long-term climate goals. For an illustrative set of climate goals, the allowable anthropogenic global emissions in 2010 are computed to range from 7.3 to 14.5 GtC/yr equivalent CO₂ (1990 level = approximately 9.6 GtC/ yr); when these limits are set twice as strict (ie divided by two), the allowable range becomes 7.6 to 9.3 GtC/yr. To fall within this lower corridor, global emissions must be lower in 2010 than in 1990.     

Evaluating cost-effective strategies for meeting regional CO2 targets

Various climate protocol proposals oblige different industrialized countries to reduce CO₂ and other greenhouse gas emissions. In principle, the total costs of these obligations could be substantially reduced if emission reductions are implemented in regions with low marginal costs for CO₂ reduction. This has been difficult to quantify because of lack of models with suitable regional and sectoral detail. In this paper we perform these calculations by taking advantage of the capability of the IMAGE 2 model to compute regional emissions and costs. Two main options are examined for allocating emission reductions required of industrialized regions in a cost effective manner: (1) allocating them among industrialized regions (2) allocating them among all world regions. The cost savings for each of these options are presented. The main conclusions are that (a) it is of great importance for the cost comparisons of protocols to use a well defined baseline scenario and clearly formulated targets, and (b) large economic benefits, in the order of 35–65%, can accrue from joint-implementation agreements which allocate investments on the basis of net marginal costs of CO₂ emission reduction.     

Methods for exploring management options to reduce greenhouse gas emissions from tropical grazing systems

Increasing atmospheric concentrations of greenhouse gases are expected to result in global climatic changes over the next decades. Means of evaluating and reducing greenhouse gas emissions are being sought. In this study an existing simulation model of a tropical savanna woodland grazing system was adapted to account for greenhouse gas emissions. This approach may be able to be used in identifying ways to assess and limit emissions from other rangeland, agricultural and natural ecosystems.GRASSMAN, an agricultural decision-support model, was modified to include sources, sinks and storages of greenhouse gases in the tropical and sub-tropical savanna woodlands of northern Australia. The modified model was then used to predict the changes in emissions and productivity resulting from changes in stock and burning management in a hypothetical grazing system in tropical northeastern Queensland. The sensitivity of these results to different Global Warming Potentials (GWPs) and emission definitions was then tested.Management options to reduce greenhouse gas emissions from the tropical grazing system investigated were highly sensitive to the GWPs used, and to the emission definition adopted. A recommendation to reduce emissions by changing burning management would be toreduce fire frequency if both direct and indirect GWPs of CO₂, CH₄, N₂O, CO and NO are used in evaluating emissions, but toincrease fire frequency if only direct GWPs of CO₂, CH₄ and N₂O are used. The ability to reduce greenhouse gas emissions from these systems by reducing stocking rates was also sensitive to the GWPs used. In heavily grazed systems, the relatively small reductions in stocking rate needed to reduce emissions significantly should also reduce the degradation of soils and vegetation, thereby improving the sustainability of these enterprises.The simulation studies indicate that it is possible to alter management to maximise beef cattle production per unit greenhouse gases or per unit methane emitted, but that this is also dependent upon the emission definition used. High ratios of liveweight gain per unit net greenhouse gas emission were found in a broadly defined band covering the entire range of stocking rates likely to be used. In contrast, high values of liveweight gain per unit anthropogenic greenhouse gas emission were found only at very low stocking rates that are unlikely to be economically viable.These results suggest that policy initiatives to reduce greenhouse gas emissions from tropical grazing systems should be evaluated cautiously until the GWPs have been further developed and the implications of emission definitions more rigorously determined.     

International trade undermines national emission reduction targets: New evidence from air pollution

Many developed countries in Annex B of the Kyoto Protocol have been able to report decreasing emissions, and some have officially fulfilled their CO₂ reduction commitments. This is in part because current reporting and regulatory regimes allow these countries to displace emissions intensive production offshore. Using a new highly detailed account of emissions embodied in international trade we investigate this phenomenon of emissions leakage. We independently confirm previous findings that adjusting for trade, developed countries emissions have increased, not decreased. We find that the sectors successfully holding or lowering their domestic emissions are often the same as those increasing their imports of embodied CO₂. We also find that the fastest growing flow paths of embodied CO₂ largely originate outside the Kyoto Annex B signatory nations. Finally, we find that historically the same phenomenon of emissions displacement has already occurred for air pollution, with the result that despite aggressive legislation in major emitters total global air pollution emissions have increased. If regulatory policies do not account for embodied imports, global emissions are likely to rise even if developed countries emitters enforce strong national emissions targets.     

Russia at GHG Market

In the first Kyoto commitment period Russia could be the major supplier for the greenhouse gases (GHG) emissions market. Potential Russian supply depends on the ability of Russia to keep GHG emissions lower than the Kyoto target. In the literature there is no common understanding of the total trading potential of Russia at the international carbon market. In this paper we focus on CO₂ emission, which constituted nearly 80%of Russian GHG emission. We compare different projections of Russian CO₂emission and analyze the most important factors, which predetermine the CO₂emission growth. In a transition economy these factors are: Gross Domestic Product(GDP) dynamic, changes of GDP structure, innovation activity, transformation of export-import flows and response to the market signals. The input-output macroeconomic model with the two different input-output tables representing old and new production technologies has been applied for the analysis to simulate technological innovations and structural changes in the Russian economy during transition period. The Russian supply at the international GHG market without forest sector may be up to 3 billion metric ton of CO₂ equivalent. Earlier actions to reduce CO₂ emission are critical to insure theRussiansupply at the international carbon market. With regard to the current status of the Russian capital market, the forward trading with OECD countries is only the possibility to raise initial investments to roll no-regret and low-cost GHG reduction. This paper discusses uncertainties of RussianCO₂emission dynamics and analyzes the different incentives to lower the emission pathway.