Cutting with both arms of the scissors: the economic and political case for restrictive supply-side climate policies

Proponents of climate change mitigation face difficult choices about which types of policy instrument(s) to pursue. The literature on the comparative evaluation of climate policy instruments has focused overwhelmingly on economic analyses of instruments aimed at restricting demand for greenhouse gas emissions (especially carbon taxes and cap-and-trade schemes) and, to some extent, on instruments that support the supply of or demand for substitutes for emissions-intensive goods, such as renewable energy. Evaluation of instruments aimed at restricting the upstream supply of commodities or products whose downstream consumption causes greenhouse gas emissions—such as fossil fuels—has largely been neglected in this literature. Moreover, analyses that compare policy instruments using both economic and political (e.g. political “feasibility” and “feedback”) criteria are rare. This article aims to help bridge both of these gaps. Specifically, the article demonstrates that restrictive supply-side policy instruments (targeting fossil fuels) have numerous characteristic economic and political advantages over otherwise similar restrictive demand-side instruments (targeting greenhouse gases). Economic advantages include low administrative and transaction costs, higher abatement certainty (due to the relative ease of monitoring, reporting and verification), comprehensive within-sector coverage, some advantageous price/efficiency effects, the mitigation of infrastructure “lock-in” risks, and mitigation of the “green paradox”. Political advantages include the superior potential to mobilise public support for supply-side policies, the conduciveness of supply-side policies to international policy cooperation, and the potential to bring different segments of the fossil fuel industry into a coalition supportive of such policies. In light of these attributes, restrictive supply-side policies squarely belong in the climate policy “toolkit”.     

Energy markets,capital inertia and economic instrument impacts

Despite the importance of emissions trading and energy taxes to the EU and national climate strategies, limited research exists on their impact on emissions from the perspective of industry sectors targeted by economic instruments. This article contributes to redressing this deficit by critically analysing whether economic instruments applied within the UK provide sufficiently strong price incentives to overcome barriers to investment in energy-intensive sectors created by the capital and finance costs of replacing ‘legacy’ infrastructure and fluctuating base energy prices. Results from a survey of 189 companies from the cement, aluminium and chemicals sectors and 23 interviews with sector associations and businesses from these and other energy-intensive industries indicate that economic instruments have raised awareness of energy efficiency but have had a minimal impact on investment decisions. EU-wide economic instruments such as the EU emissions trading scheme have yet to be fully tested but may encounter similar difficulties. On this basis, we argue that economic instruments may need to be complemented by more interventionist programmes focusing on large-scale investment in energy modernization and we also discuss how economic instruments can contribute to this agenda.     

The contribution of future agricultural trends in the US Midwest to global climate change mitigation

Land use change is a complex response to changing environmental and socioeconomic systems. Historical drivers of land use change include changes in the natural resource availability of a region, changes in economic conditions for production of certain products and changing policies. Most recently, introduction of policy incentives for biofuel production have influenced land use change in the US Midwest, leading to concerns that bioenergy production systems may compete with food production and land conservation. Here we explore how land use may be impacted by future climate mitigation measures by nesting a high resolution agricultural model (EPIC – Environmental Policy Indicator Climate) for the US Midwest within a global integrated assessment model (GCAM – Global Change Assessment Model). This approach is designed to provide greater spatial resolution and detailed agricultural practice information by focusing on the climate mitigation potential of agriculture and land use in a specific region, while retaining the global economic context necessary to understand the far ranging effects of climate mitigation targets. We find that until the simulated carbon prices are very high, the US Midwest has a comparative advantage in producing traditional food and feed crops over bioenergy crops. Overall, the model responds to multiple pressures by adopting a mix of future responses. We also find that the GCAM model is capable of simulations at multiple spatial scales and agricultural technology resolution, which provides the capability to examine regional response to global policy and economic conditions in the context of climate mitigation.     

Top-down and bottom-up modelling to support low-carbon scenarios: climate policy implications

Bottom-up and top-down models are used to support climate policies, to identify the options required to meet GHG abatement targets and to evaluate their economic impact. Some studies have shown that the GHG mitigation options provided by economic top-down and technological bottom-up models tend to vary. One reason for this is that these models tend to use different baseline scenarios. The bottom-up TIMES_PT and the top-down computable general equilibrium GEM-E3_PT models are examined using a common baseline scenario to calibrate them, and the extend of their different mitigation options and its relevant to domestic policy making are assessed. Three low-carbon scenarios for Portugal until 2050 are generated, each with different GHG reduction targets. Both models suggest close mitigation options and locate the largest mitigation potential to energy supply. However, the models suggest different mitigation options for the end-use sectors: GEM-E3_PT focuses more on energy efficiency, while TIMES_PT relies on decrease carbon intensity due to a shift to electricity. Although a common baseline scenario cannot be ignored, the models’ inherent characteristics are the main factor for the different outcomes, thereby highlighting different mitigation options.

Policy relevance

The relevance of modelling tools used to support the design of domestic climate policies is assessed by evaluating the mitigation options suggested by a bottom-up and a top-down model. The different outcomes of each model are significant for climate policy design since each suggest different mitigation options like end-use energy efficiency and the promotion of low-carbon technologies. Policy makers should carefully select the modelling tool used to support their policies. The specific modelling structures of each model make them more appropriate to address certain policy questions than others. Using both modelling approaches for policy support can therefore bring added value and result in more robust climate policy design. Although the results are specific for Portugal, the insights provided by the analysis of both models can be extended to, and used in the climate policy decisions of, other countries.     

Closing the emission price gap

Even without internationally concerted action on climate change mitigation, there are important incentives for countries to put a price on their domestic emissions, including public finance considerations, internalizing the climate impacts of their own emissions, and co-benefits, such as clean air or energy security. Whereas these arguments have been mostly discussed in separate strands of literature, this article carries out a synthesis that exemplifies how policies to put a price on emissions can be conceptualized in a multi-objective framework. Despite considerable uncertainty, empirical evidence suggests that different countries may face quite different incentives for emission pricing. For instance, avoided climate damages and co-benefits of reduced air pollution appear to be the main motivation for emission pricing in China, while for the US generating public revenue dominates and for the EU all three motivations are of intermediate importance. We finally argue that such unilateral incentives could form the basis for incremental progress in international climate negotiations toward a realistic climate treaty based on national interest and differentiated emission pricing and describe how such an agreement could be put into practice.     

Which policy instruments attract foreign direct investments in renewable energy?

Reducing GHG emissions and mitigating climate change would require significant investments in renewable energy technologies. Foreign direct investments (FDI) in renewable energy (RE) have increased over the last years, contributing to the diffusion of RE globally. In the field of climate policy, there are multiple policy instruments aimed at attracting investments in renewable energy. This article aims to map the FDI flows globally including source and destination countries. Furthermore, the article investigates which policy instruments attract more FDI in RE sectors such as solar, wind and biomass, based on an econometric analysis of 137 Organisation for Economic Co-operation and Development (OECD) and non-OECD countries. The results show that Feed in Tariffs (FIT) followed by Fiscal Measures (FM), such as tax incentives and Renewable Portfolio Standards (RPS), are the most significant policy instrument that attract FDI in the RE sector globally. Regarding carbon pricing instruments, based on our analysis, carbon tax proved to be correlated with high attraction of FDI in OECD countries, whereas Emissions Trading Schemes (ETS) proved to be correlated with high attraction of FDI mainly in non-OECD countries.

Key policy insights

• Feed in Tariffs is the most significant policy instrument that attracts FDI in the Renewable Energy sector globally.

• Fiscal Measures (FM), such as tax incentives, show a significant and positive impact on renewable energy projects by foreign investors, and particularly on solar energy.

• Carbon pricing instruments, such as carbon taxation and emissions trading, proved to attract FDI in OECD and non-OECD countries respectively.

• Public investments, such as government funds for renewable energy projects, proved not as attractive to foreign private investors, perhaps because public funds are not perceived as stable in the long run.

     

Public policy, institutional investors and climate change: a UK case-study

Institutional investors have two important roles to play in encouraging companies to address the risks and take advantage of the opportunities presented by climate change. The first is through using their influence as shareholders to encourage companies to adopt more proactive approaches to managing the risks and opportunities presented by climate change. The second is through explicitly factoring climate change risks and opportunities into ‘mainstream’ investment analysis processes. While there is growing investor activity on the former, the integration of climate change into investment analysis remains confined to sectors where there are strong government incentives (e.g. for renewable energy) or where greenhouse gas emissions have a market price. This article reviews the evolution of UK institutional investor interest in climate change from 1990 to 2005, focusing in particular on the relative contributions of ‘soft’ policy measures such as information-disclosure and awareness raising, and ‘hard’ policy measures such as regulation and market-based instruments. The article concludes that, over this period, soft policy measures played an important role in encouraging investors to discuss climate change issues with companies, but had minimal influence on investment decisions. It was only with the introduction of hard policy measures that climate change started to be systematically factored into investment analysis. The article canvasses the implications of these findings for government efforts in the UK and elsewhere to encourage investors to play a more proactive role in the climate change debate. It also considers the role that institutional investors themselves can play in strengthening public policy measures to reduce greenhouse gas emissions.     

Addressing climate change under preferential trade agreements: Towards alignment of carbon standards under the Transatlantic Trade and Investment Partnership

With its wide coverage of economic spheres and the variety of trade and investment measures currently under negotiation, the Transatlantic Trade and Investment Partnership opens windows of opportunity for advancing action on climate change. We examine possible avenues and international trade law implications for an alignment of carbon-related standards between the EU and the US. We compare EU and US carbon emissions standards for cars and argue that negotiators should strive for a mutual recognition of their equivalence for a transitional period, while pursuing the goal of full harmonization at the level of the highest standards of two parties at some date in the future. This could be a way to balance between economic and environmental interests and harness economic incentives for the benefit of climate.     

主要发达经济体从碳达峰到碳中和的路径及启示

随着气候变化影响加剧,全球气候治理进程加速,实现碳达峰已经成为全球气候行动的核心,各国也相继制定碳中和目标并开展行动。中国在第75届联合国大会一般性辩论上提出了碳达峰碳中和目标,部分已实现碳达峰的发达经济体也提出了各自的碳中和承诺。文中从“整体-阶段”及“焦点-公平”视角分析了欧盟和美国等主要发达经济体碳达峰的历程和特点,以及其碳中和目标和规划。研究发现,发达经济体在碳达峰过程中普遍经历了较长的爬坡期（58~136年）和平台期（4~20年),在碳达峰时,发达经济体的能源结构以油气为主,油气占一次能源消费比重为57%~77%,其人均排放量、历史累计排放以及人均GDP也都处于较高水平,在碳达峰前后总体处于经济与碳排放脱钩状态。各发达经济体的碳中和路径均以能源转型为重点,采用了多元化的政策工具,并且注重低碳和负碳技术的革新。根据发达经济体的政策展望,在实现碳中和时,均难以将绝对排放量降为零,都需要通过碳移除手段进行抵消。通过对比分析,发现中国的碳达峰和碳中和目标是具有雄心的气候承诺,相较其他发达经济体需要付出更大努力。建议运用全面综合的政策工具支撑碳中和目标的有效落实,加快中国的气候立法,在兼顾公正转型的同时推动能源结构调整,注重可再生能源和能效方面的新技术开发应用。     

From Lima to Paris,Part 1: The Lima Hangover

A growing body of literature suggests that an economic case may exist for investment in large-scale climate change mitigation. At the same time, however, investment is persistently falling well short of the levels required to prevent dangerous climate change, suggesting that economically attractive mitigation opportunities are being missed. To understand whether and where these opportunities exist, this article contrasts macro-level analyses of climate finance with micro-level bottom-up analyses of the scale and composition of low-carbon investment opportunities in four case study developing world cities. This analysis finds that there are significant opportunities to redirect existing finance streams towards more cost-effective, lower-carbon options. This would mobilize substantial new investment in climate mitigation. Two key explanations are proposed for the failure to exploit these opportunities. First, the composition of cost-effective measures is highly context-specific, varying from place to place and sector to sector. Macro-level analyses of climate finance flows are therefore poor indicators of the micro-level landscape for low-carbon investment. Specific local research is therefore needed to understand the opportunities for cost-effective mitigation at that level. Second, many opportunities require enabling governance arrangements that are not currently in place. Mobilizing new low-carbon investment and closing the ‘climate finance gap' therefore requires attention to policy frameworks and financing mechanisms that can facilitate the exploitation of cost-effective low-carbon options.

Policy relevance

The importance of increasing investment in climate mitigation, especially in developing nations, is well established. This article scrutinizes four city-level studies of the scope for cost-effective low-carbon investment, and finds that significant opportunities are not being exploited in developing world cities. Enabling governance structures may help to mainstream climate considerations into investments by local actors (households, businesses and government agencies). While climate finance distributed through international bodies such as the Green Climate Fund may not always be a suitable vehicle to invest directly in disaggregated, local-level measures, it can provide the incentives to develop these governance arrangements.     

Drivers of national climate policy

Patterns of national climate policy performance and their implications for the geopolitics of climate change are examined. An overview of levels of emissions performance across countries is first provided. Substantial changes in emissions trends over time are documented, notably with GHG emissions trajectories, which are shaped less and less by the developed/developing country divide. Various patterns of policy convergence and divergence in the types of policies states implement are then surveyed. Four broad types of explanation that may account for these trends are then explored: (1) variation in the institutional form of country-level governance regimes, (2) patterns of dependence on fossil fuel energy, (3) broad systemic differences among states (specifically in their population densities, carbon intensity, and per capita incomes, and (4) variations in the traditions of economic intervention by states. The article contributes to the growing body of work on comparative climate policy, and provides a first attempt at exploring the comparative politics of instrument choice. The analysis challenges the continued importance of a North–South divide for the future of climate policy, thus reinforcing a sense of the ‘new geopolitics’ of climate change. Some of the implications of the analysis for debates about the form of future international agreement on mitigation policy are also explored.

Policy relevance

The article contributes to the understanding of the variety of institutional conditions under which policy makers develop policy and thus the constraints and opportunities for the design of international agreements under these conditions.     

Land-use transition for bioenergy and climate stabilization: model comparison of drivers,impacts and interactions with other land use based mitigation options

In this article, we evaluate and compare results from three integrated assessment models (GCAM, IMAGE, and ReMIND/MAgPIE) regarding the drivers and impacts of bioenergy production on the global land system. The considered model frameworks employ linked energy, economy, climate and land use modules. By the help of these linkages the direct competition of bioenergy with other energy technology options for greenhouse gas (GHG) mitigation, based on economic costs and GHG emissions from bioenergy production, has been taken into account. Our results indicate that dedicated bioenergy crops and biomass residues form a potentially important and cost-effective input into the energy system. At the same time, however, the results differ strongly in terms of deployment rates, feedstock composition and land-use and greenhouse gas implications. The current paper adds to earlier work by specific looking into model differences with respect to the land-use component that could contribute to the noted differences in results, including land cover allocation, land use constraints, energy crop yields, and non-bioenergy land mitigation options modeled. In scenarios without climate change mitigation, bioenergy cropland represents 10–18 % of total cropland by 2100 across the different models, and boosts cropland expansion at the expense of carbon richer ecosystems. Therefore, associated emissions from land-use change and agricultural intensification as a result of bio-energy use range from 14 and 113 Gt CO2-eq cumulatively through 2100. Under climate policy, bioenergy cropland increases to 24–36 % of total cropland by 2100.     

Economic and environmental effectiveness of a technology-based climate protocol

Abstract

The present stalemate in climate negotiations between the USA and the other Annex I countries has led policy analysts and economists to explore the possible emergence of alternative climate regimes that may be applied after 2012. This article explores the idea of replacing international cooperation on greenhouse gas emission control with international cooperation on climate-related technological innovation and diffusion. This idea—recently proposed among others by Barrett (2001) and Benedick (2001)—is based on the insight that incentives to free-ride are much smaller in the case of technological cooperation than in the case of cooperation on emission control. This article provides a first applied game theory analysis of a technology-based climate protocol by assessing: (i) the self-enforcingness (namely, the absence of incentives to free-ride) of the coalition that would form when countries negotiate on climate-related technological cooperation; (ii) the environmental effectiveness of a technology-based climate protocol. The analysis is carried out by using a model in which endogenous and induced technical change are explicitly modelled. The results of our analysis partly support Barrett's and Benedick's conjectures. On the one hand, a self-enforcing agreement is more likely to emerge when countries cooperate on environmental technological innovation and diffusion than when they cooperate on emission abatement. However, technological cooperation—without any commitment to emission control—may not lead to a sufficient abatement of greenhouse gas concentrations.     

The socialization potential of the CDM in EU–Vietnam climate relations

This article argues that the material incentives associated with climate policies such as the Clean Development Mechanism (CDM) may contribute to the socialization of emerging economies such as Vietnam in economic-oriented climate change norms. In current academic research, the CDM has both been extolled as a cost-effective and vilified as an environmentally inadequate instrument. Few studies so far, however, have looked into the CDM's potential contribution to socialization-related phenomena such as raising climate change awareness. This article aims to fill that gap by studying the CDM in EU–Vietnam relations in four periods, namely initiation (2001–2007), improvement (2008–2010), consolidation (2010–2012), and potential habit formation (2012 and beyond), with both the EU and Vietnam being important players in the market for CDM credits (Certified Emission Reductions or CERs). We argue that there is at least a strong potential for habit formation resulting from the CDM's material incentives, and that the underlying causal mechanism involves the emergence and activities of norm entrepreneurs and habit formation through a process of legal institutionalization.

Policy relevance

Normative transformation or change is increasingly attracting the attention of both climate policy makers and scholars alike, certainly in view of the failures of ‘standard’ economic or technological solutions to tackle climate change. There is a need, however, to apply insights from social theory to specific policies and cases. The policy relevance of this article lies here: does the CDM (a specific policy) affect climate concerns (norms) in Vietnam (a specific case)? And, if so, to what extent and why? Based on previous research regarding the Chinese case, it is expected that the CDM's material incentives result in a mild effect in Vietnam, probably less pronounced than in China in view of the latter's relative level of economic development, and the strength of its political and legal-institutional system and (human) capacity to develop CDM projects. This article's research findings point out that whether and how ‘deep’ these new shared ideas will succeed in becoming standards of appropriate behaviour in Vietnam might to some extent depend on whether the international community is able to offer a material incentive structure that fosters such a normative transformation.     

Perceptions and responses to climate policy risks among California farmers

This paper considers how farmers perceive and respond to climate change policy risks, and suggests that understanding these risk responses is as important as understanding responses to biophysical climate change impacts. Based on a survey of 162 farmers in California, we test three hypotheses regarding climate policy risk: (1) that perceived climate change risks will have a direct impact on farmer's responses to climate policy risks, (2) that previous climate change experiences will influence farmer's climate change perceptions and climate policy risk responses, and (3) that past experiences with environmental policies will more strongly affect a farmer's climate change beliefs, risks, and climate policy risk responses. Using a structural equation model we find support for all three hypotheses and furthermore show that farmers’ negative past policy experiences do not make them less likely to respond to climate policy risks through participation in a government incentive program. We discuss how future research and climate policies can be structured to garner greater agricultural participation. This work highlights that understanding climate policy risk responses and other social, economic and policy perspectives is a vital component of understanding climate change beliefs, risks and behaviors and should be more thoroughly considered in future work.     

Promoting green industrial development through local content requirements: India's National Solar Mission

In order to make renewable energy technology deployment strategies politically acceptable, many countries are linking them to other socio-economic goals. A controversial industrial policy tool that is increasingly popular is the use of local content requirements (LCRs). These regulate the extent to which certain projects must use local products and are often justified on the basis of supporting local employment and private sector development. The LCR debate has centred on the rights and wrongs of protecting infant industry, with little progress being made in finding common ground. This article aims to move beyond this stalemate to understand conditions under which LCRs might be an effective tool for promoting local manufacturing. To do so, an effectiveness framework is applied to LCRs for solar photovoltaics in India's National Solar Mission. The article finds that for LCRs to be effective, they must be (1) limited in duration and incorporate planned evaluation phases, (2) focused on technologies and components for which technical expertise is available and global market entry barriers are manageable, and (3) linked to training and promotion of business linkages and linked to support for other stages of the value chain and wider services integral to success of renewable energy industries.

Policy relevance

It is widely appreciated that governments need to support renewable energy technology deployment in order to mitigate climate change. However, policy makers face increasing pressure to link such support with other socio-economic goals, such as job creation, economic development, and poverty reduction. One such policy support mechanism is the use of local content requirements (LCRs) linked to feed-in tariffs. Policy makers are faced with a difficult choice as manufacturing interest groups lobby for the establishment of protection measures such as LCRs whilst the international trade community led by the World Trade Organization (WTO) seeks to limit their use. This difficulty is amplified by the limited information on the impact of LCRs on job creation and economic development. In this context, this article documents the use of LCRs in India's National Solar Mission and seeks to understand the conditions under which LCRs are an effective policy tool for building a competitive local manufacturing industry.     

Evaluating the US Mid-Century Strategy for Deep Decarbonization amidst early century uncertainty

The recent change in US presidential administrations has introduced significant uncertainty about both domestic and international policy support for continued reductions in GHG emissions. This brief analysis estimates the potential climate ramifications of changing US leadership, contrasting the Mid-Century Strategy for Deep Decarbonization (MCS) released under the Obama Administration, with campaign statements, early executive actions, and prevailing market conditions to estimate potential emission pathways under the Trump Administration. The analysis highlights areas where GHG reductions are less robust to changing policy conditions, and offers brief recommendations for addressing emissions in the interim. It specifically finds that continued reductions in the electricity sector are less vulnerable to changes in federal policy than those in the built environment and land use sectors. Given the long-lived nature of investments in these latter two sectors, however, opportunities for near-term climate action by willing cities, states, private landowners, and non-profit organizations warrant renewed attention in this time of climate uncertainty.

Key policy insights

• The recent US presidential election has already impacted mitigation goals and practices, injecting considerable uncertainty into domestic and international efforts to address climate change.

• A strategic assessment issued in the final days of the Obama Administration for how to reach long-term climate mitigation objectives provides a baseline from which to gauge potential changes under the Trump Administration.

• Though market trends may continue to foster emission declines in the energy sector, emission reductions in the land use sector and the built environment are subject to considerable uncertainty.

• Regardless of actions to scale back climate mitigation efforts, US emissions are likely to be flat in the coming years. Assuming that emissions remain constant under President Trump and that reductions resume afterwards to meet the Obama Administration mid-century targets in 2050, this near-term pause in reductions yields a difference in total emissions equivalent to 0.3–0.6 years of additional global greenhouse gas emissions, depending on the number of terms served by a Trump Administration.

     

Thirteen plus one: a comparison of global climate policy architectures

We critically review the Kyoto Protocol and thirteen alternative policy architectures for addressing the threat of global climate change. We employ six criteria to evaluate the policy proposals: environmental outcome, dynamic efficiency, cost-effectiveness, equity, flexibility in the presence of new information, and incentives for participation and compliance. The Kyoto Protocol does not fare well on a number of criteria, but none of the alternative proposals fare well along all six dimensions. We identify several major themes among the alternative proposals: Kyoto is “too little, too fast”; developing countries (DCs) should play a more substantial role and receive incentives to participate; implementation should focus on market-based approaches, especially those with price mechanisms; and participation and compliance incentives are inadequately addressed by most proposals. Our investigation reveals tensions among several of the evaluative criteria, such as between environmental outcome and efficiency, and between cost-effectiveness and incentives for participation and compliance.     

Climate change in the northeastern US: regional climate model validation and climate change projections

A high resolution regional climate model (RCM) is used to simulate climate of the recent past and to project future climate change across the northeastern US. Different types of uncertainties in climate simulations are examined by driving the RCM with different boundary data, applying different emissions scenarios, and running an ensemble of simulations with different initial conditions. Empirical orthogonal functions analysis and K-means clustering analysis are applied to divide the northeastern US region into four climatologically different zones based on the surface air temperature (SAT) and precipitation variability. The RCM simulations tend to overestimate SAT, especially over the northern part of the domain in winter and over the western part in summer. Statistically significant increases in seasonal SAT under both higher and lower emissions scenarios over the whole RCM domain suggest the robustness of future warming. Most parts of the northeastern US region will experience increasing winter precipitation and decreasing summer precipitation, though the changes are not statistically significant. The greater magnitude of the projected temperature increase by the end of the twenty-first century under the higher emissions scenario emphasizes the essential role of emissions choices in determining the potential future climate change.     

Thirteen plus one: a comparison of global climate policy architectures

We critically review the Kyoto Protocol and thirteen alternative policy architectures for addressing the threat of global climate change. We employ six criteria to evaluate the policy proposals: environmental outcome, dynamic efficiency, cost-effectiveness, equity, flexibility in the presence of new information, and incentives for participation and compliance. The Kyoto Protocol does not fare well on a number of criteria, but none of the alternative proposals fare well along all six dimensions. We identify several major themes among the alternative proposals: Kyoto is “too little, too fast”; developing countries (DCs) should play a more substantial role and receive incentives to participate; implementation should focus on market-based approaches, especially those with price mechanisms; and participation and compliance incentives are inadequately addressed by most proposals. Our investigation reveals tensions among several of the evaluative criteria, such as between environmental outcome and efficiency, and between cost-effectiveness and incentives for participation and compliance.