TY - CHAP A1 - Flachsland, Christian ED - Edenhofer, Ottmar ED - Pichs - Madruga, R. ED - Sokona, Y. T1 - Mitigation of Climate Change: Contribution of Working Group III to the Fifth Assessment Report of the Intergovernmental Panel on Climate Change T2 - Climate Change 2014 Y1 - 2015 SN - 978-1107654815 PB - Cambridge University Press CY - Cambridge ER - TY - CHAP A1 - Knopf, B. A1 - Kowarsch, M. A1 - Flachsland, Christian T1 - The 2°C reconsidered T2 - Climate Change, Justice, and Sustainability: Linking Climate and Development Policy Y1 - 2014 SN - 978-9400799028 SP - 121 EP - 137 PB - Springer CY - München ER - TY - CHAP A1 - Flachsland, Christian A1 - Lessmann, Kai A1 - Edenhofer, Ottmar T1 - Climate Policy in a decentralized World T2 - Climate Change, Justice, and Sustainability: Linking Climate and Development Policy Y1 - 2014 SN - 978-9400799028 SP - 257 EP - 268 PB - Springer CY - München ER - TY - JOUR A1 - Flachsland, Christian A1 - Marschinski, Robert A1 - Jakob, Michael T1 - Sectoral Linking of carbon markets: A trade-theory analysis JF - Resource and Energy Economics N2 - The linking of emission trading systems (ETS) is a widely discussed policy option for future international cooperation on climate change. Benefits are expected from efficiency gains and the alleviation of concerns over competitiveness. However, from trade-theory it is known that due to general equilibrium effects and market distortions, linking may not always be beneficial for all participating countries. Following-up on this debate, we use a Ricardo-Viner type general equilibrium model to study the implications of sectoral linking on carbon emissions (‘leakage’), competitiveness, and welfare. By comparing pre- and post-linking equilibria, we show analytically how global emissions can increase if one of the ‘linked’ countries lacks an economy-wide emissions cap, although in case of a link across idiosyncratic sectors a decrease of emissions (‘anti-leakage’) is also possible. If – as a way to address concerns about competitiveness – a link between the EU ETS and a hypothetical US system is established, the partial emission coverage of the EU ETS can lead to the creation of new distortions between the non-covered domestic and international sector. Finally, we show how the welfare effect from linking can be decomposed into gains-from-trade and terms-of-trade contributions, and how the latter can make the overall effect ambiguous. KW - Linking KW - Emission trading KW - Trade theory KW - Competitiveness KW - Leakage Y1 - 2012 U6 - https://doi.org/10.1016/j.reseneeco.2012.05.005 SN - 1873-0221 VL - 34 IS - 4 SP - 585 EP - 606 PB - Elsevier CY - Mexico ER - TY - JOUR A1 - Flachsland, Christian A1 - Brunner, S. A1 - Marschinski, M. T1 - Credible commitment in carbon policy JF - Climate Policy N2 - In this article the problem of credible commitment in carbon policy is discussed. Investors favour long-term predictability of the policy, but without any external enforcement mechanisms a commitment made by a government can be withdrawn, leading to scepticism and lack of credibility. This results in increased market risks and investment hold-up. Regulatory uncertainty stems from (i) strategic interactions between government and firms, (ii) potential learning about climate damage and abatement cost and (iii) political volatility. Although commitment to future policy encourages private investment, it also imposes costs in the form of reduced flexibility to accommodate new information or preferences. The article reviews devices that may help policy makers raise the level of commitment while also leaving some room for flexible adjustments. In particular, legislation of a long-term governance framework, delegation to an independent carbon agency and securitization of investors' stakes in emission markets offer palliative approaches. KW - Carbon pricing KW - Climate policy frameworks KW - Incentive mechanisms KW - Regulatory uncertainty Y1 - 2012 U6 - https://doi.org/10.1080/14693062.2011.582327 SN - 1752-7457 VL - 12 IS - 2 SP - 255 EP - 271 PB - Taylor & Francis CY - Abingdon ER - TY - JOUR A1 - Flachsland, Christian A1 - Jakob, Michael A1 - Steckel, Jan C. A1 - Baumstark, Lavinia T1 - Climate Finance for Developing Country Mitigation: Blessing or Curse? JF - Climate and Development N2 - Under the United Nations Framework Convention on Climate Change, industrialized countries have agreed to cover the incremental costs of climate change mitigation in developing countries and recent climate negotiations have reaffirmed the central role of climate finance for global mitigation efforts. We use an integrated energy–economy–climate model to assess the potential magnitude of financial transfers to developing countries that can be expected under non-market transfer mechanisms as well as international emission trading with several allocation schemes. Our results indicate that for the latter, depending on international permit allocation rules financial transfers to developing countries could reach almost USD bln 400 per year in 2020, with Sub-Saharan Africa receiving financial inflows of as much as 14.5% of its GDP. Reviewing the literature on natural resource revenues, official development assistance and foreign direct investment, we identify three major channels through which such sizable financial inflows may induce harmful effects for recipients: volatility, Dutch disease, and rent-seeking and corruption. We discuss the relevance of these mechanisms for climate finance and identify institutional arrangements which could help to avoid a ‘climate finance curse’. We conclude that there is no deterministic relationship between financial inflows and adverse consequences, as the most serious problems could be prevented or at least alleviated by appropriately designed policies and governance provisions. KW - Mitigation scenarios KW - Developing countries KW - Multilateral climate policy frameworks KW - North–South Y1 - 2014 U6 - https://doi.org/10.1080/17565529.2014.934768 SN - 1756-5537 VL - 7 IS - 1 SP - 1 EP - 15 PB - Taylor & Francis ER - TY - CHAP A1 - Edenhofer, Ottmar A1 - Flachsland, Christian A1 - Jakob, Michael T1 - The Atmosphere as a Global Commons – Challenges for International Cooperation and Governance T2 - The Handbook on the Macroeconomics of Climate Change Y1 - 2014 SN - 978-0199856978 SP - 260 EP - 296 PB - Oxford University Press CY - Oxford ER - TY - JOUR A1 - Flachsland, Christian A1 - Joas, F. T1 - The (Ir)relevance of Transaction Costs in Climate Policy Instrument Choice: An analysis of the EU and the US JF - Climate Policy N2 - This article assesses the relevance of ex post transaction costs in the choice of climate policy instruments in the EU (focusing mainly on the example of Germany) and the US. It reviews all publicly available empirical ex post transaction cost studies of climate policy instruments broken down by the main private and public sector cost factors and offers hypotheses on how these factors may scale depending on instrument design and other contextual factors. The key finding from the evaluated schemes is that it is possible to reject the hypothesis that asymmetries in ex post transaction costs across instruments are large and, thus, play a pivotal role in climate policy instrument choice. Both total and relative ex post transaction costs can be considered low. This conjecture differs from the experience in other areas of environmental policy instruments where high total transaction costs are considered to be important factors in the overall assessment of optimal environmental policy choice. Against this background, the main claim of this article is that in climate policy instrument choice, ex post transaction cost considerations play a minor role in large countries that feature similar institutional characteristics as the EU and the US. Rather, the focus should be on the efficiency properties of instruments for incentivizing abatement, as well as equity and political economy considerations (and other societally relevant objectives). In order to inform transaction cost considerations in climate policy instrument choice in countries that adopt new climate policies, more data would be desirable in order to enable more robust estimates of design- and context-specific transaction-cost scaling factors. KW - Carbon tax KW - Climate policy instruments KW - EU Emissions Trading Scheme KW - OECD KW - Transaction costs Y1 - 2015 U6 - https://doi.org/10.1080/14693062.2014.968762 SN - 1752-7457 VL - 16 IS - 1 SP - 26 EP - 49 PB - Taylor & Francis CY - Abingdon ER - TY - JOUR A1 - Flachsland, Christian A1 - Grosjean, G. A1 - Acworth, W. A1 - Marschinski, R. T1 - After Monetary Policy, Climate Policy: Is Delegation Key to EU ETS reform? JF - Climate Policy N2 - Since the crash of carbon prices in phase II of the European Union Emissions Trading System (EU ETS), many have argued that the low price mirrors structural failures requiring intervention. A wide range of reform options have been suggested, including delegating the governance of the carbon market to an independent authority. This article analyses the debate by reconstructing the various arguments for or against reform. Three possible drivers of the price decline are investigated: (1) exogenous shocks; (2) insufficient credibility; and (3) market imperfections. It is argued that the extent to which a low price is problematic and warrants reform depends on the specific objectives associated with the EU ETS and the perception on the functioning of the market. A two-dimensional EU ETS Reform Space, comprising the degree of price certainty within the EU ETS and the level of delegation, is devised. Within the Reform Space, EU ETS reform options currently discussed are mapped. This descriptive structure offers a framework to clarify whether delegation responds to various concerns with respect to the EU ETS. Delegation might enhance flexibility under unforeseen circumstances, decrease policy uncertainty, and increase the credibility of long-term policy commitments. However, higher degrees of delegation face challenges including democratic legitimacy and political feasibility. KW - Carbon authority KW - Carbon central bank KW - Carbon price KW - Delegation KW - EU Emissions Trading System KW - Market stability reserve Y1 - 2016 U6 - https://doi.org/10.1080/14693062.2014.965657 VL - 16 IS - 1 SP - 1 EP - 25 PB - Taylor & Francis ER - TY - JOUR A1 - Flachsland, Christian A1 - Edenhofer, Ottmar A1 - Creutzig, Felix T1 - Closing the Emission Price Gap JF - Global Environmental Change N2 - 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. KW - Unilateral incentives KW - Co-benefits KW - Hybrid climate agreement Y1 - 2015 U6 - https://doi.org/10.1016/j.gloenvcha.2015.01.003 VL - 31 SP - 132 EP - 143 PB - Elsevier B.V. CY - Amsterdam ER - TY - JOUR A1 - Flachsland, Christian A1 - Edenhofer, Ottmar A1 - Knopf, Brigitte T1 - Science and religion in dialogue over the global commons JF - Nature Climate Change N2 - The Pope's encyclical makes unprecedented progress in developing scientific dialogue with religion by drawing on research, and encouraging further discussion about the ethical challenge of governing the global commons. KW - Climate-change policy KW - Ethics KW - Policy Y1 - 2015 U6 - https://doi.org/10.1038/nclimate2798 VL - 5 IS - 10 SP - 907 EP - 909 PB - Springer Nature ER - TY - JOUR A1 - Flachsland, Christian A1 - Carraro, Carlo A1 - Edenhofer, Ottmar A1 - Kolstad, Charles A1 - Stavins, Robert A1 - Stowe, Robert T1 - The IPCC at a Crossroads: Opportunities for Reform JF - Science N2 - The Intergovernmental Panel on Climate Change (IPCC) has proven its value as an institution for large-scale scientific collaboration to synthesize and assess large volumes of climate research for use by policy-makers, as well as for establishing credibility of findings among diverse national governments. But the IPCC has received considerable criticism of both its substance and process. The new IPCC leadership to be elected in October could help guide the IPCC to a clear, shared understanding of future objectives and could shape procedural reforms. We identify key opportunities for reform by addressing two related questions: Is the IPCC doing the right things? Is the IPCC doing things right? Y1 - 2015 U6 - https://doi.org/10.1126/science.aac4419 SN - 1095-9203 VL - 350 IS - 6256 SP - 34 EP - 35 PB - American Association for the Advancement of Science CY - Washington, DC [u.a.] ER -