Rethinking Global Emissions Trading

Rethinking Global Emissions Trading

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Pollution for a power plant
November 26, 2019

The Environmental Defense Fund's chief economist discusses a plan that leverages international cooperation to achieve ambitious, and durable greenhouse emissions reductions under the Paris climate framework.

The first global climate pact, the 1997 Kyoto Protocol, created the foundation for global emissions trading by allowing developed countries to purchase carbon offsets from areas of the globe where the cost of reducing greenhouse emissions was lowest.

Yet emissions trading under the Kyoto framework was far from perfect.

Too many projects failed to deliver carbon reductions beyond what would have happened anyway. And even where climate benefits were real, projects often weren’t built to last and deliver ongoing reductions on the scale needed to address the long-term challenge of climate change.

Suzi Kerr, chief economist at the Environmental Defense Fund, discusses a new framework for global emissions trading under the Paris Climate Accord, intended to incentivize ambitious and sustained emissions reductions. The plan, called Climate Teams, organizes small groups of countries that are economically committed to each other and establishes financial and technological conditions for addressing climate change over the long term.

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