Research project CG/DD1/27 (Research action CG)
Context
The Kyoto Protocol permits the use of four mechanisms for implementing its provisions: ‘bubbles’ (art. 4.1), ‘emission trades’ (art. 17), ‘joint implementation’ (art. 6.1) and the ‘clean development mechanism’ (art. 12.2).
Having accepted to participate in the ‘European bubble’, Belgium has been assigned an obligation to cut its CO2 emissions by 7.5% following the European agreement of 17 June 1998. While the choice of instruments remains under its sovereignty, Belgium will nevertheless have to choose in co-ordination with its European and other partners.
Objectives
Given this context, the motivation for the integrated research project is a triple one:
1. To assess the magnitude of efforts (i.e. costs) that will be required on the part of the country's economy within the framework of using flexible mechanisms .
2. To develop interdisciplinary knowledge - economic and legal - of the latest of the instruments being planned: emissions trading.
3. Assist preparation of the institutional implementation within Belgium of this instrument.
Network members, project components and expected results
The CLIMBEL Network concerns research work on three complementary levels: (i) macroeconomic; (ii) microeconomic and legal; (iii) institutional. Each level corresponds to a specific project.
Project I, entitled "Emission reduction constraints for Belgium after Kyoto, macroeconomic and sectoral dimensions" is being produced by the Centrum voor Ekonomische Studien (CES - KUL). Its purpose is to study the following issues:
1. What would be the effects of alternative multilateral arrangements between EU member states (burden sharing) on economic welfare in Belgium and in the other countries? What would be the effects of the use of alternative instruments at the European level? This analysis involves the simulation of different scenarios for European decision-making as regards the choice of instruments, as well as the simulation of various scenarios of quotas trading at the world level.
2. What is the potential role of joint implementation as far as Belgium is concerned? The analysis will feature a survey of existing literature and also conduct econometric simulations.
3. What are the emission reduction effects and economic welfare impacts of alternative instruments decided in Belgium to reach the Kyoto goals? This requires first a common sense (feasibility) analysis of the different types of measures proposed together with an analysis of their net costs and net emission reduction effects. This is an analysis measure per measure. A second step is then to evaluate a package of measures that achieves the Kyoto target.
Project II, entitled "Design and organisation of a tradable permits market in Belgium: microeconomic and legal analyses" concentrates on the specific particular instrument of emissions trading. The study of this instrument requires a reflection on two levels: economic, and legal.
The economic aspects of the design of a market in emissions trading are studied by the Centre for Operations Research and Econometrics (CORE - UCL). The analysis concentrates on the actors involved (companies, households, institutional actors, financial intermediaries and others), the instrument’s forms and characteristics, the procedures (i) for the initial allocation of permits and (ii) for operation of the secondary market and, finally, "domestic burden sharing" (distributive implications).
The study of legal aspects behind the organisation of the emissions trading market has been entrusted to the Centre de Droit de la Consommation (CDC - UCL). The required legal reflections take the form here of de lege ferenda actions and are directly inspired by the results of the economic study above. They are structured naturally into the following four viewpoints : private law and economic law perspective, public law perspective, administrative law perspective, and legal liability perspective.
Project III, entitled "Study of the institutional feasibility study of flexible mechanisms and the complementarity between instruments for emission-reduction ", addresses the implementation of the instruments under consideration. Now being conducted by the Federal Planning Bureau (FPB), this project is structured into two parts.
1. The first part analyses the national and international factors that condition the use of flexible mechanisms. The international framework, competition regulation, European policy, the Belgian institutional context and, finally, Belgian policy on climate are the context within which flexible mechanisms will be introduced. A descriptive summary of these will be produced.
2. The second part consists of a feasibility study of the use of flexible mechanisms in Belgium. Work from Project II will be the main input for this section; output will take the form of reports and working memoranda destined for administrative and /or political decision makers.
This project represents the link between the projects described above and the decision-making level within Belgium with regard to emissions abatement. In addition to the above description of the two project sections, efforts will be undertaken, via collaborators from the Federal Planning Bureau, with the relevant institutional authorities affected by the various instruments.
Scientific collaboration
At the same time as the CLIMNEG network (OSTC contract CG/DD/241-244), collaboration projects are ongoing the ‘Fondazione Eni Enrico Mattei’ (FEEM), the Massachusetts Institute of Technology (MIT), the ‘Groupement de Recherche en Economie Quantitative d’Aix-Marseille’ (GREQAM), the University of California at Santa Barbara, the Indian Statistical Institute, ‘CentER’ in Tilburg, and the BEIJER Institute of Ecological Economics in Stockholm.
Changements climatiques et instruments de réduction des émissions en Belgique: une analyse interdisciplinaire (réseau CLIMBEL): résumé exécutif
Bruxelles: SSTC, 2001 (SP1007)
[To download]
Changements climatiques et instruments de réduction des émissions en Belgique (Réseau CLIMBEL): rapport final
Tulkens, Henry Bruxelles: SSTC, 2001 (SP0987)
[To download]
[Exhausted]
Climate change and instruments for emissions abatement in Belgium: an interdisciplinary analysis (CLIMBEL project): executive summary
Brussels: OSTC, 2001 (SP1008)
[To download]
