International collective action

Part VI of the Review considers the challenges of building and sustaining frameworks for international collective action on climate change.

It considers the various dimensions of action that will be required to reduce the risks of climate change: both for mitigation (including through carbon prices and markets, interventions to support low-carbon investment and technology diffusion, co- operation on technology development and deployment, and action to reverse deforestation), and for adaptation.

These dimensions of action are not independent. For example, a carbon price is essential to provide incentives for investment in low-carbon technology around the world, and can be strongly complemented by international co-operation to bring down the costs of new low-carbon technologies. The success of international co-operation on mitigation will determine the scale of action required for adaptation.

Part VI is structured as follows:

• Chapter 21 provides a framework for understanding international collective action, drawing on insights from game theory and international relations, and sets out an overview of existing international co-operation on climate change.

• Chapter 22 examines the challenge of creating a broadly comparable price for carbon around the world. It considers what can be learned from the implementation of the Kyoto Protocol, and looks at the scope for expanding and linking emissions trading schemes.

• Chapter 23 considers how the transition to a global low-carbon economy can be accelerated through action to promote the diffusion of technology and investment in low-carbon infrastructure in developing countries and economies in transition. It explores current arrangements including the Clean Development Mechanism and considers how flows of carbon finance can be transformed to respond to the scale of the challenge.

• Chapter 24 provides an analysis of how international co-operation can accelerate innovation in low-emission technologies and in technologies for adaptation.

• Chapter 25 considers the opportunities that exist to reverse the emissions from land use, and in particular the challenge of providing economic incentives to reduce deforestation.

• Chapter 26 examines how international arrangements for adaptation can support national efforts and contribute to an equitable international approach.

• Chapter 27 brings the Review to a conclusion, emphasising the importance of building and sustaining international collective action on climate change.

21 Framework for Understanding International Collective Action for Climate Change

Key Messages Climate change mitigation raises the classic problem of the provision of a global public good. It shares some key characteristics with other environmental challenges that require the international management of common resources to avoid free riding.

International collective action is already taking place in a wide variety of forms, including multilateral, coordinated and parallel approaches.

? Multilateral frameworks such as the UNFCCC and Kyoto Protocol provide an essential foundation to build further co-operation.

? Partnerships, networks and organisations such as the International Energy Agency facilitate coordinated international action.

? Mutual understanding of domestic policy goals supports further action: the EU, China, and California are amongst those that have adopted strong mandatory initiatives that will reduce the growth of greenhouse gas emissions.

Stronger, more coordinated action is required to stabilise concentrations of greenhouse gases in the atmosphere. Successful efforts in many areas, including the protection of the ozone layer, have demonstrated that international co-operation can overcome issues of free riding. Insights from game theory help to inform the design of frameworks for international action.

Countries usually honour international commitments where they conform to shared notions of responsible behaviour, even through international law provides weak tools to enforce co-operation. Existing multilateral frameworks can be enhanced by creating a shared understanding of long-term goals and responsible behaviour.

The transparency and comparability of national action across a range of dimensions of effort are key to mutual understanding and recognition of what others are doing, as well as ensuring public accountability. Enhancing them will require a strong response from existing multilateral institutions, including those with expertise in monitoring economic policy.

Widespread public understanding of the climate change problem and support for action is growing rapidly. Public awareness and support is crucial for encouraging and sustaining co-operation.