Five Key Observations
  1. Kyoto's global capping system is dead (but not domestic cap-&-trade).
  2. $100B/year for foreign subsidies is too wasteful to happen.
  3. Global carbon pricing is still essential.
  4. It's far cheaper than recognized. (23¢/person/day in the US for a $30/ton global price + Green Fund)
  5. Reducing oil use is key for climate and for energy security
What Needs to Happen
  • Stop trying to cap China & India.
  • Commit to price carbon, and
  • Let countries choose how.
  • Green Fund: "payment for pricing"
  • Use the energy-security benefit.

What We Are Doing
  • June 15, Peter speaks in Toulouse
  • June 14, Peter speaks in Barcelona
  • May 14, New paper
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Paris Climate Change Conference Summit

Aligning Climate and Energy

Energy and climate policies should support each other. But arranging this requires a strategic approach to treaty design. And strategy requires knowing the climate/energy game. The payoff is enormous. China can be won over, OPEC's power curtailed, and the US climate coalition greatly expanded.

New: Global Climate Games: How Pricing and a Green Fund Foster Cooperation. (May 14, 2011) Explains why international (not national) cap-and-trade has failed. Why a global price target fosters more cooperation than a global cap. How linking Green-Fund payments to the price target will induce cooperation at a much lower cost and more securely than present proposals.

International Policy

Over the last few years, in anticipation of Copenhagen's failure, a new approach, Flexible Global Carbon Pricing, has been developed. It preserves the central carbon-pricing goal of Kyoto, but encourages cooperation by changing the climate game.

Climate externalities have locked the world into a multi-player "prisoners' dilemma" game. The same gaming dilemma gutted the global defense against OPEC in the 1970s. Such games, when repeated, begin with modest levels of cooperation, as in Kyoto. But as players come to better understand the individual advantages of free-riding, cooperation declines, as demonstrated in Copenhagen.

Carbon pricing is not carbon taxing. Instead it requires a commitment by countries to achieve a global target price by using cap and trade, fossil-fuel taxes or feebates. This commitment forms the basis of a self-enforcing treaty, that includes flexible incentives to meet the price target, a Green Fund to compensate low-emission countries, and backup enforcement (rarely used) in the form of trade sanctions. ... more >>

National Policy

"If we lead, China will follow." That has been the touch-stone of the US national policy agenda. But if we lead, other's have less need to cooperate and indeed have found it advantageous to exhort us to lead more strongly, so they can be paid more for following (since we will buy more foreign offsets).

Jump-starting a treaty requires that it take effect only when a critical mass agrees to cooperate. That reverses the free-riding incentive of the leader-follower strategy. The critical mass could be as small as the US and China (40% of all emissions).

National policy should focus on being ready too cooperate with and ready to reinforce a global treaty. The most likely treaty will require an similar international price commitment from all countries and will have some mechanism for compensating for differences in income and responsibility.

The first national-policy challenge is to put in place a set of mechanisms, cap-and-trade, fossil-fuel taxes, and auto feebates, that can be adjusted to roughly meet a global carbon-price target. The more daunting task may be to find a politically acceptable way to contribute to the Green Fund. ... more >>

Climate Science

Jim Hansen's new book, Storms, lets non-climate-scientists take a look at the evidence for global warming. He works with paleoclimate data, which are understandable, instead of with huge computer models, which are not. The GEP Center presents his argument with some missing details filled in. But you may want to skip over the science and go right to the answer.

Energy Science

A focus on the most policy-relevant aspects of energy science. (under construction)
  • Alternative energy:  What works?  What doesn't?
  • How much can climate policy reduce the world price of oil
  • The global rebound effect
  • Peak fossil? How soon will supply peak?  Will that save us or doom us?