This seminar is based on a paper co-authored by Xueqin Cui (Renmin University of China), Laurent Drouet (FEEM and CMCC) and Giacomo Marangoni, (FEEM and CMCC).

A limited quota of future cumulative global CO2 emissions is associated with a certain climate stabilization target. How to allocate the emission quota to regions and countries is one of the major debates in international negotiation. There are two broad approaches to allocate future emissions (or mitigation efforts): resource-sharing which allocates remaining emissions budget, and effort-sharing that shares the emissions reductions required to meet one certain climate target.
The authors a two-layer framework to integrate a spectrum of sharing principles, which extends from current proportion of emissions to equal per-capita distribution of emissions for resource sharing, and from capacity to pay for the mitigation actions indicated by GDP to responsibility measured by historic cumulative emissions for effort sharing. Variable allocation schemes could be generated by combining these endpoints.
The results show that the necessary mitigation rates to meet 2 C warming limit are very challenging for all countries. Under effort sharing schemes, emission permits of large scale negative value are require for developed countries, which makes global emission trading very important to reduce the policy cost. Monetary flows among regions through emission permit trading are then assessed.

This seminar has been jointly organized by FEEM and IEFE, Bocconi University.