The goal of the Framework Convention on Climate Change (FCCC) is to stabilize the concentration of greenhouse gases in the atmosphere at levels which avoid dangerous anthropogenic interference with the climate (United Nations, 1992). This paper examines the performance and cost characteristics of a technology based, policy instrument. Such instruments are of interest because they potentially offer a strategy for stabilizing the atmosphere, while requiring relatively minor financial transfers and allowing economic development to proceed.

The technology protocol we study here requires new powerplant and coal-based synthetic fuels capacity to scrub carbon from the waste gas stream in Annex I nations, and provides a mechanism by which non-Annex I nations can graduate into obligations. At a later date, refineries and gas processing plants come under a similar prohibition from passing carbon forward in the fuel stream–mandating a gradual transition to a Hydrogen economy by the end of the 21st century for Annex I countries, with a graduation clause for non-Annex I nations.

We show that when the first stage of the protocol goes into effect in the year 2020 and the second stage begins in 2050, the atmospheric concentration is stabilized at approximately 500 ppmv. The protocol is more expensive than a perfectly efficient policy instrument, although our study shows the effect of the economic inefficiency is limited to approximately 30%. On the other hand, a technology strategy approach can offer wide technological flexibility in meeting the performance standard.

The inclusion of joint implementation mechanisms could reduce the cost penalty of the hypothetical protocol and is a promising avenue for further work.