Research Fellow Hiroshi Hamasaki
In February 2007, the United Nations’ Intergovernmental Panel on Climate Change (IPCC) observed that the average global temperature has climbed 0.74 degrees Celsius in the ten years from 1996 and 2005, and basically concludes that global warming is escalating due to human activity. In May 2007, looking ahead to the G8 summit to be held in Germany in June, Prime Minister Abe and the Japanese government proposed the strategy of “Cool Earth 50”. Regarding the post-Kyoto framework, Prime Minister Abe proposed that all of the major emitting countries including the US, China and India aim to create a framework that will accomplish a 50% global reduction by 2050. The specifics of this plan, however, have not been produced, and what comes after the promised term of the Kyoto Protocol—in other words, the specific institutional design of the global framework after 2013—remains unclear. In this paper, we begin by assessing the Kyoto-type framework, which sets emission targets for developed countries and no targets for developing countries from economic and environmental perspectives by using a dynamic computable general equilibrium model. We then consider global emission trading scheme (GETS) as an alternative to the Kyoto Protocol and assess GETS from economic and environmental perspectives.