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Executive summary

Reducing emission is a world-wide issue, and existing conventions like UNFCCC is limited in it efficacy to some extent. To strengthen the UNFCCC and achieve our goal in 2050, three methods are discussed in this proposal:
1. CCS is a novel technology which effectively absorbs CO2 from the atmosphere to directly help avoid adverse climate change. CCS is recommended to be implemented by more countries and organizations
2. A reward-punishment (RP) system is designed to reinforce the UNFCCC by make its policies fairer and more powerful.
3. Additional social efforts that educate the public about the issue of climate change and shape their behavioral preferences into valuing low-carbon products and services.

In short, the key elements in this proposal are based on novel technology, fair mechanism and social practice which will eventually make our world a better place.
 

Team

SUN, Jianbo

Student Green Association of Tsinghua University, P.R. China

WAN, Chen Bo

Faculty of Mathematics, University of Waterloo, Canada

School of Business and Economics, Wilfrid Laurier University, Canada

School of Economics and Management, Tsinghua University, P.R. China (on exchange)

- Proposed establishing a top-down plan that governs the schedule of global aggregate emission reduction.

- Put the team’s ideas into words and drafted the economic and social sections.

YANG, Xiaofan

Department of Environmental Science and Engineering, University of Tsinghua, China

School of Economics and Management, University of Tsinghua, China

Tsinghua Student Green Association, Beijing, China

- On charge of the technical parts

1.0 Introduction

In light of rising concerns around the world for adverse climate changes caused by greenhouse gas emission and deforestation, the 2010 CoLab Global Challenge looks for feasible, novel, and well presented solutions to the issue. As per contest requirements, this proposal is prepared which offers comprehensive suggestions that cover the technological, economic and political, and social aspects.
 
Receiving closer and closer attention from researchers, scholars, politicians, and ordinary citizens around the world, the issue of reducing greenhouse gas emission has been studied by a number of individuals, who to date have offered a wide range of solutions. The most reputed among these include: establishment of the United Nations Framework Convention on Climate Change (UNFCCC), the Clean Development Mechanism (CDM), and carbon trade. The fact that the issue remains mainly unresolved suggests that additional methods must be introduced to progress on solving the issue.

In this paper, three powerful methods are discussed which are expected to solve at least part of the issue. A novel technology – CO2 Capture and Storage will directly reduce the concentration of CO2 with force; to strengthen the incentive for countries and organizations to follow the UNFCCC, a reward-and-punishment system is designed to enhance the efficiency and fairness of UNFCCC policies; at last, the importance of social and behavioral change is illustrated, and examples are provided that show how it works.

The structure of this proposal is arranged as follows: Section 2 introduces the theory behind the proposed solutions, and Section 3 predicts the results from policymakers implementing the proposal.
 

2 Effective Actions for Reducing Emision

As described by scholars, the initiatives to reduce emission and deforestation are more than an environmental issue; rather, it should take a diverse set of solutions that tackle the issue from various prospective to optimize the effect. Such a set is hereby offered which consists of technological, economic and political, and social components, each not only adding positive value but also consolidating the effect of the other components.
 

2.1 CO2 Capture and Storage System

Building a global Carbon-dioxide Capture and Storage system (CCS system) is a very feasible technological way to help slow down the up-going of the concentration of carbon dioxide in the atmosphere.
 
CCS is a very efficient way to reduce the emission of carbon-dioxide, the major cause to global-warming, to the atmosphere. And it is one of the theoretical approaches that are most probably to be put into practical use. First coming to the capture of carbon dioxide, in a emission source with high concentration of carbon dioxide, it is quite possible and can be relatively efficient to capture the carbon dioxide. The probable ways include chemical absorption method, physical absorption method, membrane separation method and low temperate separation method. These methods can be applied to different emission sources such as power plant and chemical plant where a lot of fossil-fuel was burnt. The high concentration and large amount of carbon dioxide make it more efficient and economic-possible to capture it.

The characteristic of the CCS system that it is very efficient in the large-scale source makes it more competitive, since it stands by the current trend of the change of carbon dioxide sources. Even though today, CCS may encounter difficulty when applied to scattered and small-scale sources, such as household and mobile. However, the general trend is that these small sources are converged on the large source. From example, more and more cars are trying to use electricity rather than oil. The oil used by cars are replaced by the fossil fuel used by power plant, not only the combustion efficiency has been raised, the absorption efficiency is also higher. We can forecast that in the very near future, the most part of the carbon dioxide emission will concentrate in big plants. The reduction of carbon dioxide will be more remarkable.
 
As the carbon dioxide separated, it can be sealed up in an already exploited oilfield or under a deep sea for safekeeping, or can be used as industrial raw material. After the storage, the original emission has been avoided.
 
CCS is a kind of technology that tries to reduce the emission of carbon dioxide. Otherwise, there are also possible ways to help make the concentration of carbon dioxide in the atmosphere lower, and the use of algae to treat industrial effluent is one of the most promising one. As is known, a large part of the effluent is rich in organic carbon, which causes the water eutrophication. And algae can use this high level organic carbon to grow and reproduce in a very high speed. The effluents are cleaned up in the process, and in the meantime, algae absorb carbon dioxide in the atmosphere, which is hard and inefficient to capture in the CCS system since the concentration is too low. And after the treatment, the cultivated algae can be use as materials to produce oil or animal feed.
 
With technology working on both the emission source and the current existing carbon dioxide in the atmosphere, the possibility that we will manage to bring the concentration of carbon dioxide down is really high. However, in the technology field, there are two general challenges. One is the application of these technologies from the laboratory to industry, and the other one is, how to break up the ramparts between countries and to set up international co-operations.  
 

2.2 Economic and Political Actions

In addition to proposing technological solutions that physically reduce emission of greenhouse gas, it is necessary to introduce policies that provide countries, companies, and individuals the economic incentive to cooperate, as most individuals respond to and behave based upon incentives to a large extent. 

The consensus amongst a vast majority of countries is that environmental actions must be taken to avoid the current adverse trend of global climate changes. External research shows that from the prospective of greenhouse effect, carbon dioxide can be seen as being uniformly distributed around the globe. Since emission of the gas qualifies as a public “bad” among countries, it is rational to establish based on scientific research a schedule that outlines the magnitude of reduction necessary during future periods. This schedule shall be created and monitored by the UNFCCC, with additional legal binding power emanating from conventions among global leaders. The distribution of the reduction responsibilities is determined thereafter. This top-down approach tackles the issue directly and will lead to desirable results by its design. A reward-and-punishment system is complimented to induce countries to stand by the schedule.

To illustrate the theoretical prospect of this top-down approach, suppose  represent the necessary annual volume of emission reduction in each year. Define Dx to be distribution factor of country x, such that the actual amount the country shoulders is:

                                                         (1)

To ensure the feasibility of this approach, mechanisms that improve both efficiency and fairness of distribution are incorporated. First, exchange of reduction responsibilities is allowed but monitored by the UNFCCC. The advantage of doing so is that it will provide a more economic way to reduce overall emission by encouraging those countries with lower marginal reduction cost to reduce by additional amounts for the other countries for a monetary return. For example, if it takes country A $200 to reduce an additional m3 of CO2, and it only takes country B $100. If B reduces on behalf of A at a price of $150, both countries will be better off by $50, thus their costs of following the proposal are trimmed.

The issue of fairness revolves around the determination of Dx, which directly redistributes financial resources among countries. Dx should depend on the following factors: current annual emission, accumulated historic emission, nominal GDP, and region of the world (developed, rapidly developing, and developing). One can see that the exact form of Dx will be the focus of negotiations among country leaders, therefore subject to political influence which renders the exact form difficult to predict. However, a reasonable Dx should be the weighted average between current volume and historic volume, multiplied by size of the economy, and subject to region of the world, with the wealthier countries contributing reasonably more.
 

2.3 Social and behavioral change

In addition to proposing technological solutions that physically reduce emission of greenhouse gas, it is necessary to introduce policies that provide countries, companies, and individuals the economic incentive to cooperate, as most individuals respond to and behave based upon incentives to a large extent.
 
Because the concentration level of CO2 can be seen as uniform around the world, it is rational to establish a top-down approach which first determines overall reduction needs in the future periods, and then distribute the responsibilities to countries based on model-generated factors. As an illustration of the theoretical aspect, suppose {Ra, a = 2010, 2011, …} represent the necessary annual volume of emission reduction in each year, which are determined by the UNFCCC after careful calculations. Define Dx to be the distribution factor of country x, such that the actual quantity the country shoulders is:
                                                          Va,x = Ra•Dx / Σ Dx                                                         (1)
In other words, {Va,x, a = 2011, 2012…} represents the emission reduction schedule country x ought to adopt.

To ensure the feasibility of this approach, mechanisms that improve both efficiency and fairness of distribution are incorporated. First, exchange of reduction responsibilities is allowed under the supervision of UNFCCC. The advantage of doing so is that it will provide a more economic way to reducing overall emission by encouraging those countries with lower marginal cost to make extra efforts on behalf of the other countries for a monetary return. For example, if it takes country A $200 to reduce an additional m3 of CO2, and it only takes country B $100. If B reduces on behalf of A at a price of $150, both countries will be better off by $50, thus their costs of following the proposal are trimmed.
 
The issue of fairness revolves around the model that determines Dx, which directly redistributes financial interests among countries. Dx should depend on the following factors: current annual emission, accumulated historic emission, nominal GDP, and region of the world (developed, rapidly developing, and developing). One can see that the exact form of Dx will be the focus of negotiations among country leaders, therefore subject to political influence, which renders the exact form of the model difficult to predict. However, a reasonable Dx should be the weighted average between current volume and historic volume, multiplied by size of the economy, and subject to region of the world, with the wealthier countries contributing reasonably more. In sum, a mechanism that provides rewards and punishments based on CO2 emissions drives countries to stand by the top-down approach.
 

3 Vision of the future under this proposal

If implemented successfully, this proposal will shape the world from several aspects. First, the CCS system becomes an ongoing process that constantly reduces the concentration of greenhouse gas in the atmosphere, thus damping the trend of adverse climate changes. Sharing technological knowledge and increasing global co-operation will make reducing emission generally more feasible and economical, therefore countries and companies will be better poised to fulfilling their reduction commitments by utilizing the latest technology. The suggested social programs will educate the public, and the public will in turn encourage policymakers to adopt environmental friendly policies.

Under the plan of this proposal, global emission quantities will be under control to a large extent in the future. The macro schedule sets a path towards acceptable emission levels; moreover, the UNFCCC and the associated reward and punitive systems will keep countries on track. Each country will have the financial incentive to follow the plan. The long-term concentration of greenhouse gas will gradually dwindle due to slower emission rates.
 
The proposal further decreases the opportunity cost of emission reduction by encouraging the more capable countries or organizations to contribute more than their own quota for a profit and allowing the less capable ones to purchase “emission reduction services”. This suggestion not only efficiently utilizes the capabilities, but it also sends countries and organizations the right pricing signal, encouraging and financially supporting research about emission reduction. A future of stronger trend towards reducing emission is envisioned.
 
The MIT simulation model is used to testify the feasibility of this proposal. First suppose new technologies can be widely used, and most countries follow the UNFCCC. Developed countries can provide other countries clean technology and financial supports instead of reducing their own emission. So their emission will not increase. In fast developing countries, industries will develop rapidly. However, due to efforts on reducing emission, the total amount of the increment will not be so much. The poor countries would prefer develop the economics first and they will produce a lot because of this. However the basic amount of poor countries is low and this negative influence is limited. According to this conditions, we could set the parameters in the simulation, and the result shows that within a reasonable mitigation fee, the CO2 concentration will be stable 500ppm level.