National and International Cooperation on Climate Change

Professor Warwick McKibbin presented "An Architecture for International Cooperation on Climate Change" at the ANU-Toyota Public Lecture Series, on Thursday:

... Warwick McKibbin will argue that major countries must respond to the issue of climate change, taking into account the enormous uncertainties that are involved. He will discuss the key features of the climate change policy problem and will outline a policy framework that would allow an effective but flexible response to what may be the major issue of our time.

Professor McKibbin is an economist at ANU, a member of the Board of the Reserve Bank of Australia and a member of the Prime Minister’s Science, Engineering and Innovation Council. He argues the Australian Government can cooperate with other nations on climate change while maintaining its own sovereignty. He argues that a more flexible trading system is possible. The details are in his ANU paper:

To succeed in reducing carbon dioxide emissions, a climate policy must establish credible long-term incentives for investments in new energy-sector capital and in research and development. We argue that credibility implies that international agreements should focus on enhancing coordination and collaboration between countries, rather than on coercion. At the national level, credibility requires political and economic incentives that can be provided by long-term tradable emissions permits, but it needs more flexibility than can be provided by a conventional permit system. We argue that the best mechanism for providing credible long-term incentives is a hybrid system of long and short term emissions permits. Key aspects of the system would be coordinated across countries but the permits would be issued and traded solely within national borders.

From: A Credible Foundation For Long Term International Cooperation On Climate Change,The Lowy Institute for International Policy and The Brookings Institution), Peter J. Wilcoxen (Syracuse University), CAMA Working Paper Series, 15/2006, June, ANU, 2006 Warwick J. McKibbin, (The Australian National University,

The policy proposal sounds very politically palatable, being flexible enough to accommodate different national views. But perhaps so flexible there is a risk it may not achieve its aims.

Coincidentally the talk series is sponsored by Toyota, who make low emission hybrid vehicles.

Professor McKibbin appears to be a person of many talents, having his own company, McKibbin Software Group Pty Ltd, providing numerical algorithms for research and policy analysis. He has also published the book Climate Change Policy After Kyoto: Blueprint for a Realistic Approach with Peter J. Wilcoxen. Curiously the book has only two references to China and one to India:

1. on Page 14: "... 537 1,776 29 16 Australia 77 94 2 22 China 668 669 11 0 India 176 243 4 38 Japan 286 307 5 7 Other 330 463 8 40 World ..."
2. from Back Matter: "... Tingsong. 2001. "Economic Instruments of Pollution Control in an Imperfect World: Theory and Implications for Carbon Dioxide Emissions Control in China,"