Incentives for forty-five countries to join various forms of carbon reduction agreements

This paper attemts an assessment of the incentives for 45 major carbon emitting countries to join various forms of international CO2 reduction agreements. The agreements considered are designed to implement a 50 percent cut in overall emissions by 2050, relative to the 1987 level (Toronto target). The paper extends previous work on emission quota schemes by considering damage functions. A major result is that a system of arbitrarily distributed flexible (tradeable) quotas may lead to a close approximation of an agreement with optimal quotas. If the distribution of flexible quotas is based on uniform emission rights per capita, the incentives to join a flexible quota agreement are similar to those to participate in an optimal quota agreement, provided the overall emission cap is the same.