Liability for carbon emissions literature review/Warming up to a not so radical Idea

WARMING UP TO A NOT-SO-RADICAL IDEA: TORT-BASED CLIMATE CHANGE LITIGATION[1][1][1][1][1][1][edit | edit source]

• Plaintiffs could seek for compensation for the damages that might occur in the future as a result of climate change
• Courts have been reluctant to award damages for future injuries
• Some actions taken for future damages mitigation are: building sea-walls, relocating structures, and raising the land
• Another damage claim that plaintiffs might assert is the need for a system to monitor and provide advance warning of the onset of harm to roads and buildings, which could make repairs significantly easier and less expensive
• The casual change in climate change tort suit would likely look something like following:1) companies produce fuel, power, engines, and other products;2)consumer use of these goods and products generate carbon dioxide emissions, which rise into atmosphere; 3)the emissions combine with other greenhouse gas emissions to warm the air via greenhouse gas effect; 4) this warming causes sea level to rise , permafrost to thaw, and sea ice to melt and thin; and 5) these effects cause damage to plaintiff's property
• Climate change plaintiffs might seek to bring a warning defect claim against defendants for failure to warn users of the climate changing dangers of their products' carbon dioxide emissions

The market for tradable GHG permits under the Kyoto Protocol: a survey of model studies[2][2][2][2][2][2][edit | edit source]

Abstract This paper gathers results from 25 models of the market for tradable greenhouse gas (GHG) emission permits under the Kyoto Protocol. Due to diverging projections of emissions growth and different modeling approaches, the model results differ substantially. The average market volume is approximately 17 and 33 billion USD under global trading and Annex B trading, respectively. Including non-carbon GHG lowers compliance costs and permit prices. In the absence of the US, permit demand roughly equals 'hot air' from the former Soviet Union. These countries can increase their revenues from selling permits by restricting supply, which raises the permit price.

Buyer liability and voluntary inspections in international greenhouse gas emissions trading: a laboratory study[3][3][3][3][3][3][edit | edit source]

AbstractThis paper reports a preliminary laboratoryexperiment in which traders make investments toincrease the reliability of tradableinstruments that represent greenhouse gasemissions allowances. In one half of thesessions these investments are unobservable,while in the other half traders can invitecostless and accurate inspections that makereliability investments public. We implement abuyer liability rule, so that if emissionsreductions are unreliable (i.e., sellersdefault), the buyer of the allowances cannotredeem them to cover emissions. We find thatallowing inspections significantly increasesthe reliability investment rate and overallefficiency. Prices of uninspected allowancesusually trade at a substantial discount due tothe buyer liability rule, which provides astrong market incentive for sellers to investin reliability.

• Emissions trading can reduce the overall cost of implementing emission reduction because the reductions would occur where they are the cheapest
• Buyer beware liability rule may be effective in using market incentives to help deter seller noncompliance, under this rule an allowance buyer bears the risk that the issuing party may not be in compliance
• Sold allowances would be returned to the issuer if she is not in compliance, so the buyer would not be able to use the purchased allowances to offset his own emissions
• This buyer beware liability encourages buyers to purchase allowances from sellers who are most likely to comply
• In a buyer beware setting the allowances issued by different sellers are likely to trade at different prices
• The market prices reflect the noncompliance risk and these prices provide incentives for sellers to meet their emission reduction commitments
• To obtain high prices an allowance seller would like to assure buyers that she will be in compliance
• If traders make a costly investment in emission control they can substantially reduce the likelihood that they are out of compliance
• Allowance sellers are more likely to invest in abatement reliability when they can allow inspectors to verify their investment, and this increases the allocative efficiency of the emissions and output market

Estimating signal amplitudes in optimal fingerprinting, part I: theory[4][4][4][4][4][4][edit | edit source]

AbstractThere is increasingly clear evidence that human influence has contributed substantially to the large-scale climatic changes that have occurred over the past few decades. Attention is now turning to the physical implications of the emerging anthropogenic signal. Of particular interest is the question of whether current climate models may be over- or under-estimating the amplitude of the climate system's response to external forcing, including anthropogenic. Evidence of a significant error in a model-simulated response amplitude would indicate the existence of amplifying or damping mechanisms that are inadequately represented in the model. The range of uncertainty in the factor by which we can scale model-simulated changes while remaining consistent with observed change provides an estimate of uncertainty in model-based predictions. With any model that displays a realistic level of internal variability, the problem of estimating this factor is complicated by the fact that it represents a ratio between two incompletely known quantities: both observed and simulated responses are subject to sampling uncertainty, primarily due to internal chaotic variability. Sampling uncertainty in the simulated response can be reduced, but not eliminated, through ensemble simulations. Accurate estimation of these scaling factors requires a modification of the standard "optimal fingerprinting" algorithm for climate change detection, drawing on the conventional "total least squares" approach discussed in the statistical literature. Code for both variants of optimal fingerprinting can be found on http://www.climateprediction.net/detection.

On National and International Trade in Greenhouse Gas Emission Permits[5][5][5][5][5][5][edit | edit source]

Abstract This paper considers the question under what conditions domestic markets of emission permits would and should merge to become an international market. Emission permits are licenses, and so governments would need to recognize other countries' permits. In a two-county model, we find that it is in both countries' interests to form an international market, and it may even be beneficial to the environment. Three different policy instruments of the importing country are examined, namely a price instrument (tariff) and two quantity instruments (discount and import quota). All instruments restrict trade. The importing country (and regulator) prefers an import tariff and an import quota to a carbon discount. If the exporting country releases additional permits, the importing country should not try to keep total emissions constant, as that would be ineffective if not counterproductive. Instead, the importing country should aim to keep the total import constant; this would impose costs on the exporting country that are independent of the policy instrument; an import quota would be the cheapest option for the importing country. Compliance and liability issues constrain the market further. However, both the importing and the exporting country would prefer that the permit seller is liable in case of non-compliance, as sellers' liability would less constrain the market.

Equity, greenhouse gas emissions, and global common resources[6][6][6][6][6][6][edit | edit source]

• With a commitment to equal per capita allocations, a global emissions cap covering developing and developed countries becomes possible, with enormous associated advantages
• Per capita entitlements would eliminate the incentive for developing countries to delay reductions in emissions in order to increase their claim to atmospheric space
• A transition to an agreement based on equal per capita rights would help us to stabilize atmospheric GHG concentration at lower levels and to limit the risks of dangerous climate change

Quantifying the risk of extreme seasonal precipitation events in a changing climate[7][7][7][7][7][7][edit | edit source]

AbstractIncreasing concentrations of atmospheric carbon dioxide will almost certainly lead to changes in global mean climate1. But because—by definition—extreme events are rare, it is significantly more difficult to quantify the risk of extremes. Ensemble-based probabilistic predictions2, as used in short- and medium-term forecasts of weather and climate, are more useful than deterministic forecasts using a 'best guess' scenario to address this sort of problem3, 4. Here we present a probabilistic analysis of 19 global climate model simulations with a generic binary decision model. We estimate that the probability of total boreal winter precipitation exceeding two standard deviations above normal will increase by a factor of five over parts of the UK over the next 100 years. We find similar increases in probability for the Asian monsoon region in boreal summer, with implications for flooding in Bangladesh. Further practical applications of our techniques would be helped by the use of larger ensembles (for a more complete sampling of model uncertainty) and a wider range of scenarios at a resolution adequate to analyse average-size river basins.

Implementing greenhouse gas trading in Europe: lessons from economic literature and international experiences[8][8][8][8][8][8][edit | edit source]

AbstractThe European Commission (document COM (2001) 581) has recently presented a directive proposal to the European Parliament and Council in order to implement a greenhouse gas emission trading scheme. If this proposal survives the policy process, it will create the most ambitious trading system ever implemented. However, the legislative process is an opportunity for various interest groups to amend environmental policies, which as a result generally deviate further from what economic literature proposes. A close look at implemented emission trading schemes, stressing their discrepancies with economic literature requests, is thus useful to increase the chances of forthcoming emission trading schemes to go through the political process. We thus review ten emission trading systems, which are either implemented or at an advanced stage of the policy process. We draw attention to major points to be aware of when designing an emission trading system: sectoral and spatial coverage, permits allocation, temporal flexibility, trading organisation, monitoring, enforcement, compliance, and the harmonisation vs. subsidiarity issue. The aim is to evaluate how far experiences in emission trading move away from theory and why. We then provide some lessons and recommendations on how to implement a greenhouse gas emission trading program in Europe. We identify some pros of the Commission proposal (spatial and sectoral coverage, temporal flexibility, trading organisation, compliance rules), some potential drawbacks (allocation rules, monitoring and enforcement) and items on which further guidance is needed (monitoring and allocation rules). Lastly, the European Commission should devote prominent attention to the US NOX Ozone Transport Commission budget program, as the only example of integration between the federal and state levels.

Does the Market Value Environmental Performance?[9][9][9][9][9][9][edit | edit source]

Abstract Previous studies that attempt to relate environmental to financial performance have often led to conflicting results due to small samples and subjective environmental performance criteria. We report on a study that relates the market value of firms in the S&P 500 to objective measures of their environmental performance. After controlling for variables traditionally thought to explain firm-level financial performance, we find that bad environmental performance is negatively correlated with the intangible asset value of firms. The average 'intangible liability' for firms in our sample is $380 million—approximately 9% of the replacement value of tangible assets. We conclude that legally emitted toxic chemicals have a significant effect on the intangible asset value of publicly traded companies. A 10% reduction in emissions of toxic chemicals results in a $34 million increase in market value. The magnitude of these effects varies across industries, with larger losses accruing to the traditionally polluting industries.

The liability rules under international GHG emissions trading[10][10][10][10][10][10][edit | edit source]

Abstract Article 17 of the Kyoto Protocol authorizes emissions trading, but the rules governing emissions trading have been deferred to subsequent conferences. In designing and implementing an international greenhouse gas (GHG) emissions trading scheme, assigning liability rules has been considered to be one of the most challenging issues. In general, a seller-beware liability works well in a strong enforcement environment. In the Kyoto Protocol, however, it may not always work. By contrast, a buyer-beware liability could be an effective deterrent to non-compliance, but the costs of imposing it are expected to be very high. To strike a middle ground, we suggest a combination of preventive measures with strong but feasible end-of-period punishments to ensure compliance with the Kyoto emissions commitments. Such measures aim to maximize efficiency gains from emissions trading and at the same time, to minimize over-selling risks.

• Under a seller-beware regime, any permits acquired by the buyer are valid regardless of whether the seller is in compliance
• All permits would be worth the same
• Buyers bears no risks in under the seller-beware liability
• The seller-beware liability is unlikely to exert sufficient pressure on seller's overselling
• Trading is allowed to eligible parties whose domestic monitoring, tracking and enforcement systems have met certain "minimum quality" criteria
• A tradeoff exists between the desirability of assigning the seller responsibility for the validity of acquired permits and the appropriate eligibility threshold
• To provide incentives for sellers to sell only assigned amounts surplus to their compliance needs could be done with a escrow account
• Sellers that are perceived to be too risky, may be unable to obtain insurance at a reasonable premium
• Parties that comply with inventory and reporting obligations of Article 5 and 7 of the Kyoto Protocol, and that establish and maintain a satisfactory national registry are allowed to participate in trading
• A part or all of the proceeds from the initial sales of AAUs would be deposited in an escrow account until compliance has been established, or the initial seller of AAUs would be required to acquire insurance from accredited insurance agencies, or all eligible parties would be annually required to retire the number of their AAUs to cover their GHG emissions in that year
• If a party is in noncompliance with its commitments it is required to acquire additional AAUs to cover its excess tons of emissions during a true-up period of no longer than 6 months

Prospects for mitigating carbon, conserving biodiversity, and promoting socioeconomic development objectives through the clean development mechanism[11][11][11][11][11][11][edit | edit source]

Abstract Should forest-based climate mitigationmeasures be approved for crediting through the CleanDevelopment Mechanism (CDM), they could offer anopportunity to accomplish three important objectives:cost-effective reductions in carbon emissions andsequestration of atmospheric carbon; conservation andrestoration of forests and their biological diversity;and, the assistance of host countries and communitiesin their socioeconomic development. However,prospective investors in CDM projects, host countriesand other CDM `stakeholders' might be expected toplace widely different priorities on achieving theseobjectives. This paper describes several factors thatwill affect investor interest in CDM projects, thecharacteristics of forest-based CDM projects that willattract investments, and an approach to identifyingprojects that meet the key objectives of multiplestakeholders. This approach entails identifyingsites, such as degraded watersheds, where CDMfinancing for forest conservation and restoration cangenerate readily monetizable local and regionalsocioeconomic benefits, while mitigating carbonemissions in forests with importance for conservingbiodiversity.

Equity and greenhouse gas responsibility[12][12][12][12][12][12][edit | edit source]

A nonlinear dynamical perspective on climate prediction[13][13][13][13][13][13][edit | edit source]

AbstractA nonlinear dynamical perspective on climate prediction is outlined, based on a treatment of climate as the attractor of a nonlinear dynamical system D with distinct quasi-stationary regimes. The main application is toward anthropogenic climate change, considered as the response of D to a small-amplitude imposed forcing f.

The primary features of this perspective can be summarized as follows. First, the response to f will be manifest primarily in terms of changes to the residence frequency associated with the quasi-stationary regimes. Second, the geographical structures of these regimes will be relatively insensitive to f. Third, the large-scale signal will be most strongly influenced by f in rather localized regions of space and time. In this perspective, the signal arising from f will be strongly dependent of D's natural variability.

A theoretical framework for the perspective is developed based on a singular vector decomposition of D's tangent propagator. Evidence for the dyamical perspective is drawn from a number of observational and modeling studies of intraseasonal, interannual, and interdecadal variability, and from climate change integrations. It is claimed that the dynamical perspective might resolve the apparent discrepancy in global warming trends deduced from surface and free troposphere temperature measurements.

A number of specific recommendations for the evaluation of climate models are put forward, based on the ideas developed in this paper.

Do-it-yourself climate prediction[14][14][14][14][14][14][edit | edit source]

Causes of twentieth-century temperature change near the Earth's surface[15][15][15][15][15][15][edit | edit source]

Abstract Observations of the Earth's near-surface temperature show a global-mean temperature increase of approximately 0.6 K since 1900 (ref. 1), occurring from 1910 to 1940 and from 1970 to the present. The temperature change over the past 30–50 years is unlikely to be entirely due to internal climate variability2, 3, 4 and has been attributed to changes in the concentrations of greenhouse gases and sulphate aerosols5 due to human activity. Attribution of the warming early in the century has proved more elusive. Here we present a quantification of the possible contributions throughout the century from the four components most likely to be responsible for the large-scale temperature changes, of which two vary naturally (solar irradiance and stratospheric volcanic aerosols) and two have changed decisively due to anthropogenic influence (greenhouse gases and sulphate aerosols). The patterns of time/space changes in near-surface temperature due to the separate forcing components are simulated with a coupled atmosphere–ocean general circulation model, and a linear combination of these is fitted to observations. Thus our analysis is insensitive to errors in the simulated amplitude of these responses. We find that solar forcing may have contributed to the temperature changes early in the century, but anthropogenic causes combined with natural variability would also present a possible explanation. For the warming from 1946 to 1996 regardless of any possible amplification of solar or volcanic influence, we exclude purely natural forcing, and attribute it largely to the anthropogenic components.

International greenhouse gas emissions trading: who should be held liable for the non-compliance by sellers?[16][16][16][16][16][16][edit | edit source]

Abstract Article 17 of the Kyoto Protocol authorizes emissions trading, but the rules governing emissions trading have been deferred to subsequent conferences. In designing and implementing an international greenhouse gas (GHG) emissions trading scheme, assigning liability has been considered to be one of the most challenging issues. This article discusses a variety of the rules for accountability under international GHG emissions trading. It indicates that a 'buyer beware' liability is effective only to the extent that it puts additional pressure on sellers to comply with their commitments because after all sellers exercise great, if not complete, control over whether or not they comply with their commitments. Because putting such a pressure on sellers to develop effective compliance systems is not without costs to buyers, a 'buyer beware' liability should thus be imposed only in the case where non-compliance of sellers is virtually certain to occur. Moreover, in determining the optimal combination of these not-mutually-exclusive rules for accountability that are discussed in the article, the marginal benefits of adding one rule needs to be weighted against the increased costs of doing so.

• A seller beware liability works well in a strong enforcement environment where the built-in effective enforcement mechanisms make non-compliance very expensive and unattractive
• Enforcement at the international level has proved to be less likely to be effective than at the national level
• The eligibility requirement and the seller beware liability with an escrow account could effectuate compliance by the seller, but may not be sufficient
• The last in first out approach is preferred to the simple discounting approach in taking back the seller's overage, if the parties decide that buyer beware liability is needed to complement traditional compliance procedure
• To prevent non-compliance it is desired to assign the buyer-seller hybrid responsibility by introducing the process of evaluating parties' efforts towards implementation during the commitment period
• If a party is is found to be in non-compliance at the end of the commitment period, a buyer beware liability should be imposed on all its sales in the subsequent commitment period and its assigned amounts should be reduced in the subsequent commitment period

Enforcing Compliance: The Allocation of Liability in International GHG Emissions Trading and the Clean Development Mechanism[17][17][17][17][17][17][edit | edit source]

AbstractThe possibility of international trade in credits for greenhouse gas (GHG) emission reductions is a key "flexibility mechanism" built into the December 1997 Kyoto Protocol for international GHG reduction. The Protocol allows ntities in Annex I countries (the industrialized countries agreeing to cap their total emissions) to trade emission reductions. Through the "Clean Development Mechanism" (CDM), investors in Annex I countries also can secure GHG reduction credits for emission-reducing activities in non-Annex I developing countries that have not accepted national emission caps. For these forms of international emissions trading to be seen as credible forms of real emissions reductions, legal responsibility, or liability, must be assigned for the failure of promised emission reductions embodied in the credits to materialize. While a well-functioning compliance system is crucial for the integrity of trading, however, excessive restrictions on trading to enforce responsibility could stifle emission credit markets and raise international compliance costs to unacceptable levels. The desirable allocation of liability trades off these two concerns. Liability for the "quality" of an emission reduction credit when created could rest with buyer, seller, or both parties; it also could stay with whoever originally is assigned the liability, or the liability could be transferred as credits are resold. A very high level of compliance by sellers could always be ensured by "gold plating" credits or permits. Before credits can be sold we could require they be certified by an independent agent. Buyers and sellers would then have to decide how often to bring in the certifiers, trading off the costs of more frequent quality control against the advantage of a more continuous flow of certified credits or permits. Since this approach is likely to be quite expensive, either because of certification costs or illiquidity, we focus in this paper on systems that allow trading of emission permits or credits prior to certification with post-trade liability rules that aim to enhance the credibility of trading. Designing good compliance systems would be easy if everybody – traders and governments – had lots of information about the emission-reducing activities of different entities and there were strong legal sanctions within every participating country for nonperformance. In practice, information is scarce and not evenly shared, and both domestic and international enforcement mechanisms are limited in what they can accomplish. Starting with these two points, we first consider some of the general institutional background for international emissions trading. We then consider the assignment of liability in an international GHG trading system for the Annex I developed countries, focusing on the assignment of liability for "bad" emission permits when the seller country is not in compliance with its Kyoto targets known as "assigned amounts." We turn then to address issues of credibility and liability in the context of CDM joint ventures.

• The CDM transactions involve joint ventures between actors in Annex I countries and actors in non-Annex I developing countries, wherein the former invest in the latter to obtain emission reduction credits which are less costly for the investor than other forms of GHG control
• The ultimate responsibility for meeting the numerical emission control obligations rest with the national governments of Annex I countries
• The sanctions could include having a lower national assigned amount in subsequent commitment periods
• Within a trading program, sanctions on selling countries that are out of compliance could include strictures on future trading opportunities
• Efficiency of trading is likely to be the greatest when buyer and seller both are sub-national private actors with incentives to make the best deal given the specific information about trading opportunities they possess
• Annex I and CDM transactions involve different actors and operate under different domestic regulatory which leads us to different conclusions about how responsibility for the integrity of the trading system should be imposed
• Keep records of all your searches.(e.g. Google Scholar for "GHG emission liability").
• Make a Citation List for all the articles you find relevant to your topic. Arrange in chronological order.
• Put citation in this format: Van der Geer, J., Hanraads, J.A.J., Lupton, R.A., 2010. The art of writing a scientific article. J. Sci. Commun. 163, 51–59.
• Hyperlink your citation to the available electronic file or at least the abstract.Ideally link to the DOI and include a link to an open access version if it exists.
• copy in the abstract
• include a bullet point list of the main points or useful data in the paper. Do not use complete sentences

Regional scale hydrology: I. Formulation of the VIC-2L model coupled to a routing model[18][18][18][18][18][18][edit | edit source]

AbstractA grid network version of the two-layer Variable Infiltration Capacity (VIC-2L) macroscale hydrological model is described. The VIC-2L model is a hydrologically-based SVAT (Soil Vegetation Atmospheric Transfer) scheme designed to represent the land surface in numerical weather prediction and climate models. It is coupled to a linear routing scheme which is optimized with measured precipitation and streamflow data and is derived independently from the VIC-2L model. In this way it is possible to utilize streamflow measurements for the validation of coupled atmospheric-hydrological models. A baseflow separation routine is used to derive an equivalent description between the VIC-2L model and the routing model.

Regional scale hydrology: II. Application of the VIC-2L model to the Weser River, Germany[19][19][19][19][19][19][edit | edit source]

AbstractThis paper describes the application of a grid network version of the twolayer Variable Infiltration Capacity (VIC-2L) macroscale hydrological model. The VIC-2L model is implemented on a rotated grid, which is compatible with the weather forecast and climate model REMO (Regional Model), a joint project of the German Weather Service (DWD), GKSS Research Centre and the Max-Planck-Institute for Meteorology, Hamburg. Observed surface meteorological data in the Weser River basin are used to force the model off-line on a daily time step. After a 22-month calibration period, simulated and measured streamflow data are compared for a 12-year period. The resulting predictions compare well with observations at daily, monthly and annual time scales. A sensitivity analysis is presented.

Deterministic Nonperiodic Flow[20][20][20][20][20][20][edit | edit source]

AbstractFinite systems of deterministic ordinary nonlinear differential equations may be designed to represent forced dissipative hydrodynamic flow. Solutions of these equations can be identified with trajectories in phase space. For those systems with bounded solutions, it is found that nonperiodic solutions are ordinarily unstable with respect to small modifications, so that slightly differing initial states can evolve into considerably different states. Systems with bounded solutions are shown to possess bounded numerical solutions.

A simple system representing cellular convection is solved numerically. All of the solutions are found to be unstable, and almost all of them are nonperiodic.

The feasibility of very-long-range weather prediction is examined in the light of these results.

to include[edit | edit source]

• http://www.climateprediction.net/wp-content/publications/nature_allen_270203.pdf
• http://pub.ist.ac.at/courses/2012/discretemathematicsandprobability/Extras/AllenLord2004.pdf
• https://crd.lbl.gov/assets/pubs_presos/StoneDAAllenMR2005a.pdf
• http://www.nature.com/nclimate/journal/v3/n8/full/nclimate1961.html

References[edit | edit source]