An interesting analysis has been just published by the Atmospheric Pollution and Economic Development Program of the International Institute for Applied Systems Analysis in Austria: Wagner & Amann, Analysis of the Proposals for GHG Reductions in 2020 Made by UNFCCC Annex I Countries by Mid-August 2009 (2009). This could be an excellent reading for students in the post-Kyoto section of a climate change course because it not only provides a contemporaneous summary of current pledges of Annex I countries, but also discusses the costs of reducing emissions and the continued threat that “hot air” credits from Russia and Ukraine pose to the viability of international efforts to address climate change.

Among the take-aways from the report:

• A conservative interpretation of the 2020 pledges made by Annex I Parties to date implies a reduction of their collective emissions by a mere 5% below 1990 levels, comparable to the Kyoto Protocol targets; an optimistic projection (largely assuming no use of CDM, LULUCF etc.) pegs the reduction at 17%, but even this is well below the IPCC’s conclusion in 2007 that reductions of 25-40% need to be effectuated by 2020 if we hope to keep temperatures increases below the 2C ”guardrail”;
• 40% of the pledges by Annex I Parties could be settled through “hot air” credits from Russia and Ukraine; hot air amounts to a projected 4.3% of Annex I emissions by 2020 relative to 1990;
• Even under the most optimistic interpretation of the pledges of Annex I Parties, the cost of compliance would only nick off 0.01-0.05% of GDP by 2020, compared to a projected 42% increase in GDP during that period. However, some countries would face much higher costs (e.g. 1.1% for New Zealand), while others would enjoy net revenue (Ukraine 2.9% of GDP);
• Excluding hot air credits as a means to effectuate Annex I GHG emissions reductions could increase the reductions by Annex I Parties t0 24%;
• Reducing GHG emissions would yield substantial co-benefits at no cost in terms of other pollutants. Pledges to reduce GHG emissions by Annex I Parties may result in reductions of 10% in sulfur dioxide, nitrous oxide and particular matter.