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V
Designing a Transborder
Trading Scheme
THE KYOTO ACCORD: LESSONS FOR
TRANSBORDER TRADING?
Concerns about anthropogenic global warming from greenhouse
gases led to the international agreement known as the Kyoto Accord.
The accord, which is not fully ratified, sets targets and timetables
for 39 industrialized countries to reduce emissions of six greenhouse
gases implicated in global warming. The United States, for example,
would cut greenhouse emissions 7% below 1990 levels on average
during the years from 2008 to 2012 (Fisher, et al. 1999). Similar
cuts are required in Western Europe and Japan. Russia and Ukraine
must freeze emissions at 1990 levels (Victor 1998).
Greenhouse gases mix on a global scale. Once the gases are emitted,
air currents carry them worldwide (although there is some evidence
that mixing does not occur between the northern and
southern hemispheres). Mixing pollutants, such as greenhouse gases,
are ideal candidates for emissions reduction trading since mixing
prevents the formation of local hot spots. Indeed, Kyoto relies heavily
on emissions trading as a mechanism for achieving national
goals. 1 The logic for emissions trading is compelling. Reducing
emissions in Western countries, where strict environmental regulations
have been in effect for decades, is difficult and costly. But in
developing nations, the fruits hang low and are thus easy to pick.
Projects to refurbish inefficient power plants in Poland have cut
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