Groupe d’études et de recherche en analyse des décisions

G-2004-01

A Decision Aid Tool for Equity Issues Analysis in Emission Permit Allocations

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In the long term, the Kyoto Protocol itself will be insufficient to stabilize the greenhouse gas (GHG) concentrations in the atmosphere; the participation of developing countries will be essential. International cooperation mechanisms, like permit trading system, can help achieve global economic efficiency. However, initial allocation of emission permits raises many debates on equity. The main objective is to propose a decision aid tool which can provides relevant information to the parties on various equitable permit allocation schemes. For this purpose, a dynamic multicriterion model is proposed to share the global quantity of permits among 15 regions taking into account multiple definitions of equity. The World-MARKAL energy model is used to determine the cost-effective opportunities and to compute the gross reduction cost (before permit exchanges) for each region. Then, it is possible to calculate their net reduction costs (after permit exchanges) according to different allocation schemes. Range of permit allocations and net costs are presented for each region.

, 23 pages