Portfolio Approach to Climate Mitigation

Among the options being discussed in the swirl of negotiations to develop a post-2012 climate policy framework is the potential development of an international agreement based on a portfolio of domestic commitments, whereby nations would agree to honor GHG emissions reduction commitments established on their own domestic laws and regulations. Harvard Professor of Business and Government Robert Stavins has penned a brief article on the topic for the Harvard Project on International Climate Agreements publication, Viewpoints.

Among the key points of the article are the following:

  • Domestic commitments portfolios establish agreements among a set of countries to confirm to mitigation commitments specified in domestic laws, regulations and planning documents;
  • Domestic commitments can take the form of specified greenhouse gas emission targets, or nationally-appropriate mitigation actions, the NAMAs provided for under the Bali Action Plan;
  • Portfolio agreements are well suited to furthering the principle of “common but differentiated responsibilities,” as countries can make commitments “along a continuum of stringency, rather than dividing nations into two groups as did the Kyoto Protocol;”
  • Such an agreement could be in the form of a treaty, but given the difficulty of this approach, other instruments could be explored, e.g. congressional-executive and sole-executive agreements in the United States, both of which do not require Senate approval;
  • The portfolio approach has several advantages for future climate policymaking, including affording countries flexibility in implementing mitigation instruments they choose, or link or aggregate those instruments with domestic agreements of other countries; it could also facilitate country acceding to the commitments at various times. There is also some impetus for this approach, with Australia, India, and the U.S. expressing interest.

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