Uncertainty in climate policy: impacts on market mechanisms

Abstract

In terms of geological shifts in climate, climate policy is a very young field. However, during the last two decades it has developed at a rapid pace. In 1987, the Brundtland Report first used the concept of sustainable development, followed in 1988 by the first meeting of the Intergovernmental Panel on Climate Change (IPCC) in Toronto. The establishment of the United Nations Framework Convention on Climate Change (UNFCCC) in 1992 marked the birth of global climate policy. For the first time in history governments of almost all nations gathered to discuss the effects and consequences of and measures to be taken against global warming and agreed on the principle of “common but differentiated responsibilities”. The first decade of climate policy culminated in 1997 in the signing of the Kyoto Protocol, in which industrialized countries (37 so-called “Annex B countries”), agreed to reduce anthropogenic emissions of six greenhouse gases (GHGs) by 5.2% below 1990 levels during the Kyoto commitment period, 2008–2012 (Article 3, UNFCCC 1997).