1006 MITE-o144/dd r6

ne of the hottest topics in recent climate-change negotiations has been emissions trading. Under the Kyoto Protocol, countries that face high costs to reduce emissions of carbon dioxide (CO2) are allowed to pay countries with lower-cost opportunities to make the reductions for them. An Energy Laboratory team has developed an easy-to-interpret method of showing who would trade and how specific nations would be affected. Using output from standard models that simulate economic growth, energy use, and carbon emissions, the researchers form “marginal abatement curves” that show the cost to a given region of achieving cuts in CO2 emissions. By superimposing curves for different regions, they can readily see which regions would trade and how their costs would be affected. Analyses show that, almost regardless of circumstances, all regions will benefit from trading. The savings are enormous when the lowest-cost reducers—the developing nations—participate. But costs drop considerably even when trading is limited to the major regions of the O