The role of abatement costs in GHG permit allocations: A global reduction scenario with the World-MARKAL model

Our research examines a permit trading system where all countries participate to achieve a long-term greenhouse gases (GHG) stabilization target. Our main objective is to propose allocation schemes that lead to a fair distribution of net abatement costs among world regions. These costs are good indicators of the need to emit of regions and their opportunities to abate, two criteria that are intuitively appealing, but are difficult to translate into straightforward indicators. These allocation schemes therefore complement the ones based on the more often proposed allocation criteria (population, gross domestic product (GDP), etc.). The World-MARKAL model is used to model the stabilization scenario and to calculate the regional abatement costs which are the basis for the proposed allocations. The optimal solution of the model (before permit trading), as well as the net abatement costs of regions (including permit trading), are presented. Some sensitivity analyses are discussed.