A better Kyoto: options for flexible commitments

A ‘new Kyoto’, called for by the Australian government, may well be based on cap-and-trade, but with significant changes. Under the old Kyoto, broad participation and meaningful commitments were difficult to achieve – in part because of uncertainty about compliance costs and the dichotomy between countries with targets and those without. This policy brief examines options for making greenhouse gas commitments under a `New Kyoto' more flexible: intensity targets, sectoral targets, non-binding targets, permit price caps, and linking targets with commitments for technology development. We also touch on market-based options outside the target-based paradigm.