Intensity targets: implications for the economic uncertainties of emissions trading

Abstract

Intensity targets that adjust to economic growth are discussed as one option to control greenhouse gas emissions without strongly affecting economic growth and with less uncertain economic cost than absolute targets. Intensity targets are especially promoted for developing countries but also increasingly for a general climate agreement for the Post-Kyoto period. The aim of this paper is to put the existing theoretical and empirical results about intensity targets and uncertainty into perspective and to augment them by additional data and findings. This allows initial conclusions to be derived and open research questions to be identified.