Evaluation of Paris Agreement: From the Viewpoint of Quantity vs. Price

Abstract

There are a number of possible structures of cooperation or agreement that avoid a tragedy of global commons. The structure of the Paris Agreement is in common with that of the Kyoto Protocol in the aspect that each country has an emissions target, part of which can be traded among countries. However, some economists have been proposing that the target should be carbon price. That is the target of marginal cost of reduction. Their reasoning has recently become diversified. In this paper, the Paris Agreement is evaluated from the diversified viewpoint of quantity vs. price, based on the Paris Agreement itself and its negotiation process. The appropriateness of the price target proposal is also investigated. Although the price target proposal is persuasive, further investigation is found to be necessary.