European Climate Policy: Burden Sharing after 2012

Regardless of whether or not the Kyoto Protocol enters into force, the EU may decide to set itself a long-term greenhouse gas emission target and thus to continue its leadership role in international climate policy. As for the first commitment period of the Kyoto Protocol, the EU may decide on a burden-sharing agreement as an integral part of such a long-term climate policy. Against this background I analyse three different options to distribute an overall budget of emission entitlements until 2042 among the member states of an enlarged EU. It is shown who wins and who loses with regard to compliance costs. As the member states' attitudes towards the different approaches are likely to depend on the relative attractiveness of the allocation options, a relevance threshold is introduced which may help to predict and understand the complexity of future climate negotiations in Europe.