Working Paper

The Case for Intensity Targets

Feb 1, 2005 | William A. Pizer


While the rest of the world has pursued absolute emissions limits for greenhouse gases, the Bush administration has proposed an alternative policy formulation based, among other things, on reducing emissions intensity—that is, emissions per dollar of real gross domestic product. Critics of this formulation have denounced the general idea of an intensity-based emissions target, along with its voluntary nature and weak targets. This raises the question of whether intensity-based emissions limits, distinct from the other features of the Bush initiative, offer a useful alternative to absolute emissionslimits. This paper makes the case that they do, based on how emissions targets are framed. The argument draws on four key observations: greenhouse gas emissions will continue to rise over the near term, absolute targets emphasize zero or declining emissions growth while intensity targets do not, developing countries’ economic development is integrally tied to emissions growth for the foreseeable future, and intensity targets need not be any more complicated to administer than absolute targets.

In designing rules to slow down the world's emissions of greenhouse gases, the first thing is to get the metric right. 

The metric is the measuring stick that people use to define progress, and to see whether countries are keeping their commitments.

In the Kyoto Protocol, the world's first attempt to control greenhouse missions, there are signs that the architects got the metric wrong. They put it in the form of a mandatory limit on the volume of these gases that each of 36 countries is permitted to release into the atmosphere. But the list of 36 countries that accepted limits does not include the United States or any of the developing countries such as China and India --- that is, the largest sources of emissions and the countries where emissions are rising most rapidly.

The countries that will not accept limits believe that at least in the short term there is no way to cap greenhouse emissions without cutting economic growth, a price that they are not willing to pay.

The Kyoto limits expire in 2012. That invites reconsideration of the present metric and, perhaps, its replacement with another that might be more likely to bring all the major countries into the regime.

William Pizer, an RFF researcher, discusses a promising alternative in Discussion Paper 05-02, "The Case For Intensity Targets." Emissions intensity is the ratio of greenhouse gases emitted to a country's total economic output. Emissions intensity is naturally falling in most countries, as energy efficiency rises, and targeting more rapid improvements can still support economic growth rather than threatening it.

Pizer's paper explores the concept and the ways in which it might be put to work. For at least the next two decades, he argues, greenhouse emissions will continue to rise. He concludes that it is necessary to accommodate this rise while putting in place the policies that, tightened over time, are capable of slowing the rise, then stopping it and forcing a decline.

Rapidly developing countries feel that Kyoto-style absolute limits on emissions would discriminate against them, compared with the mature industrial economies. But since their emissions intensities are at present much higher than the mature economies', and are falling faster, Pizer points out that an intensity rule would give them an advantage.