Limiting anthropogenic climate change over the next century will require controlling multiple substances. The Kyoto Protocol structure constrains the major greenhouse gases and allows trading among them, but there exist other possible regime architectures which may be more efficient. Tradeoffs between the market efficiency of all-inclusive policies and the benefits of policies targeted to the unique characteristics of each substance are investigated using an integrated assessment approach, using the MIT Emissions Prediction and Policy Analysis model, the Integrated Global Systems Model, and political analysis methods.

The thesis explores three cases. The first case addresses stabilization, the ultimate objective of Article 2 of the UN Framework Convention on Climate Change. We highlight the implications of imprecision in the definition of stabilization, the importance of non-CO2 substances, and the problems of excessive focus on long-term targets. The results of the stabilization analysis suggest that methane reduction will be especially valuable because of its importance in low-cost mitigation policies that are effective on timescales up to three centuries. Therefore in the second case we examine methane, demonstrating that methane constraints alone can account for a 15% reduction in temperature rise over the 21st century. In contrast to conventional wisdom, we show that Global Warming Potential based trading between methane reductions and fossil CO2 reductions is flawed because of the differences in their atmospheric characteristics, the uncertainty in methane inventories, the negative interactions of CO2 constraints with underlying taxes, and higher political barriers to constraining CO2. The third case examines the benefits of increased policy coordination between air pollution constraints and climate policies. We calculate the direct effects of air pollution constraints to be less than 8% of temperature rise over the century, but ancillary reductions of GHGs lead to an additional 17% decrease. Furthermore, current policies have not had success coordinating air pollution constraints and CO2 constraints, potentially leading to a 20% welfare cost penalty resulting from separate implementation. Our results lead us to recommend enacting near term multinational CH4 constraints independently from CO2 policies as well as supporting air pollution policies in developing nations that include an emphasis on climate friendly projects.