Different climate change policies are favoured by different countries due to the relative costs these policies impose. These costs depend on a country’s current emissions intensity.

Modelling from the ANU indicates that an international carbon pricing system such as emissions trading would result in emissions-intensive countries paying a higher total cost for emissions reduction.

In contrast, a Kyoto-style agreement where all countries reduce emissions by the same percentage means that these high carbon emitters would pay lower total costs for reducing their emissions.