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Tuerk, Andreas; Gubina, Andrej F. --- "Linking emission trading schemes: concepts, experiences and outlook" [2016] ELECD 1501; in Weishaar, E. Stefan (ed), "Research Handbook on Emissions Trading" (Edward Elgar Publishing, 2016) 309

Book Title: Research Handbook on Emissions Trading

Editor(s): Weishaar, E. Stefan

Publisher: Edward Elgar Publishing

ISBN (hard cover): 9781784710613

Section: Chapter 13

Section Title: Linking emission trading schemes: concepts, experiences and outlook

Author(s): Tuerk, Andreas; Gubina, Andrej F.

Number of pages: 17

Abstract/Description:

The European Commission successfully implemented the first phase of the European Emissions Trading Scheme (EU ETS) from 2005–2008 with the objective for the scheme to serve as a possible nucleus of a global carbon market that would complement a possible new global climate regime in a bottom-up manner (EC 2009). Through its activities within the Organisation for Economic Co-operation and Development (OECD), the main priority of the European Commission was to establish a transatlantic link between the EU ETS and a federal US scheme as basis of a OECD-wide trading system envisioned for 2015 (EC 2009). A combined EU-US market would have covered a major part of OECD emissions, and could have thus constituted the backbone for the future international emissions trading regime (Tuerk et al., 2009). The introduction of an Australian ETS, a mandatory federal Japanese ETS and a federal US scheme have, however, failed so far, and it remains to be seen how fast the US Clean Power Plan presented in July 2015 (US EPA, 2015a) that paves the way for a federal emissions trading scheme will be implemented. While the vision of an OECD-wide carbon market remains distant, regional initiatives in the US and in Japan have emerged in recent years. At the same time a strong dynamic to establish emissions trading schemes is becoming visible in emerging countries, in particular in Asia, with new trading systems under discussion or already evolving in China, South Korea, Thailand and Vietnam. In Central and Latin America, the discussions on introducing carbon trading are just beginning, such as in Mexico or Brazil. The aim of this chapter is to give an overview of the motivations to link trading schemes, the forms of linking, the challenges to link trading schemes and an outlook on the role, options and likelihood for linking trading schemes in the upcoming years.