Ökolinking ETS

Opportunities and Risks of Linking Emission Trading Schemes

  • Project no.250184
  • Duration 09/2014 - 10/2016

Emission trading schemes (ETS) have become prevalent in the recent years. In 2015, about 70 percent more emissions will be covered by this policy instrument than in 2005 when the European emission trading system (EU-ETS) was launched. Apart from the EU-ETS, which is the largest and first transnational regime, there are several regional systems in North America, China, and Japan, as well as national systems in New Zealand and Kazakhstan. Further states and regions already started to implement an ETS-System or are discussing about it. A global carbon market with a common price for carbon certificates would be the most efficient solution for international reductions of carbon emissions. Due to tough international climate negotiations a global carbon market seems, however, not be realistic in the short to medium term. The linking of regional, national, and subnational ETS could be a bottom-up opportunity to build up an international carbon market, thereby reducing carbon emissions more cost efficiently, and minimising competitive distortions. At the same time linking of ETS can involve significant risks, which should be examined in detail by decision-makers. The project aims at developing an evaluation framework for better assessing the risks and opportunities of ETS-Linking.

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