Carbon pricing is considered as a key instrument for limiting climate change. One instrument that puts a price on carbon is an emission trading scheme (ETS). By linking emission trading schemes and thus creating the possibility of cross-border trading of allowances, this incentive is further expanded, allowing to tap mitigation potentials that are more cost-efficient.
The focus of this project was to analyse and evaluate non-ETS climate policy instruments, such as carbon taxes or sectoral technology standards, regarding their suitability to serve as basis for establishing emission trading schemes. The project is coordinated by the Wuppertal Institute and implemented together with Perspectives Climate Change and SQ Consult.
After analysing the suitability of individual non-ETS instruments for contributing to ETS establishment at a general level, country case studies were used to analyse the actual design and implementation of selected instruments in practice. Project findings are to inform the ETS development process in the countries analysed and show how existing policy instruments might be transitioned into emission trading schemes.