PROSPECTS FOR A TRANSATLANTIC CARBON MARKET

The document concludes that a federal US carbon market is unrealistic for the foreseeable future, but identifies potential for linking the EU ETS with regional systems like the Western Climate Initiative (WCI) and California. It highlights that while the Regional Greenhouse Gas Initiative (RGGI) is operational, its low prices make it an unattractive linking partner. The authors argue that a bottom-up climate architecture, rather than a single global carbon market, is the most likely trajectory for international climate cooperation.

• A transatlantic carbon market link between the EU ETS and a federal US trading system is considered unrealistic for the foreseeable future due to political resistance and the failure of comprehensive climate legislation in the US Senate.
• The Western Climate Initiative (WCI) and California are identified as viable potential linking partners for the EU ETS, as their projected carbon prices are comparable to those in the EU.
• The Regional Greenhouse Gas Initiative (RGGI) is currently an unattractive partner for linking with the EU ETS because its market is over-allocated, leading to allowance prices that are significantly lower than those in the EU.
• The Environmental Protection Agency (EPA) is unlikely to implement a federal cap-and-trade program due to strong political resistance from the Republican majority in the 112th Congress.
• Significant barriers to direct linking of carbon markets include differences in the stringency of mitigation targets, the eligibility of offset credits, and the nature of emission targets (absolute vs. relative).
• A major technical and policy conflict exists regarding offset credits, as US systems typically allow land-use and forestry credits, which the EU ETS currently excludes.
• The authors predict that an integrated OECD-wide carbon market is unlikely in the short to medium term, and international climate efforts will instead follow a 'bottom-up' architecture consisting of a patchwork of regional and bilateral regimes.

APA

Mehling, M., Tuerk, A., & Sterk, W. (2011). PROSPECTS FOR A TRANSATLANTIC CARBON MARKET. Climate Strategies. https://climatestrategies.org/wp-content/uploads/2014/11/cs-transatlantic-carbon-market-final.pdf

Chicago

Mehling, Michael, Andreas Tuerk, and Wolfgang Sterk. PROSPECTS FOR A TRANSATLANTIC CARBON MARKET. Climate Strategies, 2011. https://climatestrategies.org/wp-content/uploads/2014/11/cs-transatlantic-carbon-market-final.pdf.

Wikipedia

{{cite report |last1=Mehling |first1=Michael |last2=Tuerk |first2=Andreas |last3=Sterk |first3=Wolfgang |title=PROSPECTS FOR A TRANSATLANTIC CARBON MARKET |publisher=Climate Strategies |date=April 2011 |url=https://climatestrategies.org/wp-content/uploads/2014/11/cs-transatlantic-carbon-market-final.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{mehling2011prospects, author = {Mehling, Michael and Tuerk, Andreas and Sterk, Wolfgang}, title = {{PROSPECTS FOR A TRANSATLANTIC CARBON MARKET}}, institution = {Climate Strategies}, year = {2011}, month = apr, url = {https://climatestrategies.org/wp-content/uploads/2014/11/cs-transatlantic-carbon-market-final.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }