Linking Emissions Trading Schemes Synthesis Report

The report assesses the potential for linking emissions trading schemes (ETS) globally, concluding that an OECD-wide company-level carbon market by 2015 is a "highly ambitious goal." It identifies that while the EU ETS seeks to be a nucleus for a global market, most emerging schemes prioritize domestic price control over full bilateral linking. The study highlights significant barriers to linkage, including divergent target stringencies, the use of intensity-based targets (notably in Canada), and different cost-containment measures like price caps. It distinguishes between unilateral links (one-way recognition), bilateral/multilateral links (mutual recognition), and indirect links (via common mechanisms like the CDM). The report also examines the legal complexities of such links, particularly the constraints on US state-level agreements and the EU's regulatory mandates. It suggests that a "bottom-up" process of linking regional markets could serve as a fallback if top-down international agreements, such as a Kyoto successor, fail.

• An OECD-wide company-level carbon market by 2015 is considered a highly ambitious goal; it is more probable that 2015 will mark the start of establishing the first links between OECD countries.
• Full bilateral linking is often not a short-term priority for many schemes because the benefits are weighed against the loss of control over domestic CO2 price levels.
• The European Union views the EU ETS as the nucleus for a global carbon market and prioritizes a transatlantic link with a future federal US scheme to form the backbone of an international regime.
• Major barriers to bilateral linking include the relative stringency of targets, the eligibility of offset credits, intensity targets, and cost-containment measures.
• Intensity-based targets, such as those proposed in Canada, create significant political and technical challenges for linking with schemes that use absolute caps.
• Indirect linking can occur when separate systems both establish unilateral links to a common third system, such as the Clean Development Mechanism (CDM), potentially leading to price convergence.
• The use of price caps in one linked system can effectively cap permit prices across all linked schemes, which may be unacceptable to other participating countries.
• In the United States, the federal Constitution limits the ability of individual states to enter into formal international treaties, though they may use state compacts or reciprocal domestic legislation to link markets.
• Linking provides a 'bottom-up' fallback option to top-down international regimes, allowing national and regional systems to integrate even in the absence of a Kyoto successor treaty.

APA

Tuerk, A., Sterk, W., Haites, E., Mehling, M., Flachsland, C., Kimura, H., Betz, R., & Jotzo, F. (2009). Linking Emissions Trading Schemes Synthesis Report. Climate Strategies. https://climatestrategies.org/wp-content/uploads/2014/11/linking-synthesis-final-may-09.pdf

Chicago

Tuerk, Andreas, Wolfgang Sterk, Erik Haites, Michael Mehling, Christian Flachsland, Hitomi Kimura, Regina Betz, and Frank Jotzo. Linking Emissions Trading Schemes Synthesis Report. Climate Strategies, 2009. https://climatestrategies.org/wp-content/uploads/2014/11/linking-synthesis-final-may-09.pdf.

Wikipedia

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BibTeX

@techreport{tuerk2009linking, author = {Tuerk, Andreas and Sterk, Wolfgang and Haites, Erik and Mehling, Michael and Flachsland, Christian and Kimura, Hitomi and Betz, Regina and Jotzo, Frank}, title = {{Linking Emissions Trading Schemes Synthesis Report}}, institution = {Climate Strategies}, year = {2009}, month = may, url = {https://climatestrategies.org/wp-content/uploads/2014/11/linking-synthesis-final-may-09.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }