TOWARDS A GLOBAL CARBON MARKET

The policy brief examines the potential for linking the EU ETS with other carbon markets, specifically focusing on ongoing negotiations with Switzerland. It argues that while linking can increase cost-efficiency, it risks reducing overall emissions abatement, lowering domestic investment, and undermining the EU's target of at least 40% domestic emissions reductions by 2030. The author highlights a lack of transparency and democratic oversight in current linking procedures and recommends that any future linking be accompanied by increased EU emission targets and strict criteria regarding target stringency, the use of offsets, and price/supply controls.

• Linking the EU ETS to a lower-cost carbon market with lower ambition could lead to several negative outcomes for the EU, including reduced overall emissions abatement, lower domestic investments and co-benefits, and a loss of public funds due to lower auction revenues.
• There is a risk that linking would allow foreign allowances and credits to enter the EU market, which could undermine the EU's commitment to achieve at least 40% emissions reductions domestically by 2030 relative to 1990.
• Current EU rules for linking carbon markets lack transparency and democratic participation, as the European Parliament is excluded from negotiations and the public has no access to negotiation mandates or crucial documents.
• The EU and Switzerland have been negotiating a link since 2010, with a goal to initial the agreement in the first half of 2015; however, outstanding issues remain regarding the inclusion of aviation emissions and the use of international offsets post-2020.
• A comparison of the EU ETS with other markets—including those in China, South Korea, New Zealand, Kazakhstan, and the US RGGI—suggests that prospects for linking are not promising due to incompatibilities in target stringency, the use of offsets, and price/supply controls.

APA

Carbon Market Watch (2015). TOWARDS A GLOBAL CARBON MARKET. https://carbonmarketwatch.org/wp-content/uploads/2015/05/NC-Towards-a-global-carbon-market-PB_web.pdf

Chicago

Carbon Market Watch. TOWARDS A GLOBAL CARBON MARKET. 2015. https://carbonmarketwatch.org/wp-content/uploads/2015/05/NC-Towards-a-global-carbon-market-PB_web.pdf.

Wikipedia

{{cite report |author=Carbon Market Watch |title=TOWARDS A GLOBAL CARBON MARKET |date=May 2015 |url=https://carbonmarketwatch.org/wp-content/uploads/2015/05/NC-Towards-a-global-carbon-market-PB_web.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{carbonmarketwatch2015towards, author = {{Carbon Market Watch}}, title = {{TOWARDS A GLOBAL CARBON MARKET}}, institution = {Carbon Market Watch}, year = {2015}, month = may, url = {https://carbonmarketwatch.org/wp-content/uploads/2015/05/NC-Towards-a-global-carbon-market-PB_web.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }