Beyond Déjà Vu: Opportunities for Policyv Learning from Emissions Trading in Developed Countries

Under pressure to abate greenhouse gas emissions without burdening their economies, several countries around the world have introduced emissions trading systems as a centerpiece of their climate change mitigation strategies. Drawing on the experiences with emissions trading made in Europe, North America, and the Asia-Pacific region, this article shows that considerable diversity can be observed across systems, providing valuable opportunities for comparison and policy learning. Individually, and in comparison, existing trading systems offer lessons that can be applied to the design and implementation of new systems – especially in emerging economies where carbon markets are currently under development, such as China – and to the improvement of already operating systems. Such lessons are identified in three different categories: the role of the political process and economic context; system design; and system implementation and operation.

As more countries around the world rely on marketbased instruments to abate greenhouse gas emissions, a growing body of experience has accumulated regarding the conditions under which emissions trading systems (ETS) emerge and develop, the implications of different design options, and the outcomes of their operation. Europe, in particular, has accumulated a wealth of experience with the design and implementation of emissions trading as an instrument for greenhouse gas (GHG) mitigation. Among the insights offered by the European Union emissions trading system (EU ETS) are difficult lessons on the allocation of allowances, price volatility, the role of market oversight, and competitiveness concerns.
Meanwhile, efforts to introduce domestic emissions trading systems in the United States at the national level have suffered a critical setback, shifting the political dynamic to the subnational level. Regional systems such as the Regional Greenhouse Gas Initiative (RGGI) and, more recently, statewide systems in California and Quebec have equally begun yielding valuable policy insights, although they are both smaller in scope and less mature than the EU ETS. Likewise, initial trading experiences in Japan and New Zealand, and advanced preparations for trading in Australia, collectively allow for an initial assessment of experiences and outcomes.
As each of these systems emerged and developed, countless policy choices had to be made which resulted in a number of material differences in their design and operation, for instance with a view to greenhouse gas coverage, trading entities, allowance allocation, the stringency and nature of reduction targets (the “cap”), and the use of offsets. Such differences have not only affected how each system performs when assessed against different assessment metrics, such as their environmental effectiveness and economic efficiency, but also have significant implications on how systems interact and potentially converge over time.



Copyright: © Lexxion Verlagsgesellschaft mbH
Quelle: Issue 4/2012 (Dezember 2012)
Seiten: 15
Preis inkl. MwSt.: € 41,65
Autor: Sonja Klinsky
Michael Mehling
Andreas Tuerk

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