Economics at your fingertips  

Mechanisms for linking emissions trading schemes

Michael Mehling and Erik Haites

Climate Policy, 2009, vol. 9, issue 2, 169-184

Abstract: Linking emissions trading schemes has attracted interest as a means of reducing costs and expanding market size and liquidity. A number of studies have explored the compatibility of schemes, although little attention has been devoted to the implementation of links. Most trading schemes provide for unilateral recognition of certified emission reductions (CERs) and occasionally other units. Restrictions on the types of units and the quantity that can be used are common. Unilateral links can be implemented through adoption of a schedule that lists the units accepted together with limits on, and adjustments to, imported units. Only a bilateral link yields the full benefits of linking trading schemes. No bilateral links have been established yet, but the number of schemes interested in such links is growing. Implementing such a link through a binding agreement affords participants considerable certainty. However, it entails cumbersome adoption procedures as well as legal and procedural constraints. Reciprocal unilateral links, possibly accompanied by an informal agreement, are easier to implement and offer more flexibility. Economic benefits will not differ significantly from a bilateral linking agreement.

Date: 2009
References: View complete reference list from CitEc
Citations View citations in EconPapers (17) Track citations by RSS feed

Downloads: (external link) (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link:

Ordering information: This journal article can be ordered from

Access Statistics for this article

Climate Policy is currently edited by Professor Michael Grubb

More articles in Climate Policy from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().

Page updated 2018-04-21
Handle: RePEc:taf:tcpoxx:v:9:y:2009:i:2:p:169-184