International emissions trading needs harmonization
Global carbon market: Governments devolve emissions trading activity to companies by implementing and linking domestic emissions trading systems. Credit: PIK
A global carbon market could be created “top-down” within an internationally binding climate regime or alternatively “bottom-up” by linking regional emissions trading systems. The study shows that ambitious targets for climate protection and stringent regulation are crucial preconditions for successful formal linking of regional emissions trading systems. To coordinate carbon market regulation an international clearinghouse should be installed. The International Carbon Action Partnership ICAP, founded in October 2007, has already started preparing the linking of trading systems and could serve as a future regulatory body.
