Beyond Deja Vu: Opportunities for Policy Learning from Emissions Trading in Developed Countries
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Beyond Dej' Vu: Opportunities for Policy
Learning from Emissions Trading in Developed
Countries
Sonja Klinsky, Michael Mehling and Andreas Tuerk*
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 com-
parison, 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.
I. Introduction
As more countries around the world rely on market-
based instruments to abate greenhouse gas emis-
sions, a growing body of experience has accumu-
lated regarding the conditions under which emis-
sions 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) mitiga-
tion. Among the insights offered by the European
Union emissions trading system (EU ETS) are diffi-
cult lessons on the allocation of allowances, price
volatility, the role of market oversight, and competi-
tiveness concerns.
Sonja Klinsky is Senior Sustainability Scientist, Global Institute of
Sustainability and Assistant Professor, School of Sustainability,
Arizona State University, United States; Michael Mehling is
President of Ecologic Institute, Washington DC, United States;
Andreas Tuerk is Senior Researcher, Joanneum Research, Graz,
and Wegener Center for Climate and Global Change, University
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 Ini-
tiative (RGGI) and, more recently, statewide systems
in California and Quebec have equally begun yield-
ing 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 trad-
ing 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
of Graz, Austria. All three authors are members of Climate
Strategies, an international network of leading experts on eco-
nomic and policy issues concerning climate change. Research
for this article was conducted as part of a Climate Strategies
project for the Institute for Global Environmental Strategies (IGES),
Hayama, Japan.
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Beyond Deja Vu: Opportunities for Policy Learning from Emissions Trading in Developed Countries
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