Linking Emissions Trading Schemes: An Assessment with Regard to Environmental Integrity

15 Pages Posted: 2 Dec 2008

See all articles by Julien Chevallier

Julien Chevallier

University of Paris 8 Vincennes-Saint Denis

Natacha Raffin

Paris School of Economics (PSE)

Date Written: December 2, 2008

Abstract

This paper critically assesses the potential for linkage of emissions trading schemes (ETS) designed to curb greenhouse gases. Based on current negotiations in order to link domestic schemes, we highlight the institutional barriers that exist due to different design options. Among these barriers, we highlight the potential negative effects on environmental integrity that arise from linking a rate-based system with an absolute system. Our results therefore suggest that increasing interests in linking ETS shall not be exempt from careful regulatory appraisal ex ante. Besides, we raise new questions by demonstrating how the linking process has an impact on agents' choices of technology and pollution levels.

Keywords: Emissions trading, linkage, rate-based system, absolute system, environmental integrity, EU ETS, European carbon market, Canadian Large Final Emitters System

JEL Classification: Q50, Q53

Suggested Citation

Chevallier, Julien and Raffin, Natacha, Linking Emissions Trading Schemes: An Assessment with Regard to Environmental Integrity (December 2, 2008). Available at SSRN: https://ssrn.com/abstract=1310222 or http://dx.doi.org/10.2139/ssrn.1310222

Julien Chevallier (Contact Author)

University of Paris 8 Vincennes-Saint Denis ( email )

Paris
France

Natacha Raffin

Paris School of Economics (PSE) ( email )

48 Boulevard Jourdan
Paris, 75014 75014
France

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