Comparing the EU Emissions Trading System and the US Regional Greenhouse Gas Initiative: Is There Compatibility Across the Ocean?

ESPRi Working Paper Series. Working Paper No. 3

26 Pages Posted: 25 Jan 2014

See all articles by Pawel Pustelnik

Pawel Pustelnik

School of Planning and Geography

Date Written: May 1, 2013

Abstract

The main aim of this article is to analyze compatibilities for linking of two independent emissions trading schemes: European Union Emissions Trading System (EU ETS) and Regional Greenhouse Gas Initiative (RGGI). Given the fact that both schemes are based on a cap-and-trade principle, they offer tangible cases for a comparison. The major issues under investigation include the allocation of the credits, their exchange and the commitment periods that each of the schemes has. In this paper I show evidence that proves that the two schemes could provide a foundation for a global solution to trading emissions. The favoring features are as follows: a strong interest in auctioning the allowances, a relative openness of both schemes to other mechanisms, possible reductions to administration costs and various similarities in governance structures within the mechanisms. It is argued as well that both EU ETS and RGGI are still in the formation state, their principles are in constant flux and their structures are being remodeled, which offers possibilities of extension/linkage.

Keywords: EU ETS, RGGI, carbon trade, climate policy

Suggested Citation

Pustelnik, Pawel, Comparing the EU Emissions Trading System and the US Regional Greenhouse Gas Initiative: Is There Compatibility Across the Ocean? (May 1, 2013). ESPRi Working Paper Series. Working Paper No. 3, Available at SSRN: https://ssrn.com/abstract=2384427 or http://dx.doi.org/10.2139/ssrn.2384427

Pawel Pustelnik (Contact Author)

School of Planning and Geography ( email )

Glamorgan Building
King Edward VII Avenue
Cardiff CF 10 3WA, Wales
United Kingdom

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