The European Emission Trading System and its followers: Comparative analysis and linking perspectives

During the past decades there has been a wide debate on which economic instruments are more suitable to fight climate change in a way that is both economically efficient and legally rigorous. Among the various instruments, Emission Trading has gained increasing importance worldwide. Following the example of the European Emission Trading System (henceforth EU ETS), which set up in 2005 the first international carbon market, many other countries have decided to set up their own ETS at the national or regional level, generating a sort of rapid sprawling of the ETSs around the world. Given the difficulties encountered in the post-Kyoto phase (and actually during the Kyoto phase too) to pursue a multilateral solution to climate change problems, many scholars and policy-makers started looking at linking ETSs as a possible way to progressively achieve a common instrument to reduce polluting emissions. Linking ETSs implies deep economic and legal difficulties: it requires a rigorous legal framework for its proper economic functioning. Still, it might become one of the main routes to fight climate change in the near future. To get a deeper understanding on this issue, this book provides a detailed analysis of the main ETSs from both the legal and economic perspectives with the intent to compare their features and examine whether and how to link them in the future. It is the effort of a joint legal and economic team based at the University of Siena where we collaborate within the research group R4S-Regulation for Sustainability.