With the introduction of an emissions trading system (ETS) in 2005, the European Union established its principal climate policy instrument for reducing greenhouse gas emissions. Since then, the EU Emissions Trading System has been continuously developed and harmonised. Of late, other states and regions have also gained experience with emissions trading or have expressed interest in the development and implementation of such systems. By linking existing and emerging ETSs, an international market for emission allowances could emerge in the medium to long term. Such a market could have the potential to form the foundation for the efficient and cost-effective reduction of greenhouse gases worldwide.
The creation of a global carbon market is still in the early stages. However, further progress can be made on the basis of initial linking of experiences. While the direct linking of ETSs, for example by mutual recognition of emission allowances of different systems, requires negotiations between two or more ETSs, the establishment of a common understanding of the basic requirements and conditions for linking can advance the development of a common market. This includes a dialogue on the specific design and development of their systems and the identification of linking-relevant ETS design elements.
To discuss progress, challenges, and solutions on the way to a global market, the German Federal Ministry for Environment, Nature Conservation and Nuclear Safety (BMU) commissioned adelphi with the planning, organisation, and hosting of the high-level, international Emissions Trading Worldwide – Moving Towards a Global Market conference which took place 11-12 April 2013 in Berlin.