Research Project on Renewable Energy Economics, Kyoto University




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No.30 Understanding barriers to linking heterogenous Emissions Trading Schemes
- Evidence from and lessons for Northeast Asia -

Joseph DELLATTEa* & Sven Rudolphb
aPhD candidate, Graduate School of Economics, Kyoto University, Japan
bAssociate Professor, Hakubi Center, Kyoto University, Japan
* Correspondence:

Abstract:Linking Emissions Trading Schemes (ETS) of countries with heterogenous climate policies is the Romeo and Juliet story of carbon pricing instruments. Despite being desirable, heterogenous linkage happens to be politically arduous to establish. But what exactly makes it more challenging for these jurisdictions to agree on ETS linkage? Focusing on Northeast Asia –– we surveyed Chinese, Japanese and Korean experts negotiating the Paris Agreement Article 6 Rulebook. We test how Feasibility, Confidence and Willingness affect the specifics of linking in the region. Our results display differences in opinion amongst countries and subcategories of agents involved in the policy process. We identify three different kinds of political barriers to linking in Northeast Asia: an institutional resistance barrier revolving around administrative challenges; a governance-sharing barrier that embodies the difficulties to solve complex sovereignty questions; and an environmental integrity barrier based on a lack of Confidence between partners in the region. The results of this study have immediate policy implications and can help overcoming barriers to linking not only in Northeast Asia but also across the globe.

Keywords:Linking; Governance; emissions trading; ETS; political barriers; governance; political economy; climate policy