Analysis of Risks and Opportunities of Linking Emissions Trading Systems

Within the frame of this project, a structured system for evaluating the risks and opportunities of linking emissions trading schemes was developed. To this end, economic, ecological and political objectives for linking were identified, relations and interdependencies were investigated and assessment criteria and indicators were defined. The report also includes an overview on economic models that can be used for analyzing linking effects. Another focus is the relevance of differences in the design of emission trading schemes and critical design features that would need to be potentially adjusted to ensure the proper functioning of a linked carbon market.