Carbon markets—international emissions trading schemes
Produced in partnership with Navraj Singh Ghaleigh of Senior Lecturer in Climate Law, University of Edinburgh
Carbon markets—international emissions trading schemes

The following Environment guidance note Produced in partnership with Navraj Singh Ghaleigh of Senior Lecturer in Climate Law, University of Edinburgh provides comprehensive and up to date legal information covering:

  • Carbon markets—international emissions trading schemes
  • Brexit impact
  • Background
  • Details of major emissions trading schemes
  • Linkage among ETS

Brexit impact

As of exit day (31 January 2020), the UK is no longer an EU Member State. However, in accordance with the Withdrawal Agreement, the UK has entered an implementation period, during which it continues to be subject to EU law. This has an impact on this content.

For further guidance, see Practice Note: Brexit—impact on environmental law and News Analysis: Brexit Bulletin—key updates, research tips and resources.

Background

The pricing of carbon internationally, especially by emissions trading schemes (ETS), has become significantly more widespread in recent years. Previously concentrated in the EU, since 2012 the number of carbon pricing instruments has increased globally from 20–38, tripling its coverage to about half the emissions in regulating states and regions. ETS cover 8% of global emissions or 4.7 GtCO2e (ie four point seven billion metrics tonnes of carbon dioxide, and equivalent gases). Of these the EU Emissions Trading System (EU ETS) is the largest by volume, covering 2 GtCO2e. The seven Chinese pilot emissions trading schemes are approximately half that size at 1 GtCO2e, and the various US schemes total 0.5GtCO2e. .

Experiments with emissions trading started in the US in the 1970s and 1980s in the context of action against ‘acid rain’ and sulphur dioxide (‘SOx’) rather than climate change. The resultant Clean Air Act Amendments of 1990