Call for UK and EU to link emission trading systems ahead of COP26

Article summary

The International Swaps and Derivatives Association (ISDA), alongside 41 other trade associations, have sent letters to both the UK government and the European Commission ahead of the COP26 in Glasgow in an effort to highlight the importance of linking the new UK Emissions Trading System and the EU’s Emissions Trading System as soon as is deemed practicable. The ISDA contends that the linkage of both systems will prove beneficial to both the UK and EU and allow them both to reach net zero faster and more cost effectively. It also notes that the linkage would allow the creation of a carbon pricing level playing field, allowing both parties to avoid ‘competitive distortions’ and align cost implications.