Cap & Trade
In Europe, while the EU Emissions Trading Scheme (ETS) is in place, opportunities for learning from it are not being maximised and an appropriate interpretation of the system is sometimes lacking. There is currently a significant amount of misinformation in circulation and no clear means of debunking or rebutting claims. Additionally, the EU ETS is by no means a perfect system, with concerns over coverage, price of carbon and the level of caps. Thus there are opportunities to learn from new thinking in the US, to suggest improvements to the system and feed into the ongoing review processes.
In the US, several state-led initiatives are under development and there is now considerable momentum in relation to a federal system, with numerous bills being discussed in Congress. There are, however, still considerable hurdles to overcome, not only so that a possible agreement at federal level might be achieved, but also in terms of operationalising state-led action. A further issue is the possibility of linking with the EU ETS.
Discussions under T-PAGE will examine the ongoing debate in Europe on what else could or should be incorporated into the EU ETS and the US discussions about how social equity/environmental justice can be achieved within a trading system, the issue of auctioning and/or grandfathering permits. Other topics to be discussed include the sectoral coverage of systems; complementary policies to support cap and trade; the broader impact of cap and trade including the impact on competitiveness - which links strongly to the debate on the way forward for and future cap and trade systems.
For further details see T-PAGE Publications.