Chapter

Governance Issues in a Multinational Cap-and-Trade System: Centralization and Harmonization

Denny Ellerman

in Global Environmental Commons

Published in print July 2012 | ISBN: 9780199656202
Published online September 2012 | e-ISBN: 9780191742149 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199656202.003.0008
Governance Issues in a Multinational Cap-and-Trade System: Centralization and Harmonization

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The European Union’s CO2 Emissions Trading Scheme (EU ETS) has shown that cap-and-trade systems can work in a highly decentralized multinational setting, but that experience has also revealed some issues in governance that threaten the feasibility of cap-and-trade in an international setting. These issues are captured in the conflicting demands for differentiation and harmonization. This chapter examines the experience of the EU ETS and of cap-and-trade systems in the USA in resolving this conflict with particular attention to the governance institutions and their potential applicability on a broader global scale.

Keywords: EU ETS; emissions trading; cap-and-trade; differentiation; harmonization; allowance allocation; Kyoto Protocol

Chapter.  7160 words. 

Subjects: Economic Development and Growth

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