Emissions trading scheme

In 2003, the EU created an internal emissions trading scheme (ETS) to assist the European Community and its Member States in achieving their greenhouse gas emissions reduction commitments under the Kyoto Protocol in a cost-effective manner.

Greenhouse gas emissions trading schemes in Canada, Japan, Australia, New Zealand and Switzerland remain candidates for linkage under Article 25 of the Emissions Allowance Trading Directive, through an agreement for the mutual recognition of allowances. With the rapid growth in global GHG emissions, and progressive developments in the United States and Australia at the sub-national level, there is also a need to consider whether sub-national schemes can be linked with the EU ETS, and if so, how this can be done most efficiently as a legal and practical matter.

In 2008, FIELD conducted a study "Analysing the legal and organisational issues arising from linking the EU Emissions Trading Scheme to other existing and emerging emissions trading schemes". The study was commissioned by the European Commission and looked at how to link the European Union's greenhouse gas emission trading scheme to other emission trading schemes.