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Carbon Trading Across National Boundaries

Carbon Trading Across National Boundaries

19 April 2005

This workshop with Sam Napolitano offered a platform for policy-makers and researchers to discuss further developments in carbon trading and other climate policy instruments. In his presentation Sam Napolitano, director of the Clean Air Markets Program of the US EPA, gave a wide overview of experiences with cap-and-trade systems in the US on state and regional level. In particular, he focused on the design, allowance allocation, targets, monitoring and results of the main US cap-and-trade systems which was of special interest to European policy makers who only recently created the European Emissions Trading System (EU-ETS). The workshop took place in Berlin,  19 April 2005.

After Sam Napolitano’s presentation [pdf, 1.7 MB, English], the discussion turned to a possible linking of the EU-ETS to a US trading system.

Kai Schlegelmilch, German Federal Ministry for the Environment, Nature Conservation and Nuclear Safety, presented on the design of national trading systems and the implications for linking. It became clear that the issue of linking is difficult to assess from an US-perspective as there are currently no plans from the federal government to implement a mandatory national trading system. However, further requirements for linking were discussed on a more theoretical level including the questions of binding vs. flexible targets, the approach to allocation of allowances, the inclusion of different sectors and other policy instruments.

As the EU ETS is only in its first phase and allocations in some countries are still being discussed and contested by industry groups, Sam Napolitano gave a closer insight to the allocation approaches of the existing US cap-and-trade systems. He showed which approaches are most popular with industry and which approaches give the best economic incentives to improve energy efficiency and productivity. The discussion then concentrated on the influence of the existing cap-and-trade systems in the US and EU on the composition of the energy-mix as well as on the improvement of energy-efficiency. It became clear that the available energy technologies as well as the existing energy supply play important roles and must be kept in mind when discussing carbon trading.

Further Links & Downloads: 

Sam Napolitano
Kai Schlegelmilch
19 April 2005
Berlin, Germany
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