UK ETS launch reignites debate over emissions market linking

Opportunity to bring together UK and EU markets, but China’s new scheme lacks compatibility with other systems

The UK's launch last month of its emissions trading system (ETS) has brought the issue of linking markets back to the top of the agenda in climate policy circles. The existence of two carbon markets—the UK’s and the EU’s—in close geographical and economic proximity has highlighted the potential benefits of bringing such markets together. There is a strong consensus among proponents of carbon trading that bringing markets together generates efficiencies of scale, boosts liquidity and widens the scope of possible emissions reductions. But crucially, linking more markets around the world also places a hard limit on greenhouse gases on a higher proportion of the world’s emissions. According to t