ETS alignment : a price collar proposal for carbon market integration

This report was written to inform the Carbon Market Policy Dialogue between the European Commission, as the regulator of the EU Emissions Trading System (ETS), and the regulatory authorities of the ETSs in California, Quebec, China, New Zealand and Switzerland.

Building on the earlier findings of the LIFE DICET project led by the European University Institute, this fifth and final report identifies the design elements requiring various degrees of alignment for successful linkages between ETSs and discusses how such alignments can be achieved in linking negotiations. Moreover, to contribute to the debate on the establishment of direct linkages between ETSs, a “price collar for the linked system” is proposed.