PODCAST on replicating LIFE DICET 2/3 – Regional linking of carbon markets in Asia

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A post by the LIFE DICET Project team

Replication is crucial for any project and a frequently necessary condition from funding bodies. For technical projects that lead to a patent, replication is straightforward. For others, replication generally consists of applying the project’s methodology to solve other related -or unrelated- problems. Among its core skeleton, the LIFE DICET project has offered a governance platform where to identify and discuss policy topics needed to align international Emission Trading Systems (ETS). Its method includes seven backbone components that can be replicated partly or totally and include 1. identifying a diversity of stakeholders to discuss the barriers and opportunities to solve a given problem (e.g., ETS alignment), 2. defining key research topics that influence the implementation (e.g., ETS alignment needs to deal with carbon leakage and free allocation). These topics (Assessments) are then 3. analysed in reports developed after Technical Workshops, 4. discussed and enriched in Policy Dialogues to 5. produce final reports with recommendations (e.g., how to solve carbon leakage under ETS alignment). These outputs are then promoted through 6. Capacity building and 7. Dissemination activities.

The LIFE DICET project foresees three replicability options:

  1. Replicability within the EU ETS to extend the sectoral scope of carbon pricing,
  2. Replicability towards linking ETS in other geographical areas,
  3. Replicability in other policy areas to support international cooperation on climate policies.

This podcast focuses on LIFE DICET’s replicability to support the future linking of other regional ETS. Professor Duan Maosheng, Director of the China Carbon Market Center of Tsinghua University, is an active member of LIFE DICET’s Core Expert Group. In this PODCAST recorded in 2020, he responds to the potential future linking of China’s ETS with other ETSs in the region such as Japan’s, South Korea’s, or Viet Nam’s. Professor Duan Maosheng recognizes that emission trading could be a helpful policy instrument to assist countries in achieving their mitigation targets at lower costs and a relevant tool under the Paris Agreement. However, linking is not a priority for China. China’s current focus remains on minimizing losses and risks from its own ETS. The potential future linking of regional Asian ETS would need to consider each ETS’s technical, economic, social, and legal aspects to understand why their designs are so different. This understanding would be a prerequisite to promoting alignment. The extension of current ETS to other jurisdictions or the linking among ETS would benefit from governance structures, such as LIFE DICET’s, to promote high-level policy dialogue and multi-stakeholder discussions. These discussions need to touch upon implementation experiences that have been gained and lessons that have been learned. Moreover, action beyond debate, including the in-depth involvement of a core expert group in designing key issues in alignment, would be beneficial.

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The views and opinions expressed in this post are solely those of the author(s) and do not reflect those of the editors of the blog of the project LIFE DICET.