Abstract

The outcome of the December 2011 United Nations climate negotiations in Durban, South Africa, provides an opportunity to move toward a more robust international climate policy architecture. We describe one important component of potential climate policy architecture for the post-Durban era: links among independent tradable permit systems for greenhouse gases. Since linkage reduces the cost of achieving targets, there is tremendous pressure to link existing and planned cap-and-trade systems and, in fact, a number of links already or will soon exist. We examine the potential roles that linkage may play in post-Durban international climate policy, both in a near-term, de facto architecture of indirect links between regional, national, and sub-national cap-and-trade systems, and in the longer-term, more comprehensive bottom-up architecture of direct links.