On July 20th 2009, the UK Department of Energy and Climate Change issued five substantial reports, each of which focuses on an issue relating to the long term future for the carbon markets. The reports are:
- A report on global carbon trading by Mark Lazarowicz, the Prime Minister’s Special Representative on Climate Change, that outlines the constituent parts of the carbon market and analyses the potential for a truly global carbon market, made up of multiple linked emission trading systems. The report makes several policy recommendations for the Prime Minister on how this should be achieved. As was widely reported in the press, the report concludes that trading in emissions is the best way to achieve global emission reductions and that global carbon trading could cut the cost of emissions reductions by 70 per cent.
- An assessment by Michael Mehling of Climate Strategies of the institutional framework that a truly global carbon market would need in order to function effectively and achieve environmental integrity.
- An assessment by Ecofys that quantifies the capacity building costs entailed in connecting developing countries to carbon markets. This contains country examples for Turkey, China, Chile, Sri Lanka and Ghana that illustrate the costs of closing capacity gaps for different sizes and types of country economies.
- An assessment of the impact of banking and borrowing rules on linkages, by New Carbon Finance and the UK’s Office of Climate Change.
- A high level study by Vivid Economics of the cost implications of achieving linkages and the design features of developed country carbon trading systems that create barriers to linking, entitled “Carbon Markets in space and time”.