Lessons Learned from Sub-National Emissions Trading System - Robert Stavins

June 2021, Paper: "Given the global commons nature of the climate change problem, international cooperation is essential, and the highest levels of effective governance — typically countries — should be involved as the key jurisdictions to implement effective GHG mitigation policies. However, if national government action is inadequate or if market failures prevent national policies from being effective, then there are potential roles for sub-national climate policies. Theory and experience of nesting sub-national climate policies within a broader, national climate policy indicate that the interactions between the two levels of governance can be problematic, benign, or positive, depending upon the nature, design, and stringency of the national and the sub-national policies. Of particular concern are situations where the national policies are based on averaging of quantities of emissions, such as with cap-and-trade systems. When the national system is a tradable performance standard, as with China’s national system planned for launch in 2021, the consequences are similar to those with cap-and-trade, but more complex." Read Via the Belfer Center at HKS

HKS Author - Robert Stavins