4 August 2010: The Organisation for Economic Co-operation and Development (OECD) has released a paper in its Environmental Working Papers series titled “Towards Global Carbon Pricing: Direct and Indirect Linking of Carbon Markets.”

In this paper, authors Rob Dellink, Stephanie Jamet, Jean Chateau and Roman Duval discuss a general equilibrium economic model used to assess direct and indirect effects of linking of emissions trading schemes across world regions. They find that significant cost savings would be possible, potentially halving mitigation costs in some countries, but that some individual countries would likely face negative impacts. The authors state, however, that linking such systems amongst developing countries would face significant practical obstacles but that the gains of such an undertaking would more than outweigh the costs. [The Working Paper]