Linking carbon markets: legal and institutional issues and lessons for Northeast Asia

Domestic and international laws govern the form and process of a link and also set out substantive conditions and restrictions. Once established, the operation of a link will benefit from defined procedures and institutions. Provision should be made for routine coordination as well as systemic change. Case studies of existing links, such as those between California, Ontario, and Québec and the European Union and Switzerland, highlight the importance of sustained dialogue, mutual transparency, and a commitment to shared principles. Over time, robust governance structures will prove as important to a functioning Northeast Asian carbon market as technical alignment of system design.