@article{Green:178244,
      recid = {178244},
      author = {Green, Jessica F. and Sterner, Thomas and Wagner, Gernot},
      title = {The Politics of Market Linkage: Linking Domestic Climate  Policies with International Political Economy},
      address = {2014-07-15},
      number = {824-2016-54870},
      series = {CCSD},
      pages = {22},
      month = {Jul},
      year = {2014},
      note = {Paper removed at the request of the authors, September 4,  2014},
      abstract = {After twenty years of global negotiations, the world is  still far from a comprehensive climate agreement. The  ‘top-down’ approach embodied by the Kyoto Protocol has all  but stalled, chiefly due to disagreements over levels of  ambition and objections to financial transfers. To avoid  those problems, many have shifted their focus on bottom-up  ‘linkage’ of regional, national, and sub-national  cap-and-trade systems. Decentralized architecture has its  appeals, but we argue that linkage among carbon markets  ultimately faces the same obstacles that are at the heart  of global climate negotiations. Linkage can potentially  reduce overall costs of tackling climate change by  leveraging the differences in the marginal costs of  emissions reductions across nations. However, as incomes,  ideologies and other conditions diverge—and, thus,  potential economic gains from linkage increase—political  obstacles to linkage grow. We identify four obstacles to  successful linkage: potential for gaming of targets;  objections to financial transfers; the difficulty of close  regulatory coordination; and incompatibility with other  domestic policy objectives. Linkage, thus, may be an  important political instrument and learning process but it  provides no end run around international “global warming  gridlock” (Victor 2011). A functioning global climate  policy architecture still requires close international  coordination with a balance of ‘bottom-up’ and ‘top-down’  elements. Only with this realization—and by employing a  gradual process toward full linkage—can early carbon market  linkages help facilitate a path towards a successful global  climate architecture.},
      url = {http://ageconsearch.umn.edu/record/178244},
      doi = {https://doi.org/10.22004/ag.econ.178244},
}