Brexit may boost global cooperation on carbon trading clubs
Brexit, by excluding the UK from Europe’s carbon emissions trading system, has stripped British industry of the value of its carbon credits. Rescue options being considered by the UK government include linking back to the EU market, but also taking the risk of joining an immature multinational carbon trade cooperation
Thrown out of the European carbon trading system, UK emitters of greenhouse gas are in climate-policy limbo
SHAMBOLIC Without knowing the price of carbon over the next few years, British industry and energy providers are unable to price their own products effectively
CLUBBING Should the CPTPP trans-Pacific partnership become a club of emissions-trading countries with British membership sparked by Brexit, the EU may ultimately decide to join as well, benefitting the global energy transition
SMALL WORLD EFFICIENCIES As carbon markets and the world of trade are increasingly digitised, geographic proximity might not be quite so important; countries can cut more emissions for each dollar or euro spent if they work together on carbon pricing and trade deals
KEY QUOTE If the EU ultimately rejects the UK as an emissions-trading partner, other countries may find a partnership with Britain attractive as they seek a low-cost transition underpinned by lots of GDP-enhancing trade ...
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