Linking the Tokyo Emissions Trading Scheme

As part of its response to climate change the 1997 Kyoto Protocol envisages a global scheme with national emissions trading schemes (“ETS”) linked to form an international market for carbon. In 2010 the Tokyo Metropolitan Government (“TMG”) established an ETS. This regime has some unique features that differentiate it so raising the question as to whether it could be effectively linked to other regimes. This is a particularly important issue given that the TMG regime is being promoted to other municipal governments as a blueprint for an ETS.The principles called into play in considering whether regimes can be linked are well developed. This paper explores these principles in the context of the TMG regime to identify if any barriers to linkage may exist and, if so, what “fixes” might be available to facilitate linkage.