Michael A. Mehling

7(2) Sustainable Development Law & Policy (2007): 46-52

https://digitalcommons.wcl.american.edu/sdlp/vol7/iss2/18

This article examines the legal challenges associated with linking greenhouse gas emissions trading schemes in the European Union and the United States, focusing on the preparatory phase of establishing such a transatlantic market connection. While economic and political arguments for linking carbon markets – such as increased liquidity, reduced compliance costs, and mitigation of competitiveness concerns – are well rehearsed, the legal dimensions have received comparatively little attention. Drawing on the EU Emissions Trading Scheme and emerging regional trading initiatives in the United States, the article analyzes the legal nature of potential linking arrangements and the procedural constraints imposed by international, regional, and domestic law. It explores alternative legal vehicles for market linkage, including international treaties, reciprocal domestic legislation, political arrangements, and private-law mechanisms, assessing their respective advantages and limitations. The analysis demonstrates that, notwithstanding constitutional and procedural complexities on both sides of the Atlantic, multiple legally viable pathways exist for linking carbon markets, provided that political consensus can be translated into appropriate legal form.

Keywords: Transatlantic Linkage; EU ETS; US Regional Markets; Mutual Recognition; Carbon Market Governance; Regulatory Compatibility