This policy brief will discuss the role of local and international technology and innovation policies for low-carbon development of the rising middle class in developing countries. Although a large segment of the population of most developing countries remains severely deprived, most developing countries also have a significant and growing part of the population that could be a feasible target for low-carbon policies.

This policy brief discusses how to organize and advance technological innovation – and key aspects of innovation policies – to contribute to climate-compatible development for the ‘bottom of the pyramid,’ drawing on lessons and experiences from the literature as well as two specific application areas, household energy and rural electricity. Deployment of suitable technologies at large scale requires that close attention be paid to technology development/adaptation to ensure that the resulting technologies and products seen by users as offering useful services and at a price point that they (or the agencies supporting the deployment of these technologies) can afford. Innovative models, such as innovation prizes or advanced market commitments, may complement traditional ‘R&D’ push approaches to the development of such technology.

This report provides an overview of existing and emerging GHG trading schemes, including those in Europe (EU ETS), North America (the WCI and RGGI), Australia, New Zealand, Japan (regional), China (regional) and South Korea. It discusses lessons learned across the systems and gives an outlook on the development of the future carbon market. The report illustrates that considerable diversity exists across cap-and-trade systems. Although unintentional, a potential benefit of this diversity is that it provides opportunities to compare different approaches and to facilitate transboundary learning. Individually, and in comparison, schemes may offer lessons that can be applied in the development or improvement of others. This report focuses on three large categories of lessons related to: the role of the political and economic process and context for establishing emissions trading systems; system design; and system implementation and oversight.

There are a number of studies from the 'International Industry Competitiveness, Carbon Leakage, and Approaches to Carbon Pricing' project that served as background studies for the synthesis of the paper series prepared in collaboration with the Institute for Global Environmental Strategies, Japan.

Modelling climate goals and the challenges from pricing carbon for energy-intensive industries

 describing a modelling approach (CASE II) to identify the impact from different measures on industries’ leakage risk for the EU and Japan (CASE-ASIA). 

International Industry Competitiveness, Carbon Leakage, and Approaches to Carbon Pricing

summarising the state of research undertaken by Climate Strategies on carbon leakage and competitiveness.

Carbon pricing and its future role for energy-intensive industries

a sector-by-sector synthesis on competitiveness and carbon leakage focusing on steel, cement, aluminium, chemicals, and pulp and paper. 

This report provides an overview of existing and emerging GHG trading schemes, analyses the political challenges of different schemes, and discusses lessons learned across the systems. These relate to the role of the political and economic context for establishing emissions trading schemes, the system design and the schemes’ implementation. The report analyses schemes in Europe (EU ETS), North America (the WCI and RGGI), Australia, New Zealand, Japan (regional), China (regional), and South Korea. 

This paper has been prepared as part of a series in a CS project in collaboration with the Institute for Global Environmental Strategies, Japan. The synthesis of the paper series provides an overview analysis of how climate action is developing internationally, with a particular focus on the role of and lessons from emissions trading, and potential implications. 

This paper has been prepared as a sector-by-sector synthesis of the wider CS project on competitiveness and carbon leakage focusing on steel, cement, aluminium, chemicals, and pulp and paper. It found that in the short term, and beyond the compensation provided under current EU legislation, Energy Intensive Industries could compensate the direct carbon cost through a mix of passing costs through. 

The European Union’s Emissions Trading Scheme is the largest greenhouse gas emissions trading system currently operating. As it approaches the end of its second phase and moves towards Phase III, its seven years of operation offer valuable lessons. Based on survey of academic literature and recent debates, this report updates and takes a deeper look at some of the key elements of the earlier Climate Strategies study, “Ten lessons from the EU ETS”, and considers additional dimensions.  

This paper has been prepared as part of a series in a CS project in collaboration with the Institute for Global Environmental Strategies, Japan.

The synthesis of the paper series provides an overview analysis of how climate action is developing internationally, with a particular focus on the role of and lessons from emissions trading, and potential implications.

Analysis and implications of market-based emissions reductions 

This Synthesis paper provides an overview analysis of how climate action is developing internationally, with a particular focus on the role of and lessons from emissions trading, and potential implications. It builds upon three papers in the study done in collaboration with IGES, the Japanese Institute for Global Environmental Strategies.

• Analysis of emerging carbon markets: lessons and key challenges

• Analysis of ‘easing policies’ particularly in relation to energy intensive industries and the risk of carbon leakage

• Analysis of effectiveness of trading in the EU ETS

This paper highlights the main opportunities that the Technology Mechanism established under the UNFCCC may bring to the development and transfer of technologies and recommends ways forward for the success of the mechanism.

For other briefing papers in this series please click <here>.