China, Japan, and the Republic of Korea are emerging as major players in the global carbon trading landscape. As Northeast Asia’s biggest industrial economies, these three countries are connected through deep commercial and trade ties, and shared environmental challenges. There are thus growing calls for these markets to leverage complementarities and manage differences to build a foundation for more extensive carbon market cooperation.

Against this backdrop, a new Asia Society Policy Institute (ASPI) report, Carbon Market Cooperation in Northeast Asia: Assessing Challenges and Overcoming Barriers— which is part of ASPI’s Toward a Northeast Asia Carbon Market initiative — draws on the expertise of a wide range of scholars and practitioners to help equip policymakers and other stakeholders with information and guidance on the potential of and pathway toward carbon market linkage in Northeast Asia.

This volume, released in June 2018, includes 11 chapters that examine the challenges of and approaches to carbon market cooperation and linkage in Northeast Asia. The report begins with four chapters focused on the status of carbon markets in the region, with examinations of how legal and institutional frameworks can facilitate the varying national and local measures employed to strengthen links and yield dividends. Chapters five through seven describe the barriers to linkage, and the uneven impacts — whether positive or negative — of linkage across the region, and also identify opportunities to pursue other forms of non-traditional linkage pathways. The remainder of the volume is organized around the particularities of emissions trading system policies and goals in China and Japan, with the final chapter making the case for the importance of business sector involvement in linkage efforts.

The volume was edited by Jackson Ewing, ASPI’s Senior Advisor for Sustainability, with the following chapters from experts and practitioners in the field.

1. Introduction: Incentives and Impediments to Carbon Market Cooperation in Northeast Asia
Jackson Ewing is Senior Advisor for Sustainability at the Asia Society Policy Institute and Senior Fellow at the Nicholas Institute for Environmental Policy Solutions at Duke University.

2. Building the Foundation for Regional Carbon Market Linkage in Northeast Asia
Jeff Swartz is Director of Climate Policy and Carbon Markets at the South Pole Group.

3. Linking Carbon Markets: Legal and Institutional Issues and Lessons for Northeast Asia
Michael Mehling is Deputy Director of the Center for Energy and Environmental Policy Research at the Massachusetts Institute of Technology and Professor of Law at the University of Strathclyde.

4. The Paris Agreement’s Article 6 and Cooperation in Northeast Asia to Address Climate Change
Robert C. Stowe is Executive Director of the Harvard Environmental Economics Program and Co-Director of the Harvard Project on Climate Agreements.

5. The Use of Quantitative Models to Assess the Impacts of Carbon Market Integration: Implications for Northeast Asia
Kirby Ledvina is a Research Assistant with the Massachusetts Institute of Technology Joint Program on the Science and Policy of Global Change. Niven Winchester is Principal Research Scientist at the Massachusetts Institute of Technology.

6. Barriers to Linking Carbon Markets in Northeast Asia
Baran Doda is Research Officer at the Grantham Research Institute on Climate Change and the Environment at the London School of Economics.

7. Political Economy of Carbon Market Cooperation in Northeast Asia
Suh-Yong Chung is a professor in the Division of International Studies and directs the Center for Climate and Sustainable Development Law and Policy and the Center for Climate Change and Marine Governance at Korea University.

8. Developing a Linkage Ready Carbon Market: A View from China
Xi Liang is a senior lecturer in energy finance and Co-Director of Research at the Centre for Business and Climate Change at the University of Edinburgh’s School of Business.

9. Carbon Pricing in Japan and the Prospects for Northeast Asia Carbon Market Linking
Sven Rudolph is an associate professor of contemporary economics in English at Kyoto University, Japan.

10. The Potential of Carbon Market Linkage between Japan and China
Toshi H. Arimura is a professor of political science and economics and Director of the Research Institute for Environmental Economics and Management at Waseda University in Tokyo.

Chapter 11. The Business of Linking Carbon Markets in Northeast Asia
Stefano De Clara is Director of International Policy at the International Emissions Trading Association.