Domestic emission trading systems in Developing Countries: state of play and future prospects

In this paper, six developing countries with possible domestic ETS are analysed: Brazil, China, India, Kazakhstan, Mexico, and South Korea. Brazil has set up a stock exchange for voluntary carbon units which may precede a domestic trading scheme. China has made concrete steps towards the creation of regional ETS in various cities and provinces. Newer announcements even envisage the creation of a national system by 2015. However, these plans are still in early stages, and differ widely in their institutional designs. India has not shown much propensity for a domestic ETS due both to political and institutional reasons. However, trading schemes for energy efficiency and renewable energy are already in place. Kazakhstan has very definite plans for an ETS and has in fact a draft law in parliament. Mexico has been one of the earliest proponents of a domestic ETS, but has not taken this plan much farther. South Korea had already come very far in the design of its ETS. However, due to opposition by domestic industry, targets have been weakened and the start date pushed back.