Clim. Policy (2020).

Domestic climate policies to reduce CO2 emissions need to be cost-effective to win public and political support. Emissions trading schemes (ETS) are a market-based approach that put a limit and a price on units of emissions. But the success of such schemes has been varied.

To determine what factors make for successful ETS, Peter Howie of Nazarbayev University, Kazakhstan, and colleagues use a policy success typology to analyse the ETS of Kazakhstan and Korea. The Korean scheme, launched in 2015, is now the third-largest carbon market in the world and covers ~70% of domestic emissions. While the Kazakhstan scheme launched in 2013, it was temporarily suspended to resolve operational issues in 2016–2017.

The authors find that stakeholder consultation from the design through to implementation phase, as well as capacity building — within both the public and private sectors — at an early stage are necessary for success in these emerging markets. Additionally, introduction of policies that complement the ETS are needed to overcome consumer resistance to energy price increases and support firms during low revenue periods.