Emissions Trading and Climate Resilience in the Caribbean: Building Bridges Towards a Low-Carbon Future

Abstract

The Caribbean region is particularly vulnerable to the impacts of climate change. Climate change pose a threat to the lives and livelihoods of the people living in the region. To mitigate these impacts, the Caribbean has joined with the international community, and pledged to implement their Nationally Determined Contributions (NDCs) to the Paris Agreement. The cost of implementing the NDCs measures in the Caribbean is high, and the region have not been receiving the required financial support. To address this limitation, a market-based mechanism such as an Emissions Trading System (ETS) could be implemented. This would create a financial incentive for emitters to reduce their GHG emissions, which in turn would help achieve the emissions reduction targets of the NDCs. An ETS is a policy tool that allows companies to trade emission allowances, which are permits that represent the right to emit a certain amount of GHGs. This study explores the mechanics of a potential regional ETS for the Caribbean.