Economic arguments in support of linking emissions trading schemes suggest that such linking could provide access to lower cost abatement options and increase market stability. The decisions of whether and how to link emissions trading schemes often focus on the design features of the relevant schemes, but an additional factor which has the potential to undermine the efficiency of linked schemes is taxation. This article systematically tests two alternative approaches to the direct (income) taxation of cross-border transfers of emission allowances for differential tax outcomes. Four hypothetical transactions are considered under three different linking mechanisms and on the assumption that a tax treaty based on the OECD Model Tax Convention on Income and on Capital is in force. This analysis evidences that, in some cases – and especially if the relevant jurisdictions adopt different approaches to the taxation of allowance transactions under domestic law – there is the potential for timing differences or double taxation that could impact on the efficiency of the linked trading schemes. It is therefore important for tax implications to be considered as part of any linking proposal.

Following the European Union (EU) experience, an increasing number of countries are establishing an Emissions Trading Scheme (ETS). The EU ETS often serves as a ‘model’ despite fundamental differences in the receiving environment. In the EU liberalized energy markets, carbon prices are intended to raise the cost of carbon-intensive energy and thereby stimulate cleaner alternatives. In contrast, many emerging economies continue to regulate energy investments and prices, which may insulate consumers and producers from the impact of an ETS. To avoid this risk, energy economists advocate EU-style energy market reforms as a prerequisite to the introduction of the ETS concept abroad. By focusing on the cases of China, Kazakhstan, and Russia, this article highlights the limits on the exportation of the EU liberalization model and argues that, instead of energy reform, the ETS must be reconceptualized as a mechanism that integrates the regulated energy market paradigm in emerging economies.

Mangroves are an imperilled biome whose protection and restoration through payments for ecosystem services (PES) can contribute to improved livelihoods, climate mitigation and adaptation. Interviews with resource users in three Solomon Islands villages suggest a strong reliance upon mangrove goods for subsistence and cash, particularly for firewood, food and building materials. Village-derived economic data indicates a minimum annual subsistence value from mangroves of US$ 345–1501 per household. Fish and nursery habitat and storm protection were widely recognized and highly valued mangrove ecosystem services. All villagers agreed that mangroves were under threat, with firewood overharvesting considered the primary cause. Multivariate analyses revealed village affiliation and religious denomination as the most important factors determining the use and importance of mangrove goods. These factors, together with gender, affected users’ awareness of ecosystem services. The importance placed on mangrove services did not differ significantly by village, religious denomination, gender, age, income, education or occupation. Mangrove ecosystem surveys are useful as tools for raising community awareness and input prior to design of PES systems. Land tenure and marine property rights, and how this complexity may both complicate and facilitate potential carbon credit programmes in the Pacific, are discussed.

Competition for coastal land use and overexploitation have reduced or degraded mangrove coverage throughout much of their distribution, especially in South-east Asia. Timber production was the initial motivation for early mangrove reforestation projects. More recently, benefits from protection against erosion and extreme weather events and direct improvements in livelihoods and food security are perceived as justifications for such restoration efforts. This study examines the socioeconomic impacts of a community-led reforestation project in the Philippines through a survey of the local fishers. Revenues from mangrove fisheries, tourism and timber result in an annual benefit to the community of US$ 315 ha−1 yr−1. This figure is likely to be considerably more if the contribution of the mangrove to the coastal catch of mangrove-associated species is included. This estimate only includes direct benefits to the community from mangroves, and not intangible benefits such as coastal protection, which paradoxically is perceived by the community as one of the most important functions. More than 90% of all fishers, regardless of where they fished, thought the mangrove provided protection from storms and typhoons and acted as a nursery site and should be protected. Those fishing only in the mangrove perceived more benefits from the mangrove and were prepared to pay more to protect it than those fishing outside. This study concludes that replanting mangroves can have a significant economic impact on the lives of coastal communities. Acknowledgement of the value of replanted mangroves compared with other coastal activities and the benefits they bring to the more economically-vulnerable coastal dwellers should support better informed policy and decision-making with regard to coastal habitat restoration.