International Carbon Action Partnership (ICAP)

This paper explores how the Article 6.2 rules agreed at COP26 could be applied to an international link of two ETSs, including how to account for the changes in emissions, addressing the challenges in determining when changes in emissions occur within an ETS, and options to generate finance for adaptation and “net” mitigation from the link.

Check out the 2023 ICAP Status Report with the latest developments in emissions trading around the world.

The report includes:
🔹 comprehensive snapshot of the latest ETS developments
🔹 up-to-date factsheets on all systems
🔹 infographics that visualize the systems' characteristics
🔹 in-depth articles from policymakers and carbon market experts

This report explores how CCS is treated in different ETSs around the world; if and how ETSs could play a role in incentivizing the development and deployment of CCS applications; and the challenges and opportunities in developing the required regulation in this context.

As market-based instruments, emissions trading systems are inherently flexible, as entities can decide to reduce their own emissions or buy emissions allowances from the market. Carbon offsets (or simply ‘offsets’) are a tool to further increase flexibility in reaching climate targets under ETSs, as they offer sectoral and geographical flexibility for jurisdictions to reduce greenhouse gas emissions outside of the scope of their ETS. This report...

Benchmarking can protect against carbon leakage while setting incentives to reduce emissions, but their design entails complex trade-offs. This paper explores benchmark-based industrial allocation design and experiences, using insights from existing ETSs, and their implications for abatement and low-carbon investment incentives.

ICAP and the World Bank jointly published a paper on the governance of emissions trading systems.