Publications

Banking and borrowing are key levers that enable a degree of temporal flexibility within emissions trading system. Understand how they work, risks associated with each and restrictions that may be imposed, and which jurisdictions allow either mechanism.

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ETS works by capping the total emissions allowed within the system. With a carbon tax, the government sets a tax rate and entities covered by the tax must pay this amount for every tonne they emit. Understand what these carbon pricing instruments have in common, how they differ, and which contexts might suit one over the other.

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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.

Given factors such as constraints in free allocation policy for some ETS jurisdictions, other ways of addressing concerns about carbon leakage and competitiveness are likely to continue attracting interest, and these approaches may increasingly focus on cross-border trade. California and New Zealand offer practical experiences with such policies that may be instructive for other jurisdictions navigating border-related climate measures.

An overview of the steps that jurisdictions in Latin America have taken to plan, design and implement carbon pricing. Available in English, Spanish and Portuguese.

This paper seeks to understand the challenges that net zero emission targets could present for the operation of emissions trading systems (ETSs) and develops a series of models for the possible interactions between ETSs and removal units from negative emissions technologies (NETs).

Current estimates suggest achieving net-zero emissions will require much higher carbon prices. What challenges could arise? A brief on the possible policy options to address them.

A review of current efforts to address carbon leakage, assess the risk of carbon leakage, and policies to strengthen decarbonization efforts in light of ongoing leakage vulnerability and the push to achieve net-zero emissions.