Featured Publications

Applying Rules under Article 6 of the Paris Agreement to Linked Emissions Trading Systems
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.

Emissions Trading Worldwide: 2023 ICAP Status Report
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

Emissions Trading and Carbon Capture and Storage: Mapping possible interactions, technical considerations, and existing provisions
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.

Offset Use Across Emissions Trading Systems
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...

Benchmark-based allocation in emissions trading systems: Experiences to date and insights on design
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 & World Bank Paper: Governance of Emissions Trading Systems
ICAP and the World Bank jointly published a paper on the governance of emissions trading systems.
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Emissions Trading and Carbon Capture and Storage: Mapping possible interactions, technical considerations, and existing provisions
Teaser + metatagsThis 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.
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Status and Trends of Compliance and voluntary carbon markets in Latin America
Teaser + metatagsAn overview of the steps that jurisdictions in Latin America have taken to plan, design and implement carbon pricing. Available in English, Spanish and Portuguese.
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Emissions Trading Systems and Net Zero: Trading Removals
Teaser + metatagsThis 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).
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Carbon Leakage and Deep Decarbonization Report
Teaser + metatagsA 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.
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Striving to keep ETS Simple: Current practices to manage complexity in emissions trading
Teaser + metatagsThis report examines options for simplification in both the design phase and specific areas of operation, outlining approaches, experiences, and lessons from existing systems to date.
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Accounting for the Linking of ETSs under Art 6.2 of the Paris Agreement
Teaser + metatagsThe paper looks at internationally linked emissions trading systems, examining four approaches to account for the flow of allowances across international borders under the Paris Agreement. The findings can inform the ongoing negotiations on the Paris Rulebook, as well as bilateral agreements between jurisdictions.
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Emissions Trading and Electricity Sector Regulation
Teaser + metatagsIn theory, ETS offers a cost effective tool to achieve emission reduction targets, but in practice, electricity sector regulation interacts with emissions trading in ways that may prevent or change how participants respond to the allowance price. This report provides a conceptual framework to understand this interaction.
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Emissions Trading and the Role of a Long Run Carbon Price Signal
Teaser + metatagsHow can emissions trading provide a carbon price signal that incentivizes cost-effective emissions abatement over the long term? A framework to understand dynamic cost effectiveness under an ETS.