Publications

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.

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.

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.

This paper explores different market stability mechanisms (MSMs) used in ETSs around the world to balance policy predictability with the need for flexibility to respond to changing circumstances or unexpected shocks.

The 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. 

An accessible resource that summarizes the main conceptual and theoretical arguments for ETS, supported by a consolidated body of up-to-date empirical evidence.

How 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.

A summary of key insights from the literature with a focus on the technical dimensions of linking ETS.

Key elements for emissions trading market oversight: an overview, including insights on institutional and legal requirements and standards.