Featured Posts

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...

Emissions Trading Worldwide: 2022 ICAP Status Report
Check out the 2022 ICAP Status Report with the latest developments in emissions trading around the world.
The report includes:
- Insights from policymakers and carbon market experts
- Infographics
- Factsheets on each system in operation, under development and under consideration

Now available in Chinese: Updated Handbook for Emissions Trading Design and Implementation
Now available in Chinese: Updated Handbook for Emissions Trading Design and Implementation (2nd Edition).

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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Benchmark-based allocation in emissions trading systems: Experiences to date and insights on design
Teaser + metatagsBenchmarking 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.
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DateCategoryPaperCover ImageDateCategoryPaper
ICAP & World Bank Paper: Governance of Emissions Trading Systems
Teaser + metatagsICAP and the World Bank jointly published a paper on the governance of emissions trading systems.
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DateCategoryPaperCover ImageDateCategoryPaper
Carbon Leakage and Competitiveness: California’s Treatment of Imported Electricity and New Zealand’s Synthetic Greenhouse Gas Levy
Teaser + metatagsGiven 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.
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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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Achieving Net Zero under a Cap-and-Trade System
Teaser + metatagsCurrent 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.
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Market Stability Mechanisms in Emissions Trading Systems
Teaser + metatagsThis 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.
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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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Benefits of ETS: Taking Stock of the Impacts of ETS Worldwide
Teaser + metatagsAn accessible resource that summarizes the main conceptual and theoretical arguments for ETS, supported by a consolidated body of up-to-date empirical evidence.
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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.
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Linking Emissions Trading Systems: A Summary of Current Research
Teaser + metatagsA summary of key insights from the literature with a focus on the technical dimensions of linking ETS.
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Carbon Market Oversight Primer
Teaser + metatagsKey elements for emissions trading market oversight: an overview, including insights on institutional and legal requirements and standards.