Stimulating Carbon Markets

4th May 2020 by Emma Goring

Technical note from the Carbon Pricing Leadership Coalition


An emissions trading system (ETS) is a market-based policy that mandates emissions reductions (through setting a cap) and provides covered entities with the flexibility to select the specific means to achieve the goal. By putting a price on carbon through an ETS, companies are incentivized to pursue the most cost-effective solutions and the overall environmental goal is achieved.

Worldwide, interest in carbon pricing and ETSs as key options for ambitious climate action is increasing and important lessons can be learned from their implementation in different contexts. In countries newly considering an ETS, however, simulations can be a useful tool to assist both policymakers and businesses to prepare for emissions trading.

Read the full technical note here: