In September 2018, the International Carbon Action Partnership (ICAP) launched this guide, which consolidates the experiences from ICAP Members that have considered or operate a linked market alongside insights from the literature. It provides policymakers with step-by-step guidance throughout the whole process of linking.

Emissions trading around the world has once again taken a major step forward: The new International Carbon Action Partnership Status Report 2018 presents latest Emission Trading System/Scheme developments.

This report features articles from policymakers around the world that provide insights into the approaches to Emissions Trading System/Scheme design currently being implemented.

An emissions trading system (ETS) is a market-based mechanism that is applied to achieve emissions targets at least cost. By fixing a quantity of emissions (the cap), requiring that companies surrender one allowance for each unit of emissions generated and making the allowance tradable, a carbon market is created through which an allowance price emerges. For producers, the allowance price is treated as a marginal cost in operation decisions and is a commodity that needs to be reflected in investment appraisals.