In the wake of the Paris climate agreement, countries are increasingly focused on using emissions trading systems as a means to achieve the emissions reductions committed to in the deal, according to an ETS handbook issued last week by the World Bank. With the added attention being paid to ETSs, it’s important to ensure that any potential systems be developed in the most efficient way possible. “To maximize effectiveness, any ETS needs to be designed in a way that is appropriate to its context,” the handbook says.
The handbook offers 10 steps to ensuring an effectively designed ETS: decide the scope; set the cap; distribute allowances; consider the use of offsets; decide on temporal flexibility; address price predictability and cost containment; ensure compliance and oversight; engage stakeholders, communicate, and build capacities; consider linking with other ETSs; and implement, evaluate, and improve.
