Welcome to the course! These 22 course units provide comprehensive information on the theory, design, and operational considerations of emission trading systems.
The earlier units cover basic concepts, while the later units provide specialised information about their design and implementation. You are strongly encouraged to devise your own personalised learning path by completing the units that address your topics of interest.
For instructions and more information about the course click here.
Click on a unit below to be directed to the course description. You may then click on the title in the desciption to access the unit - no login required!
The units with green text are available in multiple languages: English, French, Spanish and Chinese.
This e-learning platform was designed and implemented by the Ecologic Institute and Development Solutions, with funding from the European Commission. The individual units were authored by Lisa Zelljadt, Michael Gillenwater, Pedro Barata and Benjamin Görlach. The authors would like to thank the following language experts for guidance on the non-English versions of the course units: Ximena Aristizábal Clavijo, Cristián Retamal, Andrés Prieto Perez (Spanish), Emilie Magdalinski, Annabelle Vinois (French), and Guan Ziyu (Chinese).
This unit reviews the various climate policy instruments to place emissions trading in context as one of many “tools” in the policy toolbox and covers the following topics:
This unit compares ETS against other climate policy tools and covers the following topics:
The unit also discusses interactions of policy instruments, such as emissions trading and renewable energy credits and discusses why an ETS is not a complete substitute for command and control regulation.
This unit introduces emissions trading as a tool in a country’s emissions reduction policy framework and provides a basic introduction to the following:
This unit presents a brief overview of international cooperation on climate change mitigation, discussing the United Nations Framework Convention on Climate Change (UNFCCC) and its Kyoto Protocol. It reviews the Protocol’s flexible mechanisms, which are
This unit is geared towards understanding the main drivers and conditions behind the establishment of the EU ETS, its main features and lessons learned. Specifically, the following topics are explored:
This unit profiles existing ETS in various countries and regions, highlighting their similarities and differences in their design elements and reasons for these. For each ETS examined, the unit provides
This unit focuses on the sectors and entities to which emissions limits are applied, discussing
This unit uses many of the ETS discussed in Unit 6 as examples.
This unit provides details on all aspects of monitoring, reporting and verification (MRV) of GHG emission and mitigation for an ETS. It begins with a general framework, explaining the purposes and goals of MRV, then presents in detail the following:
This unit explains the design options regulators have when deciding how to allocate allowances in an ETS, evaluating pros and cons of
Building on Unit 9, this unit contrasts theory with political realities regulators typically face when making allocation decisions. It covers
This unit covers technical details of registries in emissions trading systems, including:
Basic examples from existing ETS are provided.
This unit details how to safeguard the operation of an ETS through MRV and enforcement by regulators. It reviews the importance of good compliance enforcement and provides details on the following:
This unit discusses what makes a country “ready” for a carbon market and provides information on sources of support for building market readiness. It details aspects of market readiness, breaking them into
The second part of the unit provides descriptions of and links to major institutional sources of help in setting up capacity for emissions trading and other market-based climate change mitigation policies.
This unit describes what is needed to administer an ETS in terms of capacities and infrastructure, including:
Limiting the right to emit GHGs and allowing entities to trade those rights creates a market for emission reduction allowances – this unit explains how that market works, detailing
The material in this unit requires some basic economics and may be challenging to those with no understanding of financial markets, but provides links to basic information in these fields. The material in subsequent units (especially 16 and 17) is based on the information laid out here, as regulators have a role in structuring the markets explained in this unit.
This unit looks at policies and ETS design elements that can help “manage” the carbon market discussed in Unit 15. These mainly involve influencing the supply of emission allowances and offsets. Topics covered include:
This unit looks at what regulators can do to prevent fraud and abuse of markets, either by external criminals or entities covered by the ETS programme. The material relies heavily on lessons learned from existing ETS and focuses on implementing rigorous surveillance and strict rules to
This unit explains and addresses concerns that companies covered by an ETS are put at a competitive disadvantage compared to those in regions without similar climate change mitigation policies. It provides:
Introducing an ETS only works if there is some degree of political acceptance and conceptual understanding of emissions trading – all relevant stakeholders need to be informed about and involved in the process. This unit therefore covers
This unit looks at various options companies have in complying with an ETS, in terms of trading and risk management. It reviews major risk management strategies associated with emission allowance trading, as well as types of transactions and relevant trading venues.
This unit looks at creation and operation of an ETS from a legal perspective for regulators, covering
Legal definitions are important not only for regulators who make the rules of an ETS on the basis of existing law, but also for entities subject to emissions limits with respect to proper accounting and tax reporting procedures.
This unit discusses linking separate emission trading programmes to each other in order to create a joint carbon market, assessing the associated challenges and constraints. The following topics are covered in detail: