Methods for Evaluating the Performance of Emission Trading Schemes

Robust analysis of emissions trading schemes (ETS) and their design is crucial for improving performance, and learning lessons from pilot exercises. It has been a vital component in the evolution of maturing programmes such as the European Union Emissions Trading Scheme (EU ETS). A range of options is available to conduct evidence based ex-post analysis, drawing on methodologies from a range of fields. This report provides a short summary of assessment methodologies that have been used to evaluate different operational aspects and outcomes of existing trading schemes, a literature which to date draws primarily from the EU ETS experience. We also discuss the applicability of these different methods for evaluating the performance and design aspects of the Chinese pilot schemes.

External link to Climate Strategies Discussion Paper