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The document argues that production-based emissions accounting allows the EU to outsource manufacturing and claim emissions reductions while domestic consumption drives emissions elsewhere. It introduces the Carbon-CAP project, which evaluates over 30 policy instruments across sectors like transport and food to complement existing production-focused policies. These instruments are assessed based on effectiveness, scope, economic equity, and political/legal acceptance to avoid rebound effects and emissions shifting within the global economy.

The document outlines a framework for evaluating emissions trading schemes (ETS) by categorising assessment into operational aspects and outcomes. It reviews methodologies for analysing carbon prices, market activity, and transaction costs, as well as outcomes related to emissions, innovation, trade, and employment. The authors argue that while operational data is often readily available, assessing long-term outcomes like innovation and employment requires high-quality, disaggregated firm-level data and counterfactual baselines. The paper concludes with specific recommendations for China's pilot schemes, suggesting a prioritisation of carbon price and emissions analysis due to data availability, while advising a cautious, qualitative approach to innovation and trade effects in the short term.

The document examines the benefits and challenges of linking emissions trading systems (ETSs). While full linking offers economic, political, and administrative advantages, it requires significant harmonization and risks a loss of regulatory autonomy. To address these challenges, the paper explores "restricted linking"—mechanisms that allow the flow of units between jurisdictions under specific constraints like quantity limits or exchange rates—evaluating them against criteria of environmental benefit, economic benefit, political feasibility, and practical considerations.

The document challenges the justification for granting free carbon allowances to EU industries to prevent 'carbon leakage' (production relocation). It argues that there is no compelling evidence of such leakage and that free allocations instead create windfall profits for companies, disincentivize low-carbon innovation, and deprive the public of auctioning revenues. The brief recommends a transition to 100% auctioning of allowances and a more stringent, transparent criteria for the carbon leakage list to ensure only truly high-risk sectors receive support.

The research paper argues that climate policy has historically over-emphasized demand-side measures, such as carbon pricing and energy efficiency, while neglecting the supply side of the fossil fuel economy. The authors identify three primary barriers to supply-side action: political opposition from powerful fossil fuel interests, territorial GHG accounting rules that under-credit supply-side reductions, and a common perception that restricting production merely causes 'leakage' to other regions. The paper proposes a typology of supply-side policies, including producer subsidy reform, conservation payments for leaving reserves undeveloped, and ring-fenced cap-and-trade systems for production rights. It suggests that integrating supply-side measures can widen the mitigation cost curve, reducing the cost of achieving emission targets and mitigating 'carbon lock-in' and 'stranded-asset' risks. The authors highlight the case of Norway, where a combined supply-demand strategy could potentially achieve global emission reductions at one-third the cost of a demand-only approach.

The document outlines the 'fears and suspicions' of the climate community regarding how WTO rules and trade assumptions may obstruct progress on climate change. It argues that the trade regime's focus on economic growth and the avoidance of trade restrictions creates a 'chilling effect' on climate action, as countries fear carbon leakage and loss of competitiveness. The author explores three potential trade-related strategies for climate action: 'levelling up' through border adjustment measures or coordination, favoring environmental goods and services, and using trade sanctions. The paper concludes that while specific reforms to GATT Article XX and the most-favored-nation principle are ideally needed, indirect approaches via jurisprudence or guidelines are more politically realistic.

The report argues that public finance for geothermal energy in developing countries must increase 7-10 fold to meet 2030 targets. Through case studies in Kenya, Indonesia, and Turkey, it demonstrates that public risk mitigation measures—such as concessional loans, guarantees, and exploration support—can reduce the levelized cost of electricity (LCOE) by 35-48%, allowing governments to achieve deployment targets while spending only 15-35% of the resources required for full public ownership.

The European steel and cement sectors face substantial surplus production capacity and limited reinvestment, hindering the adoption of low-carbon technologies. While energy efficiency and fuel-switching have provided some gains, breakthrough process technologies like carbon capture and storage (CCS) require significant public funding and a credible, long-term carbon price signal for both producers and consumers to be viable. The report argues that a comprehensive policy package—combining the EU ETS, innovation funding, and updated building standards—is essential to transition these capital-intensive industries toward sustainable, high-value production.

Carbon Market Watch argues that the EU ETS review proposal prioritizes industrial interests over climate goals by earmarking at least €160 billion in free pollution permits after 2020. While the proposal increases the linear reduction factor to 2.2% to meet 2030 targets, the organization contends this is offset by the release of surplus allowances and the continuation of free allocations to prevent hypothetical carbon leakage.

The paper evaluates whether intensity standards for energy-intensive and trade-exposed (EITE) industries are an efficient alternative to uniform carbon taxes in the US. Using a computable general equilibrium (CGE) model, the authors find that while lax standards may slightly reduce leakage, stringent standards can actually increase carbon leakage and lead to substantial welfare losses compared to economy-wide emission pricing. The study concludes that intensity standards are primarily driven by political economy considerations rather than economic efficiency.

The document outlines a framework called 'Planetary Economics' to address the inadequacy of traditional neoclassical economics in solving climate change. It proposes three domains of socio-economic processes: the First Domain (Satisficing), focusing on human behaviour and efficiency gaps; the Second Domain (Optimising), focusing on market trade-offs and pricing; and the Third Domain (Transforming), focusing on innovation and systemic change. These domains map to three policy pillars: standards and engagement for efficiency, markets and prices for carbon reduction, and strategic investment for infrastructure and innovation. The author concludes that only an integrated strategy combining all three pillars can effectively decarbonise energy systems and overcome systemic 'lock-in' and behavioural inertia.

The policy brief argues that current carbon pricing mechanisms, which use free allowances to prevent carbon leakage in industrial sectors, eliminate the price signal for mitigation beyond primary production efficiency. To address this, the authors propose 'Inclusion of Consumption,' where a consumption charge is levied on carbon-intensive materials (such as steel, aluminum, and clinker) based on benchmark emission values and the carbon price. This charge would apply to all domestic consumption regardless of origin, making it compatible with WTO law. The mechanism would use duty suspension arrangements to track materials through the value chain, with the charge becoming due only when the good is released for consumption. The brief notes precedents in Asia (South Korea, China, Tokyo) regarding electricity consumption and discusses potential implementation in Europe and the United States.

The policy brief examines the potential for linking the EU ETS with other carbon markets, specifically focusing on ongoing negotiations with Switzerland. It argues that while linking can increase cost-efficiency, it risks reducing overall emissions abatement, lowering domestic investment, and undermining the EU's target of at least 40% domestic emissions reductions by 2030. The author highlights a lack of transparency and democratic oversight in current linking procedures and recommends that any future linking be accompanied by increased EU emission targets and strict criteria regarding target stringency, the use of offsets, and price/supply controls.

The report examines the feasibility of linking the EU ETS with various global carbon markets, highlighting that success depends on harmonizing design features such as target stringency, offset rules, and price controls. It analyzes the successful California-Quebec linkage and the failed EU-Australia attempt, while evaluating the compatibility of the EU ETS with markets in Switzerland, China, South Korea, New Zealand, Kazakhstan, and the US RGGI. The author recommends that the EU ETS adopt safeguards used elsewhere, such as auction floor prices and banking limits, to address oversupply and price volatility.

The report assesses how Sweden can mitigate the global environmental and health footprints of its consumption. It identifies key 'hotspots'—specifically electronics from China and soy from Brazil—and proposes a mix of economic, administrative, informative, and collaborative tools. The authors argue that while many ideas exist, there is a lack of political action and a need for systemic change, such as shifting toward a circular economy and adjusting tax systems, rather than relying solely on individual consumer choices or isolated production improvements.

The document argues that removing fossil-fuel subsidies is a critical lever for reducing global greenhouse gas emissions and unlocking low-carbon energy pathways. It highlights that global emissions could decrease by 6% to 13% by 2050 through the phase-out of consumer subsidies, though these figures are likely underestimates as they exclude producer subsidies. The paper outlines how countries can incorporate FFSR into their INDCs, Nationally Appropriate Mitigation Actions (NAMAs), and the 2015 UNFCCC agreement. It emphasizes that to maximize emission reductions, subsidy removal must be coupled with binding emission caps in OECD countries to prevent 'carbon leakage' and simultaneous government investment in low-carbon energy and transport infrastructure to enable fuel switching.

The report analyzes the EU's 2030 climate deal, which includes a binding 40% domestic greenhouse gas reduction target, a 27% renewable energy target, and a 27% energy efficiency target. Carbon Market Watch argues that these targets fall short of the 55% reduction required for a fair contribution to global climate goals. The analysis highlights significant risks to the 40% target, specifically the oversupply of EU ETS allowances (estimated at 2.6-4.5 billion by 2020) and the use of ETS allowances to meet non-ETS sector targets. It also criticizes the continuation of free emission allowances for industry and the provision of financial support to the power sectors of low-income Member States, which may prolong the use of coal.

Carbon Market Watch criticizes EU leaders for adopting a 2030 climate deal that it argues weakens emission reductions to 31% due to excess permits and provides up to €300 billion in subsidies to industry. Separately, the organization highlights human rights abuses and lack of consultation affecting indigenous communities in Guatemala associated with the UN-registered Santa Rita hydroelectric project.

Carbon Market Watch warns that the leaked 2030 Council Conclusions could reduce the effective EU greenhouse gas reduction target from 40% to 26% due to the potential banking of 'hot air' (surplus allowances). The organization criticizes the 40% target as postponing urgent action, opposes the use of EU ETS allowances to meet non-ETS targets, argues against including transport in the EU ETS, and condemns the dynamic allocation of free pollution permits as an industry subsidy.

The document argues that the European Parliament's decision to uphold the European Commission's carbon leakage list, using a €30 per tonne carbon price, leads to an over-allocation of free emission permits. It claims this results in a loss of approximately €5 billion in taxpayer revenue over five years and provides windfall profits to polluters, despite a lack of evidence for actual carbon leakage.