Governments are able to set up carbon markets to put a price on greenhouse gas emissions. For example, in the framework of the European Union Emission Trading Scheme (EU ETS), European companies receive emission allowances: those that emit too much must buy allowances from other participants. These types of regulated carbon markets – as opposed to voluntary markets – have emerged in many countries across the globe following the Kyoto Protocol.

I4CE analyzes the way these carbon markets function to ensure their effectiveness in reducing greenhouse gas emissions at lower costs.