Influence of market structures and market regulation on the carbon market: Insights from selected emissions trading systems

Electricity generation is the largest source of greenhouse gas emissions in many countries. Most emissions trading systems (ETS) therefore capture emissions from electricity generation. The design of an ETS and the structure and regulation of the electricity sector have a major impact on the environmental effectiveness and quality of the carbon price signal. This project identified the impact of market structures and regulations on the carbon market and examined the interdependencies between carbon and electricity markets through 5 case studies in Europe (Germany/Poland), California, China (Hubei/Shenzhen), South Korea, and Mexico.