ETS FUNDAMENTALS

The mechanics behind the market

Background reading on ETS policy, market mechanics, and India CCTS — short, plain-language explainers that pair with the simulator.

Learning Academy

Annotated reading list of carbon-market reports

Curated reports with original commentary on what they say and why they matter.

ETS Design

Absolute Cap

A hard limit on total emissions across all regulated entities.

Free Allocation

Allowances handed to firms at no cost, typically based on historical emissions or output.

Intensity-Based Target

Emissions limits set relative to output, not as a hard total.

ETS Mechanics

Banking (Allowance Banking)

Saving unused allowances or credits to use in future compliance periods.

Compliance Cycle (Periods)

The recurring cycles in which firms measure emissions and settle obligations.

Negative-Cost Abatement

Emissions reductions that save money — but firms don't always adopt them.

Policy Context

Carbon Border Adjustment Mechanism (CBAM)

A carbon tariff on imports from countries with weaker carbon pricing.

Using the simulator

Room Codes

Short codes that let other players join a multiplayer game.

General

Circuit Breaker (Price Band)

intensity-initial-allocation.md

Randomized MAC Curves

Policy design

Linear Reduction Factor

The annual percentage by which an absolute cap is tightened, modelled on the EU ETS Linear Reduction Factor.

Abatement economics

Marginal Abatement Cost Curves

How to read a MAC curve and use it to make better trading decisions.