Nearly half of the countries that pledged at the COP21 meeting in Paris to reduce their carbon dioxide emissions plan to use or will considering using international carbon trading markets to achieve their goals, according to a new report.

The International Carbon Action Partnership (ICAP) analysed the Intended Nationally-Determined Contributions (INDCs) made by more than 185 countries, together accounting for 95% of emissions.

“Emissions Trading Systems (ETSs) are already the central element of climate policy in a number of national and subnational jurisdictions and this number will grow further in the years to come,” said ICAP’s report.

The paper highlighted the significance of China’s ETS, which it said will overtake the United States’ as the largest carbon market.

‘Flexible tool’

The report added: “The great advantage of emissions trading is that it offers policymakers a flexible tool to reduce emissions.

“From the city level, to the state, national, and supranational levels, an ETS can operate in a wide spectrum of political and economic settings.

“And as the global response to the climate challenge develops, systems will also adapt, enabling more ambitious targets to be set and eventually linking across borders to drive the global transition to a carbon-neutral economy.”

> Download the report