Accounting for internationally linked ETS under Article 6.2 of the Paris Agreement

Applying “corresponding adjustments” under Article 6.2 in order to account for the flow of allowances between linked ETS could pose several challenges. This report identifies issues and challenges (banking of allowances, price floors or ceilings, market stability reserves, single year targets, etc.) and provides recommendations on how “corresponding adjustments” can be applied, taking into account the differences between ETSs and NDCs.