Global Compliance Carbon Markets: Auction Mechanisms

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🔬研究者:Provides a comparative framework and market quality indicators for evaluating auction mechanisms across jurisdictions.

🏢実務担当者:Offers practical guidance on participating in carbon allowance auctions, including bid strategies and risk management.

🏛政策担当者:Highlights key design choices (e.g., auction frequency, price floor) that affect market outcomes and efficiency.

Executive Summary Carbon allowance allocation methods in global compliance carbon markets (CCMs) are key market design choices. The allocation of allowances influences the formation of carbon prices, the emission costs for covered entities, and market efficiency. The decision to allocate allowances freely or via auction mechanisms is a critical design feature that affects all stakeholders in the carbon market ecosystem, including covered emitters, market operators, financial intermediaries, and investment firms. In recent years, global CCMs have shifted from free allocation toward auction-based allowance distribution. The calibration of auction mechanisms is a policy choice that plays a critical role in determining market outcomes. This report reviews the auction mechanisms of global CCMs and evaluates their effectiveness, measured by various indicators of market quality. The research is designed to inform the investment industry about various auction mechanisms and to provide practical guidance on participating in auction markets. By reading this report, financial intermediaries and investment firms will be better informed to guide their decisions to participate in the primary market, while policymakers and market operators will be able to determine how best to calibrate allowance allocation in their respective markets. This report is the latest addition to CFA Institute Research and Policy Center’s carbon market research portfolio. Given the global expansion of carbon markets, Yang and Preece (2024) and Mak (2025) provided detailed overviews of global compliance and voluntary carbon markets, respectively, to help investment industry participants better understand their mechanisms. In light of the rapid growth of carbon-related trading products in secondary markets, Yang (2025) provided an in-depth analysis of the market structure of global CCMs’ secondary markets, offering practical guidance for the investment industry on engaging with CCMs.

• semanticscholar https://doi.org/10.56227/26.1.8first seen 2026-05-17 07:41:14 · last seen 2026-05-20 05:26:36