There is a lot of work required for the establishment of an ETS. The process of ETS design is iterative rather than following step by step. According to “Emissions Trading In Practice: A Handbook on Design and Implementation“, the designing and implementing an ETS can follow a 10-step process, these include:

Step 1: Prepare

Step 2: Engage stakeholders, communicate and build capacity

Step 3: Decide the scope

Step 4: Set the cap

Step 5: Distribute allowances

Step 6: Promote a well-functioning market

Step 7: Ensure compliance and oversight

Step 8: Consider the use of offsets

Step 9: Consider linking

Step 10: Implement, evaluate, and improve