Bruegel: “EU should use international carbon trading to encourage mitigation abroad” (Policy Brief)

“Within a market-based architecture, private buyers should be able to use international credits as collateral to borrow domestic allowances”, say Georg Zachmann and Annabelle Weisser, authors of Bruegel Policy Brief “International carbon trading: a strategic lever to boost global decarbonisation”, published on 23/07/2026.

The brief outlines a proposal drawing on the international carbon trading framework set out in Article 6 of the Paris Agreement - which allows countries to buy and sell emissions reductions to meet their national climate targets or pursue other cross-border mitigation goals - and points to the opportunity represented by the EU's plan to let up to five percentage points of its 2040 climate target be met through purchases of international credits.

“We propose a combination…