Vivid Economics’ Carbon Market Simulator is an interactive, multi-player market simulation tool which helps policymakers and players understand real-world behaviour in an emissions trading system (ETS). The Carbon Market Simulator has a user-friendly application where participants play as firms. These firms can vary in their emissions, production, and emission reduction costs. This allows the administrator of the simulation to represent different sectors and tailor it to specific countries. The Carbon Market Simulator allows changing design features of an ETS, such as a decreasing emissions cap, different allowance allocation methods, and price controls. It allows for remote playing with multiple users, facilitating its deployment across stakeholders, and automatically generates reports on trades and the overall market.
The Carbon Market Simulator is a powerful tool that builds stakeholders’ capacity while enriching discussions around ETS designs. The simulator has been successfully used in a World Bank Partnership for Market Readiness project in Turkey, where over 60 participants attended five workshops. The Carbon Market Simulator teaches the principles of emissions trading and mechanics behind several ETS features. By creating a mutual understanding of key design and implementation options, the simulator also enriches public-private discussions and increases overall support for ETS. Stakeholder engagement with the simulator can be carried out either through in-person workshops or online webinars. Sessions where participants interact in the Carbon Market Simulator are complemented with supporting material that encourages further discussion and reflection on ETS. This includes analysis of previous workshop data, such as market outcomes and individual player strategies, theoretical and practical training sessions on emissions trading, as well as reports and bulletins, ensuring continued learning