The study was developed as part of the Innovation Fund Project to support the Ministry of Economy and other government institutions in designing policy interventions aimed at bolstering innovative approaches towards country's development and facilitating transfer and adoption of the best practices and models to Moldova. It evaluates the costs, benefits and risks of implementing such mechanisms in Moldova, and the possibility of linking it to the EU-ETS. More specifically, the study outlines the policy issues which are relevant for Moldova with respect to Emissions Trading, presents an overview of the key issues and constraints with the view of implementation of Emissions Trading in Moldova, including the options of a domestic ETS, linking to the EU-ETS and other related aspects. It addresses the Clean Development Mechanism, including the present state of such projects developed in Moldova and the future options for so-called “project based mechanisms”. The study concludes that implementation of ETS in Moldova remains a realistic option in the mid-term and offers strategic options for the Government of Moldova with a road map for the implementation of Emission Trading in Moldova and further connection to the EU-ETS.