This document is part of Technical Report (ref: EUR 21758 EN) from the Joint Research Centre and presents part of the modelling work conducted by DG JRC/IPTS as a contribution to the DG ENV Communication on post-2012 climate policy analysis (June 2005). The analyses with the POLES and GEM-E3 models show that the costs of abatement policies, both in marginal terms and total terms, can be significantly reduced if emissions trading and project based mechanisms are used.