The EU ETS is unprepared for 2040 and beyond
The result's identifiers
Result code in IS VaVaI
<a href="https://www.isvavai.cz/riv?ss=detail&h=RIV%2F67985998%3A_____%2F25%3A00637971" target="_blank" >RIV/67985998:_____/25:00637971 - isvavai.cz</a>
Result on the web
<a href="https://www.cerge-ei.cz/pdf/wp/Wp799.pdf" target="_blank" >https://www.cerge-ei.cz/pdf/wp/Wp799.pdf</a>
DOI - Digital Object Identifier
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Alternative languages
Result language
angličtina
Original language name
The EU ETS is unprepared for 2040 and beyond
Original language description
The central instruments of a cap-and-trade program are its abatement schedule and a system of guardrails designed to prevent permit prices from becoming excessively high or low. I argue that these instruments are currently poorly aligned in the EU’s cap-and-trade flagship climate policy, the EU ETS. I argue that the abatement schedule risks being overly ambitious and that the ETS’ existing guardrails, the Market Stability Reserve (MSR), do not offer sufficient protection against extreme prices. This misalignment may result in substantial economic costs and could ultimately undermine public support for the ETS. This paper recommends consideration of more effective guardrails, such as the well-established the price collar as implemented in California’s cap-and-trade program.
Czech name
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Czech description
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Classification
Type
O - Miscellaneous
CEP classification
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OECD FORD branch
50202 - Applied Economics, Econometrics
Result continuities
Project
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Continuities
I - Institucionalni podpora na dlouhodoby koncepcni rozvoj vyzkumne organizace
Others
Publication year
2025
Confidentiality
S - Úplné a pravdivé údaje o projektu nepodléhají ochraně podle zvláštních právních předpisů