The lesson from ETS1 is therefore not that revenue use has failed, but that legitimacy cannot be taken for granted. ETS2 will succeed politically only if carbon pricing is visibly linked to fair, effective and socially conscious investment.
Weakening ETS2 risks undermining Europe’s climate strategy
Nikos Mantzaris reminds us that artificially reducing carbon prices in the past led to higher emissions and delayed green investments, as seen during the 2005–2018 period of the first ETS. Instead of repeating the same mistakes, he emphasizes that the real solution already exists within the EU framework: the Social Climate Plans, which allow Member States to support vulnerable households and small businesses through targeted measures.
Rewatch: A fair and effective ETS2 – how do we get there?
Dec 3, 2025
On Tuesday 2 December, the LIFE Effect consortium launched its ETS2 101 guide together with a panel discussion on the consequences of recent changes of carbon pricing for road transport and buildings in the EU.
Rewatch the event here:
And download presentations from:
Emma Wikström, policy expert on EU carbon markets at Carbon Market Watch
Sylvie Ludig, senior researcher at Öko-Institut
Marcus Ferdinand, senior analyst at Veyt
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