This paper discusses and explores implementation options for ETS2 in the context of Germany.

Outlined are five recommendations to ensure carbon pricing of housing and transportation sectors leads to decarbonisation:

1. Accelerate decarbonisation in the transport and buildings sectors
2. Submit an effective national Social Climate Plan
3. Accompany emissions trading system with social measures
4. Embed climate change mitigation requirements in social policy design
5. Expand the EU Social Climate Fund