Can you separate ETS2 myth from fact?
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.
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.
It is only by reducing the demand for allowances via investments in climate measures and complementary policies, that the ETS2 price can be sustainably contained. Unfortunately, many governments are falling short in their climate commitments. According to civil society and European Commission assessments of National Energy and Climate Plans, many fall short, particularly regarding efforts in the building and road transport sectors.Â
The session presented how the EU’s new carbon pricing system for buildings and road transport, the ETS2, is set to impact households in central and eastern Europe, and what policies are needed to ensure fairness and protect vulnerable groups.
Germany accounts for almost a quarter of COâ‚‚ emissions in the transport and buildings sectors in the EU, which are covered by ETS-2. The faster emissions are reduced domestically, the more stable the European COâ‚‚ price will remain and the lower the risk of sudden cost increases.
ETS2 is expected to play a decisive role in reducing household dependence on fossil fuels is strategically significant: it can determine not only the success of climate policy but also place social justice at the center of the transition.
