The EU’s Emissions Trading System is essential to meeting the European Union’s 2040 climate target. Watering the EU ETS down with international carbon credits or carbon removals will prove fatal, concludes this study. The study models various climate scenarios and strategies for calibrating the Emissions Trading System to the new reality of the 2040 climate target, including enabling polluters to use international credits or carbon removals on the EU ETS.
The EU’s Emissions Trading System is essential to meeting the European Union’s 2040 climate target. Watering the EU ETS down with international carbon credits or carbon removals will prove fatal, concludes a study commissioned by Carbon Market Watch and conducted by the Oeko Institute. The study models various climate scenarios and strategies for calibrating the Emissions Trading System to the new reality of the 2040 climate target, including enabling polluters to use international credits or carbon removals on the EU ETS.
ETS2 will be an important step in driving the acceleration of decarbonisation. However, while carbon pricing is expected to be an efficient decarbonisation
policy it can have regressive effects, including putting an unintended burden on consumers, particularly vulnerable consumers.
Alongside investments in clean alternatives like heat pumps and public transport, direct payments can protect vulnerable households and all those affected by high prices.
