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The Future of Carbon Pricing in the European Union

Cover of the Joint Policy Brief of the ENTRACTE and CECILIA2050 Projects "The Future of Carbon Pricing in the European Union"

© Ecologic Institute


The Future of Carbon Pricing in the European Union

CECILIA2050 Policy Brief No 6


Consortium, CECILIA2050 Project 2015: The Future of Carbon Pricing in the European Union. Joint Policy Brief of the ENTRACTE and CECILIA2050 Projects.

This policy brief presents insights on the historical and future role of carbon pricing in the EU. The findings discussed are drawn from research undertaken by the CECILIA2050 and ENTRACTE projects. A central pillar of EU climate policy, the EU Emissions Trading System (EU ETS) is supposed to guarantee emissions reduction at least cost. Yet, the "flagship" instrument has been paralysed by a surplus of allowances, and resulting low carbon price, and has consequentially not been the driver of low-carbon investment and innovation it was expected to be. Still, carbon pricing is an essential element of the transition to a low-carbon economy. Therefore, the EU ETS must be revitalised sooner rather than later, or the EU risks a higher cost transition and possible fossil fuel lock-in.

Four key conclusions can be outlined:

  • Conclusion 1: The original idea: the EU ETS as the flagship of an ambitious EU climate policy...but the flagship never left the harbour.
  • Conclusion 2: Carbon pricing works - the EU ETS is capable of achieving its core objective: to reduce emissions of the covered installations.
  • Conclusion 3: The plan for 2030: reinstate the EU ETS as a key element of EU climate policy, by addressing the allowance suplus that currently inhibits the effectiveness of the EU ETS.
  • Conclusion 4: A strong carbon price is needed, now and in the future. A delayed carbon price increases the risk of a high-fossil


More content from this project


Media format: Brochure A5
Concept: Beáta Vargová, Matthias Duwe
Graphic design: Beáta Vargová

Published by
16 pp.
Project ID
climate policy instruments, state of play of the policy mix in the EU, CECILIA2050, eco-innovation, decarbonisation, carbon pricing, ETS, GHG reduction, optimality, European Union
Europe, Czech Republic, France, Germany, Italy, Netherlands, Poland, Spain, United Kingdom
design, layout