This document presents main takeaways and insights from a workshop organised by the Ariadne Project in Brussels on 30 November 2022. The workshop convened experts from seven organisations that operate carbon market models – academic institutions as well as carbon market analysts.

With the Fit-for-55 package about to be put into law, and the RePowerEU plan adopted in response to the energy crisis, EU climate and energy is undergoing the most profound change in years, getting the EU on track to a post-fossil energy system. In a three-day series of events, partners from the Ariadne research project presented key insights from their work that is relevant for the further development of EU climate and energy policy, and discussed these with representatives from political institutions, academia, civil society and business. The events served to share research insights, to discuss and validate findings and their relevance for EU policy process, and to gather inputs for further research.

While policymakers are currently mulling over the EU-ETS reform, it is a good time for analysts and scientist to take a step back and discuss the analytical tools used to project the outcome – specifically: the expected, predicted or necessary carbon price(s) towards 2030. To that end, the Potsdam-Institute for Climate Impact Research (PIK) and Ecologic Institute organize a workshop in Brussels on 30 November 2022.

Social concerns around introducing a carbon price for transport and heating fuels (ETS2) are legitimate. But the EU Parliament overshot the mark in its aspiration to cushion households, which becomes apparent in its request for changes to the Social Climate Fund (SCF), write Michael Pahle, Nils aus dem Moore and Benjamin Görlach in their article for EURACTIV.

In this Ariadne publication, experts from Ecologic Institute, Potsdam Institute for Climate Impact Research, RWI – Leibniz Institute for Economic Research, Mercator Research Institute on Global Commons and Climate Change, Stiftung Umweltenergierecht, ZEW – Leibniz Centre for European Economic Research and IER Stuttgart analyzed various options for the relief and level of the CO2 price – and identified advantages and disadvantages as well as implementation requirements of different design options. The focus is on two key political points of contention, where scientific findings can prevent an impending hardening of the position and thus promote a consensus that is conducive to climate protection.

Experts from Ecologic Institute, Potsdam Institute for Climate Impact Research, RWI – Leibniz Institute for Economic Research, Mercator Research Institute on Global Commons and Climate Change, Stiftung Umweltenergierecht, ZEW – Leibniz Centre for European Economic Research and IER Stuttgart analyzed various options for the relief and level of the CO2 price – and identified advantages and disadvantages as well as implementation requirements of different design options. The focus is on two key political points of contention, where scientific findings can prevent an impending hardening of the position and thus promote a consensus that is conducive to climate protection. This German-language abridged version summarizes the findings.

With the Fit for 55 package, the European Commission made far-reaching proposals in July 2021 to align the architecture of European climate policy with the goal of climate neutrality. These proposals include the strengthening of the existing emissions trading scheme, the introduction of new emissions trading for transport and buildings, a border adjustment mechanism (CBAM) to protect against carbon leakage and the tightening of regulatory instruments for transport and buildings. However, the proposals raise a number of questions – from distributional effects and acceptance to the consistency of the instruments. In the course of this two-day hybrid event, researchers from the Ariadne consortium discussed these issues with stakeholders and decision-makers at the European level.

From sector coupling to hydrogen, from the implementation of the Climate Protection Legislation to the European Green Deal: Achieving climate neutrality requires coordinated and effective policy management across individual departments. Climate policy is a cross-cutting task, because all sectors, from power generation to industry, buildings, transport and agriculture, must become greenhouse gas neutral without delay. Experts from the Ariadne Copernicus project, which is funded by the German Federal Ministry of Education and Research (BMBF), have examined central problems of government control of German climate policy and presented options for solutions. The paper was also sent to negotiators of the coalition talks in the run-up to publication.

With the Green Deal, the European Union aims to reduce its greenhouse gas (GHG) emissions by at least 55 percent by 2030 compared to levels in 1990. Among other things, this goal is to be achieved through a stronger role for carbon-pricing. For industry, however, this plan carries the risk of "carbon leakage": energy-intensive industries such as steel or chemical production could move away – increasing emissions elsewhere. Other industries could also be indirectly affected. This policy brief analyzes the types of measures available to reduce risks for industry and embeds them in two basic strategies that can be pursued with regard to carbon leakage.

What innovations are needed to develop a climate-neutral energy system of the future? How can the national and European climate targets be achieved in 2030? What can Germany do to advance the European Green Deal together with the other member states? These and other questions will be the focus of the virtual Copernicus Symposium on 9 and 10 June 2021.

The Ariadne project shows ways in which the climate goals can be achieved. The focus is on research for energy transition strategies, their systemic effects, and which sectoral interactions arise as a result. The project investigates policy instruments to help achieve climate goals in an efficient and socially balanced way. With the help of evidence-based assessments, the scientific basis for shaping the energy transition is to be expanded and any learning processes in politics and science are to be triggered.

The policy brief discusses the different policy pathways to reach the climate target, as presented in the EU Commissions Impact Assessement of the 2030 target plan. There are different ways how the EU can reduce emissions to -55%: mainly through tighter regulation and standards, primarily via carbon price or trough a mix of both. The policy mix route may seem most attractive: politically, it is the path of least resistance, as it continues on the current trajectory. And it promises the best of both worlds – the efficiency of carbon pricing and the certainty of regulatory approaches. At the same time, the mix has some conceptual arguments in favor: companion policies, like standards and infrastructure investment, ensure that consumers have more climate-friendly options to choose from and bring down their cost. Thereby, they make it easier to stomach higher carbon prices.