Five myths about an EU ETS carbon price floor

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Series Details Number 17
Publication Date December 2018
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This policy insight builds on the workshop EU ETS Reform: Taking Stock and Examining Carbon Price Floor Options, held at the Centre for European Policy Studies (CEPS) in Brussels on July 3, 2018. The workshop was cosponsored by CEPS and the AHEAD and Mistra Carbon Exit projects. While the paper draws on insights from workshop discussions, its views are solely those of the authors.

It outlines different perspectives on the past performance of the EU Emissions Trading System (ETS) in terms of its allowance price (Section 1), analyses how the recent reform responded to related challenges (Section 2), and considers the case for introducing a carbon price floor in the EU ETS (Section 3). The main part of the paper (Section 4) identifies five myths in the debate about an EU ETS price floor and critically challenges them. Section 5 concludes by discussing potential entry points for introducing a carbon price floor in the context of the upcoming EU climate policy process.

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