Publication

This report is concerned with EU efforts to reduce carbon emissions. It assesses the pros and cons of the various possible measures built around the flagship EU emissions trading system (ETS) that have been put forward to address the level and stability of the price of carbon. The report argues that the need for some kind of ‘dynamic’ adjustment provision should be considered very seriously to address the relatively inelastic supply. It also suggests that there is a need to consider ways to improve communication of market-sensitive information for example by leaving the management of the ETS to a specialized body.