EU Carbon Pricing Reforms Could Reshape Economies, Benefit Some Nations More Than Others
The scientists looked at ways to make carbon prices stable in the EU Emissions Trading System. They explored changing the system's rules, adding extra fees on carbon emissions, and raising or lowering the cap on emissions. By using a computer model, they found that tightening the cap helps secure a reliable carbon price. Adding a price to the system provides stability during low demand for emission permits. Also, a carbon tax outside the system lowers permit prices, benefiting some but not all countries. Importantly, countries with less experience in the system are more affected by changes in the carbon price. The researchers confirmed that changing certain policies can impact economies differently.