Abstract
Should the carbon price be high to stimulate climate-friendly technologies or should it be low to realize inexpensive emission reductions? This ‘carbon price paradox’ is unraveled for the EU on the basis of legal, economic and political arguments. Legally, the primary aim of the EU ETS Directive is to promote cost-effective emission reductions. Economically, the rate of emission reduction in the EU ETS and to an increasing extent also its indirect impact on technological innovation are not so much determined by the level of the allowance price, but rather by the rate at which the emission ceiling falls. Politically, a lower carbon price creates room to lower the emission ceiling more quickly. In sum, society should welcome a low carbon price.
| Original language | English |
|---|---|
| Title of host publication | A Force of Energy |
| Subtitle of host publication | Essays in Energy Law in Honour of Professor Martha Roggenkamp |
| Editors | Ruven Fleming, Kars de Graaf, Leigh Hancher, Edwin Woerdman |
| Place of Publication | Groningen |
| Publisher | University of Groningen Press |
| Chapter | 4 |
| Pages | 28-38 |
| Number of pages | 11 |
| ISBN (Electronic) | 9789403429526 |
| ISBN (Print) | 9789403429533 |
| Publication status | Published - 11-Oct-2022 |
Keywords
- carbon price
- emissions trading
- EU ETS