Structural Supply Side Management in EU ETS: Reviewing the Market Stability Reserve

Monographien

Aleksander Zaklan, Jakob Graichen, Verena Graichen, Hauke Hermann, Johanna Cludius

Dessau-Roßlau: Umweltbundesamt, 2021, 63 S.
(Climate Change ; 2021, 39)

Abstract

The review of the market stability reserve (MSR) is one of the key elements of the forthcoming reform of the EU ETS. This report assesses if the MSR is designed in a way that it can fulfil its pur-pose to provide sufficient supply-side flexibility under the cap. The authors discuss different op-tions for adapting and complementing the MSR parameters, such as the intake rate and thresholds for interventions, and how to increase the speed of the MSR response including the pros and cons of introducing a hybrid system with price and quantity-based triggers. Preferable reforms to key elements of the MSR are proposed and assessed against the current and an enhanced cap architec-ture that might be agreed following the adoption of EU’s more ambitious emission reduction target for 2030.

Aleksandar Zaklan

Research Associate in the Energy, Transportation, Environment Department



Keywords: Emission Trading, emission reduction targets, emissions budget, Paris agreement
Externer Link:
https://www.umweltbundesamt.de/sites/default/files/medien/5750/publikationen/2021-05-19_cc_39-2021_msr_review.pdf

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