Report of December 15, 2016
29 European economists address an open letter (PDF, 127.06 KB) to European lawmakers emphasizing the importance of designing the European Emission Trading Scheme such that the carbon price will be reflected in basic materials.
The production of basic materials like steel, cement, and aluminum accounts for a significant share of Europe’s greenhouse gas emissions (16%). For Europe to achieve its Paris climate objectives, large scale emission reductions are necessary. Innovation and investments in climate-friendly material production and use can facilitate such emission reductions. This requires not only a strong EU ETS price signal, but the EU ETS price also needs to be reflected in materials prices.
Prof. Karsten Neuhoff, Ph.D.
Head of the Climate Policy department