Under the EU-wide Emission Trading Scheme (ETS), CO2 allowances have thus far been allocated largely free of charge. This paper presents a didactic synthesis on the impact of the ETS and argues that such a cost-free allocation will lead to an increase in electricity prices even when strong...

The low-carbon transition, for example in line with the European Commission’s proposed Long-Term Strategy1 net-zero2 target by 2050 or the Commission President-elect ‘climate neutrality’ objective, will require a very large increase in electricity, especially for low-carbon solutions in...