Despite the reform of the European Emissions Trading System (EUETS), discussions about complementing it with a carbon price floor (CPF) are ongoing. This paper analyzes the effect of a European CPF in the reformed EUET Susinga Hotelling model of the EUETS, amended by the market stability...

This paper uses a discrete-time partial equilibrium model of the European Emissions Trading System (EU ETS)to analyze the impact of the recent reform on allowance prices. By including bounded rationality such as myopia or hedging requirements, we find that the Hotelling price path is no longer...

To tackle structural supply-demand imbalances and to increase price stability in times of economic crises,policy makers reformed the European Union Emission Trading System (EU ETS) substantially in 2015 and 2018. As the COVID-19 pandemic led to an unforeseen contraction of the economy,it serves...