The central pillar of European climate policy, the European Emissions Trading System (EU ETS), is currently under … political factors and regulatory uncertainty have played a key role in the price decline. As a consequence, any reform of the EU … Market Stability Reserve proposed by the EU Commission is unlikely to address the current problem of price uncertainty and …

emissions without depressing carbon prices or mitigation in the near term. We calibrate our model to the EU ETS and identify …-up certificates should replace conventional ETS allowances. In the context of the EU ETS, a European Carbon Central Bank could manage …