This paper develops a methodology aimed at assisting policymakers in selecting the optimal policy option to support the carbon price within the ETS. We consider different policy proposals that can support the carbon price either by intervening on the ETS cap (-30%, set-aside, carbon central...

After recalling to which extent the inefficiencies emerged during the Emissions Trading Scheme past trading periods are related to its institutional framework, as defined by the Directive 87/2003/EC, this article focuses on the major provisions of the 2008 European Commission Proposal for a new...