The final design choices for Phase IV of the EU ETS are about to be made. With the introduction of the market stability reserve several additional design parameters have been introduced into the EU ETS. This paper explores how changes in these parameters impact on allowance price paths. Four...

Postponing the issue date of allowances in a cap-and-trade scheme as instituted e.g. in the Market Stability Reserve (MSR) of the EU ETS has an impact on abatement technology adoption. Stimulating low-carbon investments is a key objective of the MSR. We show that postponing allowances has an...

The EU Emissions Trading System was recently reformed to make it ‘fit for 55’ by 2030, with the cap on emissions designated to go down to zero by 2040. It is thus widely believed that the next decade will mark the ‘ETS endgame’: when supply approaches zero, the market will undergo...