Designing a sound EU carbon market for buildings and transport

Carbon Market Watch outlines recommendations for the EU ETS II, emphasizing that emission allowances should be auctioned rather than allocated for free to ensure the 'polluter pays' principle. The author argues that the estimated annual average revenue of €47 billion (2026-2030) should be recycled into socially fair compensation schemes for energy efficiency and renewable energy to protect low-income households. Additionally, the document asserts that carbon pricing must be complemented by regulatory frameworks, such as vehicle emission standards and energy performance requirements for buildings, as pricing alone is insufficient to drive full decarbonization.

• To adhere to the 'polluter pays' principle and maximize emissions reductions, the EU ETS II should utilize auctioning for emission allowances instead of free pollution permits.
• The European Commission's impact assessment estimates that EU ETS II auctions could generate an annual average of €47 billion between 2026 and 2030.
• Revenues from the new carbon market should be dedicated to socially fair financial compensation for energy efficiency improvements and the promotion of renewable energy in road transport and buildings to support vulnerable consumers.
• Carbon pricing is an insufficient standalone tool for decarbonization; it must be paired with complementary regulations, such as energy savings obligations, vehicle emission standards, and building energy performance rules.
• The proposed EU ETS II includes a Market Stability Reserve (MSR) with 600 million frontloaded allowances to manage supply and demand imbalances during the system's launch.

APA

Martellucci, E. (2022). Designing a sound EU carbon market for buildings and transport. Carbon Market Watch. https://carbonmarketwatch.org/2022/04/01/designing-a-sound-eu-carbon-market-for-buildings-and-transport/

Chicago

Martellucci, Elisa. Designing a sound EU carbon market for buildings and transport. Carbon Market Watch, 2022. https://carbonmarketwatch.org/2022/04/01/designing-a-sound-eu-carbon-market-for-buildings-and-transport/.

Wikipedia

{{cite press release |last1=Martellucci |first1=Elisa |title=Designing a sound EU carbon market for buildings and transport |publisher=Carbon Market Watch |date=1 April 2022 |url=https://carbonmarketwatch.org/2022/04/01/designing-a-sound-eu-carbon-market-for-buildings-and-transport/ |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@misc{martellucci2022designing, author = {Martellucci, Elisa}, title = {{Designing a sound EU carbon market for buildings and transport}}, publisher = {Carbon Market Watch}, year = {2022}, month = apr, url = {https://carbonmarketwatch.org/2022/04/01/designing-a-sound-eu-carbon-market-for-buildings-and-transport/}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }