The EU-ETS Price Through 2030 and Beyond: A closer look at drivers, models and assumptions

Benjamin Görlach; Dr. Michael Pahle; Joanna Sitarz; Dr. Sebastian Osorio

The EU-ETS Price Through 2030 and Beyond: A closer look at drivers, models and assumptions

Input material and takeaways from a workshop in Brussels

Publication: Conference Paper
Citation: Pahle, Michael et al. 2022: The EU-ETS price through 2030 and beyond: A closer look at drivers, models and assumptions. Input material and takeaways from a workshop in Brussels. Documentation.

This document presents main takeaways and insights from a workshop organised by the Ariadne Project in Brussels on 30 November 2022. The workshop convened experts from seven organisations that operate carbon market models – academic institutions as well as carbon market analysts.

The goal of the workshop was to discuss in-depth the types of models, implementation details as well as core assumptions employed in the analysis of ETS prices targeted to inform the policy debate. More specifically, the workshop served to take stock of the diversity of approaches, discuss their pros and cons, and identify major sensitivities and arising developments affecting the price of EU Allowances (EUAs) through the end of this decade and beyond. In preparation of the workshop, all participants took part in a survey and provided a short model fact sheet, information about EUA in their default "Green Deal/FF55 COM" scenario, as well as an assessment of what they view as the main price drivers in 2025 and 2030.

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Benjamin Görlach

Head, Economics and Policy Assessment

Senior Fellow

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The EU-ETS Price Through 2030 and Beyond

A closer look at drivers, models and assumptions

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Year 2021

Language: English
Authorship: Benjamin Görlach

Dr. Michael Pahle, Joanna Sitarz, Dr. Sebastian Osorio (PIK)
Funding: Federal Ministry of Education and Research (BMBF), Germany
Year: 2022
Dimension: 47 pp.
Project: Evidence-based Assessment for the Design of the German Energy Transition (Ariadne)
Project ID: 30003
Table of contents: Click to show full table of contents

Workshop: goal and set-up
1. Survey results
Different modelling approaches to forecast the EU ETS prices
Different models deliver convergent expectations about EUA price development in the medium term
Main expected price drivers will continue to be ETS policy parameters and power sector, but industry sector will gain importance
2. Main takeaways and insights from workshop discussions
Long-term convergence of most models implies stronger choice constraints and/or converging expectations as decarbonization progresses
Overlapping policies are one key driver of projected prices – but implementation matters, not targets
Industrial emitters play a growing role in the carbon market, changing market dynamics – and modeller's understanding of them
(To what extent) does the carbon market factor in long-term scarcity?
Appendix I: Completed questionnaires
Appendix II: Summary slides (for webinar)
Keywords: Climate

Economics

Energy

Attachments

30003-Ariadne-Documentation_ETSWorkshopBruessel_December2022.pdf (2.3 MB)

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