Environmental Financial Reform

With an environmental financial reform, we are using fiscal policy and taxation to redirect towards a sustainable and fair economy and society - by reducing subsidies that harm the environment and society, by placing our tax system on a broader basis and by making the consumption of resources and the burden on the climate more expensive. The additional revenue should be used sustainably for investments in the future and social justice. 

 


ANSPRECHPARTNER
Holger Bär

KONTAKT

        

Publicationtitle

EU ETS Carbon Leakage: How to Remediate Disincentives within the Current System of Free Allocation

Publicationtype Policy Brief
Publicationabstract

The free allocation of allowances within the EU ETS prevents the price signal to be fully passed on to most industrial installations. This significantly lowers the incentives to invest in climate-friendly measures – and hinders the EU ETS from realizing its full potential as one of EU’s main policy instruments to meet the EU climate target Plan.
In this policy brief, we evaluate the proposal by the Euro-pean Commission and point out suggestions to improve the current system of free allocation. If free allocation remains in the EU ETS and is amended according to the revised proposal, three measures should be implemented:
1. An earlier and more comprehensive CBAM phasing-out free allocation
2. Tighter conditions for free allocation
3. A more stringent benchmark approach
 

Authors
Simon Meemken, Isabel Schrems, Swantje Fiedler
Publicationclients WWF
Publication institution FÖS
Publicationtags EU ETS, Carbon Leakage
Topics
Energie
Publicationdate 2022
Publicationfile 2022-07_WWF_ETS_Carbon_Leakage_Policy_Brief.pdf