Heating Up Inequality? Socio-spatial impacts of ETS2 on European housing and cohesion

Thomas Schwab, Sara Hagemann, Johannes Többen, Imke Rhoden, Sandra Venghaus and Jochen Linßen

MPRA Paper from University Library of Munich, Germany

Abstract: ETS2 will introduce uniform EU-wide carbon pricing for heating, affecting about half of all households across the Union. Using a synthetic EU population of 188 million households, this study shows that most can absorb the additional costs, but a significant minority faces high burdens—especially in Eastern and Southern Europe. ETS2 revenues can cushion these impacts but are insufficient to fund large-scale heating system replacements. Targeted support and complementary investment policies are essential for a fair and effective transition.

Keywords: ETS2; carbon price; heating (search for similar items in EconPapers)
JEL-codes: D31 H23 Q48 Q52 R28 (search for similar items in EconPapers)
Date: 2026-01-22
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