The Market Stability Reserve in the EU Emissions Trading System: A Critical Review

Simone Borghesi (), Michael Pahle, Grischa Perino, Simon Quemin and Maximilian Willner
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Simone Borghesi: Department of Political and International Sciences, University of Siena, Siena, Italy
Michael Pahle: Potsdam Institute for Climate Impact Research (PIK), Potsdam, Germany
Simon Quemin: Potsdam Institute for Climate Impact Research (PIK), Potsdam, Germany
Maximilian Willner: Department of Socioeconomics, Universität Hamburg, Hamburg, Germany

Annual Review of Resource Economics, 2023, vol. 15, issue 1, 131-152

Abstract: Having experienced low prices for about a decade, the European Union Emissions Trading System has been supplemented with the market stability reserve (MSR) that adjusts the supply of allowances to market outcomes. We critically review the literature assessing the performance of the MSR against several policy objectives. In doing so, we cover both conceptual aspects and quantitative assessments. We conclude by pointing out important policy implications and open issues for further research.

Keywords: climate policy; emissions trading; EU ETS; stability mechanism; overlapping policies (search for similar items in EconPapers)
JEL-codes: H23 Q54 Q58 (search for similar items in EconPapers)
Date: 2023
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Related works:
Working Paper: The market stability reserve in the EU emissions trading system: a critical review (2023)
Working Paper: The Market Stability Reserve in the EU Emissions Trading System: A Critical Review (2023)
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DOI: 10.1146/annurev-resource-111820-030145

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