Climate | Contribution to book
Carbon pricing and social acceptability : using EU ETS auction revenues for social expenditures in a changing world
27 July 2023
Achieving carbon neutrality requires increasingly stringent climate policies that, in jurisdictions with an emissions trading system (ETS), may lead to higher carbon prices, affecting industries, end-users and households. In the last few years, a rising carbon price trend has emerged in the leading carbon markets, which may partly be attributed to higher ambition. This rapid increase has provoked concerns about the social acceptability of more stringent climate policies among the population vulnerable to price changes. These concerns have been fuelled by the rise in energy prices, particularly after the outbreak of the war in Ukraine, which may hit the poor and jeopardise the successful post-pandemic recovery. The viability of more stringent climate policies and the achievement of the climate neutrality goal also depend on the (re)distributional impacts of such policies and the way the population perceives these impacts. In this context, an ETS can play a role by raising revenues that can be used for redistribution purposes. It is, therefore, relevant to examine ETS revenues and the related expenditures performed by the governments. The EU provides a relevant case study. In 2022, new policies aiming at putting the EU on track to climate neutrality were agreed. This climate ambition was confirmed despite concerns about the high carbon price in the EU ETS and the distributional impact of high energy prices triggered by the invasion of Ukraine by Russia.
logo cadmus Read it on Cadmus Download in open access


Aviation is crucial for Europe's mobility, connectivity and competitiveness. With over 900 million air passengers travelling to, from and within the European Union each year, Europe makes up a third [...]
Technical Report
Lack of interoperability is increasingly becoming a significant issue in the electricity sector. The need to integrate a growing amount of distributed resources, such as renewable energy sources and electric [...]
Technical report
The energy transition calls for a rapid expansion of electricity grids at both transmission and distribution levels. Technological progress and digitalisation offer new solutions to system needs that can increase [...]
Technical report
The interaction of “Contracts”, “Markets” and “Law and Regulation” have informed the economic analysis of market economies for over 40 years. One of the main lessons learnt is that (contracts), [...]
Rail transport and inland waterways are crucial to achieve the objectives outlined in the Green Deal agenda. These aims include a 55% reduction in greenhouse gases by 2030 and attaining [...]
Urban mobility plays a key role for the promotion of the socio-economic development of a country. Particularly, MaaS platforms are important for those daily journeys made by travellers that must [...]

Join our community

To meet, discuss and learn in the channel that suits you best.