Background

Market Stability Reserve – Informing the EU ETS Options

This project worked to bridge the information gap on the Market Stability Reserve (MSR) by informing the highly relevant debate. Climate Strategies brought together a world class research consortium to undertake a model comparison study to explore key drivers, uncertainty and discrepancies of different options proposed by the European Commission.

Year: 2014 Past Project

  • Overview

    The European Commission’s 2014 package of climate and energy policy reforms included a proposal for EU ETS reform via a supply side adjustment mechanism (the Market Stability Reserve (MSR). 

    A lack of information limits the understanding of key opportunities and challenges associated with specific adjustment mechanisms and presents a risk of dogmatic rather than evidence-based evaluation.

    This project worked to bridge the information gap by informing the highly relevant debate. Climate Strategies brought together a world class research consortium to undertake a model comparison study to explore key drivers, uncertainty and discrepancies of different options proposed by the European Commission.

    The analysis can provide policy makers and market participants with confidence in the design of the market stability reserve, which is simply not possible from an individual, compartmentalised, modelling approach.

  • Partners

    This project included researchers from London School of Economics, Colorado School of Mines, European Economic Research, University of Michigan, Climate Economics Chair in Paris (Université Dauphin), DIW Berlin, University of Virginia and Swedish Environmental Research Institute.

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