Carbon Pricing and the Financing of the Low-Carbon Transition Under Volume Scarcity: Evidence from the EU ETS

This dataset is the companion data file for the paper “Carbon Pricing and the Financing of the Low-Carbon Transition Under Volume Scarcity: Evidence from the EU ETS,” prepared under the ETS Functioning and Directions for Mechanism Improvement report.

It contains all inputs, intermediate values, and results underlying the paper’s analysis of EU ETS auction revenues over 2031–2040. The file is a single CSV organised into seven labelled sections, followed by three appendix tables. The seven sections are: (1) inputs and parameters (cap, linear reduction factor, CBAM phase-out factors, GDP, and investment needs); (2) the Low, Mid and High carbon-price scenarios in EUR/tCO₂; (3) cap, free allocation and auction volumes for 2021–2040 in million EUA; (4) annual EU auction revenues by scenario; (5) country data for Germany, France, Italy, Spain, Poland, the Netherlands and Sweden (GDP shares and historical EEX auction shares); (6) a country-year projection matrix for 2031–2040; and (7) decade totals and coverage ratios. The three appendix tables report a drop-one robustness check on the six-source price consensus, a sensitivity corridor over alternative post-2030 cap paths, and an allocation of national investment needs by GDP share versus 2005 verified-emissions share.

The central post-2030 projection continues the latest adopted linear reduction factor as a fixed annual reduction of about 90 million allowances. Under this rule the cap, and with it the auction base, closes to zero in 2040. A taper to a 10% residual cap is reported as an alternative in the sensitivity corridor.

The paper finds that auction revenues cover only 1.4–3.1% of projected EU energy-system investment needs across the decade, with the volume effect of a tightening cap dominating the price effect from 2031 onwards. Coverage is modest in every Member State, ranging under the mid scenario from about 0.7% in France to about 6% in Poland. Carbon-pricing effectiveness and transition-financing adequacy therefore emerge as related but structurally distinct policy objectives.