The Revision of the European Union Emissions Trading System Directive: Assessing Cap and Market Stability Reserve Reform Options

The modelling exercises show that an isolated analysis of a few reform options for the cap and for the MSR can easily lead to less robust results in view of the different uncertainties. The integrated analysis of the largest possible number of options and their combinations (e.g. with a view to baselines, caps, MSR design, demand for hedging and/or long-term banking) as well as the relevant uncertainties is an important prerequisite for a sufficiently robust assessment of the upcoming reforms.