In this paper the authors develop a model to evaluate first, the market developments in the European Union emissions trading scheme (EU ETS) over 2008–2017 ex-post and second, the performances of main features of the EU ETS reforms that took place in 2018, ex-ante.

In this paper the authors develop a model to evaluate first, the market developments in the European Union emissions trading scheme (EU ETS) over 2008–2017 ex-post and second, the performances of main features of the EU ETS reforms that took place in 2018, ex-ante.

In this paper, the authors develop a model to assess the market stability reserve, a key feature of reforming the European Union’s emissions trading system (EU ETS). Reforms to the EU ETS have been made in the face of a significant, prolonged downturn in the allowance price.