The European Emissions Trading System and the German and Polish Electricity Market

This report analyses the interaction of the European Emissions Trading System (EU ETS) and the German and Polish electricity markets along two main questions: How do EU ETS design features affect the environmental effectiveness of the system and the quality of the carbon price signal? How do electricity market design features in Poland and Germany affect the carbon price induced abatement in the power sector? Based on publicly available data and expert interviews, we derive three main findings on the impact of the electricity market structure on the quality of the EUA price.