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The impact of the EU ETS on greenhouse gas emissions in the EU from 2005 to 2022

Klimko Roman, Hasprová Sabína

Economics and Environment

2025

No. 1

art. no. 874

Although there is an abundance of research focused on the European Union Emissions Trading System (EU ETS), there are only a few long-term studies on this theme. The majority of the studies examine the first two phases of the EU ETS. Our approach is different, we use the latest data available and analyse the EU ETS throughout all four phases from 2005 to 2022. The aim of this paper is to investigate the impact of the EU ETS on greenhouse gas emissions in the EU27. Examining its effectiveness is essential for better adjustment in the future to meet the EU's 2030 greenhouse gas emissions target and the EU's 2050 net-zero target. We set a research question: Was the EU ETS effective in reducing overall CO2e emissions in the EU27 in the period 2005-2022? We applied two regression models and can confirm that total investment, corporate investment, price of emission allowance, and time are statistically significant and have an impact on the CO2e emissions in the EU27. The results show that the EU ETS led to a 42.8% reduction in CO2e emissions between 2005 and 2022. Our findings suggest that the EU ETS has become an effective tool in the transition to a low-carbon future within the sectors included in the system.