Policy Brief 23-13: Russia's invasion of Ukraine has cemented the European Union's commitment to carbon pricing
28 September 2023
The transformation of the European Union’s power supply is therefore still a work in progress and has since the Russian invasion been mostly characterized as “running to stand still.” In the 12 months after the invasion, the European 5 Electricity grids must balance at all times and EU power prices are set at the margin, meaning that the cheapest sources of power are accessed first and the price f. [...] Like with the acceleration of clean US power production, decarbonizing US industry in many of the same sectors that are part of the early CBAM design through the IRA will increase the chances that the European Union and United States can avoid a carbon-based trade war in the future. [...] As at least the early version of the EU CBAM and the FPF cover several of the same traded goods categories, it seems not entirely implausible that these two carbon-based trade tools form the basis of a future “transatlantic carbon club” in relevant industrial goods between the European Union and the United States. [...] The GOP House majority in the spring of 2023 passed a bill33 to increase the federal government’s debt ceiling that included in Title 3 of the bill removing the vast majority of the IRA’s green subsidies. [...] Report from the Commission to the European Parliament and the Council on the Functioning of the European Carbon Market in 2021.