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This analysis evaluates how the new European Union Emissions Trading System affects household welfare and the cost of living across EU Member States.

May 9, 2026Energy PolicyOpen Access

The impact of the EU-ETS2 on prices and welfare in the European Union

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Randomized trial assesses EU carbon pricing effects on household welfare, indicating varied regional impacts.

This analysis evaluates how the new European Union Emissions Trading System affects household welfare and the cost of living across EU Member States.
Applied a multiregional input–output price model under various carbon price levels and energy efficiency scenarios.
Analyzed changes in the Harmonized Consumer Price Index to assess the policy's impact on households.
Carbon pricing at 57.5 euros per metric tonne leads to a 1.18% increase in living costs without energy efficiency measures and 1.04% with improvements in efficiency.
Central and Eastern European countries exhibit more significant increases in costs compared to Northern and Western countries.
Energy efficiency policies mitigate inflationary pressures but do not fully equalize disparities across Member States.

Markaki et al. (2026) studied this question.

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