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The Market Stability Reserve in Perspective
This CEPS Special Report contributes to the debate on the Market Stability Reserve (MSR), which was proposed by the European Commission in early 2014. With the proposal soon to be considered, this report presents the MSR’s rationale, and reviews the different options available for its design, governance and timing, as well as its consequences for the functioning of the EU ETS and the EU’s climate and energy policy.
Based on discussions in various stakeholder meetings organised by the CEPS Carbon Market Forum throughout 2014, the report takes the view that if the MSR is needed to ensure better market functioning of the still-young EU carbon, there do not seem to be good technical reasons that would advocate for the delay of its implementation.