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A strong revision of the EU ETS, but the future may bring impetus for further reform
The ongoing reforms of EU climate policy reflect the precarious balance between environmental ambition and the demands of the political economy facing policy-makers and stakeholders. Yet, it is conceivable that 2018 could be a rare year – and the first during the third trading phase (2013-2020) – in which EU legislators are not discussing the reform of the European carbon market. How long will this lull last? In the end, much of the discussion in recent months between the Council, Parliament and Commission centred around a simple, specific and highly political point: Can funds generated by the sale of ETS allowances and earmarked for aiding the transition to cleaner energy systems in lower-income member states be spent on coal-fired power plants? The answer is a qualified no.