The objective of this project is to assess and propose the design of an effective carbon pricing mechanism conducive to decarbonization of the Energy Community Contracting Parties’ electricity sector in a cost effective and socially acceptable way.
The design allows for transitory carbon pricing by each Contracting Party and prepare Contracting Parties for joining the EU ETS in the future. It includes solutions for a targeted and fair reallocation of the funds obtained by the states and minimize the impact on system adequacy and security supply.
Kantor is tasked with drawing up an overview of the available policy instruments and measures to initiate the process of decarbonisation of the Community’s power sector through a carbon pricing mechanisms, to evaluate these options, and then recommend the elements of such a scheme, as well as an implementation timeline.
Hence, activities to take place will include:
- Analysis of any carbon pricing schemes currently implemented in selected EU and non- EU countries
- Evaluation of national and regional carbon pricing schemes currently implemented in the EnCs
- Elaboration and proposal of suitable design options for carbon pricing for the EnCs
- Review and assessment of the adequacy of applied carbon dioxide emissions monitoring, reporting and verification schemes currently applied in the EnC contracting parties
- Analysis of the economic, institutional and legal conditions for the implementation of the proposed carbon pricing schemes
- Estimation of the overall financial impact of the carbon price.
Energy Community Secretariat