Briefly on the Climate: The Coronavirus Crisis and its Effects on European Emissions Trading

The national shutdowns triggered by the coronavirus pandemic led to a collapse in economic activity in Europe. Among other things, greenhouse gas emissions in Europe fell significantly due to the shutdown of production plants and lower demand for electricity. This also affected the European Emissions Trading Scheme (EU ETS). Since companies temporarily require fewer CO2 certificates, the CO2 price fell sharply for a while. With the support of the EU REGEN model, it was simulated that the current savings in emissions will be of only limited help in meeting European climate targets, as only 140 million –  in the event of a rapid recovery of economic activity – to 541 million – in the event of a severe and lasting recession – additional certificates are cancelled.