EU-ETS under attack? The impact of carbon price suppression on the decarbonization of the power sector
European countries are debating policies to mitigate the increased energy costs caused by renewed geopolitical tensions, while pursuing decarbonization and electrification. A notable example is Italy's 2026 Decreto Bollette package, which proposes to remove the carbon price equivalent from the bids of certain gas-driven power plants to wholesale electricity markets, among other provisions. We use this as a case study to assess the long-term implications of suppressing the carbon price signal in the electricity market for investment, emissions, and consumer costs. We employ a stylized Italian power system using MARLEY, a multi-agent reinforcement learning framework focused on long-term ele...
| Authors | Javier Gonzalez-Ruiz, Carlos Rodriguez-Pardo, Alice Di Bella et al. |
|---|---|
| Primary category | econ.GN |
| Published | 6 July 2026 |
| Last updated at source | 6 July 2026 |
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