CAKE at LIFE NETS Adviory Board

CAKE at LIFE NETS Adviory Board

CAKE at LIFE NETS Adviory Board

On 11 February this year, Robert Jeszke CEO of CAKE had the pleasure of participating in the inaugural meeting of the Advisory Board of the international LIFE NETS (Net-Zero Emissions Trading Systems) project. The project, implemented by the Florence School of Regulation (FSR/EUI) with the support of the European Commission, has a budget of over EUR 1.6 million and aims to develop strategic solutions for emissions trading systems over the next 36 months.

The main starting point for the discussion was the role of the EU ETS as the foundation of European climate policy. Although the system has been effective in reducing emissions (by nearly 48% over the last 20 years), it currently faces serious social and communication challenges. Experts unanimously pointed to low public awareness of the distribution of costs and revenues from emissions trading. With the upcoming implementation of the ETS2 system, the key risk is a lack of public acceptance and susceptibility to misinformation about the increase in the cost of living.

The LIFE NETS project will take measures to fill the identified information gaps. The creation of an EU ETS Data Tracker (an intuitive data and visualisation hub) and the implementation of in-depth social research combined with behavioural experiments are planned. These will make it possible to test which communication strategies (narratives vs. hard data) are most effective in building understanding and support for climate policy.

During the Advisory Board meeting, three key pillars emerged around which the project work will focus:

• Policy mix: The ETS cannot be seen as the only tool for decarbonisation, but as the basis for a broader architecture in which real technological alternatives for industry are essential.

• Price predictability: It is essential to communicate long-term price paths in order to reduce fears of sudden market spikes and ensure investment stability.

• Revenue transparency: The project will place great emphasis on how proceeds from allowance auctions are returned to the economy, supporting industrial transformation (including through the Clean Industrial Deal) and protecting the most vulnerable households.

The international perspective was also an important topic of discussion. By exchanging experiences within a ‘coalition of the willing’ (including the EU, the UK, Switzerland and Quebec), the project has the opportunity to develop standards for monitoring the costs passed on to end consumers by value chains. Cooperation with the European Environment Agency (EEA) in the field of analytics and dashboards will enable the creation of tools that will provide real support to decision-makers and the public in understanding the mechanisms of the transition to net-zero.