A systematic review of 40 studies concludes that EU ETS effects on green innovation depend on stable sufficient carbon prices, institutional design and complementary policy rather than carbon trading alone.
Key findings
- Innovation effects were strongest under stable sufficient prices, exemplified by levels above €25–30/t, sophisticated design such as auctioning, and an ETS embedded in a policy portfolio with R&D support and border measures. Effects varied substantially across firms and member states.
Why this matters globally
The review reframes the question from whether carbon pricing works to when and for whom it stimulates innovation, relevant to emerging carbon markets.
Thai researcher contribution
Chiang Mai University researchers synthesized European policy evidence and clarified price, institutional and policy-mix conditions for international debate.
Limitations to consider
The abstract does not detail databases, screening, risk-of-bias appraisal or synthesis of heterogeneous designs. Evidence is EU electricity-specific and mixes studies of potentially different causal strength.