1/ In EU day-ahead electricity markets, CO2 allowance costs are largely passed through into the uniform clearing price. Result: higher consumer expenditure and large inframarginal rents (“windfalls”) for non-fossil generation.
A Market Design Proposal for Decoupling Carbon and Electricity Prices by @wifo.bsky.social colleagues @b-kasberger.bsky.social , Simon Finster, and Simon Rütten. A rules-based system rather than ad hoc taxation of "excess profits". www.wifo.ac.at/publication/...