The EU Commission's latest ETS proposal made headlines, but the climate arithmetic tells a more sobering story than the 1.5 °C Paris goal suggests. Run through a four-expert framework, the reform is best framed as 2 °C aspirational, 2.5–3 °C probable. The interactive below compares the warming cone with and without the reform.
Each band is a scenario; its width is the uncertainty around the central path (dashed). The dotted horizontals mark the two Paris reference lines — 1.5 °C and 2 °C. Toggle between the side-by-side comparison and a single overlay.
The proposal was stress-tested across four mutually-exclusive lenses, each challenging a different assumption.
Cumulative emissions, not the 2048 end-date, drive warming. Slow early action locks in roughly 0.3 °C this decade regardless of later targets. A ~11% cut by 2030 is far short of the −40 to −50% a 1.5 °C path needs.
The ETS is one tool of many. If buildings, agriculture and non-ETS transport hit their own targets, the EU can still reach ~55% by 2030. If only the ETS moves, the package is off-track. It all hinges on policy stacking.
"High-quality" international credits do not yet exist at scale, and Article 6 double-counting is a live risk. Assume ~50% of the 2% credits are real and effective ambition slips a further ~0.2 °C.
The slowdown to 1.7%/yr is an admission that easy substitution is exhausted and hard-to-abate industry remains. 2048 is a wild card — 2040 on a tech breakthrough, 2055 on realistic friction.
| Assumption | Expert view | Risk |
|---|---|---|
| Cap trajectory 3.7% → 1.7% | Modeller: too slow early. Economist: realistic friction late. | Under-delivers this decade; may over-promise post-2036 |
| ETS-only pathway | Analyst: incomplete — depends on non-ETS sectors | If non-ETS lags, warming 2.7–3 °C |
| International credits (≤2%) | Skeptic: only ~50% credible | Effective ambition +~0.2 °C |
| Technology progress | Economist: assumed neutral; actually a wild card | ±0.5 °C on breakthroughs vs bottlenecks |
| Cumulative emissions this decade | Modeller: under-weighted in the 2020s–30s | Early deficit locks in ~0.3 °C |
1 · Non-ETS credibility. The single biggest execution risk. The ETS alone cannot carry the target; buildings, agriculture and transport must hit their own — and their track record is mixed at best.
2 · "High-quality" credits, defined. The 2% cap leaves room for definitional gaming. Standard carbon-market practice applies a 30–50% additionality haircut to stated impact.
3 · The 1.7%/yr rate post-2036. Needs independent verification, not political optimism. It assumes breakthroughs stay on schedule and ignores harder-to-decarbonise industry hitting substitution limits sooner.
4 · The cumulative-emissions maths. Even if 2048-zero is achievable, slower action now means more CO₂ in the atmosphere this decade — pre-locking warming regardless of the end-date.
Gogerty, N. (2026). EU ETS Reform: Tracking Toward 2.5–3 °C, Not 1.5 °C. Carbon Finance Lab. https://carbonfinancelab.com/eu-ets-warming-cone/
@misc{eu_ets_warming_cone_2026,
author = {Gogerty, N.},
title = {EU ETS Reform: Tracking Toward 2.5--3 C, Not 1.5 C},
year = {2026},
publisher = {Carbon Finance Lab},
howpublished = {\url{https://carbonfinancelab.com/eu-ets-warming-cone/}}
}