The Biggest Problem With The EU’s Emission Trading System

The European Union's Emissions Trading System has seen record-high prices lately. This has prompted two kinds of response: on one side, some analysts and officials have welcomed the trend, saying it would motivate businesses to decarbonize more quickly. On the other, some, including European business associations, have warned that record carbon prices are hurting their profitability and competitiveness.

Now, governments have cried out against the EU's emission ambitions, too. The reality is that not everyone can afford the green transition price…