The Sound of Economics How can carbon credits work better?
Nov 19, 2025
Join Georg Zachmann, a Bruegel economist focused on energy transition, and Jos Delbeke, former Director General of the European Commission's climate division, as they explore innovative solutions for carbon credits. Zachmann proposes using EU targets to create a global carbon buyers club, while Delbeke emphasizes enhancing the EU Emissions Trading System without direct foreign credits. They discuss the governance challenges, the role of the private sector in maintaining reputation, and advocate for proactive European leadership in global climate efforts.
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Form A Carbon Buyers Club
- Form a club of 'common buyers' (rich OECD states) to manage purchases and avoid a race to the bottom.
- Use a contained list of accepted credit categories and strong governance to protect domestic markets.
Build A Quality Buffer Before Acceptance
- Create a clear buffer between compliance markets and international credits to manage quality and quantity.
- Let the European Commission or a compact buyers' club perform strict checks and exclude weak categories.
Manage The Price Gap With An Exchange Rate
- Price gaps between EU allowances (
€80) and many voluntary credits (€10) require active management. - An exchange-rate mechanism could steer quality and market incentives more effectively than ex-ante taxonomies alone.