Keywords
green innovation
EU ETS
electricity
policy mix
How to Cite
Abstract
This systematic review synthesises evidence from 40 studies to advance the debate on the European Union Emissions Trading System, moving from whether it stimulates green innovation to how, when, and for whom. We establish that its impact is contingent on a triad of factors: a stable, sufficient carbon price (e.g., >€25–30/ton); sophisticated institutional design (e.g., auctioning); and, crucially, its role as the core of a synergistic policy portfolio amplified by tools like research and development subsidies and the Carbon Border Adjustment Mechanism. The findings provide policymakers with an evidence-based roadmap for leveraging carbon pricing as the cornerstone of an innovation-driven climate strategy, while highlighting the need for tailored approaches due to significant heterogeneity across firms and member states.
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