Even ignoring the fact that this isn't a free market by any stretch, the fact is the EU imposes massive costs which will necessarily be reflected in the price of electricity.
For example, about 60% of the cost of electricity in Poland is tied up in buying carbon credits [1]. Now you may agree with the existence of such a system, but that doesn't make its consequences cease to be.
It actually does. When your regulations is interfering with the normal functioning and price discovery of the market, you're not in a free market.
You might be able to argue that regulations that simply provide market participants with additional information dont interfere with that, but carbon credits are most certainly not that.
You may agree with the regulations, but that doesnt maoe them any less nefarious.
That's literally what Carbon credits are. That indeed is the whole point of economists proposing them as a mechanism.
What do you think they are if not that?
Note electricity is and always has been a highly regulated industry, but Carbon Credits are in fact a move towards more market signals.
You might disagree with the shared consensus reality, perhaps you think CO2 is a hoax molecule invented by the Swiss as a prank, but even then, Carbon Credits are clearly an attempt to price in this fictitious molecule and apply market signals to it.
Except carbon credits are not providing information, they are imposing costs. The 2 are not one and the same.
You might argue that electricity providers having to inform their customers of how much carbon was generated in the production of electricity is simply informing the customer and therefore compatible with a free market.
You cannot make that argument when the state is imposing the legal requirement to purchase licenses to output said carbon.
Again, you may agree with such a measure (I don't), but agreeing with the measures doesn't change their nefarious effects.
The carbon credit is not imposing the cost, it's ensuring that the person who causes the cost pays for it, i.e. that it is priced correctly and people can make decisions based on that. As a result it increases efficiency.
june 2020 had the lowest ever prices. no one was complaining.
in reality these high prices are due to a combination of factors:
- countries reopened after covid at the same time across the planet leading to pressure from asia to europe
- norway’s gas infrastructure works
- cold winter and spring followed by a very hot summer which increased energy demand for heating and AC
- lack of wind in northern Europe meaning burning more coal and gas
- fire at a Russian gas processing plant in August reducing output from Russia to Europe. thus Russia couldn’t fulfil anything more than long-term contracts (no spot)
- Russia’s Putin also has an interest to put pressure on Europeans in order to fast track Nord Stream 2.
- Putin also wants Europeans to rely less on the free market and more on long term contracts, since those disincentivise investments in energy efficiency, diversification, the transition to cleaner energy sources. EU initiatives have also made Europe less susceptible to market manipulation by Gazprom than it used to be. these are big no-no’s for the Kremlin
For example, about 60% of the cost of electricity in Poland is tied up in buying carbon credits [1]. Now you may agree with the existence of such a system, but that doesn't make its consequences cease to be.
[1] https://twitter.com/michal_1979/status/1472635201226428416?t...