In this episode we speak to Dr. Sonja Peterson, Senior Researcher at the Kiel Institute for the World Economy. We discuss the implications of introducing an EU ETS 2 for buildings and road transport in terms of welfare effects, predicted prices, and the future role of the land use, land use change and forestry sector (LULUCF). The interview was led by Marie Raude and Lea Heinrich, Research Associates at the Climate Team of the Florence School of Regulation, and recorded during the LIFE COASE workshop on the role of carbon markets in reaching carbon neutrality which took place in June 2024.