1.1. What do you think would have happened to pass through if the largest of the electricity providers had been heavily invested in solar power, which does not produce carbon? The cap-and-trade program introduced in Europe and described in the text effectively resulted in a price for carbon in Europe, thus increasing the costs for carbon-producing firms. Electricity firms are among the largest of the carbon producers, and one might therefore expect increases in electricity prices to be a result. A recent study with Spanish data provides some evidence on this.