The Environment is an important aspect of economics. The purpose of this study was to investigate the effect of the price of carbon on emissions. EU ETS was the cornerstone of this study due to the maturity of the emissions trading system itself and the broad engagement of EU ETS in various sectors. The price setting for the price of carbon is built on the theory of demand & supply of allowances followed by the variation in trade explained by the different cost functions on firm level. By using time series data on aggregate emissions and emissions on the sectorial level, an OLS regression was conducted. The findings suggest that on an aggregate level, the price of carbon shows a significant and negative effect on verified emissions when controlling for other prices and non-prices which should in theory affect emissions. On a sectorial level, the price of carbon is significant and possesses a negative effect on emissions for the Energy sector, production of metals, and mineral industry, while for the pulp & paper, a negative but not significant effect was found. The highest effect of the carbon price on emissions reduction is shown for the production of metals, where a 1% increase in the price of carbon results in a -1.71% decrease in emissions. Although, the share of consumption from renewable energy sources has increased, the so-called economic transition. The results obtained should therefore be interpreted with caution and considered as an upper bound of the price of carbon effect on emissions due to the lack of ability to control for the economic transition. Policymakers can use these findings to target sectors which is not showing a significant effect or as a means for a deeper understanding of the impact of an active and mature ETS system on emissions reduction.