The article discusses the rise in carbon prices within the EU Emissions Trading System (EU ETS) and attributes it to increased policy credibility and more farsighted behavior by market actors. Between 2017 and 2021, carbon prices surged tenfold, reaching over €80 tCO₂⁻¹, significantly influencing investment decisions in the electricity and industry sectors. The increase is not solely due to tighter caps from reforms like the MSR and Fit for 55, but also because of enhanced credibility in long-term climate commitments. This credibility has led actors to adopt a more farsighted approach, affecting carbon prices. The study uses a model to show that myopic behavior (short-term planning) leads to lower carbon prices, while farsightedness results in higher prices. The article also explores the risks of a potential return to myopic behavior due to crises or political backlash, which could undermine the energy transition. It concludes that current carbon prices align with EU climate targets and highlights the importance of maintaining policy credibility to ensure continued decarbonization. The study provides insights into the role of external investors and the impact of policy reforms on carbon prices, emphasizing the need for complementary policies to stabilize expectations and support the energy transition.The article discusses the rise in carbon prices within the EU Emissions Trading System (EU ETS) and attributes it to increased policy credibility and more farsighted behavior by market actors. Between 2017 and 2021, carbon prices surged tenfold, reaching over €80 tCO₂⁻¹, significantly influencing investment decisions in the electricity and industry sectors. The increase is not solely due to tighter caps from reforms like the MSR and Fit for 55, but also because of enhanced credibility in long-term climate commitments. This credibility has led actors to adopt a more farsighted approach, affecting carbon prices. The study uses a model to show that myopic behavior (short-term planning) leads to lower carbon prices, while farsightedness results in higher prices. The article also explores the risks of a potential return to myopic behavior due to crises or political backlash, which could undermine the energy transition. It concludes that current carbon prices align with EU climate targets and highlights the importance of maintaining policy credibility to ensure continued decarbonization. The study provides insights into the role of external investors and the impact of policy reforms on carbon prices, emphasizing the need for complementary policies to stabilize expectations and support the energy transition.