Description:In 2014, EU leaders agreed upon the policy vision out to 2030 in order to transform Europe into a highly energy efficient, low carbon economy. On the energy side, security of energy supply and the promotion of energy efficiency alongside are prioritised in conjunction with the deployment of renewable and sustainable forms of energy with increased interconnection of energy networks. These aims are supported by market-based tools, such as taxes, subsidies and the emissions trading scheme, binding targets, as well as developing pioneering energy technologies. Climate mitigation policy is now an EU competence. National abatement targets for the non-ETS sector are determined through effort-sharing negotiations between member states, and there is a single EU-wide target for the EU-ETS sector. The Energy Union, published in February 2015, outlines the European Union's framework and timetable to achieve these goals.
Implication(s):EU mandated climate and energy policies require investment, and this will result in costs for the consumer. Policy makers must balance the cost of investing in renewable sources of generation and energy efficiency measures, and the required investment in infrastructure facilitate intermittent generation versus industrial policy considerations such as competitive electricity costs. As the EU progresses towards greater network interconnection and a Single European Electricity Market, business costs in one member state could be increasingly impacted by domestic energy market and carbon mitigation policies in neighbouring states.
Current Position:Policies aimed at addressing the decarbonisation agenda must be rational, effective and cost-effective with an alignment between policy initiatives on climate, renewables and energy efficiency. The institutions of the EU need to focus on creating a post-2020 framework that provides for sustainable investment balanced with societal gain. Ibec members believe international UN climate deal marks an important step in a new international framework to reduce the risk of dangerous climate change. It recognises the need for all countries to take action to prevent global temperatures rising. It also provides for co-operative international mechanisms between developed and less developed countries, recognising the key role of the private sector in delivering low carbon solutions. The agreement will come into legal force once ratified by a quorum of conference parties.
Before Paris, EU leaders committed to reduce greenhouse gas emissions by at least 40% compared to 1990 levels, and increase energy efficiency and renewables by at least 27% by 2030. Individual member state targets in the non-ETS sector (agriculture, buildings, transport and waste) will be decided in 2016. Uncertainty remains over what substantive parts of the agreement means in real terms.
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Last Updated: 01/18/2016