Economic Analysis of Measures for GHG Emission Reduction

Abstract

The European Union, as a signatory to the Paris Agreement, has approached the action against greenhouse gas (GHG) emissions and climate change quite ambitiously, striving to achieve climate neutrality by 2050. Extension of the European Green Deal policy implementation to the Western Balkans can only increase the chances of the climate neutral agenda. Expectations from Montenegro in the coming period are transposable to other Western Balkans countries as they are urged to start implementing the Paris Agreement by establishing appropriate policies and measures. In this regard, this paper presents the analysis of the financial and economic analysis results of measures to reduce GHG emissions in Montenegro. With this respect, least cost analysis—cost effectiveness analysis and cost–benefit analysis were conducted. The analysis results indicated that due to the thermal power plant reconstruction, increased use of renewable energy sources and measures to increase energy efficiency, the largest reduction in GHG emissions in Montenegro in the next 10 years is expected in the energy sector.