Interaction between Climate, Emissions Trading and Energy Efficiency Targets

Abstract

The European Union has set a system of climate and energy targets comprising target values for greenhouse gas emissions (GHG), Emission Trading Sectors ETS and non-ETS sectors, energy efficiency and renewable energies until 2020. A new framework up to 2030 is just being developed. We analyse what lessons can be learned from the EU 2020 target system and how a new 2030 framework could be designed coherently. We derive a coherent target system for 2030 from a bottom-up assessment of energy efficiency potentials. Thus we show that ambitious energy efficiency and renewable energy targets also guarantee significant reductions in greenhouse gas emissions of 47–60% compared to 1990. ETS sectors can contribute significantly to the GHG reduction, provided that a stabilisation of the carbon price can be reached. An alternative design with a 40% GHG emission reduction as the only headline target, as currently debated, will not exploit all cost-effective energy saving potentials and so not take advantage of the macro-economic co-benefits of energy efficiency either.