Legitimizing, Rational, or Enlightening? Economic Modelling, Policy Innovation, and the Adoption of the 55% Emission Reduction Target in the European Union

One of the major concerns about low-carbon policy innovations are uncertainties about economic impacts. These are increasingly addressed in policy-making processes, for example in the form of ex-ante impact assessment studies and rely mostly on economic modelling. Yet, how economic modelling actually influences policy processes and whether it enables or hinders policy innovations is not well understood. In this study, we address this knowledge gap through an empirical analysis of the role of economic modelling in the adoption of the 55% emission reduction target for 2030 of the European Union (EU). We provide a brief review of the literature on knowledge utilization in the policy sciences as a conceptual frame. Our empirical case study involved an analysis of 28 policy documents and news articles, and 12 semi-structured interviews with economic modelers and policymakers that were closely involved in the policy process. Our findings indicate that insights from the economic analysis informed decision-making on different elements of policy and were used by different actors in different ways. First, they were utilized by the European Commission to legitimize a previously articulated preference for the 55% emission reduction target as a policy objective. Second, the Parliament utilized the modelling results in in an enlightening way to motivate higher targets. Third, they were used rationally by the Commission for the choice of policy instruments in the following policy cycle of the “Fit-for-55” package. Further, economic modelling influenced the dynamics among different actors in the policy process. We contribute to the literature on the use of evidence in policy-making by highlighting the multiplicity of evidence uses between different actors and elements of policy design with an empirical case study of economic modelling.