Should We Reform the EU Climate Policy Framework?

Though to-date the EU has played a very significant leadership role in international negotiations to reduce greenhouse gas (GHG) emissions, the emission-reducing performance of individual EU Member states has often been less than stellar. Based on an analysis of the most successful policy instruments, this paper argues that EU policy efforts could benefit from three important policy innovations. The following strategies—the adoption of an EU-wide FIT (feed-in tariff), the introduction of an EU-wide carbon tax and the introduction of more flexibility in the trading of carbon credits—could significantly improve the rapidity of emission reductions, their relative cost-efficiency and help spread burden-sharing more evenly across individual sectors and EU Member states. In focusing on these key strategies, important questions are raised about the effectiveness of EU and Kyoto-style commitments. To-date, the commitment strategy has had the smallest impact on actual emission reductions. Without these policy innovations, EU climate and emissions reduction strategies miss several important opportunities. By promoting this set of strategies, the EU could make an invaluable contribution to future global efforts to stabilize atmospheric GHG concentrations.