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Environmental Economics and Policy

EU policies

Climate change mitigation (GHG reduction)

Many European countries have adopted national programmes aimed at reducing emissions. Similar EU-level policies and measures include:

  • increased use of renewable energy (wind, solar, biomass) and combined heat and power installations;
  • improved energy efficiency in buildings, industry, household appliances;
  • reduction of CO2 emissions from new passenger cars;
  • abatement measures in the manufacturing industry;
  • measures to reduce emissions from landfills.

The EU climate and energy package was adopted in 2009 to implement the 20-20-20 targets endorsed by EU leaders in 2007 – by 2020 there should be a 20 % reduction of GHG emissions compared with 1990, a 20 % share of renewables in EU energy consumption, and energy improvement by 20 %.

The core of the package comprises four pieces of complementary legislation.

  1. Revision and strengthening of the EU Emissions Trading System (ETS): a single EU-wide cap on emission allowances from 2013 onwards, with a linear annual reduction until 2020 and beyond; the progressive replacement of free allocation of allowances by auctioning; and an expansion of the system to new sectors and gases.
  2. An “Effort Sharing Decision” for emissions from sectors not covered by the EU ETS, e.g. transport, housing, agriculture and waste. Each Member State will have to achieve a binding national emissions limitation target for 2020. Overall, these national targets will cut the EU’s emissions from the non-ETS sectors by 10 % by 2020 compared with 2005 levels.
  3. Binding national targets for renewable energy: this will help reduce EU’s dependence on imported energy as well as bring down GHG emissions.
  4. A legal framework to promote the development and safe use of carbon capture and storage (CCS).

The package creates pressure to improve energy efficiency but does not address it directly; the EU’s energy efficiency action plan does.