Carbon Flows between the EU and Eastern Europe: Baselines, Scenarios and Policy Options

Abstract

We develop baseline data and an analytical framework for understanding the role that flows of carbon between the Former Soviet Union/Commonwealth of Independent States (FSU/CIS) and the European Union (EU) may have in enabling the EU to meet major reductions in greenhouse gas (GHG) emissions in the medium-term future. The paper sets out an analysis of contemporary flows of carbon between the EU, EU Candidate Countries and the FSU/CIS, and outlines two scenarios for investigating how flows may develop in the future under different assumptions about climate and energy policy. The 'trading' scenario assumes unconstrained trade in tangible (mainly gas) and intangible (tradable emissions permits) flows of carbon from the FSU/CIS to the EU. The 'autonomy' scenario assumes limits to carbon flows and a subsequent requirement for high levels of domestic de-carbonisation in the EU (e.g. energy efficiency and indigenous energy sources). We conclude that neither scenario is feasible or desirable, but that even a combined approach, which sees trade complemented by tough domestic action, still requires far greater efforts than are currently planned.