Regional Climate Policy Analysis in the EU Member Country Germany

Why carbon leakage matters and what can be done against it

Does the European Union energy policy support progress in decoupling economic growth from emissions?

Environmental, Social, and Governance (ESG) is a market for environmental criteria that has recently attracted the attention of policymakers and in particular European Union (EU) countries to improve environmental quality. In the context of the EU Sustainable Development Goals, this study aims to examine the impact of climate risk uncertainties (transitional (TRI) and physical (PRI)), carbon allowances (EU ETS), and technology index (MSCI) on the ESG market. To this end, the study uses a quantile-on-quantile regression and its multivariate version for the period from November 28, 2007, to January 05, 2023. The results show that TRI and PRI increase ESG market development at higher quantiles, while EU ETS and technological progress reduce ESG progress. This shows that the risk of climate change requires the introduction of stricter environmental standards in EU countries, while the EU ETS and technological progress provide environmental benefits that reduce the need for the ESG market.

Analysis of the efficiency and structure of energy consumption in the industrial sector in the European Union countries between 1995 and 2019

With the EU ETS 2 a new EU-wide emissions trading system is introduced that covers the greenhouse gas emission of the buildings and road transport sectors, i.e. sectors the decarbonization of which has so far been the responsibility of the Member States under the Effort Sharing Regulation. Since they will remain responsible for the achievement of their national greenhouse gas emission reduction targets under that regime, the question arises whether the Member States can maintain or introduce additional carbon pricing instruments alongside the new EU ETS 2. Hence, this paper examines the legality of such an approach, by assessing relevant provisions of EU secondary and primary law. Without going deep into the economic and political considerations, it concludes that from a legal perspective, the coexistence of national carbon pricing instruments and the EU ETS 2 is not prohibited.With the latest reform of the EU Emissions Trading System Directive (ETS Directive), the European Union (EU) has introduced a new EU emissions trading system for buildings and road transport (EU ETS 2)1. The decarbonization of those sectors traditionally falls within the responsibility of the EU Member States under the regime of the Effort Sharing Regulation (ESR). The ESR introduces legally binding national greenhouse gas (GHG) emission reduction targets. Hence, over the last few years, the Member States have introduced different measures in order to reach their targets. Those include carbon pricing instruments, understood as measures that put a price on the emission of GHG and thus create an incentive to reduce those emissions. Carbon pricing instruments include carbon taxes, as well as emissions trading systems2. With the introduction of the new ETS 2, the question arises whether the Member States can maintain (or introduce) such national carbon pricing instruments in parallel to the new EU ETS 2.

As part of its Green Deal, the European Commission is considering the introduction of border carbon adjustments and alternative measures. The measures, which would primarily apply to basic materials like steel and cement, pursue a double objective: they are aimed at enhancing the effectiveness of carbon pricing for the transition to climate neutrality but also at avoiding carbon leakage risks. When implementing carbon adjustment mechanisms and alternative measures, various design options might be considered to reform the EU Emissions Trading Scheme (EU ETS). In this paper, we have decided to focus on three main models, which help to highlight the main differences between the available options. Under the first model, importers of basic materials would be required to surrender carbon allowances at the level of a product benchmark or, where lower, at the verified level of foreign carbon intensity. In parallel, allocation of free allowances would be phased out. Under the second model, a symmetric adjustment mechanism for exports and imports would be adopted, including refund to exporters for the carbon costs incurred on basic materials embodied in products. Finally, under the third model, the EU ETS would be complemented with a climate contribution charged for materials sold in the European Union (EU) at the product benchmark level related to the carbon intensity of each material. The free allowance allocation regime would then be modified to be directly linked to the volume of material production at the product benchmark level. In order to contribute to the current policy debate, we evaluate for each of these three models, their legality, coherence with EU climate objectives, effectiveness in carbon leakage prevention, potential international implications, as well as their administrative complexity and compliance costs.

Emissions trading is arguably the lynchpin of EU (European Union) climate policy. In January 2005 the EU adopted a cap-and-trade emissions trading system, through which a certain emission cap was set and a fixed number of emission allowances distributed amongst installations in the various Member States. Although the system has encountered some problems, the EU has not lost faith in it. In fact, even more now depends on its performance – not least the EU’s credibility in international climate politics – than when it was first adopted. The system is undeniably innovative. Prior to 2005, only a few countries had experimented with emissions trading, and no one had ever attempted to employ it at a supranational level. Against this background, this report seeks to analyse and assess the functioning of the EU ETS from a political and legal perspective, and to explore how capable the scheme is to deal with future challenges. To this end, the report examines the past, present and future of emissions trading in the EU.

Neoliberal capitalism has extended the use of markets to address climate and energy issues. Carbon trading characteristically exemplifies the neoliberalization of climate policy. This paper discusses the workings of the European Union’s Emissions Trading System (EU ETS) in the European Union (EU) with a focus on its application in crisis-ridden Greece. Beyond environmental effectiveness and distributional effects, the paper explores the interactions of the EU ETS with crisis, austerity programs, energy poverty, and uneven development. Despite adjustments and changes, the EU ETS continues to indicate limited environmental effectiveness and unjust distributional effects. Moreover, by forging a centralized neoliberal transition to a low-carbon economy without consideration of the issues faced by unevenly developed and crisis-stricken EU members such as Greece, the EU ETS leads to additional disturbances and problems for the Greek economy as a whole, its pauperized working people, and its energy and climate options to reduce emissions on its own potential, needs, and priorities.

Optimal allocation of the EU carbon budget: A multi-model assessment

Editorial: Governing the EU's climate and energy transition through the 2030 Framework

The EU Response to COVID-19: From Reactive Policies to Strategic Decision-Making.

The introduction of electromobility contributes to an increase in energy efficiency and lower air pollution. European countries have not been among the world’s leading countries in this statistic. In addition, there have been different paces in the implementation of electromobility in individual countries. The main purpose of this paper is to determine the directions of change and the degrees of concentration in electromobility in European Union (EU) countries, especially after the economic closure as a result of the COVID-19 pandemic. The specific objectives are to indicate the degree of concentration of electromobility in the EU and changes in this area, especially during the COVID-19 pandemic; to determine the dynamics of changes in the number of electric cars in individual EU countries, showing the variability in this aspect, while also taking into account the crisis caused by COVID-19; to establish the association between the number of electric cars and the parameters of the economy. All EU countries were selected for study by the use of the purposeful selection procedure, as of December 31, 2020. The analyzed period covered the years 2011–2020. It was found that in the longer term, the development of electromobility in the EU, measured by the number of electric cars, is closely related to the economic situation in this area. The crisis caused by the COVID-19 pandemic has influenced the economic situation in all EU countries, but has not slowed down the pace of introducing electromobility, and may have even accelerated it. In all EU countries, in the first year of the COVID-19 pandemic, the dynamics of introducing electric cars into use increased. The growth rate in the entire EU in 2020 was 86%, while in 2019 it was 48%. The reason was a change in social behavior related to mobility under conditions of risk of infection. COVID-19 has become a positive catalyst for change. The prospects for the development of this type of transport are very good because activities related to the development of the electromobility sector perfectly match the needs related to the reduction of pollution to the environment.

(1) Background: accident rates prove the uneven development of the member countries in the area of work safety. Remedial actions and structural programmes should take into account, e.g., the level of work safety in all European Union (EU) countries. Aim: the identification of differences in the level of work safety in the production sector of EU countries, especially the so-called “old” and “new” EU countries. (2) Methods: for each country UE (in 2008–2018), the relative risk (RR) of an accident at work was determined and a comparative analysis was conducted. (3) Results: an increase in the RR of an accident at work was observed along with an increase in the GDP of a given country. It was found that the level of occupational safety in Sweden and the United Kingdom is higher than in other countries, and lower in Spain and Portugal. In the three largest economies of the EU, Germany, France, and Italy, the RR of the accident in the industrial sector in relation to the national data is one of the lowest in the entire EU, not exceeding 1.3. In The Netherlands, an increase of 1.7 RR of fatal accidents in the industrial sector was observed between 2008 and 2018. (4) Conclusions: RR in the manufacturing sector of the so-called “old” EU is higher than in the so-called “new” EU, which may result from the implementation of Industry 4.0 assumptions in the “old” EU. The presented results and conclusions may be useful in shaping the EU policy in the field of sustainable development of production sectors of individual member countries.

Constructing post-carbon institutions: Assessing EU carbon reduction efforts through an institutional risk governance approach

This paper provides a historical overview regarding the emergence, development and deepening of divergences between the European Union (EU) and the People's Republic of China (China) in reducing global aviation emissions. It focuses on their divergences on three specific issues, i.e. under which framework to tackle global aviation emissions, whether and how to reflect the Common but Differentiated Responsibilities and Respective Capabilities (CBDR-RC) principle in the design and implementation of the global market-based measures (MBMs) for international aviation and which role the International Civil Aviation Organization (ICAO) should play in offsetting these emissions. Besides, this paper explains the driving forces behind these divergences by examining both normative and economic-related factors, which have formed different stances of both sides. From a Chinese perspective, considerations about the issues of state sovereignty, fairness regarding burden sharing in tackling climate change, the development of China's aviation and aircraft manufacturing and its limited capability in promoting the large-scale SAF deployment help explain its hardline stance on reducing global aviation emissions. As for the EU, perceptions of its leading role in the global climate governance and the CBDR-RC principle, the targets of strengthening the EU ETS role in the global carbon market, and the competitiveness of the European airlines are underlying reasons behind its attempt to include the international aviation under its ETS. Moreover, the EU member states' support to the ICAO can be explained through the conformity between the emissions offsetting objectives under this organisation and the EU's current climate policies.