Europe's next economy: The benefits of and barriers to the low-carbon transition

~ 9532 ~ Europe's next economy: The benefits of and barriers to the low-carbon transition ~ David Nash David Nash, 14001 ~ 9559 ~ Will Straw ~ Will Straw Will Straw, ~ 9622 ~ Will Straw ~ Reuben Balfour Reuben Balfour
Published Mon 4 Jun 2012
This report examines the competing views of the transition to a low-carbon economy of businesses across Europe. With partner thinktanks in France, Germany, Spain and Poland, we brought together businesses and industry associations in four roundtable discussions.

Businesses in each country were characterised by their own domestic concerns. In France, much of the debate centred on the presidential election, the economic crisis, protectionism and energy supply. In Germany, the debate focused on the uncertainty brought on by the German government's decision to cease nuclear production, which has caused concern around rising energy prices. In Spain, discussions focused on the eurozone crisis and Spain's austerity measures, which appeared to hamper climate change policy. In Poland, much of the debate focused on Poland's reliance on coal as a source of energy making reducing emissions in Poland economically and politically difficult.

However, our findings show that even with these national differences in mind, the debates about climate change and the level of the EU's ambition are similar throughout the continent. Indeed, in every country there is a dichotomy of businesses set to benefit from the low-carbon transition and those that believe they will lose out.

The paper makes the following recommendations:

  1. Expand the EU ETS to include imported energy-intensive goods: serious consideration should be given to extending the ETS into imported goods from energy-intensive sectors if binding emissions commitments for 2020 are not agreed by 2015.
  2. Raise the price of carbon: the EU should act to raise the price of carbon, which is worryingly low.
  3. Focus the EU's multiannual financial framework on innovation: in addition to the demand-side measures described above, the EU should develop a set of supply-side policies.
  4. Protect ETS revenues for low-carbon projects: the ETS is partly undermined by concerns that it has become a fiscal policy to raise revenue rather than a climate policy to reduce emissions. More revenue from the EU ETS should be directed towards low-carbon projects like the EU's NER 300 programme.
  5. Provide industry with greater regulatory certainty: industry participants from France, Germany and the UK called for more stability in the EU's regulatory setting process.
  6. Maximise the EU's role as a standard setter: for example, the EU has been successful in setting new vehicle emissions standards for passenger and light commercial vehicles.
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