Policy Brief final results & conclusions of the research project ENTRACTE

Policy Brief on EU Climate Policy Insights and Interactions launched at ENTRACTE Final Conference

The ENTRACTE policy brief offers insights relating to the future of European climate policy, drawing directly from research undertaken as part of the FP7 funded research project ENTRACTE. The principal aim of ENTRACTE was to understand climate and energy policy interactions in Europe, and acknowledging those interactions, to conduct research that would support the identification of a feasible and effective policy mix to achieve Europe’s ambitious long-term climate targets.

The detailed research outputs are accessible through the project website and individual ENTRACTE deliverables are referenced throughout this policy brief. Selected headline messages from the research that are presented in the policy brief include:

  • Policy interactions are numerous and unavoidable. They are a fact of life in policy and no different in effect than market interactions. Our research shows that they can as easily reduce costs, by overcoming market barriers, as they can increase costs, by constraining cheaper options.
  • The most sustained recession since the 1930s has been the single largest contributor to reducing the levels of carbon emissions from what they were expected to be at this point in time, and this has in turn lowered the cost of meeting the European Emissions Trading Scheme (EU ETS) cap. However, our research, like that of others, shows that the ETS has reduced European carbon emissions even farther, perhaps by as much as 15% below what they would otherwise have been in the absence of this mechanism.
  • Innovation is the key to long-term cost reductions and our research shows that existing climate regulation, of all kinds, has stimulated innovation in emission-reducing technology. There is, however, no evidence from the research that economy-wide productivity has been either increased or decreased by this regulation and the associated innovation that it has triggered within the market.
  • Given the consensus in the literature that the EU ETS has had little to no effect on competitiveness, the ENTRACTE research focused in on issues involved in implementing border carbon (or tax) adjustments should they become necessary as EU ambition increases and should major trading partners not take commensurate measures. The research shows that the design requirements for effective border carbon (or tax) adjustments are extremely challenging, and identifies an immediate need to develop the means to track embedded emissions and understand the complex domestic effects of such adjustments.

The policy brief was launched at the ENTRACTE final conference in Brussels organised by its project partner EnvEconin the end of September 2015.

The one day event focused upon presenting concise policy relevant messages and evidence from the completed research project, and thereby facilitating discussion and networking amongst high-level stakeholders and policy makers across a range of clearly defined subjects.

The conference was introduced by the scientific coordinator Andreas Löschel, University of Münster & Centre for European Economic Research, and continued with six sessions around key topics, such as European climate policy interactions, the role of the ETS and stimulating innovation. Each session was presented by one partner of the project consortium and closed with a discussion on each topic involving speakers and panellists. The conference finished with a response from Jos Delbeke, Director-general of the Directorate-General for Climate Action (CLIMA) at the European Commission.

Eurice is the management partner of ENTRACTE and contributes to the successful implementation of the project goals.

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Juliane Roßbach
European Research and Project Office GmbH
Tel.: +49 30374415837
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