Is the current EU climate instrument mix adequate?

Abstract

The EU is on track to meet the 2020 targets for greenhouse gas emissions reduction and renewable energy. However, climate policies have not been the main drivers of emission reductions but the economic crisis. *The price signal of the EU ETS is not in line with the expected role of the scheme in the transition to a low-carbon economy. However, it is the only relevant interregional instrument in the world to reduce CO2 emissions. *Energy efficiency polices are far from meeting their 2020 targets. *The current instrument mix has been successful in increasing the share of renewables. However, renewables support schemes have generally generated very high abatement costs in the short term. *The cost-effectiveness of the current instrument mix is low. The policy mix has not succeeded in generating a uniform carbon price across sectors and emitters. *The feasibility of deeper emission reductions will depend crucially on the public acceptance and design of more stringent climate policies.