Energy and Climate Policy: Quantifying the Benefits of a European Approach
Key Messages
- The European Union Emissions Trading System has considerable monetary and environmental advantages over national systems.
- I compare three different policy scenarios to examine the impact of joint European efforts beyond 2030: Rapid Decarbonization, 2050 Climate Neutrality, and a Break scenario.
- A common European Union approach leads to monetary advantages generated by lower electricity prices and reduced need for subsidies.
- The simulations quantify the total benefits for Europe over the period 2024–2050 at EUR 248 billion, for Germany at EUR 66 billion.
Abstract
The European Emissions Trading System is a cornerstone of the EU climate policy and its development is set until 2030. However, it is unclear what will happen afterwards. This policy brief compares three different scenarios: Rapid Decarbonization, 2050 Climate Neutral and a Break scenario. The simulations quantify the total benefits of a joint European effort at EUR 248 billion between 2024 and 2050. In the worst-case scenario, total costs could reach EUR 8.629 trillion.
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Citation
Mathias Mier: “Energy and Climate Policy: Quantifying the Benefits of a European Approach,” EconPol Policy Brief 58, May 2024.