Across Europe there is an increasing concern over rising energy prices and their impacts on industry, households, and national economies. Many believe that relaxing Europe’s commitment to a clean energy future is the only way to reduce energy costs. This study demonstrates that there is a better path: by focusing on the smart use of carbon revenues, instead of merely hoping to drive change through carbon prices, Europe can meet ambitious clean energy goals at lower costs to families, businesses, and national economies. This study shows that energy efficiency programmes can save several times more carbon per consumer Euro spent than would just raising carbon prices through the Emissions Trading Scheme (ETS). It also finds that a combined strategy of a tighter cap along with targeted energy efficiency programmes can deepen carbon savings towards 2030 goals with minimal or neutral effects on power bills and the economy more generally. This is provided, however, that the ambition levels of the ETS cap and energy efficiency strategies or programmes are sufficiently stringent, relatively evenly matched in order to be complementary, and, very importantly, enforceable.
Cap and Invest: The Economic Benefits of Investing EU ETS Auction Revenues into Energy Savings
January 17, 2014
- Sarah Keay-Bright