How to Reach the New Green Deal Targets: Analysing the Necessary Burden Sharing within the EU Using a Multi-Model Approach

Felix Kattelmann, Jonathan Siegle, Roland Cunha Montenegro, Vera Sehn, Markus Blesl and Ulrich Fahl
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Felix Kattelmann: Institute of Energy Economics and Rational Energy Use (IER), University of Stuttgart, 70565 Stuttgart, Germany
Jonathan Siegle: Institute of Energy Economics and Rational Energy Use (IER), University of Stuttgart, 70565 Stuttgart, Germany
Roland Cunha Montenegro: Institute of Energy Economics and Rational Energy Use (IER), University of Stuttgart, 70565 Stuttgart, Germany
Vera Sehn: Institute of Energy Economics and Rational Energy Use (IER), University of Stuttgart, 70565 Stuttgart, Germany
Markus Blesl: Institute of Energy Economics and Rational Energy Use (IER), University of Stuttgart, 70565 Stuttgart, Germany
Ulrich Fahl: Institute of Energy Economics and Rational Energy Use (IER), University of Stuttgart, 70565 Stuttgart, Germany

Energies, 2021, vol. 14, issue 23, 1-24

Abstract: The Green Deal of the European Union defines extremely ambitious climate targets for 2030 (−55% emissions compared to 1990) and 2050 (−100%), which go far beyond the current goals that the EU member states have agreed on thus far. The question of which sectors contribute how much has already been discussed, but is far from decided, while the question of which countries shoulder how much of the tightened reduction targets has hardly been discussed. We want to contribute significantly to answering these policy questions by analysing the necessary burden sharing within the EU from both an energy system and an overall macroeconomic perspective. For this purpose, we use the energy system model TIMES PanEU and the computational general equilibrium model NEWAGE. Our results show that excessively strong targets for the Emission Trading System (ETS) in 2030 are not system-optimal for achieving the 55% overall target, reductions should be made in such a way that an emissions budget ratio of 39 (ETS sector) to 61 (Non-ETS sector) results. Economically weaker regions would have to reduce their CO 2 emissions until 2030 by up to 33% on top of the currently decided targets in the Effort Sharing Regulation, which leads to higher energy system costs as well as losses in gross domestic product (GDP). Depending on the policy scenario applied, GDP losses in the range of −0.79% and −1.95% relative to baseline can be found for single EU regions. In the long-term, an equally strict mitigation regime for all countries in 2050 is not optimal from a system perspective; total system costs would be higher by 1.5%. Instead, some countries should generate negative net emissions to compensate for non-mitigable residual emissions from other countries.

Keywords: Green Deal; burden sharing; effort sharing regulation; emissions trading system; energy system analysis; TIMES PanEU; NEWAGE (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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