Burden sharing and cohesion countries in European climate policy: The Portuguese example

Suraje Dessai and Axel Michaelowa

No 89, HWWA Discussion Papers from Hamburg Institute of International Economics (HWWA)

Abstract: The EU has been a leader in international climate policy. However, due to activities of interest groups, domestic action, an area which the EU has strongly defended, is proving difficult to carry out, particularly for cohesion member states. Although their behaviour resembles free-riding, at least in an international dimension, Cohesion country targets are actually challenging in the face of their economic boom. Portugal accepted accepted limiting its GHGs emissions to a 27% increase up to 2010 whereas current projections lead to doubt that Portugal is capable of achieving its target unless more stringent policies are implemented. Underdeveloped institutional capacities and lack of abatement interests accompanied by the rapid economic and road traffic growth are the main causes of the inefficiency of current "quasi-policies". If Portugal is unable to comply, a consistent EU-wide climate policy is impossible and the risk that the EU as a whole fails to reach its Kyoto targets rises considerably. To reduce this risk, the EU could try to introduce strong enforcement rules and sanctions to prevent member states overshooting their targets. This will be extremely difficult as past efforts to enforce EU regulation have shown. A second way may be to use EU enlargement to enlarge the bubble by the accession countries and thus gain a safety margin. The third and easiest way would be to give the EU Commission the power to buy emission permits from abroad if the target is not reached and reduce EU transfers to those countries that have not reached their target proportionally to their degree of nonattainment. This would open a safety valve while leaving an incentive to countries not to default on their target. Even if the EU manages to keep its bubble intact, Portugal represents the problem of future high emitters which will be followed by developing countries in the near future. Moreover, Portugal also represents an equity dilemma vis-?-vis developing nations as it will be difficult to ask the latter to limit their emissions when a developed country such as Portugal will have them increased.

Date: 2000
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