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Seven Charts on Climate Policies for Key Sectors in the European Union
September 24, 2020
Electric car charging on Oslo street, Norway. Specific policies for key sectors such as transport can help the EU achieve its climate targets. (photo: anouchka/iStock)
The European Union remains a global leader in reducing greenhouse gas emissions. The European Commission has proposed a significant cut in emissions by 2030 and net zero emissions by 2050.
Meeting the bold new targets will require strong and sustained policy efforts, including more ambitious carbon pricing and sector-specific complementary policies. The large stimulus packages put together by European governments to facilitate the recovery from the COVID-19 crisis also provide an opportunity to intensify the adoption of climate-friendly policies.
The EU Emissions Trading System (ETS) remains the main tool to further cut emissions in the power and industry sectors. While it provides certainty in emission reductions, the implied carbon price can be volatile. Introducing a carbon price floor would provide a predictable price signal to guide investment decisions. Regulations and standards could provide additional nonprice incentives to reduce emissions.
While higher carbon prices in all sectors will help, they may not be enough to address some sector-specific obstacles to reducing emissions. Complementary policies will therefore be crucial.
