Policy options for greenhouse gas reduction

In pursuit of the EU’s 2020 and 2030 energy and climate ambitions and the targets of the Paris climate agreement, climate policies are being deployed in all EU member states. While each country has its own climate policy framework, there could be benefits in joining forces in some areas to speed up the necessary developments. Coordination and alignment of policy measures within a group of neighbouring countries can increase policy effectiveness while reducing carbon leakage effects and competitive disadvantages. This report, commissioned by the Dutch Ministry of Economic Affairs and Climate Policy, provides a broad review of policy measures for which synergy effects might be achieved through cross-border coordination.

As a first step, an overview of the most effective existing and scheduled climate policy instruments and measures was developed for nine North-West European countries: the Netherlands, Belgium, Luxembourg, the United Kingdom, France, Germany, Austria, Switzerland and Denmark. Based on this list, policies were identified that could benefit from transnational cooperation among this group of countries. The measures concerned cover all sectors and include, for example, phasing out coal-fired power stations, a carbon price floor, higher energy taxes for industry and higher transport fuel taxes. The final step in the analysis was an assessment of potential policy gaps, including sectors where current policy efforts are still limited compared with the emissions reductions required over the coming decades. In addition, various new technologies may become key to meeting the longer-term climate targets but are not yet covered by existing policies.

This analysis resulted in a range of potential new policies and measures that could achieve significant greenhouse gas emission reductions in North-West Europe. For example, policies for new technologies like power-to-hydrogen and energy storage could benefit from a transnational approach, as would consumer policies in the agricultural sector.

The results of this quick scan can be used as a basis for discussions with countries that share the Dutch ambition to speed up CO2 mitigation in the coming decade.