Quantitative assessment of EU climate policy
This study delves into the impact of EU climate policy over the period 2005-2020. The European Council’s approval of the climate and energy package in 2008 marked a significant milestone in the EU’s commitment to combat climate change. With the EU20-20-20 targets in mind – a 20% reduction in greenhouse gas emissions, a 20% share of renewable energy, and a 20% improvement in energy efficiency by 2020 – several policy packages were implemented. Our report presents a comprehensive ex post evaluation of these policies, utilising a combination of top-down and bottom-up approaches to assess their effectiveness.
The top-down approach involved a decomposition analysis of greenhouse gas emissions using the Kaya identity, allowing us to understand the contributing factors to emission changes. The analysis – that contains data on the period 2009-2018 – reveals that emissions mainly increased in this period due to factors that typically fall outside the domain of climate policy (such as population growth, GDP growth, and structural changes in the economy). But other factors – energy efficiency, renewable electricity generation, and carbon intensity reductions – are part of the climate policy domain: for instance, the EED affecting energy savings (energy use per unit of value added) and the RED and ETS directly reducing carbon intensities (carbon emissions per unit of energy). The results at the EU level suggest that energy savings were an important contributing factor to emission abatement. Additionally, the EU’s transition towards renewable resources and the reduction of carbon-intensive fuels contributed to a positive overall impact on emissions.
Our bottom-up analysis consisted of a thorough literature review, examining the effectiveness and efficiency of EU climate policy instruments. While quantitative (ex post) evaluations were limited, qualitative evidence suggests that EU policies made a significant contribution to achieving the headline targets. Policies directly related to the 20-20-20 targets – such as the Emissions Trading System (ETS), Energy Efficiency Directive (EED), Renewable Energy Directive (RED), and Energy Savings Directive (ESD) – demonstrated high effectiveness. Other policies indirectly related to the targets – such as the Fuel Quality Directive (FQD), Energy Performance of Buildings Directive (EPBD), CO2 emission performance standards for cars, and the Ecodesign Directive – also played a role in reducing greenhouse gas emissions, increasing renewable energy, and improving energy efficiency.
As part of the bottom-up approach, we also developed a monitoring framework to track progress on indicators related to EU climate policy targets, while exploring the core challenges of Innovation, Investment, Infrastructure, and Integration (the 4 I’s) throughout our analysis.
Based on the combination of the top-down and bottom-up analyses, we conclude that EU climate policy generally had a positive contribution to meeting the climate targets. The top-down analysis showed that a significant share of the decrease in CO2 emissions can be attributed to energy efficiency, whereas renewable electricity and other carbon intensity effects contributed to a lesser extent to the decrease in CO2 emissions. This complements the findings in the bottom-up analysis. The bottom-up analysis showed that a positive contribution of EU climate policies to progress on the headline targets seems likely, but that it is difficult to quantitatively attribute climate policy to changes in GHG emissions, the share of renewable energy, and especially energy efficiency.
The report can also be found on the 4i-TRACTION website.