Distributional choices in EU climate policy: 20 years of policy practice

Abstract

The distributional choices of the EU in three policy phases, spanning 20 years, are examined: the negotiations on emissions reduction targets for the EU15 under the first commitment period of the Kyoto Protocol, the negotiation of National Allocation Plans for Phase II of the EU Emissions Trading Scheme (ETS) between 2008 and 2012, and the formulation of the 2008 Climate and Energy Package for the period 2013–2020. A flexible and pragmatic framework, consisting of the normative principles of capacity, responsibility, equality, and need, is used to elucidate the indicators and policies used in deciding how the EU Member States are to share the cost of meeting climate policy objectives. The analysis extends the literature by applying a common analytical framework across the three different policy phases and provides a structured basis for the assessment of what the EU and other jurisdictions can learn from them.

Policy relevance

Distributing the cost of climate policy is a key policy concern, both at the domestic and international level. The EU has more than 20 years of policy experience with such distributional choices and is also preparing the next steps of its policy, where distributional choices will again be central. A framework is developed to assess the modalities and rationale for EU distributional choices in order to inform the future climate policy of the EU and other jurisdictions.

Keywords:

• distributional issues
• effort sharing
• EU climate and energy package
• EU climate policy
• EU ETS

Notes

In EU policy, the issue of how EU Member States share the cost of meeting the EU's own climate objectives is often referred to using the term ‘effort sharing’. However, as this term came to the fore in the context of the 2008 CEP, and is largely associated with the distribution of GHG reduction targets in the non-emissions trading scheme sector, the broader term ‘distributional choices’ is used here.

It should be noted that Soltau (2011) also includes a fifth: principles for a working consensus, i.e. a pragmatic principle.

These are Portugal, Ireland, Greece, and Spain, which were the major recipients of funds from the EU Cohesion policy before the CEE Member States joined the EU.

Bulgaria, the Czech Republic, Estonia, Hungary, Latvia, Lithuania, Poland, Romania, the Slovak Republic, and Slovenia.

Bhatti, Lindskow, and Pederson (2010) have regressed Kyoto targets onto various hypothesized determinants of the negotiated targets, and found support for the hypothesis that the prospect of EU membership led to the adoption of tougher targets than those adopted by other former Communist Economies in Transition (e.g. Russia, Ukraine).

2005 verified emissions are not available for Romania, Bulgaria, and Malta. Data from 2007 for Romania and Malta and data from 2009 for Bulgaria were used.

As for Figure 1, 2005 data from Romania, Malta, and Bulgaria are not available and so 2007 data for Romania and Malta and 2008 data for Bulgaria were used.

To access the extra 1% of CDM credits, Member States must comply with one of the following criteria as set out in Article 5, Sections 5a–5d of the European Parliament and the Council of the EU (2009b): the direct costs of the overall package exceed 0.7% of GDP according to the Commission's IA; there is an increase of at least 0.1% of GDP between the target actually adopted for the relevant Member State and the cost-effective scenario according to the Commission's IA; more than 50% of the total emissions covered by this Decision for the Member State concerned are accounted for by transport-related emissions; the Member State concerned has a renewable energies target for 2020 in excess of 30% as set out in Directive 2009/28/EC (European Parliament and the Council of the EU, 2009c).

Bulgaria, Romania, Latvia, Lithuania, Slovakia, Estonia, Hungary, the Czech Republic, Portugal, Greece, Spain, Austria, Finland, Denmark, and Ireland.

Eurostat: GDP per capita in purchasing power standards (tec00114) and Energy intensity of the economy (tsdec360).