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Does Europe need a renewables target? – yes, but it should be defined in terms of innovation

February 8th, 2014 by Georg Zachmann, Research Fellow, Bruegel

The discussion on whether the EU needs a new renewables target beyond 2020 is gaining traction. The proponents argue that a target for 2030 would give the visibility needed for long-term investments all along the value chain (e.g. into network and storage infrastructure). That is, without a firm political timetable for the roll-out of renewables, the cost of deployment might be much higher. The opponents of firm deployment targets argue that having such targets under an emission trading system is overly costly (e.g., Robert Stavins) and that artificially high demand is creating excess rents in those parts of the value chain where supply is slow to react.
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Empirics of energy competitiveness

October 10th, 2013 by Georg Zachmann, Research Fellow, Bruegel

The loss of competitiveness because of elevated energy costs is concentrated in a limited number of sectors. The cost of subsidising energy-intensive companies might be greater than the benefits. Continue reading »

Why the European Emissions Trading Scheme needs reforming, and how this can be done

May 16th, 2013 by Raphaël Trotignon, Université Paris Dauphine

Following the vote in the European Parliament, the Commission will not be able to quickly implement “backloading”, the point of which is to send a very short-term signal to the market pending further structural reforms. There still remains the question of what actions can be taken to revitalize the CO2 allowances trading system. Continue reading »

Energy transition: ambiguity of the notion of variable geometry

April 21st, 2013 by Christian de Perthuis, Université Paris Dauphine

Since the Copenhagen conference of December 2009, the actors involved in climate negotiations seem be engaged in a game of mistigri, in which everyone is in a hurry to pass on any card that exposes them to the slightest commitment. The overall result is that deadlines are being pushed back, and the prospect of an international agreement coming into force from 2020 now seems optimistic in the extreme. The economic crisis has accentuated this turning away from the climate issue, or at least its decline in policy makers’ scale of priorities. A curious semantic shift has accompanied this phenomenon: there is much less talk of global warming, while the media have turned their attention to the concept of energy transition. This shift is not innocuous, and may lead, if this novel concept is not defined more rigorously, to a justification of our collective resignation in the face of climate risk.
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Has the EU ETS induced low-carbon innovation?

February 21st, 2013 by Antoine Dechezlepretre, Grantham Research Institute on Climate Change, London School of Economics

The EU ETS is the main instrument of European climate policy, and many policymakers envisage it as a driving force of the EU’s transition to a low-carbon economy. By putting a price on emissions, the scheme is expected to encourage heavy polluters to develop new low-carbon technologies. At first glance it is encouraging to notice, then, that patenting for low-carbon technologies has surged in Europe since 2005. When analyzing new data we find compelling evidence that the EU ETS has indeed encouraged regulated companies to develop new low-carbon technologies, but this effect is concentrated among too few companies to account for the surge in low-carbon patenting.

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Decarbonisation is no 100 metre race

November 20th, 2012 by Georg Zachmann, Research Fellow, Bruegel

This week, the European Climate Commissioner made a proposal to stabilise the European Union’s emission trading system – a market for greenhouse gas emission allowances that has been in place since 2005. Under the proposal, allowances worth six month of EU emissions (900 million tonnes) would be temporarily taken out of the trading system, and sold in 2019 and 2020 rather than 2013-2015.
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A sustainable framework for biofuels in the European Union

October 4th, 2012 by Ignacio Perez-Arriaga, Comillas University

Biofuels are a key component of the EU strategy to improve the efficiency in transport, one of the sectors with a larger energy use and carbon emissions in Europe, and for which the European Commission has set very ambitious reduction objectives Continue reading »

How to refurbish all buildings by 2050

July 26th, 2012 by Leonardo Meeus, Florence School of Regulation

Buildings account for 40% of the total energy consumption of the EU and they are one of the most significant sources of greenhouse gas emissions (36% of the EU total). In order to achieve the 2050 EU building sector target, the energy performance of existing buildings will need to be improved substantially.

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Wind’s Mid-life Crisis

July 17th, 2012 by Fereidoon Sioshansi, EEnergy Informer

As new technologies go, wind has enjoyed 3 decades of continuous innovation, performance and reliability improvements and falling costs – benefits of economies of scale, technological advancements and learning by doing. The law of diminishing marginal returns, however, appears to have gotten in the way of further cost reductions.

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Wind power: A model of successful public policy?

July 2nd, 2012 by Matthieu Glachant, Ecole des mines de Paris

Wind energy has been developing very quickly in the past years. Installation of wind turbines grew at an annual average rate of 30% between 2000 and 2009 and global installed capacity now represents 238 GW, of which 62 GW are in China, making it the largest wind energy provider worldwide. As a result, a significant fraction of electricity is now produced by wind in certain areas (e.g., 6% in the European Union, 3% in the USA).
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