The European Union (EU) has undoubtedly made a big effort in developing a progressive environmental policy, but many of its own policies are still far from making a difference to climate change. The EU aims to limit its greenhouse gas emissions to 20% below 1990 levels, and to meet a 20% renewables target of total energy supply by 2020 through the 20-20-20 climate and energy package. Each EU region must take complementary and coordinated actions to green themselves, by implementing their own national plan. The aim of our paper is to analyze the problem of coordination among policy makers that undermine the achievement of the 20-20-20 targets. Governments in EU regions use a large variety of support instruments to face the climate and energy package. Evidently, every region would want to spur new activities, new investment, more employment in its own territory, by using an appropriate mix of local taxation and subsidies, in conjunction with other command and control instruments. However, EU regions have the incentive to free-ride, or to impose as few costs as possible on their home economy while enjoying the benefits created at the other countries’ cost. So, there are formidable problems of opportunistic behavior and inefficient outcomes. Through a model of Nordhaus (2009) that we have adapted to the European context, we study the costs of reaching EU energy and environmental targets where there is limited participation by member States. From our calculation, we show that limiting participation produce inefficiencies by rising the costs for the participating countries to the agreement.
Regional coordination of European environmental policies
BOLLINO, Carlo Andrea;MICHELI, SILVIA
2012
Abstract
The European Union (EU) has undoubtedly made a big effort in developing a progressive environmental policy, but many of its own policies are still far from making a difference to climate change. The EU aims to limit its greenhouse gas emissions to 20% below 1990 levels, and to meet a 20% renewables target of total energy supply by 2020 through the 20-20-20 climate and energy package. Each EU region must take complementary and coordinated actions to green themselves, by implementing their own national plan. The aim of our paper is to analyze the problem of coordination among policy makers that undermine the achievement of the 20-20-20 targets. Governments in EU regions use a large variety of support instruments to face the climate and energy package. Evidently, every region would want to spur new activities, new investment, more employment in its own territory, by using an appropriate mix of local taxation and subsidies, in conjunction with other command and control instruments. However, EU regions have the incentive to free-ride, or to impose as few costs as possible on their home economy while enjoying the benefits created at the other countries’ cost. So, there are formidable problems of opportunistic behavior and inefficient outcomes. Through a model of Nordhaus (2009) that we have adapted to the European context, we study the costs of reaching EU energy and environmental targets where there is limited participation by member States. From our calculation, we show that limiting participation produce inefficiencies by rising the costs for the participating countries to the agreement.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.