Report: Additional costs for EU climate and energy policy small

Reducing emissions may cost the European Union less than the current climate policy does, according to a recent report by VTT Technical Research Centre of Finland. The report shows that the additional costs for the EU climate and energy policy will be small at the EU level. Depending on the estimate, the costs will amount to -0.5% to +0.5% of the EU GDP by 2030.

The main aims of the EU climate policy for 2030 are to reduce greenhouse gas emissions, increase renewable energy share and improve energy efficiency. According to the VTT report the additional costs in Western Europe are higher than in other countries. The report estimates that the measures required by climate policies would reduce the GDP in Finland by 0.2-0.7% by 2030. The amount depends on the level of the national reduction targets, which have not yet been agreed.

As an EU climate and energy policy objective, the European Commission has proposed a 40% reduction target in greenhouse gas emissions for 2030 relative to the 1990 levels. This will be achieved through reducing emissions and increasing energy efficiency and the use of renewable energy.

The VTT report summarises the impact assessments published of the EU 2030 package. In the impact assessments by the European Commission and the Member States, the emissions trading sector, the national non-emissions trading sectors, renewable energy, the land use sector, air pollution and costs were all reviewed. The longer a Member State has been making impact assessments, the better its situation and characteristics are considered in the Commission assessments. Particularly the assessments by Finland and Germany have been extensive and are well in line with those of the Commission.

When estimating the additional costs of EU climate and energy policy in Finland, the impacts on the operating conditions of the emissions trading scheme need to be examined, as do national emissions reductions and the land use sector, particularly forestry. The development of the sectors is linked together and to the development of the entire European Union. The VTT report says that making national assessments is especially important to better highlight the Finnish view in energy and climate policies in the Union and in international climate negotiations.

The Summary and Comparison of Impact Assessments of the EU’s 2030 Climate and Energy Package was carried out as part of the implementation of the Government's 2014 plan for analysis, assessment and research.

Summary and Comparison of Impact Assessments of the EU’s 2030 Climate and Energy Package (Report in Finnish)

Government’s analysis, assessment and research activities

Inquiries: Tomi J. Lindroos, Research Scientist, tel. +358 20 722 5781, VTT; Tiina Koljonen, Research Team Leader, tel. +358 20 722 5806, VTT; and Sari Löytökorpi, Project Manager (Government analysis, assessment and research activities), Prime Minister’s Office, tel. +358 295 160 187.