Implementing the EU Climate and Energy Package with the Economic Crisis Note de l'Ifri, December 2009

The reinforcement of European Union"s climate policy in the decade to come was prepared and decided in 2007-2008 via the EU Climate and Energy Package. But in the meantime, the economic conditions have radically changed. This new study released by Ifri analyzes how the economic downturn in Europe will affect the EU"s greenhouse gases emissions and its ability to reach its 20% emission reduction's target by 2020 compared to 1990. Indeed, the global economic crisis that has affected Europe since the end of 2008 will have a significant impact on greenhouse gases emissions and help the EU bend further its emissions path in the years to come. In order to measure this “reduction bonus” generated by the economic crisis, the study builds several scenarios of EU-wide energy-related CO2 emission profiles until 2013 and until 2020 by adjusting the European Commission"s 2020 pre-crisis growth scenario (the one used to prepare the EU Climate and Energy Package in 2007-2008) under a reviewed post-crisis macroeconomic hypothesis that takes into account latest International Monetary Fund's previsions for the recovery that cover the period until 2014. The scenarios also draw on the patterns of energy and carbon intensities in the past to project EU energy and carbon intensities to 2020 under various hypotheses. The study shows that the emission gap obtained thanks to the new economic path in Europe following the crisis will not be instrumental in complying with the Union"s target by 2020. It will not be sufficient in itself to cut EU-wide greenhouse gases emissions at such a level. The package"s requirements are still relevant and tough enough for member states in the context of the economic crisis. The challenge remains as great as before (and even greater for the question of financing) for the EU to find a way to both significantly improve the energy efficiency of its economy and to transform its energy mix to give it a much more low-carbon profile.