By defining three targets as pillars of their environmental policy (20% cleaning, 20% greening and 20% saving energy by 2020), European authorities are putting out noisy signals on what the actual objective is and how to achieve it. I show that, whereas the Community-wide CO2 market (named Emissions Trading System, ETS) is one of the right answers to fix greenhouse-gas emissions, the policy tools implemented by Member States to achieve the greening and saving objectives reduce the efficiency of ETS and push the CO2 price down. I then analyze the efficiency distortions created by the forced entry of Renewable Energy Sources into the mix of electricity production.
environmental policy; Emissions Trading System; Renewable Energy Sources; State aid;
- Q38: Government Policy
- Q42: Alternative Energy Sources
- Q48: Government Policy
- Q58: Government Policy
Analysis of Competition Policy and Sectoral Regulation, Martin Peitz, and Yossi Spiegel (eds.), Now Publishers Inc. Boston-Delft, 2014, pp. 339–363