This policy brief summarises the insights conducted under the CECILIA2050 project on the international dimensions of EU climate policy. The aims of the research were to understand the economic and political interactions between EU policies and the rest of the world, assess the effectiveness of these measures and determine the legal and political feasibility of policy responses in regards to diminishing the risk of carbon leakage.
Five key conclusions can be drawn from the research.
- Conclusion 1: In a fragmented world, ambitious emissions reduction policies by sub-global coalitions may have difficulties achieving the “two degrees” target.
- Conclusion 2: In a fragmented world, without comparable policies in the rest of the world, the effect of ambitious EU climate policy on the competitiveness of energy-intensive and trade-exposed sectors may be negative in the long run.
- Conclusion 3: Current and proposed anti-leakage measures are not ‘optimal’ in all respects.
- Conclusion 4: The best way to mitigate carbon leakage and loss of competitiveness in the long run is to promote low-carbon innovation in industry.
- Conclusion 5: Promoting low-carbon innovation in industry may be the best policy to enhance the international competitiveness of the entire EU industry and may provide a first-mover advantage.
More detailed results can be found in the reports on the international context and carbon leakage that underlie this policy brief.