This study applies the global economic environmental model GINFORS to analyse the economic wide effects of current policy instrument mixes concerning economic instruments. GINFORS is especially suited for this task, because it is an econometric model and allows for a realistic analysis of policy impacts, as country structures and sectoral interdependencies are reported in deep sector detail. In addition, the theory behind the model has been evaluated, allowing only equations to enter the system, which have passed statistical testing. 

To identify the impacts of the present EU climate policy mix, the study uses a counterfactual simulation as research method for the time between 1995 and 2009. In a first step a baseline is calculated over the estimation period of the model including the current developments of the economic instruments of climate policy. Subsequently, alternative scenarios are created by the model in which EU climate policy instruments have been removed. The comparison of the results of the baseline and the alternative scenarios makes it possible to assess all direct and indirect effects of the EU policy measures.     

The study includes three counterfactual simulations in which the three main economic instruments used in the EU climate policy (taxes on energy goods use, tradable permits as well as subsidies for renewables) are removed. The three guiding questions for these simulations are:

1. What would have happened, if the tax rates of 2008 would have been frozen at the level of that year 1998 for the whole period till 2008
2. What would have happened, if the EU ET would not have been installed
3. What would have happened if no guarantees for investment in renewable energies in form of the feed in tariffs or green certificates would have been given? 

The overall conclusion of the study is that if the EU Member States had not introduced the environmental tax reforms (ETRs), the EU emission trading system (ETS) and subsidies for renewables in the late 1990s and early 2000s, their CO2 emissions would have been up to 12% - 13% higher in 2008 than historically observed. Another conclusion of the study is that if these policy measures would not have been introduced in the EU, the figures for GDP and employment of the EU member states would have been probably lower but certainly not higher.