Mitigation of CO2 emissions in 2020 : impacts of the " 20/20/20 " European policy

The study aims to quantify the interactions between the three European objectives in the horizon of 2020: (1) the reduction of 20% of greenhouse gas emissions (GHG) (2) the saving of 20% of the energy consumption and (3) the share of 20% of renewables energies in the overall energy consumption. Particular focus is, however, placed on the influence of the environmental policies on theCO2 emission reduction and the carbon price in 2020.The national objectives for the energy savings and renewables energies in our study are realized with the quota systems in every country: white and green certificate systems, while the CO2 emission reduction is carried out at the European level within the ETS in thecontext of international carbon market. In order to exploit the interactions among the differentenvironmental policies, a number of scenarios are tested within a combination of two powerfulmodeling tools: POLES world energy model and ASPEN, dedicated for the analysis of quota systems.The paper shows, in particular, that the order of environmental policies does not affect significantly the reduction of emissions and the carbon price. On the other hand, the presence of these policies diminishes highly the marginal European reduction cost and, consequently, the compliance costs for ETS participants.