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Roland Kube / Finn Wendland IW-Policy Paper No. 13 14. July 2021 How the EU can achieve the 2030 climate targets in the road transport and building heat sectors

With the upcoming Fit-for-55 package the European Commission works towards implementing a set of wide-ranging legislative proposals to align policy frameworks across the EU with the objectives of the EU Green Deal.

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How the EU can achieve the 2030 climate targets in the road transport and building heat sectors
Roland Kube / Finn Wendland IW-Policy Paper No. 13 14. July 2021

How the EU can achieve the 2030 climate targets in the road transport and building heat sectors

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With the upcoming Fit-for-55 package the European Commission works towards implementing a set of wide-ranging legislative proposals to align policy frameworks across the EU with the objectives of the EU Green Deal.

This study examines four regulatory options, including carbon pricing, for the road transport and buildings sectors, which are responsible for 40 percent of GHG emissions and so far not covered under the EU-ETS. While a swift harmonization of carbon pricing mechanisms under one uniform framework, covering all countries and sectors, may seem theoretically appealing on the basis of economic efficiency and cost minimization, severe distributional implications, both economically (carbon-leakage) and socially, undermine such options as practicable at least in the short-term. Alternatively, we propose the introduction of a separate 2. ETS in combination with an emissions-oriented reform of the existing energy taxation rules as a framework which proves economically efficient, socially balanced and ecologically effective. Any carbon pricing scenario should integrate complementary social measures for cost redistribution favouring low-income households, as well as measures to maintain industry competitiveness. Additional measures supporting a conversion of parallel carbon pricing systems may minimize the economic costs of the EU Green Deal over the long-term.

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How the EU can achieve the 2030 climate targets in the road transport and building heat sectors
Roland Kube / Finn Wendland IW-Policy Paper No. 13 14. July 2021

How the EU can achieve the 2030 climate targets in the road transport and building heat sectors

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Better regulation and green nudges for more sustainability
Dominik H. Enste / Jennifer Potthoff IW-Analyse No. 146 30. December 2021

Behavioral Economics and Climate Protection: Better regulation and green nudges for more sustainability

Protecting the climate is one of the greatest challenges our society is currently facing. In view of the heated political and social discussions surrounding this topic, the question naturally arises as to whether behavioral-economic insights can be used to ...

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Hubertus Bardt IW-Report No. 41 8. November 2021

Industry, climate protection and trade: Balancing different costs and prices for industrial climate protection

In interrelated markets for exchangeable goods there is - apart from transaction costs - only one single price. In contrast, international climate protection is characterized by very different prices for greenhouse gas emissions.

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