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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

German Economic Institute (IW) German Economic Institute (IW)

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

German Economic Institute (IW) German Economic Institute (IW)

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Digital Product Passport - Enabler of the Circular Economy
Adriana Neligan / Carmen Schleicher / Barbara Engels / Thorsten Kroke IW-Report No. 47 27. September 2023

Digital Product Passport - Enabler of the Circular Economy

In a circular economy, a new understanding of economic activity and an alternative approach to raw materials are required. Resources should be used for as long as possible in order to reduce both the material and energy consumption as well as the waste and ...

IW

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Thilo Schaefer Event 20. September 2023

Climate Clubs as a Lightning Rod for Tensions in Trade and Industrial Competitiveness

The Paris Agreement has established a transformative paradigm. While this transformation will create winners and losers, it now seems increasingly clear that overall, there are tremendous opportunities.

IW

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