The Commission’s ’08 climate action and renewable energy package: options for flexibility regarding the emissions trading scheme and renewable energy proposals

This paper accompanies the seminar on the Commission’s ’08 climate action and renewable energy package. The seminar, and hence this paper, focuses on two of the legislative proposals that the package consists of, namely the revision of the EU Emissions Trading Scheme and the directive on the promotion of Renewable Energy.

The purpose of this paper is to provide a clear overview
of these two proposals. Its purpose is, furthermore, to provide the seminar with a clear focus. This is achieved by
means of the inclusion of sections on flexibility in each proposal and the posing ofissues for discussion.

The objective is to analyse whether the market-based mechanism, as chosen policy instrument, and the way targets are set in the proposals allow for sufficient flexibility in achieving the targets. This refers to whether they can be expected to lead to cost-effective reductions, and whether the target-setting is perceived as fair
and accommodating to economic growth projections.

Important in this respect, is whether the proposals accommodate the emission reduction and renewable energy
potential, as well as the investment capabilities of member states.