The European Climate Policy is Ambitious: Myth or Reality?

We investigate carbon emission trends among EU Member States by testing the assumption of beta-type convergence for per capita CO2 emissions, conditional upon per capita output and energy use. We find that the emission growth/income relation is strictly negative, indicating that EU-15 countries switched to a less carbon intensive economy starting from the early 1990s. This result remains robust when the new Member States are included. We therefore argue that the decline in EU carbon emissions is a long-term trend and not a result of the economic crisis. We then discuss the effectiveness of climate and energy policies and the EU burden-sharing agreement. Some countries like Germany, Great Britain and France can meet their carbon targets without adopting more aggressive climate and energy policies. Other EU-15 Member States can reduce their domestic emissions beyond their targets if they adopt energy-efficient technologies. Most of the new Member States emit much less than their domestic targets even when per capita income and oil prices increase.