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Www.indi-link.net Funded by DG Research 6 th Framework Programme Summary of Policy Conclusions and Implications for the EU SDS Simon Dresner, Policy Studies.

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Presentation on theme: "Www.indi-link.net Funded by DG Research 6 th Framework Programme Summary of Policy Conclusions and Implications for the EU SDS Simon Dresner, Policy Studies."— Presentation transcript:

1 www.indi-link.net Funded by DG Research 6 th Framework Programme Summary of Policy Conclusions and Implications for the EU SDS Simon Dresner, Policy Studies Institute 30 September 2009, Luxembourg

2 2 Overview Review of sustainability policy assessment literature The most synergistic sets of integrated policy instruments Implications for the EU Sustainable Development Strategy

3 Searching for synergies Looking for integrated sets of policy instruments that - best take advantages of synergies - best mitigate trade-offs To identify those policies that have the best chance of achieving positive environmental, economic and social outcomes

4 Environmental policy instruments Regulation Economic instruments - Tradable permits - Environmental taxes - Subsidies Voluntary agreements Information-based instruments

5 Regulation Essential if impacts very dependent on location or optimal output is zero Environmental certainty, cost uncertain Not necessarily most economically efficient No incentive to go beyond the standard Rebound effect

6 The problem with efficiency GINFORS modelling The obvious way to find synergies is through double wins Many policies focus on both environmental and economic gains through resource efficiency The problem is the rebound effect Need to limit total resource consumption Need for higher prices

7 The importance of prices Analysis of real-world data in found prices were dominant influence on usage, not regulation - Can be taxes, tradable permits, subsidies or market prices Combination of prices and regulation can also be effective

8 Tradable permits Must be cap and trade, not baseline and credit Auctioned better than grandfathered Auctioned similar to environmental tax Environmental certainty, cost uncertain Price uncertainty can deter investments

9 Environmental tax reform Classically revenue-neutral Green taxes offset by reductions in other taxes, usually labour Double dividend boosts employment Cost of taxes certain, environmental outcome uncertain Price certainty encourages investment

10 Modelling results Reduction in emissions and resource consumption Small effect on employment Costs of achieving targets much less than costs of climate change Reduction target achieved through ETR with a lower carbon price and less GDP loss if some revenue spent on low-carbon technology ETR more effective in combination with regulation and targets achieved at lower cost

11 Combating leakage and externalisation Externalisation of Europes environmental impact EU policies alone have little global impact Agreement covering all major countries vital Stopgap solution is border tax adjustment

12 Issues with ETR Harmonisation of taxes between countries Distributional impacts

13 Other instruments Voluntary agreements best seen as complementary to regulation - Can encourage exceeding regulatory standard - Or preparation/threat for future regulations Eco-labels not very effective on their own - Can be more effective in combination with regulation or taxes

14 14 Need to phase out harmful subsidies Agriculture - reform needs to go further Fisheries Roads Car industry in some member states Coal production in some member states

15 15 Green New Deal UNEP advocates a Green New Deal A combination of policy measures described above and economic stimulus directed towards environmental industries South Koreas green stimulus Example of existing German support for environmental industries

16 Support for environmental industries Pushes forward innovation Promotes competitiveness Increases self-sufficiency and security Creates jobs and economic welfare Reduces environmental footprint

17 17 Beyond GDP Economic growth based on increasing resource use is unsustainable Less focus on GDP Environmental and social indicators Recent Commission communication

18 18 Lessons for the EU SDS SDS emphasises efficiency improvements Needs more emphasis on limiting total resource use Environmental tax reform in combination with regulation and more support for environmental industries Phase out harmful subsidies Green New Deal New ways of measuring welfare

19 Funded by DG Research 6 th Framework Programme Thank you for your attention! For more information please visit www.indi-link.net 19


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